Transparency data

NHS Electronic Staff Record Transformation Programme: accounting officer assessment

Updated 13 April 2023

Applies to England

© Crown copyright 2023

This publication is licensed under the terms of the Open Government Licence v3.0 except where otherwise stated. To view this licence, visit nationalarchives.gov.uk/doc/open-government-licence/version/3 or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: psi@nationalarchives.gov.uk.

Where we have identified any third party copyright information you will need to obtain permission from the copyright holders concerned.

This publication is available at https://www.gov.uk/government/publications/department-of-health-and-social-care-accounting-officer-assessments/nhs-electronic-staff-record-transformation-programme-accounting-officer-assessment

An accounting officer assessment for the NHS Electronic Staff Record Transformation Programme was conducted in line with our commitment to publish accounting officer assessments for government’s Major Projects Portfolio.

This accounting officer assessment considers the 4 standards of:

  • propriety
  • regularity
  • value for money
  • feasibility

Overview

The NHS electronic staff record (ESR) provides payroll and HR services to NHS organisations in England and Wales, making payments every month to over 1.8 million NHS employees. The current service is provided by IBM under a contract with the NHS Business Services Authority (NHSBSA).

The ESR solution is built on the Oracle e-Business Suite platform (eBS) and Oracle plans to cease premium support for this software in 2033. This – combined with an estimated timeframe of 5 to 7 years to transition all users from the legacy eBS solution to an alternative solution – means that the ESR Transformation Programme is of critical importance. The ESR Transformation Programme will deliver a transformed NHS workforce solution.

The future NHS workforce solution will aim to support the delivery of the ambitions and requirements of the:

The ambition is to deliver a new and transformational workforce solution, reflecting user-led requirements and using the latest technology to ensure a positive user experience.

The current scope of ESR is restricted to NHS secondary care user organisations (approximately 400+ user organisations). The transformed NHS workforce solution will be looking to incorporate sufficient scalability and flexibility to extend into primary care, should this be required in the future, in support of the formation of integrated care boards across the regions.

Background and context

An extensive discovery, aligned to the Government Digital Service’s framework, has been undertaken to define the user and business needs for the future NHS workforce solution. A summary of the discovery activities is provided as follows:

  • ESR Transformation Discovery (1.0) commenced in January 2021 with findings (current and future state analysis, options assessment and proof of concept plan) documented and ratified by the NHSBSA Workforce Services Transformation Programme Board during July 2021
  • an Infrastructure and Projects Authority (IPA) Gate Review (Gate Review 0) undertaken in May 2021 recognised that a number of external programme strategies were being produced upon which the ESR Transformation Programme will be dependent (for example, NHS England’s Future of HR and organisational development programme)
  • in response to this recommendation, the scope of discovery activities was extended to incorporate workshops to further strengthen strategic alignment and undertake extensive market engagement (referred to as ESR Transformation Discovery 2.0)
  • a project to complete pre-procurement and commercial readiness activities (referred to as Discovery 3.0), including the drafting of the outline business case (OBC), completed in April 2022

Following approval by the NHSBSA Board, the Department of Health and Social Care (DHSC) Investment Committee, the Secretary of State for Health and Social Care, HM Treasury and Cabinet Office, the formal procurement activity commenced on 19 August 2022.

Assessment against the accounting officer standards

Propriety

The primary drivers for undertaking the ESR Transformation Programme are as follows:

  • since 2004, NHS organisations have relied on the ESR service to enable their delivery of mission-critical payroll and HR activities
  • the expiry of the current contract with IBM for the provision of ESR in August 2025
  • the end of premium support for the Oracle eBS software in 2033
  • the likely medium or long-term obsolescence of the Oracle eBS product as Oracle focuses development on their newer software as a service (SaaS) product
  • the need to transform the existing solution to provide a modernised digital service to end users coupled with the accurate and timely provision of workforce data

The programme conforms with HM Treasury’s Managing public money principles and rules, and delivery is supported by third-party assurance partners including legal assurance, finance assurance, and specialist commercial and contract advice provided by the Cabinet Office Complex Transactions Team.

The programme has robust governance in place via the NHSBSA Workforce Services Transformation Programme Board, which includes representation from:

  • NHS England
  • NHS Wales
  • DHSC
  • NHS Employers
  • the Integrated Single Finance Environment Programme

The programme board is supported by project boards, which provide the oversight for individual projects including:

  • monitoring progress
  • escalations, risk and issue management
  • formally capturing actions and decisions

The ESR Transformation Programme, due to its size and profile, is part of the government’s Major Projects Portfolio (GMPP) and is subject to external Gate Reviews. The IPA is therefore providing independent assurance over the risk management arrangements undertaken by NHSBSA. IPA Gate Reviews have taken place in May 2021 and February 2022.

The OBC has been reviewed and approved by DHSC, Cabinet Office and HM Treasury, which enabled the commencement of procurement on 19 August 2022.

The economic case within the OBC explored and assessed a series of options for delivering the spending objectives, resulting in the identification of a preferred option that is an optimum balance between costs, benefits and risk (refer to the ‘Value for money’ section below for further details).

Regularity

NHSBSA has been directed by the DHSC (on behalf of the Secretary of State for Health and Social Care) to deliver the ESR service since 2018. The ESR Transformation Programme is following the NHSBSA internal governance process and is classified as the highest-priority programme within the NHSBSA portfolio change plan.

The OBC was developed in line with HM Treasury Green Book guidance and has been ratified by the appropriate internal NHSBSA boards, culminating in approval by the NHSBSA Board in January 2022.

The NHSBSA Commercial Team operates under the oversight of the DHSC Commercial Directorate and has engaged extensively with the Cabinet Office Complex Transactions Team to co-create the delivery model assessment (DMA), which has informed the procurement strategy and structure of the procurement activity process.

The programme is further supported by third-party assurance partners, including legal assurance partners, who are integrated as part of the programme delivery team.

Given the above, the programme is therefore considered regular.

Value for money

The economic case within the OBC explored and assessed a series of options for delivering the spending objectives (identified in the strategic case), resulting in the identification of a preferred option that is an optimum balance between costs, benefits and risk.

The preferred option has a positive net present social value (NPSV), the key performance indicator for programmes that must be assessed based on social as well as economic impact, The preferred option identified has a positive benefit-to-cost ratio (BCR) greater than 3:1. The preferred option also delivers an enhanced level of qualitative benefits.

The ability of solutions to meet user requirements will be explored as part of procurement. Option analysis will be refreshed at full business case stage.

The existing service supports national counter-fraud initiatives and investigations – for example, the bi-annual National Fraud Initiative. This is specified as a requirement and will continue in the new agreement.

Given the above, the programme is therefore considered value for money.

Feasibility

The options that have been subject to analysis within the OBC have been informed by the extensive discovery activities that were undertaken in conjunction with the NHSBSA discovery partner (Accenture).

The proposed solution options and wider discovery findings have been shared with the market via numerous market engagement events that have taken place throughout 2021 and 2022. As part of this, engagement findings were presented and potential suppliers were supportive of the discovery findings, and there were no material concerns raised by potential suppliers regarding the feasibility of delivery.

The programme has also engaged extensively with the Cabinet Office Complex Transactions Team to co-create the DMA, which has informed the strategy and structure of procurement activity.

Representatives from the Cabinet Office Complex Transactions Team are integrated as part of the programme team and will continue to provide delivery assurance.

There were no major feasibility or deliverability issues raised by the IPA Gate Review that was undertaken in February 2022. All recommendations from the IPA Gate Review are being implemented, and include ongoing commercial collaboration with the Cabinet Office Complex Transactions Team and Government Commercial function.

The procurement activity will explore solutions options further with a view to securing a solution that best meets requirements and provides optimal value for money. The procurement will be requirements-driven and supplier or vendor agnostic.

Given the above, the programme is therefore considered feasible.

Conclusion

In conclusion, the discovery activities have identified options that have been subject to detailed analysis within the OBC. This analysis has identified a preferred option that provides an optimum balance between costs, benefits and risk.

The OBC has been subject to review and approval by DHSC, Cabinet Office and HM Treasury, which allowed procurement to commence in August 2022. The options proposed by potential suppliers will be explored further as part of the procurement activity, which is now in progress and will be subject to detailed analysis at full business case stage.

As the accounting officer for NHSBSA, I considered this assessment of the ESR Transformation Programme and approved it on 30 September 2022.

I have prepared this summary to set out the key points that informed my decision. If any of these factors change materially during the lifetime of this programme, I undertake to prepare a revised summary setting out my assessment of them.

This summary will be published on GOV.UK. Copies will be deposited in the Library of the House of Commons, and sent to the Comptroller and Auditor General and Treasury Officer of Accounts.

Michael Brodie, Accounting Officer
24 November 2022

Back to top