Cost of delivering digital health system ‘encompass’ has spiked by £1bn

Delays in delivering major public sector IT projects are resulting in existing contracts for legacy systems being repeatedly extended, at a cost of hundreds of millions of pounds to taxpayers, according to a report published by the Comptroller and Auditor General Dorinnia Carville on Friday.

The high-level overview of the portfolio of 29 major IT projects being delivered by the North’s central government departments (and their arms-length bodies) between April 2022 and March 2025.

The total cost of the portfolio is estimated at £5.2bn, with over two-thirds of these costs relating to the Department of Health (£2.47bn across eight projects) and the Department of Finance (£1.12bn across six projects).

Ms. Carville’s report examined DoH’s encompass programme which replaced approximately 45 systems within the Health and Social Care (HSC) system and went live in the Western Trust in May 2025.

She notes how the cost of the modernisation programme ballooned over the past eight years.

“The estimated costs of delivering encompass have increased considerably since the initial 2017 Outline Business Case estimate of £982.5 million.

“The Full Business Case (FBC) Addendum in December 2022 estimated full programme costs of £1.95bn. The latest available estimate of full programme costs is £1.93bn.

"The implementation was originally planned on a phased go-live approach across the Trusts, commencing in April 2022 in the South Eastern Trust and the Western Trust planned to be the last to go live in April 2024.

"Go-live in the South Eastern, Belfast and Northern Trusts was achieved in November 2023, June 2024 and November 2024 respectively – approximately 19 months behind schedule.

"A combined go-live in the Southern and Western Trusts was achieved in May 2025, 20 months and 13 months behind schedule respectively,” the report points out.

Ms. Carville warns that the timeframe for the integration of critical services including Children’s Social Care, Healthcare in Prisons and Child Health Services within encompass remains uncertain and that old systems continue to generate costs.

“To date, none of the legacy systems replaced by encompass have been switched off and the costs of maintaining the legacy systems continue to be incurred. The cost of the legacy systems per the FBC is approximately £6.5 million a year.

"The encompass Business Case did not include data archiving which is required to fully support the decommissioning of legacy systems. While the implementation of encompass facilitates the transition from 45 legacy systems, legacy system contracts are held by individual Trusts and Business Services Organisation (BSO) with Digital Health and Care NI commissioning and overseeing the data archiving programme.

"A mandate for the data archiving programme has recently been approved with anticipated costs of around £10 million,” the report warns.

An estimated time of delivery for the implementation of a Centralised Archiving Solution has been earmarked for December 2028.

Legacy systems are due to be decommissioned in March 2029.

Addressing issues with the delivery of major IT projects across Departments, Ms Carville said: “The successful design, implementation and delivery of IT projects presents an opportunity to improve and transform public services.

"However, extending contracts on legacy systems risks a gap growing between the system’s functionality and the needs of citizens, businesses and communities.

"It represents very poor value for money and a missed opportunity to have more modern and efficient systems in place earlier.

“Major IT projects are recognised as being complex, but this is all the more reason why the NI public sector needs to adopt a much more strategic approach.

"This means planning and working collectively to maximise potential synergies in IT solutions, to better understand shared risks and to ensure best use of skills and resources. Fundamentally, the public sector needs to approach these IT projects in terms of how they change the way services are delivered, ensuring clarity on the improvements to be achieved and how these benefits will be measured and monitored.”

The report notes that there can be valid reasons for extending contracts, but that in many cases these extensions were not a strategically planned choice but rather made out of a necessity to maintain continuity of service.

Extensions come at a cost, including missed opportunities to improve efficiency, functionality and performance, as well as risks of service disruption or vulnerability to cyber attacks.

Additionally, there are significant financial costs – the report looks in detail at five projects which each experienced delays or issues, with subsequent contract extension costs totalling in excess of £573 million.

Key factors contributing to the delays at the project initiation stages of these projects included a lack of clarity on the scope and the intended outcomes and benefits of new systems, as well a lack of appropriately skilled staff.

This resulted in the complexity of projects not being fully understood, leading to unrealistic delivery time and cost estimates.

The report recommends the development of a NI Civil Service-wide strategy to build the capacity and capability to successfully deliver major IT projects.

There is currently no NI Civil Service-wide IT strategy in place the most recent strategy ended in 2021, was not fully implemented and has not yet been evaluated.

The report also notes that, once approved, major IT projects take close to six and half years to be procured, designed, implemented and become business-as-usual across the NICS.

It recommends that public sector bodies undertake urgent cross-sector planning to identify legacy systems in order to prioritise investment decision and maintain or replace systems well in advance of the current contract expiring.