The Department of Health and Social Care publishes its accounting officer assessment of the NHS Electronic Staff Record Transformation Programme, evaluating costs, benefits, and implementation risks
The Department of Health and Social Care (DHSC) has released its latest accounting officer assessment of the NHS Electronic Staff Record (ESR) Transformation Programme, the ambitious project to modernise payroll and HR systems across England’s NHS. The evaluation examines whether the programme is delivering value for money, managing risks effectively, and is on track to meet the needs of the NHS workforce.
Why ESR Transformation is critical
The NHS Electronic Staff Record (ESR) provides vital payroll and HR services to NHS organisations in England and Wales, making payments to over 1.8 million NHS employees each month. IBM provides the service under a contract with the NHS Business Services Authority (NHSBSA).
The ESR solution currently runs on the Oracle e-Business Suite (eBS), for which Oracle has announced the end of premium support in 2033. Given that transitioning all users from the legacy eBS system to a new solution is expected to take between five and seven years, the ESR Transformation Programme is considered critically important. This programme aims to deliver a fully modernised workforce solution for the NHS.
The future NHS workforce solution aims to support the delivery of the NHS Long Term Plan, the NHS People Plan, the NHS People Promise, the NHS England Future of HR and organisational development report, and A Healthier Wales: Long Term Plan for Health and Social Care.
The goal is to deliver a new, transformational workforce solution that utilises the latest technology to ensure a positive user experience.
The current scope of ESR is restricted to approximately 400 secondary care user organisations. The transformed NHS workforce solution looks to increase scalability and flexibility in primary care.
Transforming the NHS ESR
The most significant 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
Value for money
The business case for the ESR Transformation Programme assessed multiple options for achieving the programme’s objectives, carefully weighing costs, benefits, and risks. The preferred option was chosen because it provides the optimal balance between these factors. Analysis shows it has a positive net present social value and a benefit-to-cost ratio of more than 3:1, meaning the programme is expected to deliver benefits that significantly exceed its costs.
In addition to quantitative gains, the programme offers enhanced qualitative benefits, including improved efficiency in payroll and HR activities, better support for NHS staff in managing their workload, and a more user-friendly interface for end-users. Current critical services, including national fraud detection initiatives, will continue under the new system. Overall, the programme represents good value for money.
Feasibility
Extensive discovery activities, conducted in collaboration with the NHSBSA discovery partner, informed the proposed solutions and ensured that the options were realistic and deliverable. The findings have been shared widely with the market during 2021 and 2022, with potential suppliers expressing support and raising no significant feasibility concerns.
The programme has also collaborated closely with the Cabinet Office Complex Transactions Team, a group of experts in managing complex government projects, whose members are embedded in the programme team to provide delivery assurance and guidance. An official IPA Gate Review in February 2022 did not raise any significant issues, and all recommendations from the review are being actively implemented. Procurement activity will continue to explore solutions in detail to secure one that meets user requirements and delivers optimal value, remaining vendor-neutral and requirements-driven. Based on this, the programme is considered feasible.
