Management: As the 2000 explosion looms, the bomb squad's fee goes up

Government and the business sector are accused of lack of concern over the Millenium Timebomb.

The body in charge of monitoring local authorities and hospital trusts is joining this chorus of disapproval. Hospital patients may die, councils and hospitals run out of money, and our cities grind to a traffic gridlock unless councils and NHS trusts react quickly to the threat of the Year 2000 computer problem, warns District Audit, the body that audits most local authorities and trusts.

Hospital heating and ventilation equipment, lifts and traffic lights are among the many micro - processor controlled systems that may cease to work at the end of the century. Hospital pharmacies and stock rooms are already being thrown into chaos, with computers refusing to recognise that life will continue after 1999.

The problem stems from the smaller memory capacity of early computers, which led programmers to recognise years by only the last two digits to save computer memory space. Systems based on old programmes are likely to read the year 2000 as zero.

Glynis Rockett, District Audit's national coordinator for year 2000, says: "Initially it was thought that the problem only affected computer systems. In recent years it has come to light that it has an impact on other systems, like lifts and air conditioning. Year 2000 compliance was not written into supply contracts. It is not just financial and administration systems that are affected, but anything with micro - chip technology - video surveillance, lifts, traffic lights. One of the biggest challenges is to recognise which equipment might be affected. It is a huge task.

"The level of preparedness varies enormously through the country. One county council has had a year 2000 team in place for five years. Other sites, especially those going through mergers of hospital trusts or local government reshuffles are putting it off until after reorganisation in April 1998.

"If they are lucky they won't experience problems before that date. But eventually they will have to devote more resources, especially human resources, to protect themselves. If they are unlucky they will have systems collapse before that date."

The later an organisation attempts to remedy its year 2000 problems, the greater the cost. There is a limited number of experts available to put right programming errors, and their prices are increasing all the time. The problem is made worse for councils and trusts with fixed budgets. Extra financial demands will have to be met at the expense of service cuts.

"We are already finding high rates being charged for consultancy, and clients getting people with varying levels of skills," says Ms Rockett. "We have never been through this before. Clients must be very careful in choosing consultants, and in how they negotiate contracts. One was pounds 750,000 just to monitor projects."

Even though councils and trusts may have been placed in this vulnerable position by their suppliers, the advice from District Audit is to be wary about using the law as a remedy.

"It is a last resort to sue suppliers," says Ms Rockett. "They provide according to specifications. If compliance with year 2000 was not part of the contract then they might argue it is not part of their duty. In some circumstances it would be difficult for them to pursue that line of thought, for example if equipment is leased beyond year 2000, as the system should work for the whole duration of the agreement.

"Everything hinges on what was included in the specifications. Some clients have included year 2000 compliance for over a year. Others are still not doing it. It has been difficult to establish the right choice of words, and difficult to find legal expertise. Industry's own understanding about year 2000 compliance has changed a lot. Year 2000 standards were only recently established in Britain, so it is now easier to include in a contract."

District Audit is embarking on an ambitious programme of persuading councils and trusts to review their equipment and their supplies contracts.

"We are holding workplace seminars, helping clients understand how to set - up year 2000 teams, and fixing problems," explains Ms Rockett. "We have reviewed the procedures from 200 sites nationally, and built up a database of good practice examples, so we have templates for key tasks on the year 2000 process. Sites can now produce inventories of equipment at likely risk, and decide how to prioritise systems, concentrating first on failures that would be life threatening. We are giving advice on how to write contracts with suppliers, and we will go in to see clients periodically to check progress."

It is no exaggeration to say that the continuity of many public services depends on the success of this exercise.