Computer Sciences Corporation could retain £1bn in health contracts

http://www.guardian.co.uk/society/2012/mar/06/computer-sciences-corporation-retain-health-contracts

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One of the NHS's worst-performing IT contractors has announced that it has reached a deal with the government that could allow the company to retain £1bn in health contracts.

The Department of Health (DoH) announced last year that a £1.4bn national IT programme, started in 2002 under Labour, was to be scrapped because it was "not fit to provide the modern IT services that the NHS needs". But it remained in negotiations with the US group Computer Sciences Corporation (CSC) over a £3bn agreement to install IT systems in the Midlands, north and east of England.

CSC said on Monday that it had "agreed to a set of high-level principles, which are intended to be reflected in a binding interim agreement" with the DoH. The Wall Street-listed company added that it was "reasonably possible" that such an agreement could allow it to recover some of the $1.5bn (£944m) it wrote off late last year amid uncertainty about the deal.

CSC admitted in December that eight years of delays and setbacks on its disastrous NHS contract had left little or no value for shareholders, as the company prepared to write off almost £1bn.

The colossal write off – equivalent to 40% of CSC's market value – followed delays and IT glitches centred on a new software system called Lorenzo. It was supposed to be ready in 60% of English hospitals more than four years ago, but was installed in its first acute hospital in June last year.

The company said that a "non-binding letter of intent" signed with the DoH was meant to establish an agreement for CSC to deliver "additional Lorenzo implementations", with options for more where there was a demand.

"CSC is confident that Lorenzo's modern technology base and the fact that it has been specifically designed in collaboration with the NHS should result in further demand in the future," the company said.

"CSC believes that the principles contained in the letter of intent represent the appropriate way to support the NHS reform agenda, providing value for money to taxpayers and, through technology, significantly improving standards of patient care in England."

ENDS