CSC contracts could cost NHS more to cancel than keep

Summary:Damages, transition charges and other costs may make it uneconomic to end £1.3bn CSC contracts for the Lorenzo and IPM systems, NHS CIO Christine Connelly has told a committee of MPs

Certain contracts for beleaguered health projects in the north of England could cost the NHS more to cancel than to see to term, according to chief information officer for health Christine Connelly.

NHS desk

Certain NHS IT contracts could cost more to cancel than to keep, chief information officer for health Christine Connelly has said.

That analysis applies to £1.3bn agreements with Computer Sciences Corp (CSC) for Lorenzo and IPM patient management software in the north, midlands and east of England, Connelly told MPs on the House of Commons Public Accounts Committee on Monday.

"Potentially, if you ask me about the absolute maximum, we could be exposed to a higher cost than the cost to complete the contract as it stands today," the NHS chief information officer said.

The immediate cost of ending the deals would be several hundred million pounds, according to Connelly. CSC could then seek damages, based on its work in progress, and these could add several hundred million pounds to the total. On top of this, there would be the investment needed to transition to a new supplier, plus the expenditure on running the old system until the new one was ready.

When the NHS cancelled Fujitsu's health technology contract in May 2008, the IT supplier doubled its support costs during the transition to new systems. In a similar way, terminating the CSC agreements would put the NHS "over a barrel" in terms of support costs, Connelly said.

The Public Accounts Committee meeting was held to ask suppliers BT and CSC to respond to a damning National Audit Office (NAO) report into NHS spending on the National Programme for IT (NPfIT). The report, published on Wednesday, found that electronic patient care records will not be delivered by the time supplier contracts end in 2016. The government is now considering whether to cancel NPfIT contracts.

Connelly told committee members that the NHS is taking legal advice on some of its contracts with CSC, which it believes have not been adequately fulfilled.


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Topics: Government : UK, IT Employment

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Tom is a technology reporter for ZDNet.com, writing about all manner of security and open-source issues.Tom had various jobs after leaving university, including working for a company that hired out computers as props for films and television, and a role turning the entire back catalogue of a publisher into e-books.Tom eventually found tha... Full Bio

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