CSC contracts could cost NHS more to cancel than keep

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.

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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

Tom Espiner

About Tom Espiner

Tom is a technology reporter for He covers the security beat, writing about everything from hacking and cybercrime to threats and mitigation. He also focuses on open source and emerging technologies, all the while trying to cut through greenwash.

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  • If Ms Connelly does allow CSC to claim damages she should be fired as CSC will have in its audit archives reports stating that the NHS design is dodgy. She should ask to see CSC Internal Service and Operational reports from every stage of the NHS IT programme they will show just how much was known about the state of this programme and when.
    If she doesn't then she is letting the UK tax payer down.
  • If the different government departments worked 'joined-up' they would realise that CSC has a dark past - some high profile MOD contracts spring to mind.
  • Tiffin
    24 May, 2011 18:28

    She does not have a choice, it will be down to courts and the interpretation of the law and the contracts. An if we loose that just adds further costs to the bill aka lawyers fees and court costs and possible more compensation for the IT firms as well,.

    The reason the things is so delayed is because it been change so many times by so many people. An it not solely down to the companies carrying out the work, as the government led commitees would like us to believe and it is not all Labor fault either, as the government would like us to believe as well.

    Everyone share the blame at all levels of the NHS, Government and IT firms.