Outsourcing
CSC warns it would fight over NHS IT programme cancellation
Government plans still unknown ahead of autumn Spending Review
By Leo King | Computerworld UK | Published 12:49, 13 August 10
CSC has warned that a legal fight would ensue over its estimated £3 billion contract on the NHS National Programme for IT, if the government attempted to end the project.
Speculation is rife over the future of the scheme, the world’s largest non-military IT programme, whose other main contractor is BT with a £1 billion deal. The government has already said it would slash spending on consultants for centralised programmes in the NHS, create a “more plural system of IT suppliers” and effect an “information revolution”.
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A change in scope is rumoured to be planned, but the Department of Health has consistently declined to comment. An official announcement is expected by the time of the public sector Spending Review in October. Fujitsu, which quit the programme in 2008, has been embroiled in a legal dispute with the government.
On Wednesday, during a quarterly results conference call with investors reported by E-Health Insider, CSC chief executive Michael Laphen said there was no “indication” that the government planned to cancel the scheme. But he warned that if that happened, CSC’s “top line would be impacted”.
"I would say if it happened today ... then more than likely we would wind up in disputes,” he said. “I don’t think either one of us wants that to happen.” CSC was operating “within the affordable envelope” of the NHS, he insisted.
CSC's quarterly profit rose nine percent year-on-year to $143 million, but revenues fell seven percent amid lower government spending globally.
While Laphen said both parties wanted to ensure the programme was a success and would attempt to avoid legal problems, he said: “I’m not going to speculate on how disputes will come out, but I’m sure that the government would take one position and we’d take another position.”
CSC declined to comment further and the Department of Health had not commented at the time of writing.
BT and CSC experienced delays or problems with their early rollouts of hospital patient administration systems. CSC’s latest deployment of the iSoft Lorenzo system went live in Morecambe Bay in June, intended to trigger a major payment to the company, but a decision on its workability in practice has not been disclosed.
Laphen said that the deployment had been “successful”, and that there would soon be a “quickening pace” of later installations.
