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CSC gets £68m for rewritten £2.9bn NHS IT contract

CSC gets £68m for rewritten £2.9bn NHS IT contract

Government saves £1bn, CSC has access to potential £1.9bn orders

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CSC is to receive £68 million from the government under a deal which ends a £2.9 billion pound contract to provide care records systems to the National Health Service.

Announcing the deal, the Department of Health said it was saving £1 billion on the contract, which has seen CSC struggle to deploy the Lorenzo system in trusts across the UK.

A new agreement with CSC means the NHS will not be subject to volume purchasing commitments and that trusts can deploy other care systems, should they wish.

The new deal also reiterates government policy to provide central funding for trusts wishing to buy the CSC system, with £1.9 billion of the original £2.9 billion contract largely unspent so far, and potentially available to CSC.

The new deal also offers CSC the opportunity to sell its Lorenzo system outside the NHS’s North, Midlands and East regions of England, where the outsourcer held its initial contract.
However, it appears that central CSC has agreed to non-exclusive deployment rights in its designated regions. Trusts will receive on-going managed services from CSC for a period of five years from the date of Lorenzo deployment by a trust, provided deployment is complete or substantially complete by July 2016.

The agreement, dated 31 August, but only announced today offers, said CSC, “substantial flexibility to NHS trusts in their choice of electronic care records solutions while affording CSC the opportunity to expand and accelerate its marketing of the Lorenzo solution to NHS trusts across England”.

The new deal represents a significant concession by CSC. By dropping the minimum volume commitment the department of Health is not tied to make payments to CSC however few systems are deployed.

It is not clear yet whether the department of Health has, nevertheless, effectively guaranteed to CSC a minimum number of trusts will take its products.

Health Minister, Simon Burns said “We’ve removed the restrictive, top-down, centralised approach and given the local NHS the power to make their own decisions about which IT systems they use.

“The modern NHS still needs healthcare IT systems to exchange information securely and meet the needs of their patients. By re-shaping this contract, delays will be avoided in delivering much needed IT systems to the NHS, and will ensure the investment made to date is not wasted.

“This agreement marks a step in the right direction and a move to a new way of working which will allow the NHS to secure value for money and tailor its IT systems to meet the needs of its local patients.”

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