CSC to cut £1bn from its NHS contracts? Not yet ...

The Times reports that CSC is to cut at least £1bn from its NHS IT contracts. E-Health Insider reports that the Department of Health has secured savings of £1bn from CSC.  But nothing is certain yet.CSC announced in a filing to the...

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The Times reports that CSC is to cut at least £1bn from its NHS IT contracts. E-Health Insider reports that the Department of Health has secured savings of £1bn from CSC.  

But nothing is certain yet.

CSC announced in a filing to the Securities and Exchange Commission that it signed a non-binding letter of intent with the NHS on 2 March 2012. It's a without-prejudice (not to be part of any legal proceedings) document in which the two sides agree"high-level" principles that could be incorporated into a "binding interim agreement" that the Department of Health and CSC expect to sign by the end of this month.

If the binding agreement is signed it appears that CSC will be the net beneficiary. The Department of Health will commit a certain number of trusts to deploying Lorenzo from CSC. The DH, says CSC, will also commit central funds for additional products and local configuration work. 

Says CSC: " ... additional amounts will be available from centrally available funds for additional products, supplemental trust activity and local configuration."

CSC may also receive a "structured set of payments following certain product deliveries, as well as additional payments ... which would cover, among other items, various deployments for the named trusts and payments for work already performed." If the binding agreement is signed there would be a mutual release of accrued claims relating to Lorenzo deployments, which would appear to draw a line under past legal disputes.

CSC's statement says there "can be no assurance that CSC and the NHS will enter into the interim agreement" or that a deal finally negotiated will be favourable to CSC.

So why is the DH so willing to do a deal with CSC after the failure of Lorenzo and the NPfIT? 

Is new CSC accord good for the NHS and taxpayers?

Is the NHS about to bail out CSC?