Accenture drops out of NHS IT project
US consultancy firm Computer Sciences Corporation has taken over as the largest regional contractor on the NHS's troubled £6.2bn IT overhaul after rival group Accenture yesterday exited two 10-year contracts with the health service worth £2bn. CSC, already the lead contractor on a £973m contract in the north-west of England, is now charged with digitising the largely paper-based systems in GP surgeries, hospitals and other NHS trusts in the east and north-east of England.
Accenture yesterday remained circumspect about its reasons for leaving the NHS's National Programme for IT (NPfIT) after almost three years' work.
Under the terms of its exit agreement, Accenture must repay £63m of the £173m it has been paid for work delivered on its two contracts. The settlement is a fraction of damages the NHS promised to extract in the event of a major contractor leaving the project. Accenture faced a maximum liability on the two contracts of close to £1bn.
At the beginning of April, Accenture made a £240m provision against future losses on its work on the NPfIT. This came on top of a £75m loss on the two contracts last year.
Accenture was the only lead contractor to have made write-downs or provisions on NPfIT work despite the NHS's own figures showing the US firm has made more progress on the programme than its peers. The figures show Accenture has been responsible for 80% of regional contractor system deployments so far and made progress in many more of the work areas defined under the NPfIT than the other lead contractors, CSC, BT and Fujitsu.
Richard Granger, director general for NHS IT, yesterday insisted the replacement of Accenture would not cause a loss of momentum, nor would it cost the taxpayer a penny. "The settlement is good value for money for the taxpayer when compared with what has been delivered," he said.
CSC now has contracts across three regions with iSoft to install the financially stretched software firm's Lorenzo package. CSC and iSoft are responsible for deploying IT systems for 620,000 NHS staff looking after a population almost 30m. In February, CSC and Accenture produced a damning joint report on Lorenzo. It found iSoft had "no believable plan for releases".
There followed a series of legal letters making clear both US consultancy firms felt they had grounds for claims against iSoft. Accenture publicly made clear it blamed the London-listed software firm for missed NPfIT deadlines - delays which cost the US firm dear. Last month, iSoft announced it had resolved all legal disputes with CSC. CSC now has rights to take managerial control should Lorenzo delivery fall behind an agreed schedule.
Accenture yesterday agreed to drop its potential legal claims against iSoft as part of its exit deal with the NHS. The move will be welcomed by iSoft which remains at full stretch financially after posting a £344m pre-tax loss last month. It emerged this month that iSoft had received payments directly from the Department of Health of £82m for up-front work on IT system maintenance which it had not yet carried out. A cash injection of £58m was critical in helping iSoft meet City expectations last year.
Health Direct reminds Richard Granger of the old adage- stop digging if your neck is approaching the waterline.
The NPfIT project was fatally over- ambitious in it’s concept and is evolving into an expensive white elephant as it developments. On 20 Mar 06 Health Direct warned that the NPfIT NHS plan is evolving but one-size-fits-all is a fundamental flaw, says hospital chief when Sir Jonathan Michael, a top NHS executive, spoke at a healthcare symposium at London's City University and pointed to a fundamental flaw in the NHS's IT-driven modernisation. The flaw Michael sees in the National Programme for IT (NPfIT) is its centralised, standardised approach at a time when the health service is decentralising.
Accenture yesterday remained circumspect about its reasons for leaving the NHS's National Programme for IT (NPfIT) after almost three years' work.
Under the terms of its exit agreement, Accenture must repay £63m of the £173m it has been paid for work delivered on its two contracts. The settlement is a fraction of damages the NHS promised to extract in the event of a major contractor leaving the project. Accenture faced a maximum liability on the two contracts of close to £1bn.
At the beginning of April, Accenture made a £240m provision against future losses on its work on the NPfIT. This came on top of a £75m loss on the two contracts last year.
Accenture was the only lead contractor to have made write-downs or provisions on NPfIT work despite the NHS's own figures showing the US firm has made more progress on the programme than its peers. The figures show Accenture has been responsible for 80% of regional contractor system deployments so far and made progress in many more of the work areas defined under the NPfIT than the other lead contractors, CSC, BT and Fujitsu.
Richard Granger, director general for NHS IT, yesterday insisted the replacement of Accenture would not cause a loss of momentum, nor would it cost the taxpayer a penny. "The settlement is good value for money for the taxpayer when compared with what has been delivered," he said.
CSC now has contracts across three regions with iSoft to install the financially stretched software firm's Lorenzo package. CSC and iSoft are responsible for deploying IT systems for 620,000 NHS staff looking after a population almost 30m. In February, CSC and Accenture produced a damning joint report on Lorenzo. It found iSoft had "no believable plan for releases".
There followed a series of legal letters making clear both US consultancy firms felt they had grounds for claims against iSoft. Accenture publicly made clear it blamed the London-listed software firm for missed NPfIT deadlines - delays which cost the US firm dear. Last month, iSoft announced it had resolved all legal disputes with CSC. CSC now has rights to take managerial control should Lorenzo delivery fall behind an agreed schedule.
Accenture yesterday agreed to drop its potential legal claims against iSoft as part of its exit deal with the NHS. The move will be welcomed by iSoft which remains at full stretch financially after posting a £344m pre-tax loss last month. It emerged this month that iSoft had received payments directly from the Department of Health of £82m for up-front work on IT system maintenance which it had not yet carried out. A cash injection of £58m was critical in helping iSoft meet City expectations last year.
Health Direct reminds Richard Granger of the old adage- stop digging if your neck is approaching the waterline.
The NPfIT project was fatally over- ambitious in it’s concept and is evolving into an expensive white elephant as it developments. On 20 Mar 06 Health Direct warned that the NPfIT NHS plan is evolving but one-size-fits-all is a fundamental flaw, says hospital chief when Sir Jonathan Michael, a top NHS executive, spoke at a healthcare symposium at London's City University and pointed to a fundamental flaw in the NHS's IT-driven modernisation. The flaw Michael sees in the National Programme for IT (NPfIT) is its centralised, standardised approach at a time when the health service is decentralising.
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