Concern at hidden cost of DH's new deal for Lorenzo

13-Mar-2012

Taxpayers could end up paying for non-existent systems after DH \'forced\' to sign new contract

Despite falling years behind schedule with the rollout of patient records software at NHS trusts in England, supplier CSC is to see its contract with the Department of Health (DH) extended.

In a controversial move, ministers are poised to sign a new deal for the continued deployment of the troubled Lorenzo system.

It is believed the decision was made to avoid massive costs which the DH would have been liable for if it had cancelled the £1.3billion contract earlier than planned.

Instead, the scope and value of the deal is expected to be reduced, although details of which trusts will use the system are still to be announced.

Ministers have also made it clear that, while Lorenzo was initially seen as a central system to be rolled out on a regional basis, the decision on whether or not to use it will be left to individual trusts.

“The agreement we have negotiated gives choice to trusts about taking this software, rather than imposing the decision on NHS organisations

A DH spokesman said: “The agreement we have negotiated gives choice to trusts about taking this software, rather than imposing the decision on NHS organisations. This is in line with the Government\'s overall approach to the NHS,"

CSC said it has signed a non-binding letter of intent with the department, under which the two parties have agreed to a ‘set of high level principles’ that are expected to become part of a binding framework before the end of the month.

As part of the deal the company agreed to right off around $1.5billion from the NHS contract, but this week’s announcement essentially puts new business its way.

Tony Collin, co-founder of pressure group, Campaign4Change, said the DH had little choice but to sign an agreement to continue working with the company as contracts made under the now-defunct NHS National Programme for IT are notoriously difficult to change, and trusts still need support for the Lorenzo systems that have been rolled out to date.

But he warned that, because of the new deal, the NHS may end up paying for systems even if none are deployed, or that ‘DH officials [may] quietly twist the arm of some trusts to make them deploy Lorenzo to avoid taxpayers paying CSC for deployments that don’t happen’.

CSC may end up putting back onto its balance sheet money it has written off on its NHS National Programme for IT contracts, and the Department of Health may end up paying for deployments that don’t happen. Is this real progress?

He added: “CSC may end up putting back onto its balance sheet money it has written off on its NHS National Programme for IT contracts, and the Department of Health may end up paying for deployments that don’t happen. Is this real progress?”

This is a view supported by TechMarketView analyst, Tola Sargeant, who said it was ‘far from clear’ that the NHS, or taxpayers, would get value for money from the new agreement.

She added: "The version of the Lorenzo software that it’s deploying does not have as much functionality as planned, far fewer trusts are committed to receive it and rumour has it the contract has been extended by a further year to 2016.”

Commenting on the deal, a spokesman for CSC said: "CSC is confident that Lorenzo’s modern technology base and the fact that it has been specifically designed in collaboration with the NHS, should result in further demand in the future.

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So far, CSC has delivered the system to around 80 acute trusts in the North, Midlands and East of England and to 137 prison health centres.

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