CSC Expecting £2bn For Botched NHS Project

American IT services firm CSC believes it is entitled to receive another £2 billion from the British taxpayer thanks to an extended contract from the Government.

This is despite the fact that it was heavily criticised by a committee of MPs for its part in the failure of the NHS National Programme for IT (NPfIT).

According to sources quoted in the Times newspaper and elsewhere, CSC allegedly delivered a ‘veiled threat’ to the government over the costs of any potential cancellation of the NPfIT, despite the fact that CSC was widely blamed for the project’s failure.

CSC Confident

Indeed, according to a regulatory filing with the US Securities and Exchange Commission, CSC insisted there was “no existing right” for the NHS to terminate the contract. It also mentioned it would resort to court action to recover hundreds of millions of pounds.

“Based upon events to date, the Company does not anticipate that the NHS will terminate the contract,” says the filing.

This confidence comes despite the fact that the Coalition government finally confirmed in September it was axing the project. It said at the time that the £12.7 billion NHS Programme for IT would be “urgently dismantled”, and it gave local health trusts the power to choose their own systems.

The NpfIT was hugely controversial right from the start. The project was meant to provide better communications across the NHS infrastructure, based around a central database for patients’ medical records, scans and X-rays.

It was also perhaps one of the most expensive of the many failed IT projects created by the Labour government.

The project was initially set up in 2002, but it came under continuous criticism for rising costs and dubious management. The Coalition government inherited the deeply unpopular project when they came to power and pledged in September 2010 to pull the plug on NpfIT, claiming that a centralised, national approach was no longer required.

Suppliers Blamed

The NPfIT was thought to be the world’s biggest civil IT programme, but its death was assured in August when the House of Common’s Public Accounts Committee (PAC) demanded its axing. The PAC also laid the blame squarely on major suppliers BT and CSC.

CSC in particular came in for stinging criticism. “CSC has yet to deliver the bulk of the systems it is contracted to supply and has instead implemented a large number of interim systems as a stopgap,” said the PAC at that time. “The Department [of Health] has been in negotiations with CSC for over a year, and told us that it may be more expensive to terminate the contract than to complete it.”

But CSC believes that it is about to receive a £2 billion extension until 2017 for the NHS project. According to The Times, “taxpayers will foot the bill for a further £2bn on a failed NHS IT project even though the Government has already pulled the plug on it”.

The newspaper report also said that “American technology company Computer Sciences Corporation (CSC) has boasted to Wall Street that it expects an extension of its contract to provide electronic patient records despite failing to deliver a fully functional version of its software”.

To add further insult to injury The Times claimed that CSC’s former chief-executive and chairman, Michael Laphen, who presided over the debacle, has quit with a golden handshake agreement worth millions of pounds.

The Daily Telegraph quoted the Department of Health as admitting that “negotiations” were ongoing with the company over its NHS contracts, but would not comment further.