The National Programme for NHS IT has signed a contract with Oracle expected to save the health service £100m in licence fees. It has also concluded the last of five Local Service Provider (LSP) agreements.

The nationwide Oracle deal will avoid licence costs rising as up to 300,000 more staff start using IT systems, Richard Granger, director general of NHS IT, told Computing.

'One of things we are very concerned about is that we don't get into a situation where there is a penalty for every new user, as usage of digital infrastructure increases in the NHS,' he said.

'By negotiating a site-wide licence the vendor is assured of our commitment, application developers have access to world-leading products, and the NHS doesn't pay a penalty every time it wants to add another user,' said Granger.

The agreement is a multi-year deal for full access to all Oracle's latest products, and will include the database at the core of the national care records service.

'This is first enterprise-wide agreement but there are many more in the pipeline,' said Granger.

'There will be other comparable deals with other organisations that have been selected by LSPs.'

Granger and Secretary of State for Health John Reid met Microsoft chairman Bill Gates in London this week to discuss a similar deal.

'We discussed how we could align the increased use of software in NHS with an appropriate licensing model such as the one we have achieved with Oracle,' said Granger.

The fifth and final LSP implementation deal was signed with the Fujitsu Alliance for £896m.

Fujitsu Alliance is partnered with healthcare systems provider IDX, which is also working with London LSP BT. The Fujitsu win ends speculation over a dominance by iSoft, the clinical systems sub-contractor chosen in the three other regions.