IT services provider CSC claims politics is behind stalled NHS deal

By Chris Middleton
05 Apr 2012 View Comments
NHS England to forge ahead with 'unchanged' plans

Guy Hains, CSC president of healthcare, has suggested that the government's plan to devolve more NHS decision-making to primary care trusts is “the backdrop” to the stalled relationship between the company and the NHS, rather than the failure to agree new contract terms.

Progress on the Lorenzo project is currently at an agreed standstill until 1 June, and the mutually agreed deadline of 31 March for completion of contract negotiations on the scope and cost of the programme has passed without agreement.

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Hains said: “I can report that the dialogue with the NHS is fundamentally going well. Both parties continue to see considerable merit in the revised structure we agreed. I would say that the delay reflects the complexity of the change.

“Much of it [is down to] the extent to which the NHS itself is changing. The government is, with the NHS, moving to much more devolved power in the trusts and therefore there is a need to consult very widely on this agreement.

“We continue to deploy product into the NHS. That momentum hasn't stopped. And we're also continuing to add to the Lorenzo product. And we're working with trusts who are developing and co-developing those now mainly clinical elements of the programme.

“Deployment will require us to work on more concurrent trusts as we go forward. We'll need to be more active in the market as the decision-making is devolved. So it's a different profile for the labour, but it's not a result of having any slackness in the workforce or the demand.”

Hains suggested that the ongoing restructuring of the NHS means that, as power is devolved to trusts, those trusts will become more reliant on CSC to support them and provide bespoke versions of the technology – which could be seen either as a pragmatic reading of the facts, or as a veiled threat to the government that a deal needs to be struck to avoid a collapse of separate IT programmes across the NHS.

“The key customer contact will now move, as indeed the government has stated as policy, move much more towards the trusts. And I think you may recall from the very outset of the national programme there was a lot of criticism over the lack of clinical engagement.

“The major change is that we're not building a monolithic system to address the back office through a significant main contract through a large, structured, fixed-price development programme with a central agency. The key focus of our activity will be working closely with the trusts.”

Hains refused to discuss the overall financial implications for CSC of the failure to sign a revised deal with the NHS, but he reminded analysts that CSC was taking a write-off of $1.5bn and was taking action to reduce its costs by redeploying or removing 30 per cent of its workforce on the NHS programme.

But he added: “As we said in the past, we expect our UK healthcare revenues to be approximately two to three per cent of CSC's overall revenues. And within that, Lorenzo will not be taking a significant part of that revenue for next year. So in this context, our go-forward risk really should be seen as modest.

“There isn't a market, I think, globally that still doesn't have considerable interest in learning from the UK NHS, both good and bad,” he said.

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