"We're just supporting the NHS": CSC responds to Computing (UPDATED)

By Chris Middleton
19 Apr 2012 View Comments
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IT services giant CSC has responded to Computing's coverage of ongoing controversy about the company and its complex relationship with the UK government.

Earlier this month, Computing reported on stalled negotiations between CSC and the NHS over implementation of its Lorenzo system, and this week on the company being named as preferred bidder on a £400m personnel services deal with the Ministry of Defence (MoD).

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The MoD announcement was greeted with disbelief by some, leading to gossip within the industry about the reason for the deal being moved away from current incumbent HP – and whether there was any connection with the NHS discussions.

In a boldly worded statement, CSC paints an upbeat picture of its dealings with Whitehall and says it is simply supporting the government's reform agenda.

The company said: "CSC's selection as preferred bidder for SPVA [Service Personnel and Veterans Agency] is a decision made by the MoD and government officials.

"Our NHS discussions, as have been widely reported, are now progressing towards a new, and different contractual arrangement, and a Letter of Intent to this effect was signed between CSC and the Department of Health in March 2012.

"Much has moved on since the well-reported reviews of the entire NHS NPfIT programme last year. For CSC, Lorenzo, our new solution for the NHS, has developed and matured, and the Letter of Intent, which defines a way forward for CSC to deliver healthcare solutions and services, in support of the NHS' reform agenda, reflects a new, more localised approach in response to a shift to more devolved decision-making and budgetary control within the NHS.

"Beyond Lorenzo, it should be noted that CSC provides a wide range of other solutions and services to the NHS, including hospital systems, GP, ambulance, and community systems, digital imaging, and these services will continue to be delivered and managed as they have been successfully and securely for many years. In fact today CSC solutions are deployed in around 85 per cent of all hospital trusts in England."

On 4 April, CSC hosted a teleconference to explain why negotiations between it and the NHS remained at a standstill.

In it, Guy Hains, president of healthcare, suggested that political change and the increased involvement of private suppliers in the NHS lay behind the stalled discussions, and not the apparent breakdown of trust between CSC and the government.

"Much of it [is down to] the extent to which the NHS itself is changing," said Hains. "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.

"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.”

Hains said this to rebuff suggestions that the real reason for the impasse was CSC's lack of progress with Lorenzo, and its 2011 proposal to reduce the cost of deployment by one third while only supplying Lorenzo to 80 out of 220 trusts – a deal that would effectively double the cost of the remaining deployments.

Leak of that proposal led Margaret Hodge, chair of Parliament's Public Accounts Committee, to declare in 2011 that "there is no way that these guys ought to be working for the government".

Christine Connelly, NHS director of informatics, told the PAC in 2011 that accepting such a deal would leave the NHS "over a barrel", while challenging it would risk leaving the Health Service open to litigation that might cost "several hundred million" pounds.

PAC member Richard Bacon MP agreed, saying that CSC was putting itself in a position where it would be "dangerous" to get rid of it. He added that the company had caused "chaos" in the NHS.

The announcement this week that CSC had been named as preferred bidder on the 10-year deal with the MoD, in preference to current incumbent HP, took most industry observers by surprise.

The PAC's Bacon described the MoD's decision yesterday as "regrettable". 

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