BT receives £500m windfall from NHS

BT's payments for patient records systems increases by 50 per cent after taking on additional work in the south of England region

BT has taken on new deals with the NHS

The NHS is to pay BT an extra £546m for work on the £12bn National Programme for IT (NPfIT).

Health minister Ben Bradshaw said in a written answer to Parliament earlier this week that the additional cash was for work BT is undertaking in the south of England.

BT is responsible for four new patient record systems implementations in the south, for ongoing running of systems already installed at eight more trusts and for smaller RiO systems at 25 mental health and community trusts.

The supplier has taken over the responsibilities because Fujitsu – previously responsible for the Southern region - left the programme last year after disputes over costs with Connecting for Health, the agency running NPfIT.

The extra money increases BT's total contract value for implementing patient record systems by 50 per cent to £1.5bn, in addition to an £889m contract for the central NHS "spine".

BT already runs the London region, where implementation of the patient records programme is continuing after a delay following problems with a go-live at the Royal Free hospital. Four acute trusts are now live.

Problems with the NHS deal contributed to a recent £134m loss announced by BT.

A spokesman for BT said it was not policy to comment on commercial deals.

The extra cash going seems an unexpectedly large jump in contract value, according to Ovum senior analyst Tola Sargeant.

"An extra £546m seems a hefty price tag for these limited additions,” she said.

“The price is evidence of a number of things. First, that BT underpriced the contract originally. In its haste to secure a landmark IT services deal, BT underestimated the challenge the London contract represented.

“Second, that the vendor had the NHS over something of a barrel during contract renegotiations. As one of just two remaining local service providers, BT’s very public threat to walk away from the contract carried real weight. Of course, the new contract value might also be evidence of a more pragmatic approach from Connecting for Health; a realisation that suppliers work best when they are paid a fair price for the work required.”