CSC hands back £170m as NHS contact negotiations stall

IT services giant CSC has handed back £170m to the NHS after contract negotiations with health service chiefs stalled.

CSC was originally given an advance payment of £200m on 1 April 2011, in relation to changes that it anticipated to its local service provider contract, which formed part of the disastrous National Programme for IT (NPfIT). This advance payment was subject to repayment if - as happened - NHS chiefs and CSC failed to agree a new memorandum of understanding (MOU) to cover new working arrangements by 30 September 2011.

As a sign of the increasingly fractious relationship between government officials and CSC, the IT services firm blamed the delay in signing the MOU on "delays in government approvals".

The announcement comes just weeks after the government confirmed it was all but abandoning the NPfIT. It had long been accepted that the vision of a single, all-encompassing electronic patients record system could not be delivered, but the government has committed to continue to work with the local service providers to deliver some form of integrated patient care system.

In August, the Public Accounts Committee had urged ministers to consider "whether CSC has proven itself fit to tender for other government work".