Press reports question future roles of iSoft and Accenture

Weekend press reports raised further questions over the future shape of the NHS National Programme for IT and the long term involvement of key software contractor iSoft, together with raising questions over the future involvement of consulting giant Accenture.

The Department of Health has said that the NHS IT programme is not in jeopardy or at risk of stalling – despite the core electronic patient record systems running two years late, and the huge financial losses of sub-contractors iSoft, which on Friday posted qualified accounts showing losses of £382m.

In a Friday statement, the DH said: "The NHS IT programme is not at risk of stalling, in jeopardy or close to collapsing because of iSoft’s recent troubles. It [iSoft] confirmed that it will make its new software through 2008 – so in no way is the programme at risk."

Last week iSoft also admitted that it was being investigated by the Financial Services Authority for accounting irregularities after problems had been found during an initial Deloitte investigation which led to commercial director Steve Graham being suspended earlier this month.

The company also revealed last week that it was in dispute with Accenture, which sub-contracted work to iSoft for the North-east and Eastern clusters of the NHS IT project – two of iSoft’s three key NHS contracts.

Quoted in the Telegraph yesterday iSoft Chairman John Weston said: “Accenture claims we have various breaches. We’ve not got a formal claim; there are exchanges of letters".

iSoft’s results revealed that CSC has also accused iSoft of being breach of contract in relation to delays, although no claims have yet been made and iSoft denies any liability.

Weekend press reports, including BBC Newsnight, meanwhile, reported the rumor that Accenture might be about to depart the programme either partly or wholly. A research note from Bridgewell, which is iSoft’s broker, said: "There is still talk that Accenture is trying to get out of at least the secondary care part of its contract."

A spokesperson for Accenture told E-Health Insider: "We don’t comment on press speciulation".

EHI sources indicate that Computer Sciences Corporation has been extremely bullish in recent weeks about the prospect of picking up additional work in the two Accenture clusters – through implementing legacy iSoft systems in acute trusts.

Intriguingly though, CSC’s current contract with NHS CfH for the North-west and West Midlands is thought to have omitted primary care.

As part of its new agreement with iSoft, also announced on Friday, CSC will take over management of seven existing iSoft sites – implemented pre-NPfIT. Under the agreement CSC can now take direct management of iSoft’s software development is the company continues to fail to deliver.

The Sunday Times, meanwhile reported at the weekend that both CSC and BT are examining a potential purchase of iSoft, with CSC said to be “running the rule” over the Manchester-based company, although it is not yet clear if either will end up bidding.

Further industry reports indicate that the new financing arrangements for iSoft are short-term. One analyst spoken to by EHI said that the new financial arrangements were strictly short-term, sustainable for no more than 15-months. The analyst predicted that iSoft would still require an £80m-£100m rights issue.

Commenting on iSoft’s Friday announcements Paul Farrelly, Labour MP for Newcastle-under-Lyme, said: “From iSoft’s results announcement… it was quite clear that question marks remain over the future viability of the company."