CSC signs new deal with DH

CSC and the Department of Health have agreed a new deal that the DH says will save the NHS more than £1 billion.

It will also remove CSC’s exclusive rights to be the only provider of clinical IT systems in the North, Midlands and East of England. 

Today’s announcement ends a long saga of negotiations about the future of CSC’s local service provider contract, signed as part of the National Programme for IT in the NHS.

The term of the latest agreement extends through July 2016 and in some cases contracts will extend to 2021. Crucially, the new arrangement appears to quash the threat of legal action from either side.

"The agreement includes full mutual releases of all claims between the parties through the date of the agreement," a CSC statement says.

CSC and the DH have been locked in negotiations about a new deal since last spring, when Pennine Care NHS Foundation Trust pulled out of becoming the fourth early adopter of Lorenzo. The latest ‘standstill’ agreement between the two ran out on Friday.

According to a filing to the US Securities and Exchange Commission, CSC will receive a payment of £68m, which represents "payment for value delivered to date."

Under the new arrangement the NHS will not be subject to “trust volume commitments” and CSC will deliver the system “based on demand from individual NHS trusts,” a DH statement says.

Trusts wishing to take Lorenzo will be able to access centralised support and funding if they can develop a robust business case and demonstrate value for money.

The CSC statement says: “A flexible arrangement has been established for these trusts to combine additional clinical modules with the core care management functionality of the Lorenzo solution to meet their specific requirements.”

Trusts will receive ongoing managed services from CSC for a period of five years from the date of Lorenzo deployment, provided deployment is complete or substantially complete by July 2016, it adds.

Health minister Simon Burns said the new agreement will save taxpayers more than £1 billion which will be reinvested in patient care and front line services.

“We’ve removed the restrictive, top-down, centralised approach and given the local NHS the power to make their own decisions about which IT systems they use,” he said.

“The modern NHS still needs healthcare IT systems to exchange information securely and meet the needs of their patients.

"By re-shaping this contract, delays will be avoided in delivering much needed IT systems to the NHS, and will ensure the investment made to date is not wasted.”

Francis Maude, minister for the Cabinet Office, said that that the government “will not tolerate poor performance – and today’s announcement will leave suppliers in no doubt that we will act to strip out waste from contracts where they offer poor value for the taxpayer.”

CSC has been developing Lorenzo under the £12.4 billion NPfIT, in which it has invested £1 billion.

However, its failure to implement at Pennine Care meant that it did not meet contractual commitments set out by both the DH and NHS Connecting for Health while Christine Connelly was head of NHS IT.

In March this year, CSC announced a revised deal with the DH that secured savings of £1 billion from its disputed £3.1 billion deal, but the memorandum of understanding was not signed.

An agreement has been looking increasingly likely in recent weeks. Last month, the DH apparently signed off the deployment verification criteria for three of the early adopters of Lorenzo.

And eHealth Insider has been able to identify a number of trusts still interested in taking the system.

CSC president and chief executive Michael Lawrie said today’s announcement “represents a renewed commitment by the NHS and CSC to a long-term partnership as well as CSC’s healthcare solutions."

“Under this agreement, CSC will continue to have the opportunity to support the NHS information and communications technology infrastructure through deployment of our groundbreaking Lorenzo base product solutions, now rigorously tested and approved for wide-scale deployment across the NHS,” he added.

“We are already seeing strong demand from NHS trusts that are confident our solutions will bring the safety and efficiency gains required by a modern NHS."

There have been four, key early adopters of Lorenzo: NHS Bury, University Hospitals of Morecambe Bay NHS Foundation Trust, Birmingham Women’s NHS Foundation Trust and Humber NHS Foundation Trust.

Pennine Care NHS Foundation Trust has since absorbed NHS Bury and has indicated that it will switch off Lorenzo at the community services arm following its decision to procure Paris from Civica.