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Accenture escapes £1bn penalty for NHS walk-out

It's 'been delivering'

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Accenture, the IT and consultancy firm has avoided huge penalty fees for withdrawing from the UK National Programme for IT (NPfIT).

Connecting for Health (CfH) said Accenture, which announced yesterday it is withdrawing from its £2bn contracts for the NPfIT will not have to pay up to 50 per cent of its total contract in compensation as stipulated in the contract. The IT and consultancy firm has been asked to pay just £63m compensation.

In March, director general for NHS IT Richard Granger, told a conference in Paris that any supplier struggling to deliver and who wanted to walk away would have to pay dearly for the "disruption" caused.

"If they would like to walk away, it's starting at 50 per cent of the total contract value," he said.

But yesterday he appeared to back track saying the cancellation fee would not be imposed on Accenture: "The £1bn figure (or 50 per cent of the contract value) is the maximum cancellation fee but Accenture has been delivering."

John Pugh, member of the Public Accounts Committee, told Kablenet today: "It is very worrying that Richard Granger has not issued any contract penalties even though he said he would.

"The Public Accounts Committee will want to look into why the terms of the contract were not enforced. It does suggest to me that the (departure of the IT firm) was not entirely Accenture's fault and that the government is also to blame."

Shadow health minister Stephen O'Brien has also called on the National Audit Office (NAO) to launch a full scale probe into the project.

"Yet again this (Accenture withdrawing) poses embarrassing questions for Patricia Hewitt about the future of the NPfIT. If Accenture are willing to cut their losses, that seriously undermines confidence in the whole programme."

The opposition parties are also questioning why the change of supplier was not put out to tender, which could be a breach of European laws.

Computer Science Corporation (CSC), which is already running the north west and west midlands clusters, will take over Accenture's east and north east regions making it the primary contractor from January.

Meanwhile, Accenture reported flat fourth-quarter figures, as its agreement to exit the NHS programme wiped out gains.

It unveiled revenues of $3.97bn (£2.12bn) in the three months to August 31, up from $3.92bn last time. Revenues would have been $4.31bn without the agreement, it said.

Any potential legal action from its sub contractor Isoft has also been squashed following the decision to hand over to CSC. Accenture had blamed Isoft for the delays.

This article was originally published at Kablenet.

Kablenet's GC weekly is a free email newsletter covering the latest news and analysis of public sector technology. To register click here.

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