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CSC faces £1bn write-off over botched NHS IT project

UK Govt not keen to pay for late patient record system

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CSC, one of the two remaining prime contractors to the NHS National Programme for IT (NPfIT), has told its shareholders that it might lose an amount in excess of its £943m investment in the project.

The US firm and the government had been discussing amendments to its NPfIT work under a memorandum of understanding (MOU), which would have reduced its scope and value, but left CSC in place as a substantial provider of electronic patient record (EPR) systems to trusts in the north, Midlands and east of England.

In early December, the company said it expected to receive a further £1.5bn to £2bn from the government for this work.

However, CSC said in a financial disclosure that it was recently informed "that neither the MOU nor the contract amendment then under discussion would be approved by the government".

In the filing, used by US-listed companies for unscheduled disclosures, CSC said that this lack of approval could result in it losing an amount equal to, or in excess of, the firm's £943m investment in NPfIT, and that as a result it is withdrawing its financial guidance for the current year.

"There can be no assurance that CSC and NHS will enter in to a contract amendment or, if a contract amendment is negotiated and entered into, that the contract amendment as finally negotiated will be on terms favourable to CSC," the firm said. It added that negotiations with the government will continue in the new year.

Shares in the company dropped 9% following the announcement.

CSC's work implementing iSoft's Lorenzo EPR software is years behind its original schedule, with only a handful of systems in place across the north, Midlands and east of England.

The government said in September that it was accelerating the dismantling of NPfIT, with the expectation that in future trusts will buy EPR systems independently.

This article was originally published at Guardian Government Computing.

Guardian Government Computing is a business division of Guardian Professional, and covers the latest news and analysis of public sector technology. For updates on public sector IT, join the Government Computing Network here.

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