BT deal 'has killed risk of NHS IT walkout'

One of the only two suppliers left for the £12.7bn project to revamp NHS IT has staked its commitment to the project by signing a new deal with the health service.

The National Programme for IT (NPfIT) scheme currently has just two local suppliers, BT Global Services (BTGS) and CSC, and has been recently dogged by suggestions the former was looking to pull out of its involvement with the multibillion-pound project.

Such rumours have effectively been put to bed with the news last week of a new deal that will see BT Global Services support patient administration systems at eight health trusts within the south of England, previously looked after by Fujitsu until negotiations around the £896m contract fell apart last May.

Dr Grant Ingrams, chairman of the British Medical Association joint GP IT Committee, said that BT's commitment offered some encouragement as the NPfIT had already lost enough suppliers with the departure of Fujitsu and Accenture.

"I hope that this means that hospitals in the south will now start to get proper clinical systems," he said.

Richard Holway, director of analyst house TechMarketView, said this month's eight-trust deal has also averted a very real risk of BTGS walking away from the NPfIT contracts it holds.

BTGS has been renegotiating one such deal - its existing £1bn contract to link up and standardise all of the NPfIT computer systems in the London area, which analysts say have become loss making, partly because of the NHS demanding late changes to systems.

"[The London contract] was so open-ended that there was talk of BT having £1.7bn-worth of contingencies," Holway said.

"If BT had walked away it would have left CSC as the only supplier for the entire NPfIT. That would have been an absolute disaster for the NHS and the taxpayer.

"All the indications are that they have done a very good deal and they have got quite a lot more money and much better terms for any changes to the London contract as a result of taking on Fujitsu's sites.

"They still might have to write something off but it won't be anywhere near £1.7bn."

A spokesman for BTGS said it had not discussed the value of contingencies for its NPfIT contracts.

"At this point it is just speculation on behalf of analysts," he said.

Last month BTGS announced it was having to writedown £340m from 15 of its largest contracts. A writedown of some hundreds of millions is expected on two other deals, thought to include the £1bn contract to standardise London systems.

As well as the London contract, BTGS also has two other deals with a combined value of £1.4bn under the NPfIT. These see it providing and integrating IT systems for the NHS N3 national broadband network and the Spine central database.