Health contract costs BT millions

The Financial Times comments, "BT Group warned last week that it could take another charge on profits of "˜hundreds of millions of pounds' against two big contracts, it was understood that one of them was the National Health Service's deeply troubled IT programme to create an electronic record of 50 million patients."

BT has three deals worth more than £2 billion for the programme that is running at least four years late, according to the National Audit Office (NAO). Two of them have progressed well - installing broadband to link up the National Health Service (NHS) was completed in March last year and a backbone network.

However, it has come unstuck with the patient administration and records software installation, along with CSC, Accenture and Fujitsu, the last have had their contracts terminated.

BT has a contract worth over £1.08 billion to install these systems in London. In five years in, only four new systems have been put into the capital's 31 big acute hospitals, and all have been plagued by serious problems, the FT says. Smaller installations elsewhere have gone ahead.

Now the decision has been taken for no further deployments in London until all the problems have been fixed. From BT's point of view, the delay is hugely costly as contracts state that suppliers do not get paid until systems have been working to the user's satisfaction for 45 days.

More than four years into BT's £1 billion ten year London deal, BT had earned just £191 million by last March. Overall, by last March the NHS had paid less than half of what it had expected to by the point because so many projects were late and unsatisfactory.

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