CSC standstill agreement stands still

CSC has again failed to reach an agreement with the Department of Health for a new local service provider deal for the North, Midlands and East of England.

In a brief filing to the US Securities and Exchange Commission over Britain’s long bank holiday weekend, the company said its ‘standstill’ agreement with the NHS had been extended again, this time from 1 June to 31 August.

CSC was contracted to deliver the Lorenzo electronic patient record system to the NME as part of the National Programme for IT in the NHS.

Progress has been slow, and the company has been locked in contract talks since the fourth ‘early adopter’ of the system, Pennine Care NHS Foundation Trust, pulled out last year.

In March, CSC announced that it had signed a non-binding letter of intent to establish high-level principles about contract scope.

This would deliver what the government calls ‘savings’ of around £1 billion on CSC's £3 billion contract. But no contract has been signed.

CSC managed to get Lorenzo live at the new mental health early adopter, Humber NHS Foundation Trust, at the end of May.

However, the filing to the SEC says that “there can be no assurance that CSC and the NHS will enter into the interim agreement or any amendment to the existing agreement or, if the parties do not enter into the interim agreement or an amendment by 31 August, that the standstill agreement will be extended.”

CSC has already announced plans to take a significant write-down on its NHS contract, which it blamed for “poorly” fourth quarter results last month.

It has also run into union opposition to its plans to make a significant number of its UK staff redundant. And it recently had to admit that an "internal accounting error" had led it to exaggerate its NPfIT income.