Lead contractor for NHS IT programme set to walk away

Accenture is reportedly set to walk away from its ten-year £2bn contract to supply systems to the NHS, after struggling to make profits from it.

Accenture is reportedly set to walk away from its ten-year £2bn contract to supply systems to the NHS, after struggling to make profits from it.

Media reports suggest Accenture, the lead contractor for the work, could announce a termination of its agreement later today.

The company is scheduled to post its latest financial results this afternoon in the US, and reports suggest the figures could be accompanied by an NHS pull-out statement.

Earlier this year the company took a £265m charge for losses associated with its NHS National Programme for IT contracts, where it is helping to build a new computer system.

The effect of the charge meant Accenture saw its quarterly net profits dive 67%.

BT is one of a number of subcontractors working on the Accenture projects, and it may be in a position to take its place if the outsourcer pulls out.

The Accenture contract covers the design, building and management of systems that support patient care, such as electronic medical records, appointment booking and prescription systems.

But the system Accenture is now working on will now not be deployed as widely as previously forecast, as the UK government has decided to allow GPs and other local health-care providers to use alternative computer systems.

Accenture chief executive officer Bill Green told investors last year that problems associated with the NHS contract had been resolved. On reporting the company results earlier this year, Green said the company had underestimated the problems.

Green said, “Several issues increased the risks and uncertainties associated with the NHS contracts and affected our estimates of the expected contract revenues and costs. We were required to record this provision [the £265m charge] to reflect these new circumstances.

Accenture had said that it planned to try to renegotiate the contract terms of the loss-making contract, but there was no guarantee that this attempt would be successful.

The NHS has closely written contracts with a number of suppliers which has led to “fines” for suppliers that have not met technology roll-out goals.

BT has been forced to pay fines in the past for the late delivery of technology under its NHS contracts.

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