Fujitsu quit NHS project as terms were unaffordable, MPs told

Fujitsu Services withdrew from talks to re-negotiate...

Fujitsu Services withdrew from talks to re-negotiate parts of its £1bn contract with the Department of Health because the terms set down by the health service were unaffordable, a director has disclosed to MPs yesterday.

Fujitsu's withdrawal from the talks last month prompted the Department of Health to terminate the company's contract under the NHS's National Programme for IT (NPfIT).

Fujitsu was awarded a 10-year contract in January 2004 as the local service provider to hospital trusts throughout the south of England. Its losses on the contract - which was in part for the supply and installation of the Cerner "Millennium" system - are understood to be about £340m.

At a hearing of the Public Accounts Committee into the NPfIT yesterday, Peter Hutchinson, Fujitsu's group director for UK public services, revealed that his company had been willing to continue with its original NPfIT contract - even when talks over the contract "re-set" had failed.

"We withdrew from the re-set negotiations. We were still perfectly willing and able to deliver to the original contract," he said.

Asked by public accounts MP Richard Bacon why Fujitsu had withdrawn Hutchinson said, "We had tried for a very long period of time to re-set the contract to match what everybody agreed was what the NHS really needed in terms of the contractual format.

"In the end the terms the NHS were willing to agree to we could not have afforded. Whilst we have been very committed to this programme and have put a lot of our time, energy and money behind it we have other stakeholders we have to worry about including our shareholders, our pension funds, our pensioners and the staff who work in the company. There was a limit beyond which we could not go."

The termination of Fujitsu's contract has left the NHS with a "gaping hole," said the chairman of the Public Accounts Committee Edward Leigh.

See IT Projects Blog >>

Read more on IT project management

Data Center
Data Management