British PM tells CSC that NHS contract may be downsized

Prime minister openly states that £500 million or more may be slashed from deal

David Cameron has openly warned CSC in parliament that the government could consider cancelling all or part of the supplier's £3 billion contract with the NHS, after it assesses forthcoming reviews.

Speaking during Prime Minister's Questions in the House of Commons today, Cameron said he was "very concerned" that the troubled £12.7 billion National Programme for IT represented poor value for money and said he would examine "all available options".

Answering questions from Conservative MP Richard Bacon, a member of the Public Accounts Committee and an expert on NHS IT, the prime minister said the government was "absolutely determined to achieve better value for money".

He added that the government expected to cut £1.3 billion from the total cost of the programme, including a planned £500 million saving from CSC's contract.

Following concerns that the Department of Health could sign a new Memorandum of Understanding with CSC ahead of next week's publication of a National Audit Office report, Cameron insisted that a series of thorough reviews would take place before anything is agreed.

Cameron said that there were "no plans to sign any new contract with Computer Sciences Corporation until the National Audit Office report has been reviewed, and until the Public Accounts Committee meetings and until the Major Projects Authority reviews have taken place".

The Cabinet Office would also be directly involved in any decision on contracts with CSC, he added.

"The Department of Health and the Cabinet Office will examine all available options under the current contract including the option of terminating some or indeed all of the contract," the prime minister said.

Last week, CSC told investors that an agreement was due to be signed in the "next few weeks". CSC would deliver work on a "reduced scope and volume" under the forthcoming agreement, it said.

Given the timescale of conducting an NAO report, PAC hearings and Major Project Authority reviews, any such agreement, if one is signed, could be affected significantly. CSC had not commented at the time of writing.

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