NHS IT delays cost Accenture £260m

Andy McCue CNET News.com

Published: 03 Apr 2006 09:30 BST

The body in charge of the £6.2bn NHS IT project has called for "key personnel changes" at Accenture after the outsourcing company announced a $450m (£260m) loss on its health service contracts due to delays in hitting delivery deadlines.

Accenture said in its second-quarter financial results this week it expects to take a $450m hit on its NHS IT contracts over the next three to four years. Accenture is the prime contractor for the North East and Eastern regions in two contracts originally estimated to be worth around £2bn over 10 years.

The company largely pointed the finger of blame at subcontractor iSoft for failing to deliver the clinical IT software on time — but also cited higher than expected development and integration costs and lower demand for iSoft's GP software after the government said local practices could choose alternative products if they wanted to.

iSoft, whose shares plummeted on the announcement, declined to comment but the government's NHS IT body Connecting for Health (CfH) warned that the blame for any delays lies squarely with Accenture.

A CfH statement said: "Under the contracts, the prime contractor has a clearly defined responsibility to manage its delivery obligations... suppliers do not get paid until they deliver. We believe that the issues are within Accenture's control and have requested key personnel changes within the Accenture organisation."

CfH also said that CSC, the prime contractor for NHS IT systems in the North West and the West Midlands, has already developed a plan for the delivery of iSoft software.

"We are awaiting a similar resourced plan from Accenture," CfH added.

Accenture's chief executive, William Green, said in a statement: "We have established guiding principles for success for our ongoing work with the NHS and have devoted additional management resources at the highest level to resolve the NHS matter as quickly as possible."

Accenture had also warned of losses on the NHS IT contracts last year after delays in hitting delivery deadlines set by CfH.