NHS IT project failure could cost taxpayers £700m

NHS IT project's contract with Fujitsu ended in a legal dispute and a hefty bill for the government

Doctor NHS

Labour's failed Connecting for Health NHS IT scheme could end up costing taxpayers 700 million, following reports that a legal dispute between Fujitsu and the NHS has been settled in the IT supplier's favour.

According to a report in The Telegraph, Fujitsu was pursuing compensation after its 896m contract with the NHS was cancelled.

The IT supplier reportedly won 700m, although it seems Fujitsu is feeling a little hard done by, and pressing for higher levels of compensation. 

The case was heard in secret to protect the parties' reputations and save on legal bills and, as yet, neither the Cabinet Office nor Fujitsu has commented on the results.

Connecting for Health was part of the 12bn NHS National Programme for IT and sought to digitise patient records in the South of England.

The Labour government revealed the plans in 2001 it, but the project was closed down in 2008, after disputes about changes to the plans including the storing of X-rays.

In 2010, the Cabinet Office took over the case and tried to come to an agreement with Fujitsu out of court, but it led to arbitration and a 31.5m legal bill instead.

This is the most recent tale of the government's failed IT strategy.

Last month, it was revealed that the Home Office was caught up in another arbitration, worth 500m of compensation, with border IT supplier Raytheon.

A Cabinet Office spokesman told the BBC: "Fujitsu are an important supplier of IT services to the government. The government does not comment on contractual disputes with suppliers."

Fujitsu also said it wouldn't comment on the case but explained: "Fujitsu has been a strategic partner to the UK government implementing critical IT for the last 40 years and we are committed to working closely with the UK public sector for the next 40 years and beyond."

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