The Department of Health has revealed plans to hand over the management of the NHS' current HR and payroll system to a new outsourcing provider in a deal that could be worth up to £450 million.

The ESR system is a single workforce management tool for the NHS, which the department claims provides a “true end to end” solution covering HR, payroll, learning and talent management, and workforce information provision.

ESR is provided under a current outsourcing contract that is due to expire in August 2015. However, the Department of Health has released a prior information notice this week detailing that it plans to re-procure the provision of the ESR services, so as to ensure continuity following the expiry of the current agreement. There are multiple providers on the current contract, including Equiniti, which provides HR and payroll services to some trusts, as well as the pensions system to the whole of the NHS.

The notices states: “It is anticipated that the Department of Health will require suppliers to transition the existing system (which will be a Department of Health asset from expiry of the current contract) from the incumbent supplier, operate the existing system and undertake future enhancements to increase functionality in the asset.”

As this is a prior notice, suppliers are currently just being invited to participate in a series of market engagement events to help shape the requirements that will be issued in an OJEU contract notice at a later date.

Suppliers are advised by the department that a transfer of employees from the current provider (TUPE) may apply to the contract once it is issued.

The Department of Health estimates that the deal could be worth between £250 million and £450 million once it is issued.

It was also revealed this week that the NHS is set to receive a £1 billion investment in technology from the government in order to enable patient record sharing. Health secretary Jeremy Hunt has said that he wants the NHS to be paperless by 2018 in order to save taxpayers £4.4 billion a year.