The government’s NHS IT programme has been thrown into a new crisis by the collapse of negotiations with Fujitsu, which is providing IT services across the South of England.

Fujitsu pulled out of contract “re-set” negotiations on Tuesday with NHS Connecting for Health over its £896m contract. The negotiations had been going on for 10 months.

Fujitsu is the second firm to pull out of the Local Service Provider contracts for the NHS IT contracts.

In September 2006 Accenture transferred contracts worth almost £2 billion to it rival CSC after pulling out of the NHS. It had earlier taken a £300 million charge on its balance sheet to cover penalties for withdrawing from the contract.

Connecting for Health has launched an emergency programme to deliver a contingency plan to cover the termination of the Fujitsu contract.

Fujitsu has promised to work with the NHS to ensure a smooth transition to the new arrangements – whatever they may be and the company will support those sites which have already gone live with Fujitsu-supplied systems.

A reset in January of the contract with BT, which supplies the London part of the £12.4 billion NHS Connecting for Health programme, led to an additional £55 million in payments being promised, on top of the near billion pound deal.

At the time, health minister Ben Bradshaw said that the increased cost did not change the scope of the contract, nor change responsibility for delivery. He said contract resets took place to reflect the “evolving needs” of the NHS.

Contract discussions are still continuing with CSC, which is running the North West, West Midlands, East Midlands, North East and East regions of the programme, the NHS confirmed.

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