The Department of Health has set aside £600m to pay up to 22 NHS trusts to procure a patient records system branded “completely useless” by a senior MP, it has emerged.

The Lorenzo electronic records system is made by IT giant CSC – a company public accounts committee chair Margaret Hodge on Wednesday branded “rotten” during a hearing into the National Programme for IT.    

Ms Hodge said: “You are going to spend [more money] with this rotten company with a hopeless system. How much are you putting in of our money to bribe trusts to buy this system?”

The DH’s senior responsible owner for local service provider programmes Tim Donohoe told the committee the £600m pot was part of a further £1bn being paid to CSC.

The deal was brokered with the company last year as part of an agreement the DH said last September represented the “dismantling” of NPfIT. This claim was dismissed as a “PR exercise” by Ms Hodge.

Under the original NPfIT, CSC was granted exclusive rights to supply systems to 160 trusts in a deal worth £3.8bn in 2012 prices. However, the deal unravelled.

Mr Donohoe said: “They knew that we could not name 160 trusts, we knew that they could not deliver 160 trusts so effectively we were in a position where the contract was heading for dispute.

“Terminating the contact would not have offered good value for money.”

He said CSC had been paid £1.1bn to date and the final £2.1bn bill represented “a good deal for the taxpayer”, while the NHS had paid the firm £100m to renegotiate the deal.

The department’s reluctance to attempt to ditch the CSC contract entirely is understood to have been influenced by its attempt to terminate a contract with another NPfIT contractor, Fujitsu. Proceedings began in 2008 and are still not concluded, costing the health service £31.5m in legal costs.

A further £2.9m has been spent on legal issues relating to the CSC deal, with law firm DLA Piper picking up most of the fees, he said.

Wednesday’s revelations follow a prolonged campaign by the DH to keep the figures out of the public domain.  

HSJ asked last November how much had been set aside in the CSC “interim agreement” deal. A DH spokeswoman responded: “We are bound by a confidentiality clause in the contract not to share this commercially sensitive information.”

HSJ pursued the matter via a Freedom of Information request, which was also rejected by the DH on grounds of commercially sensitivity.