A deal designed to save the NHS more than £1bn on its contract with the National Programme for IT’s biggest provider has stalled.

The Department of Health was due to sign a deal with American based software provider CSC by the end of March after agreeing the outline terms earlier in the month.

However, CSC’s president of healthcare Guy Hains told investors during a teleconference last week that the company had “climbed out on” the earlier agreement and the deadline had been extended until 1 June.

CSC was contracted to install a care records system at 171 NHS trusts and 4,400 GP practices in the North and Midlands and East region of the NPfIT project by 2013-14 in a deal worth £3.1bn.

However, according to figures from the National Audit Office, as of March 2011 less than a third of organisations had a care records system installed that met the contracted requirements.

CSC’s Lorenzo product has experienced the biggest problems. Under the outline terms of the deal, which were set out in a non-binding letter of intent at the beginning of March, the number of organisations expected to take Lorenzo will be vastly reduced but the NHS must still commit to a “certain number of trusts” receiving a version of CSC’s Lorenzo software.

The letter of intent committed the NHS to identifying a portion of these organisations by the end of March in order for the deal to be signed. However, last month health secretary Andrew Lansley announced local NHS services would “no longer be told what to do” when choosing IT systems.

Mr Hain told investors the delay was “driven” by changes in the NHS and the move to evolve more decision making power to individual NHS trusts which meant there was a “need to consult very widely on this agreement.”

He said: “I can report that the dialogue with the NHS is fundamentally going well… I would say that the delay reflects the complexity of the change being undertaken and the need for very detailed agreements.”

A spokeswoman for the DH said they were still working towards signing a new contract with CSC in “spring”.

She added: “This is intended to ensure that the local NHS has control over whether to introduce Lorenzo and that the ones in charge of decisions are the ones driving improvements locally.”

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