The Department of Health (DoH) will not renew its £500 million contract with software giant Microsoft when the deal expires later this year, it has emerged.

It will end its agreement for 900,000 licences for PC software, which was signed by former health secretary John Hutton in November 2004. Mr Hutton claimed at the time that expanding the previous deal from 500,000 licences would result in a saving of £330m.

A DoH spokesman said: “The Department of Health has already invested so that NHS trusts are able to have access to the latest versions of Microsoft desktop software. Future investment decisions will be taken at a local level, in line with the proposals set out in the white paper published this week.”

The Government’s health white paper has promised to make NHS organisations “customers of a more plural system of IT and other suppliers”.

The value of the DoH’s contract with Microsoft is said to be “commercially confidential”, but has been estimated at around £500m.

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