One of the two remaining contractors in the delay-hit National Programme for IT has agreed to reduce the value of its contract with the Department of Health by around £300m.

HSJ understands that the cut agreed with provider CSC amounts to about 10 per cent of the original £3bn contract to install a care records system at 171 NHS trusts and 4,400 GP practices in the North and Midlands and East regions.

However, latest figures from the National Audit Office show at the end of March 2011 more than two thirds of organisations still did not have a care records system installed which met the contracted requirements. The £300m is also less than the £500m the DH announced it wanted to slice off the contract in 2010.

One NHS source said it was impossible to judge the value for money of the arrangement without knowing how much CSC would still be required to deliver.

The DH did not respond to HSJ’s request for information about the deal.

HSJ understands the deal will be formally announced early next week and will be followed by new details of how NHS trusts will procure systems after the National Programme for IT contracts run out in 2015-16.

In March last year only four acute trusts, a third of GP practices, and two thirds of community services providers had software that met contracted standards while CSC had failed to deliver against the contract in any mental health setting, according to the NAO. Many providers will be anxious for guidance on how a more flexible, localised market will work in future.

The deal will avoid an expensive legal action. The DH is still in dispute with Fujitsu, the original provider for the south region, nearly four years after the contract was terminated.

HSJ understands DH lawyers were interviewing NHS staff involved with implementation of CSC’s Lorenzo software earlier this year as part of an evidence gathering exercise ahead of a decision on whether to take legal action.

CSC is currently a month in to a 90-day consultation process with the 1,700 staff working on its NHS account. It anticipates making about 500 redundancies.

The company declined to comment.