ISoft shares surge on NHS contract win

Click to follow
The Independent Online

Accenture and the US technology company CSC won contracts worth more than £1.9bn yesterday to install electronic systems to keep NHS patient records and to maintain them for 10 years.

The two contracts are for the North-west and East of England. The announcement means four out of five regions the NHS has divided Britain into have now been catered for. It is expected to announce the successful bidder for the large southern contract, worth more than £1bn, in the new year.

One of the main beneficiaries of the outsourcing push has been the computer software provider iSoft, whose shares rose 4 per cent to 377p yesterday. ISoft is a major supplier to Accenture and CSC, and also to BT, which was awarded the London contract on 8 December.

The 10-year deals take the total contracts for the NHS information technology programme, which is among the biggest software procurement in the world outside the defence sector, to almost £4.7bn.

The announcement leaves IBM as the big loser in the battle for the lucrative NHS contracts. Earlier this month, it lost the central care record contract and the London region to BT, in a deal which would have been worth more than £1.6bn. On Tuesday, it failed in its bid to run services for the West Midlands and the North-west.

Under the terms of the deal announced by the NHS yesterday, Accenture snapped up a £934m contract for the East of England. Earlier this month, it won a £1bn contract to install and run the systems in the North-east. CSC took the contract for the North-west and West Midlands at a price of £974m. ISoft, which is the preferred supplier to Accenture and CSC, is gaining as the NHS modernises its systems in an attempt to save money and to improve customer care. The remaining southern contract is also being sought by a group including iSoft.

Other companies to lose out in the bidding for the eastern region included Cerner, Cap Gemini Ernst and Young and PlexusCare, a grouping that includes EDS and Logica.

EDS and Logica remain in the battle for the South and South-west, along with Fujitsu and SchlumbergerSema.

The Government initially said it would spend £2.3bn to rejuvenate the NHS's IT systems. The programme has expanded to handing out 10-year contracts, which will aim to see more than 30,000 GPs and 270 NHS trusts able to access the electronic records of 50 million patients in a system that will stretch across the NHS and into social care.

Separately, iSoft's offer for rival Torex went unconditional yesterday despite there being uncertainty as to whether the deal will be referred for a full-scale investigation by the competition authorities.