The NHS patient care record project has suffered another serious setback - key contractor Fujitsu is ending any involvement in the scheme.
The National Programme for IT, NPfIT, is already four years late and over budget and losing Fujitsu is unlikely to help. Estimated costs for the whole project have risen to £12.7bn. Fujitsu was running the patient records scheme in southern England.
Fujitsu told us: "Fujitsu Services can confirm that we have now taken the decision to withdraw from the National Programme for IT (NPfIT) contract re-set negotiations with NHS Connecting for Health as we did not feel there was a prospect of an acceptable conclusion. Our contract with the NHS will therefore end early."
It is understood that Fujitsu wanted to return to the original contract while Connecting for Health wanted to renegotiate.
A spokeswoman for the NHS's Connecting for Health said: "Regrettably and despite best efforts by all parties, it has not been possible to reach an agreement on the core Fujitsu contract that is acceptable to all parties. The NHS will therefore end the contract early by issuing a termination notice.
"Work has started immediately on planning the necessary arrangements.".
It is possible the two sides could end up in court over the issue.
The ten-year contract was worth £895m to Fujitsu but finding a replacement provider won't be easy - in 2006 consultancy Accenture pulled out of NPfIT and handed £2bn of contracts to CSC.
The only other option will be to give the work to BT, but it is hard to negotiate effectively when you only have one possible supplier.
The north of England and the Midlands are awaiting arrival of untested software, called Lorenzo, from iSoft. Lorenzo is due to begin testing later this summer.
The National Programme for IT lost two senior figures at the end of last year - director general Richard Granger and interim CIO Mathew Swindells. They are still to be replaced. ®