Toxic National Programme for IT contracts to be housed under one body

Billions of pounds of toxic IT contract exposures at the Department for Health could be housed under one central unit, according to reports.

Health minister Andrew Lansley is understood to be in the process of drawing up plans to contain the failed contracts from the National Programme for IT (NPfIT), as the liabilities are too large to rest with individual trusts once the NHS' 10 strategic health authorities are abolished, The Observer newspaper has reported.

Lansley is expected to announce his plans for NHS IT this month.

The news follows recommendations that the remaining £4.3bn in IT contracts under the NPfIT be reviewed by the Cabinet Office's Major Project Authority after MPs called for them to be reviewed, in particular the relationship with key supplier CSC.

But the government faces significant cancellation fines if the contracts are not seen through to completion. The Department for Health is also facing a legal challenge from Fujitsu, which tore up its £1bn contract with the government over the project four years ago and has incurred heavy write-offs.

In the recent Public Accounts Committee report, the Department for Health was slammed for not informing MPs that it had given CSC £200m in advanced payments for yet-to-be-delivered contracts. The department has always been keen to emphasise that it only pays for results.

So far, just four of 97 systems have been delivered to acute hospital trusts in seven years in the North, Midlands and East, found a recent National Audit Office report. More than two systems a month would need to be delivered over the next five years to meet the revised deadline of 2016, it said.