The multi-billion pound scheme to computerise the medical records of every patient in England has suffered a further blow after the NHS fired one of the project's key suppliers, it emerged today.
The £12.7bn project - already four years late - has already faced repeated criticism over the delays and fears about the security of patients' information.
The latest setback for the project, which will create a single electronic records system for patients, comes with the termination of Fujitsu's £896m, 10-year contract for installing the system in the south of England.
The move came after 10 months of renegotiations of the deal between the Japanese-owned services company and Connecting for Health, the NHS IT programme, broke down.
The termination of the contract could cost Fujitsu around £300m.
The total cost of creating the electronic patient records system is estimated at £12.7bn.
While the programme has repeatedly been delayed, tough contracts with IT suppliers have prevented costs from spiralling out of control.
However, these contracts have been the cause of tension between the programme and its suppliers.
A Fujitsu official told the Financial Times that talks had broken down because the programme had demanded more flexibility in delivery of the services, costing more.
The company wanted either more money or a return to the original contract.
A spokeswoman for Connecting for Health said: "Regrettably, and despite [the] 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."
Fujitsu is the second IT firm to leave the project. In 2006, Accenture - which was responsible for delivering the system to the north and north-east of England - quit key parts of the programme.
The Conservative shadow health minister, Stephen O'Brien, said the government's attempts to "ram through a top-down, centralised, one size fits all NHS supercomputer system" had come "crashing down".
"This is £12.7bn of taxpayers' money now at risk, and the intended result is already four years behind schedule, not to mention the impact on patients and NHS staff," he added.
A spokeswoman for the Patients' Association said the termination of Fujitsu's contract was further proof that the NHS IT programme was misconceived.
She said the problem with the scheme was that the government seemed to want it to control all information about patients.
"We wouldn't be in this mess if patients had something like a bank card which stored their own medical information," the spokeswoman said.
"Nobody seems willing to entrust patients with their own records and, until they do, we're going to continue to have this kind of nonsense."
Earlier this month, the National Audit Office, the public spending watchdog, said the government had seriously underestimated the challenges involved in creating the electronic patient record system.
The IT programme involves four main projects - a centralised electronic medical record system for 50 million patients; an online "choose and book" system for booking hospital appointments; electronic prescriptions, and fast network links between NHS organisations.
It is expected to link more than 30,000 GPs in England to nearly 300 hospitals.
In March, the government defended the system and insisted it could produce more than £1bn in savings by 2014.
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