NHS Connecting for Health is on the cusp of signing renegotiated deals with both of its two main regional contractors, Computer Sciences Corporation and BT.

CfH says “agreement has been reached” with both suppliers. But while the final ‘Penfield agreement’ with CSC has been signed, the agreement with BT is understood to be a non-binding Memorandum of Understanding.

The two deals are intended to ensure that the struggling local service providers can successfully deliver iSoft’s Lorenzo and Cerner’s Millennium electronic record software to a significant number of hospitals by the end of the year.

Extra money appears to have been found, functionality scaled back in some areas, previous release schedules ditched, and the central concept of single shared system sacrificed in a final attempt to achieve delivery through the LSP model ahead of a 2010 general election.

The deals cover the three LSP contracts CSC holds for the North, Midlands and East of England and BT’s LSP deal in London. Termed ‘Contract Change Control Three’, they are the third major renegotiation of the LSP contracts since they were signed in 2003.

A spokesperson for CfH said: "We can confirm that contract discussions have been successfully concluded with our two main suppliers, BT and CSC, demonstrating their continuing commitment to the National Programme for IT.”

"We are confident that the Lorenzo and Millennium systems can be deployed successfully and will bring significant benefits for NHS patients.”

Officially termed a ‘reset’, the LSP contract renegotiations have, in the case of CSC, been running for almost a year.

E-Health Insider understands the renegotiation of the three CSC deals focuses on reworking the Penfield delivery strategy for the Lorenzo software and concentrating resources on implementations of the initial versions of the software now in use on a small scale in South Birmingham, Morecambe Bay and Bradford.

EHI has learned that development work with NHS trusts has been suspended for later versions of Lorenzo, which was set to include clinical modules such as maternity and theatres from release three onwards. CSC will also continue to provide trusts with versions of older iSoft software, where required.

In London, the new LSP contract is understood to focus on moving to a new delivery model for NPfIT, which focuses resources on a series of stand-alone acute implementations of Cerner Millennium, with more local configuration at a much higher cost than originally planned.

In London, BT is also understood to have negotiated a deal that will see it hand back responsibility for providing new GP systems out of a hosted data centre. The LSP will, however, continue to offer CSE-Servelec’s RiO community system.

BT Group is reported to have examined all options in London, including quitting the LSP contract, unless it could agree a new delivery model. The exit of BT would have left the NHS with just one surviving LSP out of the original four appointed; Accenture and Fujitsu having already departed.

But a clear indication that deadlock had been broken came at the end of March, when BT was awarded a lucrative deal to support eight existing Cerner sites in the South. The eight sites have been in limbo since Fujitsu exited as LSP for the south last May.

BT’s beleagured Global Services Division last year announced a £336m write-down against 15 of its 17 contracts; one of the remaining two is thought to be NHS London. Originally signed in 2003, the deal is worth £996m.

The company is expected to announce further write-downs against the London NHS deal next month. BT Global Services has already slashed thousands of contractor jobs, with further cuts expected.

This raises questions of how BT will deliver new implementations when much of its NHS expertise resided with now departed contractors. The biggest winner of a contract reset in London may prove to be Cerner, gaining additional lucrative implementation and configuration work from working with trusts directly.

Martin Bellamy, head of NHS Connecting for Health and director of programme and systems delivery at the Department of Health, recently said the priority for the next 12 months is to demonstrate that Cerner and Lorenzo can be deployed over the next year in large, complex hospital trusts and provide value to patients and clinicians.

The CfH spokesperson said: “ The NHS is delivering something which no other comparable size health system in the world has managed.

"Most people using the health service, or working in it, agree that high quality, safe patient care depends on shared patient information. The core aims of the National Programme for IT remain, as does our focus on delivering them."