MP Richard Bacon has called for any savings that are made on the CSC deal to be redistributed to trusts to “buy products that they want and that work.”

EHealth Insider reported yesterday that CSC and the Department of Health have signed a “non-binding letter of intent” that opens the way for the company to secure a new deal for the North, Midlands and East of England.

EHI understands that the deal will secure savings of around £1 billion on CSC’s contract for the regions, where it has been struggling to develop and deploy the Lorenzo electronic patient record system to trusts.

Bacon, a member of the Public Accounts Committee, and long-term critic of the National Programme for IT in the NHS, said he was not sure much had really changed as a result of the move.

He pointed out that the agreement between the DH and CSC was non-binding, and said he understood there was still a lot of wrangling behind the scenes about an eventual deal, which is due to be agreed by 31 March.

However, he said any savings that were secured should be spent on helping those trusts that did not get a system from NPfIT to “buy products that they want and that work.”

EHI asked the DH to clarify an assertion made by several national newspapers this morning that savings would be reinvested in frontline care. However, the DH said it was making no further comment on the deal.

In a statement issued overnight, the DH said the letter of intent “makes clear that a new contract, to be signed this spring, will ensure that the local NHS has control over whether to introduce Lorenzo.

“The agreement we have negotiated gives choice to trusts about taking this software, rather than imposing the decision on NHS organisations.”

However, in a filing to the US Securities and Exchange Commission, CSC said the NHS would “provide a commitment of a certain number of trusts, some to be named in the interim agreement and the remainder within six months, to receive the Lorenzo software product.”

It added that this has “been redefined into deployment units categorised as ‘base product’ and ‘additional product’ for pricing purposes.”

Bacon said there was a clear contradiction between what the DH and CSC were saying about the new agreement, since CSC’s statement implied that it would get a guaranteed number of trusts to deploy the Lorenzo product.

He argued that minimum volume commitments had been a problem for the national programme from the start because they “pre-supposed an important thing” – that the systems contracted for actually worked.

“There’s no evidence that Lorenzo is making the patient experience better or saving tax-payers money,” he said. “It has caused problems where implemented and is not something people want much to do with if they can possibly avoid it.”

Bacon said the DH could end up in litigation with CSC over breach of contract if trusts in the NME ultimately decided they did not want Lorenzo.

However, he claimed CSC was “massively in breach of contract” for failing to deliver a working product; something that CSC denies.

In March 2010, trusts across the NME were asked by the DH whether they would still want to take Lorenzo with scaled back functionality and the vast majority indicated that they would.

However, an EHI investigation revealed the number of committed trusts was likely to be much lower than the DH was estimating at the time, with at least 70 out of 230 effectively opting out.

Bacon said while it was obviously better to be paying CSC £2 billion rather than £3 billion, paying £2 billion for a system that did not work would not be a good outcome for tax-payers.

“Nobody wants to pay these people for not delivering. If they want any business from the government, they have got to produce things that work, it’s really quite simple,” he said.

Margaret Hodge, chairman of the PAC, told the Times that if the DH had managed to get tough on CSC, its approach should be used “as a spring-board to examine other public-sector contracts across government.”