US technology giant Computer Sciences Corporation - which has a major office in the West Midlands - yesterday confirmed that it was taking over a contract from consultancy Accenture to upgrade computer systems for the NHS.
The transfer of the contract covering the North-east and Eastern England gives fresh hope for the £6.2 billion upgrade, which is one of the world's biggest IT projects but running about two years behind schedule.
The deal is also a boost for troubled healthcare software firm iSoft Group, which analysts had feared would lose work if Accenture pulled out of the project.
ISoft, whose shares have plunged on profit warnings and accounting irregularities linked to the delayed project, said in a separate statement it would continue to work on the old Accenture contract as part of the CSC team.
The announcement sent iSoft shares up around 16 per cent.
CSC, which employs several hundred people in Solihull, said it will take over Accenture's responsibilities from January 8. The contract is worth as much as £1.97 billion. CSC is already leading the IT upgrade for the NHS in the North-west and West Midlands. Around 500 staff at Solihull are involved in the work.
"The announcement is covered by tripartite binding agreements which conclude all material matters of contention associated with the agreements and which require Accenture to manage the transfer of its responsibilities to CSC in an orderly manner over the next 100 days," CSC said in a statement.
Accenture had been widely expected to pull out of the project after it announced in March it was taking a $450 million (£239.36 million) charge related to its contract.
ISoft said last month that both CSC and Accenture had alleged in formal correspondence that iSoft had breached its contracts with them, raising fears of litigation.
However, iSoft, which is headquarted in Manchester and formerly had a base in Birmingham, yesterday confirmed the termination of its contract with Accenture, although the firm will continue to provide transitional services until January 8 next year.
"Under the termination arrangements, iSoft and Accenture have agreed that no further payments will be made between the two parties and any potential litigation relating to the period between April 2 2004 and today's date will be annulled," the company said in a statement.
