Accenture to take $150m hit on NHS IT delays

Accenture is set to lose $150m on the first year of its massive NHS IT contracts due to missed deployment deadlines.

The revelation was the one black mark in a record set of financial results that saw revenues rise 10 per cent to $3.8bn in the last year on the back of strong growth in its consulting business.

But Accenture took a hit on its margins due to delays on two of its £2bn NHS IT contracts, which led to payment being withheld in line with NHS IT chief Richard Granger's hardball policy for dealing with suppliers.

Full-year losses on the NHS contracts are expected to come in between $110m and $150m with Accenture saying they will remain loss-making until financial year 2007.

Robert Morgan, director of outsourcing advisors Morgan Chambers, warned that Accenture is not the only IT supplier struggling to make money on the NHS contracts.

"The rumours in the market are that two or three suppliers are suffering losses on this. Accenture is just the first one to break cover on this. It is an indictment of the way Granger's contracts have been put together, with the terms and conditions remaining a very tight secret," he said.