Secret files reveal fears over future of NHS IT giant Atos

Secret documents show a scramble to safeguard critical public services from the potential collapse of tech giant Atos, which works with billions of pounds worth of government contracts.

Files seen by the BBC show work has been under way with consultants since January, aiming to limit “severe implications” to essential services by lining up alternative IT providers.

The UK government outsources IT services, including for NHS records and disability benefits, to the French IT giant’s UK arm, which admitted being more than £3bn in debt in April and is now undergoing financial restructuring.

The risk assessments, first reported by i news, show the Cabinet Office and Ministry of Justice hired consultants PwC to review the company, described as “in financial distress” to “ensure continuity of critical public services”.

The BBC has seen the unredacted files, which were mistakenly released into the public domain by the Cabinet Office in May, although hastily replaced with blanked-out pages.

The documents reveal PwC was hired to work on a risk assessment project codenamed “Project Aztec” at the start of the year.

Project Aztec is believed to refer to Atos, with Aztec Group understood to refer to its Paris-based HQ and Aztec UK understood to be its London-based subsidiary.

Atos shares tumbled in January as the group replaced its chief amidst ongoing struggles with debt, missed financial targets and reportedly looked to open negotiations with creditors.

Last week, the French government offered a £600m (750m euro) bid to buy the company’s most sensitive businesses and Atos accepted an eleventh-hour financial restructuring plan led by French investor David Layani.

Back in January, the Cabinet Office asked PwC to assess what was was likely to happen to government contracts if the wider company went under, and whether restructuring options being considered by the French government would include the financial rescue of the UK arm of Atos.

According to the document, the government was seeking advice on “the likely impact on Aztec UK and the His Majesty’s Government (HMG) critical contracts in the event that any part of the Aztec Group were placed into an insolvency process…

“Review and comment on any financial support provided by the French Government and whether this could be ring-fenced from the UK group “Aztec UK”, which performs the services under HMG contracts.”

Atos has invoiced the government for contracts worth about £6bn since 2016 and currently has more than 40 government contracts worth nearly £1bn.

The firm is involved in IT systems at the Ministry of Defence, the Ministry of Justice and the Home Office, including:

• NHS health records in hospitals
• Disability benefit assessments for personal independents payments (PIP)
• Records for the Student Loans Company
• Tax refunds from His Majesty’s Revenue and Customs (HMRC)

Jonathan Ashworth, Labour’s shadow paymaster general, said the documents showed ministers needed to focus on major issues ” happening in the real world under their watch”.

He added: “The fact that a contract of such extreme commercial sensitivity was published by accident is not just evidence of breathtaking incompetence, it is also a disturbing indication that the grip the government should have on this issue is completely lacking.

“After 14 years of Tory chaos, it’s time to turn the page and rebuild Britain with Labour.”

A spokesman for the Cabinet Office declined to name the firm known within Government as Aztec, but said: “We undertake regular reviews of suppliers and on occasion will undertake further due diligence to ensure public services can be maintained in a variety of scenarios.”

A spokesman for Atos said he could not comment on this issue, but on the wider issue of the company’s financial issues, he said: “Atos is currently undergoing a financial restructuring and reached an agreement with a Consortium and its creditors which will create a stable financial future globally and in the UK.

“The provision of services to our customers has remained unaffected and we will continue providing high-quality services to the UK public sector as we have for over 30 years.”

PwC declined to comment.

The Conservative Party has yet to respond to requests for comment.