Image caption Katrina Percy stepped down as chief executive of Southern Health NHS Foundation Trust in August

A company controversially paid millions of pounds by the Southern Health NHS Foundation Trust has served notice it is terminating a new contract.

Talent Works Ltd is owned by an associate of Katrina Percy, the trust's former chief executive.

The training services firm was paid more than £5m over four years for a contract valued at less than £300,000.

Southern Health staff were informed in a letter that Talent Works had served notice it was terminating its contract.

Ms Percy, who stepped down as chief executive of the troubled trust last month, and Talent Works owner, Chris Martin, had worked together in previous posts.

'Specialist services'

In July, BBC News revealed it was paid nearly £5.4 million over a four year period despite winning a contract valued at less than £300,000 - an overspend approaching 2,000%.

It had been awarded a new £3.5m three-year contract in March 2015.

The trust's interim chief executive announced that Talent Works had served notice that it wanted to terminate its contract in a letter on Friday.

The trust said it was unable to provide further details on when the contract would formally end.

Talent Works has not yet responded to a request for a comment.

At the time of the original revelations, Southern Health said: "We fully accept that the original contract for Talent Works was for a sum far less than the eventual spend," adding it was "not unusual" for Ms Percy to have worked with Chris Martin due to the "specialist services they provide to the NHS".

The trust said it took its financial responsibilities "very seriously".

Southern Health has been under intense scrutiny since an NHS England-commissioned report in December found it failed to investigate the unexpected deaths of hundreds of patients.

A failure of leadership and governance at the trust was blamed for the problems, a conclusion a subsequent CQC report in April agreed with.

Image copyright Talent Works Image caption Chris Martin's website contained a commendation from Katrina Percy

Timeline

2006 - Management consultant Chris Martin and Katrina Percy start working together while she was chief operating officer at Surrey and Sussex Hospitals

2009 - Ms Percy becomes chief executive of Hampshire Community Health Care and Mr Martin follows her, providing coaching and leadership support

2010 - Mr Martin starts a firm of organisational psychologists called Talent Works Ltd, whose website says they are "experts in culture and behaviour change"

2010 - In December, Southern Health advertises for management development support. The tender has a value of £288,000, and the contract is to last three years, with an option for a one year extension

2011 - Ms Percy joins Southern Health as chief executive and the work is awarded to Talent Works Ltd

2014 - The initial three year contract ends and the firm is paid £5.365m. The trust chooses to exercise its option for a one-year extension