Original URL: http://www.theregister.co.uk/2006/09/13/isoft_government_payments/

iSoft's £82m City sweetener

Public money paid to private firm

By Kelly Fiveash

Posted in Financial News, 13th September 2006 16:11 GMT

iSoft Plc, the beleaguered NHS software provider, has been given two large chunks of cash totalling close to £82m over the last two years, the government has admitted.

An initial payment of £58m was made at the end of April 2005 with a further £23.8m paid out in April this year - just days before the company's financial year drew to a close.

The government bail out helped Manchester-based iSoft secure a its position with the City despite its ongoing troubles, according to a report in The Guardian.

Conservative MP Richard Bacon wrote to health secretary Patricia Hewitt on 9 August requesting details of any advance payments made to iSoft by NHS Connecting for Health. In a written response dated 5 September, Hewitt said: "The Department [of Health] agreed to make advance payments in April 2005 and April 2006 against the charges payable by NHS trusts to iSoft."

She goes on to confirm that iSoft had paid back £37.9m by the end of July this year - leaving an outstanding deficit of £43.9m.

"There has been no indication from iSoft that the advance payments made by the Department of Health (DoH) are the subject of the suspected accounting irregularities that the iSoft Board are investigating," Hewitt said.

The "accounting irregularities" she refers to relate to an audit for 2004 and 2005, which the Financial Services Authority had been investigating.

Hewitt also said that NHS Connecting for Health - acting on behalf of the DoH - has full financial audit rights to inspect iSoft's bank account at any time.

In response, Bacon put the question to The Guardian: "What good reason could there possibly be for what looks like another giant free public subsidy to a failing company?"

As one of the biggest IT projects in the world, iSoft will be looking to turn its bad fortune around, but the NHS may yet be the victim of its bad health. ®