Richard Bacon MP - Member of Parliament for South Norfolk

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MP receives admission of £82 million in payments to iSoft

MP says records system may put patients at risk

	Click here to read Patricia Hewitt's letter

	Click here to read Richard's initial letter to Mrs Hewitt

South Norfolk MP Richard Bacon has received a letter from Health Secretary Patricia Hewitt admitting that £82m in up-front payments were made to troubled software firm iSoft by the NHS.

Mrs Hewitt disclosed that the Government had made two payments to iSoft, one of £58 million in 2005 and one of £23.8 million in 2006. In both cases, the payments were made just days before the end of iSoft's financial year, raising fears that taxpayers' money was used to rescue the firm.

iSoft have a central role in the £12.4 billion upgrade of NHS computer systems, but recently declared a £344 million loss and announced plans to close their Manchester headquarters.

Mr Bacon said today: “The story of the Government’s dealings with iSOFT descends ever further into the murk of financial manoeuvring and sharp practice”.

“It is hard to avoid the conclusion that Connecting for Health has repeatedly bent over backwards to try to rescue this company from its financial crisis – presumably to avoid the disaster that will hit the National Programme for IT in the NHS if a vital software supplier collapses”.

“The clear implication is that at least some Government money was used by iSOFT to inflate its apparent profits – good news for the Directors who then sold their shares at an artificially high level, but bad news for other investors, the NHS and the general public”.

“The Secretary of State’s letter also makes it clear that the Government advanced iSOFT another £23.8 million in April this year when at least £20 million in returned fee income was still outstanding from the £58 million advanced the year before. What good reason could there possibly be for what looks like another giant free public subsidy to a failing company?”

“I will be demanding a further explanation of this extraordinary admission by the Secretary of State.”

13 September 2006