Forward payments have been made to the National Programme for Information Technology (NPfIT) suppliers to reduce contract costs. All forward payments are repayable in the event of subsequent non-commencement of services and are protected by bonds or charges against assets, which enable the payments to be withdrawn on demand. Moreover, forward payments are typically made after the contractor has already incurred the costs to which the payments relate. This prudent approach has subsequently been adopted as an option in guidance issued by the Office of Government Commerce in respect of the procurement of IT-enabled services from the private sector.
The value of forward payments made to local service providers (LSPs) since inception of NPfIT, as at 31 March 2007 are shown in the following tables. Forward payments are depleted as the supplier successfully delivers the contracted solutions. Instead of being paid as the projects go live, suppliers are allowed to recognise the appropriate amount of the forward payment for that project. The principle of payment on delivery is thus maintained.
£ million LSP area Total advance payments Earned to date Repaid Total advance payments outstanding East/East Midlands 56.8 8.1 13.8 34.9 North Eastern 72.5 4.0 21.8 46.7 London 53.0 53.0 0.0 0.0 North West/West Midlands 216.6 155.0 0.0 61.6 South 246.8 33.9 37.0 176.0 South/London 71 11.0 0.0 0.0 11.0 Total 656.7 254.0 72.6 332.3 1 Payments made to CSC in respect of seven trusts in the London and South LSP areas which have opted to take the iSoft solution from CSC rather than the London and South LSPs’ Cerner solution.
£ million LSP area Total advance payments Earned to date Repaid Total advance payments outstanding East/East Midlands 24.9 24.7 — 0.2 North Eastern 19.7 19.7 — 0.0 London 29.7 16.4 — 13.3 North West/West Midlands 50.3 27.3 — 23.0 South 65.8 55.2 6.9 3.7 Total 190.4 143.3 6.9 40.2
We expect to publish the results of the review shortly.