12 May 2005 | Joy Persaud
The NHS plans to pay suppliers on its £6 billion Connecting for Health IT programme early in a controversial move aimed to avert cash-flow problems.
The likely beneficiaries include Accenture, one of the biggest suppliers. It approached the Department of Health (DoH) after making a loss on the deal, which it blamed on the NHS delaying the finalisation of some contracts.
The programme includes an electronic patient records system.
The DoH told SM that it has agreed to discuss "revised deployment plans and different financing arrangements under which [the DoH] would consider advance payments to the contractor, probably secured on its assets".
Suppliers will only be paid early if they have performed exceptionally well or would be worse off if they weren't paid in advance.
But early payments should not be encouraged, said Ken Cole, chairman of the CIPS information systems committee.
"If IT companies think a deal is too risky, they shouldn't take it."
David Hawkins, director of operations at PSL, a government and industry-backed organisation established to encourage partnering, said clients should listen to requests for earlier payment.
Hawkins added although such requests are common, they should be made at the risk assessment stage, not when the contract is running.