IT underspend 'will be cleared by end of this financial year'

The NHS Information Authority says it is on target to clear a£4.1m underspend by the end of the financial year.

The underspend represents a little under 3.3 per cent of the annual£125m budget, with the largest portion,£2.5m, relating to 19 pilot sites involved in the electronic record development and implementation programme.

A spokesperson said the authority would not release funds for the work done by these pilots 'until they can demonstrate they have used the money as intended, and they have not done this as quickly as we planned in our budgets'.

'However, from discussion with the sites, we understand that spending will have caught up by the end of the financial year, ' she added.

She told HSJ that budgets have now been 're-phased' to reflect anticipated spending more accurately, with the balance of the underspend applied to projects that have not been able to progress due to lack of funds or to newly commissioned projects.

The authority also benefited from a VAT refund of£1.5m after it was discovered that VAT is not payable on NHSnet connections.

Of this amount,£900,000 was returned to the Department of Health as it related to payments due to trusts and HAs, while the balance has been retained to help fund further NHSnet connections and upgrades - in particular connections to PCTs.

Dr Grant Kelly, a member of the British Medical Association's IT sub-committee, said problems with ERDIP sites were not unexpected.