Figures reveal another Labour PFI disaster

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by a Newsnet reporter

Figures released by the UK government show a massive overspend in a Department of Justice contract with final costs for an IT project running nearly 300 per cent over budget.

The figures obtained by the SNP reveal that the cost of a computer case management system purchased by the UK Government has trebled from its original budget of £146 million to more than £444 million.  Even worse, the £444 million total does not include an annual service charge of more than £10 million.

The costs relate to an IT system called Libra, commissioned by the Department of Justice for use in Magistrates’ Courts in England and Wales.  The system was intended to give the courts easy access to criminal records and to allow courts across England and Wales to share information.  The contracts for the project were signed by the Blair government in 1998, ever since the project has been dogged by cost overruns and delays.  

In 2003 Edward Leigh, then chairman of the UK Public Accounts Committee investigating the cost overruns and delays to the project, said:  “The Libra project is one of the worst IT projects I have ever seen.  It may also be the shoddiest PFI project ever.”  At the time Mr Leigh made his remarks, the cost of Libra had ballooned to £319 million.  

The true extent of the costs was revealed by a Parliamentary question put this week to the Secretary of State for Justice in the Coalition governement by Mike Weir, SNP MP for Angus and the party’s Westminster spokesperson for business and enterprise.  In his reply the Permanent Under-Secretary of State Jonathan Djanogly MP admitted that the Labour PFI project had continued to escalate in cost, adding an extra £125 million in overruns.  In addition there would be a service charge of over £10 million annually for the life of the project.  

The revelation is the latest in a line of Westminster IT disasters whose costs have rocketed, and comes just weeks after UK Ministers revealed they were to axe Labour’s flawed £12 billion NHS computer scheme.  An earlier question by the SNP revealed that another IT system, purchased for the Passport Agency, has more than tripled to £365 million.

Commenting, Mr Weir said: “Labour spent all week claiming they can be trusted on the economy, but this one project sums up how they have poured taxpayers’ money down the drain by mismanaging government projects.

“This overrun would be bad enough on its own, but it is just the latest in a catalogue of Westminster waste – which is all the more depressing at a time when household budgets are under real pressure.  It seems the UK Government is incapable of delivering big projects on time or on budget.

“Serious questions must be asked about how the cost of the Libra system was able to treble – and the first of those questions should be raised with the former Ministers who signed the contracts.”

The contract was initiated by the Home Office in 1998 when it was headed by Jack Straw MP. 

Mr Weir added: “Westminster needs to take a leaf out of the Scottish Government’s book on efficiency.  The SNP Government has pursued a vigorous programme of efficiency and public sector reform that is delivering results and driving improvements.  In the first two years of the programme, it has exceeded its targets by 300 million pounds and 400 million pounds.  Last year, 2.276 billion pounds of efficiency savings were made – 673 million pounds above the target – through new ways of using resources, collaborating across public services or improving procurement.

“That money is being reinvested in the public sector to deliver frontline services or lever in new efficiencies.  This is an impressive level of delivery that Westminster should learn from.”