Westminster IT system cost over twice original budget

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By a Newsnet reporter

An IT system commissioned by Westminster has cost the taxpayer more than double its original estimate.

The software management system purchased by the UK Government for the Child Support Agency (CSA) has more than doubled from its original budget of £94 million to more than £225 million.  The system was intended to facilitate the collection of child support payments from absent parents, so reducing costs to the public purse.

Details of the overspend were revealed after a parliamentary question was asked by SNP MP Dr Eilidh Whiteford, the party’s Westminster spokesperson on work and pensions.

The official response showed that as well as the purchase cost of the system growing by a massive 140%, an additional £107 million was invested between 2006 and 2009 as part of the Operational Improvement Plan (OIP) in order to upgrade the CSA system.  Two further injections of public cash totalling £9.6 million were made to pay for remedial upgrades after the closure of the OIP.   

The ballooning figures do not include the running costs of the system.  They are the latest in a long line of massive overspends on IT projects initiated by the previous Labour government.

Similar over-spends were encountered with the Libra IT system used by the UK Department of Justice which saw costs balloon from an original budget of £146 million to more than £444 million.  Another IT system, purchased for the Passport Agency, saw costs quadruple to £365 million.  

The Ministry of Defence, already notorious for over-spends in defence procurement, has also been dogged by runaway costs in the development of IT projects.  The MoD’s Future Integrated Soldier Technology scheme is intended to integrate equipment, weapons and sighting devices with target locating devices.  The project is expected to cost of £151 million in its lifetime, representing a £125 million ‘overrun’ on the original projected cost.

Dr Whiteford said: “Given the catalogue of IT cost overruns, we would all be better off if Westminster got a calculator rather than another computer.  It seems the Westminster government is incapable of delivering big projects on time or on budget.”

“At a time when household budgets are under real pressure, revelations over how wasteful Westminster has been with taxpayers’ money are an absolute scandal.”

“Serious questions must be asked about how the cost of the CSA computer system was able to more than double – and the first of those questions should be raised with the former Labour Ministers who signed the contracts.”

The mismanagement of UK public sector IT projects contrasts strongly with the efficiency within the Scottish administration which has been achieved since the SNP took office at Holyrood.  In Scotland public sector efficiency targets have been smashed for the third year in a row.

The latest figures from the Scottish government show that the public sector delivered £2.3 billion in efficiency savings in 2010-11, exceeding the target of £1.6 billion by £673 million pounds. That equates to 8.5 per cent of the 2007-08 baseline, considerably above the target for six per cent savings for the year.  Efficiency savings are reinvested in improving public services.

Dr Whiteford added: “When it comes to efficiency, Westminster needs to take a leaf out of the Scottish Government’s book.  The SNP Government has pursued a vigorous programme of efficiency and public sector reform that is delivering results and driving improvements.”

“Last year, £2.276 billion of efficiency savings were made 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 a level of delivery that wasteful Westminster should learn from.”