Andersen Consulting to pay no more compensation for overdue computer system

The consulting giant has already paid £4.1m for the delays to getting the National Insurance Recording System – the now infamous NIRS2 – up and running, but Nick Montagu, chairman of the Revenue, yesterday told the powerful Commons Public Accounts Committee that no more cash would be sought.

Montagu said: ‘We will not be pursuing Andersen Consulting for further compensation.

‘Our first priority has been to get it working, get it stabilised and get those parts affecting the tax payer in order.

‘A critical part has been establishing a working relationship with Andersen Consulting.’

He added: ‘If we really want to get on with this strong relationship it’s a good idea to get those questions of compensation out of the way.’

Last week the National Audit Office qualified the accounts of the National Insurance Fund citing problems with NIRS2 as a contributing factor and expressing fears it may come into service up to four years after its initial start date of 1997.

Yesterday Nick Montagu assured the PAC that the system was near to completion with only 2% ‘functionality’ still to achieve.

Andersens spent £100m developing NIRS2 and has spent a further £20m, including the compensation, since it was installed. The firm has only received a £19m fee for installing the system.

Elisabeth Anstell, a partner with Andersens, told the Commons committee that the firm still expected to benefit by selling the system on the international market.

MPs slam Andersen Consulting’s national insurance computer system