The disagreement centres on who is responsible for errors that lead to overpayments of benefit.
Under the current contract, the council foots the bill, while ITNet also receives 50% of any monies recovered, says council leader Steve Hitchins.
‘ITNet is determined to keep a clause in the contract that is financially beneficial to it when it provides a bad service,’ he said.
‘I cannot believe we could possibly let the contract go forward with that sort of clause in it.’
The original contract containing this clause was signed by a Labour administration. But with complaints about benefit claim backlogs on the increase, the now Liberal Democrat council and ITNet agreed to renegotiate in January.
If new terms are agreed, the contract will be extended by three-and-a-half years to 2009, and ITNet will receive an extra £17m to improve the service.
Outstanding cases of benefit overpayment have already been cut from 8593 in December to 3714 in April, claims the council.
But the stalemate has put the future of the contract into doubt, and local MPs are now pushing for ITNet to be ditched altogether.
Chris Smith, MP for Islington South and Finsbury, says that while there has been some improvement in the service, it is still the main cause of concern among his constituents.
‘I’ve criticised the Labour administration for entering into a flawed contract, but also the new Liberal Democrat administration for extending and enhancing the contract rather than playing hardball,’ said Smith.
ITNet would not comment while negotiations are in progress.
- Andy McCue writes for Accountancy Age’s sister publication Computing
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