Westminster’s main financial watchdog condemned the management of theprivate finance deal with Siemen’s Business Services which left thegoverment with a huge benefits bill because of a 200,000 strongbacklog of applications.
The all-party group’s chairman, former Tory Treasury Minister DavidDavis said:’The project was over-ambitious from the outset.
‘To combine and complex information technology project with a majorreorganisation was always likely to be a risky venture.’In view of the time-scales should have been more realistic and allaspects of the project more tightly managed.
‘In particular, where citizens depend on continuity of service,contingency plans should always be robust when planning major change.Otherwise, as in this case, the risk is effectively transferred not tothe private sector but to the general public.’The enormous distress caused to hundreds of thousands of peoplewould have been avoided had the project been better managed.’
The committee reported that Siemens has not received any milestonepayments and 70 per cent of their expected return on the contract willnot be paid until productivity improvements are delivered and that thecompany has agreed to mitigate additional expenditure by the HomeOffice because of software delays. But it criticised Siemens for notrevealing whether sub-contractor Perot Systems had paid themcompensation.
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