Hackney terminates ITNet contract

The London council voted to end the £70m, 10-year contract with ITNet in October last year, two years after it started, following complaints from Hackney residents and councillors about payment and claim processing backlogs.

In November ITNet was given two weeks to produce a recovery plan and 30 days to remedy faults in the service identified by the council. An Audit Commission report into Hackney Council had revealed council tax collection rates of just 50 per cent and a backlog of 17,000 housing benefit cases.

ITNet, which has written off £10m-£11m as a result of the troubled contract, said it received notification of the contract termination from Hackney on Friday evening.

A spokeswoman for ITNet said: ‘It has been a very difficult contract and [ITNet] has been in discussions with the council to try to agree ways for performance improvements. Both sides could not agree on a way forward and the lawyers will now have to discuss the end of the contract.’

‘We expected it to happen. It was a matter of when it was going to be ended,’ she added.

Last week ITNet announced an agreement with London’s Islington Council to provide a revised benefits administration system. The agreement, which extends the contract term by 3.5 years to 2009, includes ‘clear performance targets’, said ITNet.

‘ITNet and Islington have worked together to improve performances – the complete opposite situation to Hackney,’ said the ITNet spokeswoman. ‘They have agreed what extra services will need to be brought in to manage any backlog.’

Hackney council announced last week that it had agreed a five-year contract, worth £10m, with IT contractor Northgate Information Solutions. Northgate said it will consult with the council over ways to improve efficiency with its software and infrastructure.

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