Botched public sector IT contracts leave big ‘black hole’

Caroline Gardner. Picture - Andrew Cowan/Scottish Parliament
Caroline Gardner. Picture - Andrew Cowan/Scottish Parliament
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Repeated problems with IT contracts across the public sector in Scotland have cost the taxpayer more than £250 million in recent years, analysis has revealed.

The botched implementation of upgraded computer systems across the police, NHS and other quangos has led to the public purse having to write off a total of £257m, the Scottish Conservatives said.

The Tories claimed it was proof SNP ministers had repeatedly failed to get a grip on handling contracts for vital IT systems relied on by thousands of public sector staff.

A spokesman for finance secretary Derek Mackay said the Scottish Government had introduced a strengthened system for managing IT to ensure every project worth more than £5m was subject to a comprehensive programme of technical assurance.

It follows a report last week that found an IT project with no clear business case has left Scotland’s public sector pension body with a £23m budget gap.

The Auditor General for Scotland, Caroline Gardner, said the failed scheme had considerably set back planning at the Scottish Public Pensions Agency (SPPA).

The SPPA runs retirement plans for more than 500,000 people, including NHS employees, teachers, firefighters and police officers. The organisation’s planned IT scheme to integrate pensions’ administration and payments was meant to save cash and boost efficiency.

The watchdog said the SPPA had awarded the IT contract to outsourcing firm Capita in 2015 despite concerns that its bid was “abnormally low” in terms of overall costs.

The agency also said the body had set an “unrealistic” 18-month timescale for the completion of the project, which was supposed to save it money by integrating pensions’ administration and payments.

The project was shut down in February last year after Capita failed to deliver a working IT system or hit any of its key milestones.

But the Tories said it was just one of several similar incidents that had left taxpayers out of pocket.

They pointed to long-term issues with CAP payments for farmers, which saw costs balloon from £50m to £129m – costing taxpayers an additional £79m.

The party added that plans to sort out NHS 24’s IT system saw a £75.8m process turn into an expected £131m – an extra £55.2m.

And Police Scotland’s new computer system has come in £100m more than initially planned, now totalling £300m.

Scottish Conservative MSP Donald Cameron said: “It would be unrealistic to expect every major IT project to be completed on time and on budget, especially when large organisations are involved. “But the fact this series of blunders has cost the taxpayer more than £250m shows just how negligent the SNP has been.

“Nationalist ministers have spent years pleading poverty – slashing public services and hiking taxes as a consequence.

“But a more competent approach to these schemes could have saved the taxpayer tens of millions of pounds and spared some of the subsequent misery.

“The SNP cannot blame anyone else for this record of financial recklessness.

“It’s been in charge for 12 years and must take full responsibility.”

Mike Rumbles, the Scottish Lib Dems’ connectivity spokesman, said: “Too many SNP IT projects have been allowed to spiral out of control.

“From policing to farming payments, too often these projects have become a black hole for money and staff time and do not delivered the benefits promised.”

A spokesman for Mr Mackay told The Scotsman: “We will take no lectures from a Tory party responsible for Chris Grayling’s phantom ferries fiasco, which wasted £33m of public cash – and which comes on top of more than £2 billion more in wasted funds on his watch.

“There have also been a litany of IT failures under successive UK governments, including the Tories’ scrapping of the NHS’s national electronic health record system after spending at least £9.8bn.

“The Scottish Government has introduced a new and strengthened system for managing IT to ensure every project worth more than £5m is subject to a comprehensive programme of technical assurance.”