A Department for Transport cost-cutting scheme designed to save £57m will end up costing £81m, MPs say. The efficiency drive aimed to slash administration expenses by placing finance, payroll and personnel services all on one site in Swansea.
But according to MPs the system was destined to make large losses because it had been rushed. The Commons public accounts committee criticised the DfT for setting itself an ‘overly optimistic’ deadline of April this year for getting all its agencies involved.
The new system was designed to help staff manage car tax and driving licences more easily but on one occasion it sent emails in German and on another it took nine days leave off an employee. The public accounts committee today accuses the Department for Transport officials of 'stupendous incompetence' and said 'the service was worse than that previously provided'.
The project was originally forecast to cost £55m but would lead to £112m benefits - a saving of £57 million. But department officials told MPs compiling the report that they now estimate the programme will cost £121m and produce benefits of £40m, resulting in a net cost to the taxpayer of £81m.
Edward Leigh, the committee's Tory chairman, said it was the one of the ‘worst cases of project management’ he had ever seen. 'The department knew that it was pushing things with such a tight timetable but, without robust challenge to such a risky strategy, ploughed on confidently,' he added.
'The result was lamentable. The underlying computer system was inadequately procured and tested, resulting in an unstable set-up when it was switched on.'
A DfT spokesman said there had been ‘consequences’ for some staff involved in setting up the scheme. He added: ‘As with any large scale and long term project, there have been aspects of shared services that have taken longer to implement than others.
‘However, the system is now starting to deliver real change within the department with smoother and more streamlined processes. We continue to develop shared services and believe that the new way of working will result in significant improvements. We welcome this report and will be responding to its recommendations in due course, with an update on our progress.’
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