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DVLA EFFICIENCY DRIVE LANDS TAXPAYERS WITH £81M BILL

A GOVERNMENT initiative to save £57m was run so badly from its Welsh HQ it ended up costing the taxpayer £81m instead.

The project, to share back-office functions for the Department for Transport, went so disastrously wrong the IT system frequently sent messages to staff in German.

Today the House of Commons Public Accounts Committee publishes a scathing report into the fiasco, which the MPs describe as “one of the worst this committee has seen”.

In 2005 the Department for Transport decided to centralise its human resources, payroll and finance support services for those of all its agencies – including the DVLA and Driving Standards Agency – at a new office in Swansea.

But a demanding timetable and the decision to base the new super- database on the DVLA’s existing computer system led to a series of problems.

The new system was not properly tested before it went live – in a bid to save more money – and there were difficulties in relocating skilled staff from each of the various agencies to work in Swansea.

Today the MPs lay the blame at the feet of senior management, and say that although DfT bosses have been denied their bonuses “no individuals have been dismissed or been properly held to account”.

It remains a mystery why staff frequently received computer messages in German.

An investigation by the National Audit Office quoted one worker as saying: “When you log on, it tells you in German that your password has expired; I think absolutely everybody got that.”

Several civil servants found that the new computer system wrongly cut their holiday entitlement, and one worker who took time off due to a bereavement had the cause of their absence recorded on the system as “anxiety”.

Meanwhile, the new system was sending multiple invoices to some customers while failing to pay suppliers on time. It also paid some suppliers in euros by mistake.

There were further problems when the DfT decided to use staff based in India for some of the work as a cost-cutting measure, only to run into difficulties getting security clearance for the Indian workers.

In March 2008, the DfT projected that far from saving money as was intended, the fiasco would actually cost the taxpayer £81m. The department says it will eventually recoup this money, and expects to eventually save staff costs by cutting 309 jobs. But MPs today dismiss this claim as “speculative”.

Edward Leigh, the Tory MP who chairs the Public Accounts Committee, said: “The DfT planned and implemented its shared corporate services project with stupendous incompetence.

“This is one of the worst cases of project management seen by this committee.”

He added: “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. The result was lamentable.”

Earlier this year, MPs called Robert Devereux, the permanent secretary at the DfT, to answer questions on the project.

Mr Leigh told him: “It is enough to make you weep, is it not?”

Mr Devereux replied: “Yes, it is.”

A year ago the same committee of MPs took the DVLA to task for its sick-note culture, complaining that taking days off was a “way of life” when more than 1,000 staff took more than 21 days off sick in 2006.

The new DfT shared-services centre is based near the DVLA at Morriston, Swansea. At present only two of the DfT’s agencies, the DVLA and the Driving Standards Agency, are using the troubled IT system, with a further five due to be added in the near future.

The problems also raise questions about the ability of government departments to make major efficiency savings. The Treasury want to make £5bn in new savings by 2010-11, with the Cabinet Office estimating more sharing of services would save up to £1.4bn each year.

A Department of Transport spokesman said: “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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