Warnings 'ignored' as govt IT project costs doubles

The government ignored warnings about an IT project which went on to cost twice what was expected, according to a committee of MPs.

The House of Commons Committee on the Environment, Food and Rural Affairs said it was "deeply unimpressed" by the failure of the Rural Payments Agency (RPA) to implement a new system for making payments to farmers.

The committee's interim report said the RPA signed a contract with Accenture in January 2003, to develop an IT system to enable it to make payments under the new scheme.

But the cost of the IT contract has more than doubled - from £18.1 million (US$32.3 million) to £37.4m (US$66.8 million) - and payments will only start next month.

The RPA said this was the result of the growing complexity of the payments scheme, the high volume of applications for funds and the fact that some of the schemes were abolished after Accenture had started work on the systems to support them.

The report said: "We were alarmed to learn about the scale of the cost overrun on the revenue side of the RPA's IT contract with Accenture, given that it amounted to a doubling of the original budget.

"We are concerned that the nature of the contract agreed between the RPA and Accenture apparently allowed for the costs to increase so dramatically, and thus seemingly ignored the practical workload implications of the SFP [Single Farm Payments] policy agreed by ministers."

The committee said that with "better planning and monitoring many of the problems could have been avoided". It added: "The importance of the IT systems was stressed in the committee's previous scrutiny of the RPA. We regret that the government appears to have taken little notice of our previous warnings."

The committee's chairman Michael Jack said in a statement: "The result of these failings is extra cost and more worry for England's farmers and a bill for the taxpayer of an extra £18 million (US$32.2 million) to cover the 100 per cent increase in the running costs of the systems tasked with delivering the new payments."

The Department for Environment, Food and Rural Affairs minister, Lord Bach, told Radio 4's Today programme the first payments would be made next month.

He agreed there had been problems with the system but added: "As well as implementing [Common Agricultural Policy] reform the rural payments agency is engaged in a massive modernisation program to enable it to deliver value for taxpayers' money in the future and this resulted in the increase in the agency's total budget."

Steve Ranger of Silicon.com reported from London.