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NAO slams Fujitsu project

London: Another large scale government IT project in the UK has met severe criticism from the UK's National Audit Office, NAO.

The NAO says the implementation of a project to create a centre to streamline back-office functions for the UK's seven research councils, sponsored by the Department of Business and Innovation, has so far not been good value for money and there is a risk that the councils may not recover their investment. To date, the project has cost £130 million to implement — a 65% budget overshoot.

Amyas Morse, head of the National Audit Office, said, "This is yet another example of a project embarked upon without the necessary planning. Once it did start to go wrong, proper governance or intervention from the Department should have rectified the problems, but this did not happen until a great deal of taxpayers' money had been spent.

"The Department, the research councils and the Shared Service Centre now need to get performance up to where it needs to be."

The aim of the Shared Service Centre was to share services, such as finance, HR and procurement, in order to make savings. By the end of March 2011 the project was £51 million over budget.

The NAO says the councils have not monitored benefits effectively, resulting in a lack of clarity about the savings delivered. However, the available evidence indicates that to date the project has underachieved against total expected savings by at least £73 million. And it is likely to take two years longer than planned before the project recovers its set up costs.

According to the NAO's report, the reasons for the overrun and delay included complex governance arrangements, slow decision making and the lack of a clear vision for the project from the outset. The contract with Fujitsu, the supplier of the Centre's ICT systems, was terminated wasting £13 million because some elements of the system then had to be rebuilt in-house. When the project did start to go off-course, the Department for Business Innovation and Skills, as sponsor Department, did not intervene.

Fujitsu was paid £32 million for its work as IT consultant, integrator and supplier on the project.

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