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Wednesday, 1 March, 2000, 08:31 GMT Computer blunders plague government

Last year a computer glitch hit the Passport Agency A trouble-hit new computer system for the Inland Revenue may not be up and running until the middle of next year - more than three years late, it has emerged.

The NIRS2 system for handling National Insurance accounts has already caused problems costing the taxpayer an extra #53m, including #37m in compensation for wrong payments, said the National Audit Office (NAO).

In a highly critical report, the NAO said despite assurances that the system - a public-private finance project with Andersen Consulting - would be fully operational by the end of March, it might not actually be ready until June 2001.

The head of the NAO, Sir John Bourn, said: "In the meantime these problems will continue to have a significant impact on the Inland Revenue's ability to manage National Insurance contribution debt and the taxpayer is continuing to bear compensation costs for payments made to those individuals who have suffered from delays."

For the 13th year in succession, the NAO "qualified", or expressed reservations about, the National Insurance Fund accounts because of the high level of benefit fraud - estimated at #103m million - and #45m in mispayment of jobseekers' allowance.

David Davis, chairman of the Commons Public Accounts Committee which examines NAO reports, said there had been no improvement in the situation since a year ago.

"These figures tell the same depressing tale as is found in recent NAO reports covering other benefits, particularly housing benefit and income support," he said.

"Taken together they suggest a social security system plagued by fraud and riddled with error."

This is the latest in a catalogue of costly government computer blunders which have had a direct impact on the public.

An earlier failure of the National Insurance computer system Problems with a new National Insurance computer caused difficulties in paying benefits and pensions.

Thousands of pensioners were temporarily underpaid by as much as #100 a week in the meantime, owing to problems with calculations related to contracting out of the State Earnings Related Pension Scheme.

These include last year's fiasco at the Passport Agency when problems with the introduction of a new computer system led to a backlog of more than 500,000 unprocessed applications.

A damning report by the National Audit Office reported that the crisis would cost the taxpayer about #12.6m.

Teething troubles with another new network have plagued the Home Office's Immigration and Nationality Directorate.

The faults have contributed to the build up of a backlog of 76,000 unprocessed asylum seeker cases and 100,000 nationality cases.

-- Homer Beanfang (Bats@inbellfry.com), March 01, 2000