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Public pensions agency's £23m hit over botched IT system

A failed IT project left the public-sector pensions body with a £23m budget gap.

Pensioner: (Generic pic)
Pensioner: (Generic pic)

A failed IT project that left Scotland's public-sector pensions body with a £23m budget gap had no clear business case, a spending watchdog has found.

The SPPA runs retirement plans for more than 500,000 people, including NHS employees, teachers, firefighters and police officers.

Its planned IT scheme to integrate pensions administration and payments was meant to save cash and boost efficiency.

The project was shut down last February after years of trouble when the chosen supplier, Capita, failed to provide a working system.

The Audit Scotland report states: "In our judgment, SPPA did not have enough assurances over Capita's ability to deliver the project before it awarded it the contract."

Auditors also found the agency did not have the resources to manage a project of this scale.

The pensions body agreed a budget of £9m for the scheme but set no detailed scope or objectives, said to be a " significant omission" which contributed to the overall project failure.

The Auditor General for Scotland, Caroline Gardner, said the botched scheme has considerably set back planning at the Scottish Public Pensions Agency (SPPA).

Ms Gardner said: "The public sector is under pressure and we are seeing more instances of bodies embarking on IT projects without the necessary staff and assurance arrangements in place to manage them properly.

"In this instance, I found no evidence of a clear business case for a new integrated system, which was pursued at a time when the SPPA was going through significant change.

"The result was a project that failed to provide value for money and has considerably set back the SPPA's planning."

Scottish Conservative pensions spokesman Bill Bowman said: "This is yet another botched IT contract on the SNP's watch, and it's costing the taxpayer millions of pounds.

Labour's James Kelly called on the Scottish Government to "properly fund" public services, saying: "This is an absolute mess which has cost taxpayers millions of pounds."

A Scottish Government spokesman said: "While the report raises important issues, there has been, and will be, no disruption to pension services."

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