£1bn benefits system scrapped

A Government computer project aimed at transforming the benefits system ended up being cancelled at the cost of £1 billion, an influential committee of MPs reported today.

They said that the scheme, to replace paper-based payments of benefits with a magnetic strip card to be used in an automated machine, "must rank as one of the biggest IT failures in the public sector".

Work and Pensions Secretary Alistair Darling who cancelled the project, agreed with the committee's report, but pointed out that the troubled project started under the Conservative government.

But Edward Leigh, Tory chairman of the influential public accounts committee, said his committee was still "sceptical" about the Work and Pensions Department's ability to manage big IT projects.

"This is a sorry tale of waste amounting to more than £1 billion," Mr Leigh said today. "There is no excuse for the department's failure to manage this project correctly, or for the very laboured process of actually putting it out of its misery."