The problems that beset the introduction of the National Insurance computer system have cost the Inland Revenue £85m, it has been revealed.
A report published today by government watchdog the National Audit Office confirmed that the Revenue has been forced to pay the sum to compensate UK citizens for losses as a result of the IT problems.
The NAO also reported that remedial work to Nirs2 cost an extra £67.9m.
In 1995-96, the Revenue suspended its Deficiency Notice programme, diverting staff to fire-fight problems with the £144m National Insurance Recording System 2 (Nirs2).
Deficiency notices were issued by the Revenue to alert individuals that they needed to top up National Insurance contributions to qualify for the basic state pension.
These notices were not resumed until 2003. The downturn in the stock market in the intervening years meant that pension scheme members faced losses to their pensions in order to cover additional National Insurance contributions.
The Nirs2 project, which holds 65 million records and contains over 14 million lines of code, was awarded to Andersen Consulting, now Accenture, in 1995. An extension to the contract was signed last year, to run until April 2005.
"The Inland Revenue continues to face challenges in maintaining individuals' National Insurance contribution records, upon which large amounts of the public's benefit entitlement depend," said Sir John Bourn, head of the National Audit Office, in a statement.
Double legal trouble for Musk as he also faces civil lawsuit over renewed British pot-holer 'paedo' claims
Battery development could help boost performance of smartphones
Topological photonic chips promise a more robust option for scalable quantum computers
In quantum physics both the chicken and the egg can come first, claim University of Queensland researchers
Cause-and-effect is not always straightforward in quantum physics