HL Deb 24 July 2002 vol 638 cc73-5WA
Baroness Serota

asked Her Majesty's Government:

What is the progress of discussions between the Lord Chancellor's Department and Fujitsu Services on the Libra project to provide IT services for the magistrates' courts in England and Wales. [HL5595]

The Lord Chancellor

There are two parts to the Libra project: the provision of a modern IT infrastructure and network to link the magistrates' courts with other parts of the criminal justice system and the special software for case management, accounting and other administration within the courts. Installation of the infrastructure and network is 75 per cent complete and will be completed during the first half of 2003. The specialised software has been delayed.

The department has now signed a variation to the contract with Fujitsu Services (formerly known as ICL) in respect of the Libra project.

Under these new arrangements, Fujitsu Services will continue to deliver the IT infrastructure and network and provide support until March 2007.

However, the department has decided that Fujitsu Services will not be required to continue with the development of the specialised software for case management, accounting and other administration. Serious concerns arose last year when delays in delivery of the software and increases in their costs led Fujitsu Services to seek to renegotiate the contract. As many courts and offices had already been equipped with the IT infrastructure, a basis for renegotiation was agreed. Despite intensive negotiation however, it has not proved possible to reach an agreement on the specialised software at an acceptable price, which will deliver value for money for the taxpayer.

Instead, the department will procure application services separately. Assessments show that robust, tried and tested software is now available in the marketplace which could meet requirements at a lower cost than that on offer from Fujitsu Services.

The original 1998 contract was valued at £183 million to run until July 2009. A variation to this was signed with Fujitsu/ICL in 2000, which was valued at £319 million was to run unti 2013. This was not a real price increase as the extra cost was for the extra years and other benefits. In each case the contract with Fujitsu Services was for the delivery of both the infrastructure and the specialised software.

The estimated value of the revised contract with Fujitsu Services is £232 million which includes some £31 million paid under the existing contract from 2000 to the end of June 2002 for the delivery and operation of the infrastructure services received by the magistrates' courts. In addition, the Government have paid Fujitsu Services £6.8 million for design products produced as part of the software application development that can be reused. Apart from this amount, the financial and management risks of developing the software have been borne by the supplier.

A number of studies have been carried out by external organisations to provide assurances on the way forward, including a benchmark exercise on the infrastructure costs and an assessment of the costs, timescales and market capacity to deliver the software application services.

The benchmarking exercise shows that the cost of the provision of the infrastructure service in the revised contract is in line with the cost of similar services provided to organisations of similar size, structure and complexity in the private and public sectors. It is possible, but by no means certain, that a new competitive procurement could deliver the services for less cost, but the department's assessment of the costs of delays and procurement and completing the implementation of the service to all courts shows that the revised contract provides best value for money to the taxpayer.

The studies on the software application services indicate that the services can be delivered by the end of 2004—a delay of nine months on the original 1998 contract—and at a price that will be affordable and provide value for money. The department is planning on this basis. However, these services will be subject to new procurements and the House will be informed of the outcome when the procurements have been completed.

There are lessons to be learned for all parties from the project. Since the original award of contract a range of government guidelines on managing IT contracts and on PFI/PPP contracts have been issued. These have been fully utilised in the recent negotiation. Improvements introduced on Libra in the past 12 months include strengthening of the governance arrangements, better risk management, the use of external benchmarking and an external review under the gateway process. This has provided more effective controls for the negotiations and future plans. The new arrangement separates the delivery of the infrastructure from the application which is designed to better ensure the success of the overall programme and at the same time place appropriate risk with the respective providers and the department.