§ Mr. Russell BrownTo ask the Chancellor of the Exchequer if his Department plans to seek compensation from Andersen Consulting as a result of the delays to the new National Insurance Recording System. [115218]
§ Dawn PrimaroloMy conclusion is that it would not be sensible or cost effective to seek further compensation from Andersen Consulting beyond the agreed amount of £4.1 million which was paid for delays in 1997 and 1998. This also involved Andersen Consulting in additional, unrecoverable development costs of £20 million.
In reaching this decision I have taken into account not just the contractual and legal position, but also the further investment made by Andersen Consulting beyond the development costs of some £7 million, at no cost to the Government, to ensure that the system is fully functional. Beyond this, I am satisfied that taking action against Andersen Consulting would prejudice the partnership 185W relationship now established between it and the Inland Revenue. This is essential to the delivery of future changes to the system in support of the Governments National Insurance and Pensions and Welfare Reform proposals.