Sheffield City Council is to fine IT outsourcing firm CSL over failures in the city's privatised housing benefit service.
The local authority will not disclose the size of the penalty it will impose on CSL following the company's failure to meet a rectification programme agreed last October, to put the service right by New Year's eve.
Paul Blackwell, CSL's director of local government, said, "We regret that not all the rectification targets were met, though some important ones were. We are processing more work, on a daily basis, than we receive.
"We have proposed new solutions to the council. The issue for negotiation is the date for clearing the backlog."
Sheffield's financial services manager, Andrew Dolling, said the council had been forced to prioritise payments to private tenants in a bid to prevent evictions, and to housing associations which could face cash flow problems.
This may be protecting private tenants but it has hit the city's finances with rent arrears for Sheffield's 65,000 council tenants shooting up to £14m last year.
Across the Pennines in Manchester the city council's problems following the implementation of a Bull housing benefits system are continuing (see Computer Weekly, 9 December 1999).
The council has continued to cut access to its customer service centre and close phone lines every afternoon so staff can concentrate on clearing the housing benefit backlog.
Meanwhile, Hackney councillors in east London have yet to act on threats made last November to sever their links with IT outsourcing firm ITNet over housing benefit backlogs (Computer Weekly, 18 November 1999).