The London Assembly Budget Committee has issued a report criticising the £31m contract re-negotiated with Capita by Transport for London to run the London congestion charge.
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The report on the revised contract, made six months into the congestion charge scheme, was published in advance of the committee's budget meeting on 16 October.
The report found that the one-off payment to Capita of £3.5m for IT systems was a cost "which should have been met by Capita, not TFL".
Capita has also been fined £1m for poor performance in the seven months the scheme has been in operation.
Tens of thousands of penalty notices were issued in error following incorrect data entry and poor checks.
The London Assembly Budget Committee was also surprised that the contract was renegotiated as a result of problems with customer service at Capita, rather than technical failures.
In a statement responding to the £1m fine, Capita said financial penalties and additional payments form a routine part of any contract. It said the penalty represented a tiny percentage of the potential penalties Capita would incur if it failed to meet its service level agreement with TFL.
Capita also runs the Criminal Records Bureau IT and the BBC's TV licensing service. It was heavily criticised after IT systems it supplied for the government's Individual Learning Accounts scheme were abused by unscrupulous training firms.