The Ministry of Justice (MoJ) has been forced to write off £56.3m from its shared services programme (SSP) which aimed to create an enterprise resource planning (ERP) system.
The ERP system was meant to deliver human resources, operational finance, procurement, payroll and end-to-end transactional services, but has suffered from cost constraints, lateness and poor governance.
The MoJ was also forced to abandon the project when it realised it had been duplicated by the Cabinet Office.
A spokesperson for the MoJ told the Guardian: “We wrote off the money because we discovered in 2012 that the Cabinet Office was planning to implement a similar scheme. We could not recoup some of the costs, such as staffing.”
In 2011, three companies, including Steria, won the outsourcing contract for the SSP, of which £56.3m has now been scrapped. At the time, the project was expected to create savings of £28m a year by 2014 and be one of the first pan-departmental shared service solutions in the UK central government.
The £56.3m came from accounts realised by the MoJ.
The project was designed specifically for MoJ use, but the department realised it had been duplicated by the Cabinet Office. The Cabinet Office shared services programme is a joint venture, also with Steria, called Shared Services Connected Limited (SSCL).
The MoJ has now decided to enter into negotiations with SSCL to try to outsource its shared services from autumn 2014.
In doing this, elements of the existing programme will become redundant and will be “of minimal use to expected future developments”, therefore leading to write-off costs.
The MoJ said: "This work is central to the government's ongoing reform programme, which was put in place to create a more accountable and unified Civil Service.
"We are currently in discussions with Shared Services Connected Limited with a view to signing a contract later this year, which will save the taxpayer millions of pounds a year.”
The MoJ shared services programme was one of the 23 IT projects labelled as "red" or "amber/red" in the Major Projects Authority’s annual report 2014. The government watchdog warned last month that the project needed urgent action or reassessing to be delivered successfully.