Legal advice received in 1999 said the 1994 Home Office deal with Bull to implement the National Probation Service Information Systems Strategy (Npsiss) IT infrastructure and Crams, a common case management system, was defective and restricts further investment.
In a damning draft report into probation service IT, seen by Computer Weekly, the National Audit Office (NAO) says the Home Office is now unable lawfully to fund vital developments to the heavily criticised systems. By the end of the year the systems are expected to have cost £118m, some 70% more than the forecast in the Home Office's original business case.
"Since 1999 the Home Office has been working within legal restrictions on letting new purchase orders under its enabling agreement with Bull due to defects in the letting of the original agreement," the document states.
"Legal advice received by the Home Office suggests that any new purchase orders raised under the enabling agreement are unlawful. As a result, for example, the Home Office is unable under the existing agreement to fund any expansion in the capacity of the current network to accommodate increased electronic traffic."
Last March Simon Hughes, the Liberal Democrat home affairs spokesman, raised the legality of the probation service contract in Parliament but was told by Home Office minister Paul Boateng, "It is not our policy to discuss legal advice in relation to such commercial arrangements."
A Home Office spokesman said, "The Home Office welcome the NAO's scrutiny of Npsiss and Crams. However, until its report is published it would be inappropriate for us to comment further."
The NAO document attacks the project management at the Home Office. The Home Office programme team had seven programme directors in seven years, only two of whom had significant experience of managing major IT projects, said the NAO.
The Home Office and Bull did not agree service level agreements until 1998, four years after the contract was signed, and even then "performance was not systematically monitored".
Crams was introduced with a poor user interface and other technical problems unresolved by initial testing, the NAO said.
Despite a series of critical reports the Home Office did not draw up a recovery plan until July 2000, just three months before Her Majesty's Inspectorate of Probation's report called for "very significant improvements" in probation service IT.
Some progress has been made. The IT project team has been doubled in size and an experienced head of information and technology for the National Probation Directorate, Robin Pape, has been appointed.
The Home Office is promising "much tighter controls and monitoring of probation IT development and support" and the search is on for short-term improvements before a replacement for Crams it introduced in 2003.
Napo, the probation officers' union, has campaigned on the problems with Crams. Harry Fletcher, union assistant general secretary, said, "It has been a colossal waste of public money. The people responsible should be called to account."
"Significant risk" from Bull contract
1998: Consultants tell Home Office the contract allowed "unnecessary orders, duplication and overlap resulting in scope for double charging by Bull"
2000: Home Office Audit and Assurance Unit investigates new £5.4m per year consolidated purchase order for support and maintenance agreed with Bull to overcome problems highlighted by 1998 report
2000: Consultants warn Home Office, "Its information services capability was badly under-resourced with misaligned skills, and that this was exposing the Home Office and services to significant business risk."