Contract-free FutureLink processes £2bn public cash

The UK arm of FutureLink, the ailing US ASP, has been processing billions of pounds of public money for the Housing Corporation...

The UK arm of FutureLink, the ailing US ASP, has been processing billions of pounds of public money for the Housing Corporation without a formal contract.

According to Futurelink Europe, registered social landlords have submitted more than £2.2bn of online bids via its Housing Corporation service. However, CW360 has discovered that the UK government agency has been working with FutureLink Europe for one year, on the basis of a preliminary four-week contract without any formal agreement.

With FutureLink's US parent company filed for Chapter 11 bankruptcy protection this week, a cloud now hangs over the future of the European operation, which could significantly impact the current service it has been providing to the Housing Corporation.

It is understood that as a result of the absence of an official contract, the Housing Corporation has no service level agreements in place to protect its data and the service FutureLink Europe has provided.

An initial contract was announced in a press release last November, which described the system as a "secure, password-protected gateway". Since then, 550 local housing authorities have used the investment management system, called Housing Corp-Online, deployed by FutureLink Europe.

No executives from the Housing Corporation were available to comment, although Sian Jones, the corporation's head of communications, said: "We haven't got a contract with FutureLink."

The Housing Corporation did confirm to CW360 in a written statement that it is currently in discussions with "an ASP", through the government procurement body GCAT.

Housing Corporation internal documents shown to CW360 reveal that a cost benefit and risk analysis has been conducted with regard to signing a more formal contract with FutureLink Europe. A GCAT official confirmed that FutureLink is not, and has never been, on the government's list of approved IT suppliers.

Following the US parent company's decision to file for Chapter 11 bankruptcy protection, the European arm of FutureLink issued a statement on 16 August claiming its customers were not at risk as a result of the US arm's position. "FutureLink Europe Ltd is a separately incorporated, independent, self-funding UK business. The company and its customers will not be affected by the Chapter 11 announcement made by the US company on 14 August 2001 and will continue to trade as usual," the statement said.

However, as losses mounted earlier this summer, FutureLink said it was considering the sale of its European operations. If this were to happen, the lack of legally binding service level agreements could pose difficulties for the Housing Corporation.

The managing director of FutureLink Europe refused to comment on the company's relationship with the Housing Corporation.

Read more on IT legislation and regulation