IT outsourcing company CSL is failing to deliver an adequate service on more than half of its housing benefits contracts.
That is the frank admission of company director Dick Turpin, this week.
He put much of the blame for the chaos that has hit housing benefit operations across the country on the Government's anti-fraud Verification Framework
Turpin warned that the situation will get worse as the Verification Framework is extended to more councils, unless significantly more resources are found.
"This is not just a CSL problem and not just an outsourcers problem; it is a total industry problem," said Turpin. "We all got it wrong.
"CSL has eight benefits contracts," he added. "On five of them we are falling well below the expected standards. In all five there is a common theme - the introduction of the Verification Framework."
Turpin said that CSL had rectification plans in place for all its problematic contracts and was hitting its targets for recovery.
Over the past year, Computer Weekly has reported on the housing benefit contract problems faced by CSL and other IT outsourcers like EDS, Capita and ITNet, and the difficulties of local authority in-house services.
According to CSL the Verification Framework will eventually lead to service improvements as fraudulent claimants are removed from the system. "There is light at the end of the tunnel," said Turpin. "But it is a much darker and longer tunnel than any of us realised."
IT outsourcers are used to managing change, said Turpin, but admitted his surprise at the challenge posed by new regulations. "The industry is at fault. We all underestimated what was going to happen."
The CSL director expressed disappointment that the Government was dragging its feet over reform of the housing benefit system. He also warned ministers that they would have to increase incentives to local authorities if the verification framework was to be implemented successfully.
"This is a resource problem," said Turpin. "You've got to get the right number of people and systems in place. I hope the Government has learnt from the problems we've had."