Science: Ministers felled by 2000 'bug'

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Ministers have admitted they are hopelessly behind schedule in preparing for the millennium computer bug. Fran Abrams reveals that the first official estimates say the 2000 timebomb will cost the Government pounds 1bn.

Attempts to avoid a massive millennium computer failure will cost the Government pounds 1bn, according to parliamentary answers given to the Liberal Democrats' treasury spokesman, Malcolm Bruce. But experts say the figure is far too low, and that the real price will be three or four times as much.

Only three out of 16 government departments had completed an audit of their systems by a target date of January 1997, and only seven had completed costed action plans by a deadline of October 1997.

The "millennium bug" arises because many computer systems and chips in everyday equipment, including banking and hospital systems, store the year as a two-digit, rather than four-digit number. An unknown number of computers will crash at midnight on 31 December 1999 because they will think the year is 1900 instead of 2000.

Some of the worst affected government departments are refusing to say what they have done about the millennium bug on the grounds that an official statement is forthcoming. But even among those that were prepared to give information, the picture was dismal.

Costs have already risen, and experts believe they will go much higher. In July the Department of Social Security estimated it needed to spend pounds 30m, but now it says it will need pounds 45.6m. It is believed the problem will cost the NHS about pounds 210m and the Ministry of Defence pounds 250m.

The private sector is way ahead in its response to the bug. BT will spend pounds 300m and the four main clearing banks expect to spend pounds 500m.

According to Robin Guenier, head of the Taskforce 2000 group set up to tackle the problem, a similar spend by the Government would amount to pounds 7bn. Even if it wanted to spend that amount it could not do so, though, because the skilled labour would not be available. Figures of between pounds 3bn and pounds 4bn are believed to be more realistic.

"This emphasises the need for senior people to start a process of radical prioritisation," Mr Guenier said.

Mr Bruce is pressing David Clark, the Chancellor of the Duchy of Lancaster, for an early statement on the issue.

"There is clearly still too much complacency in Whitehall and it really is time for some action before it simply is too late to sort things out," he said.

Yesterday, one of the leading experts on the problem, Maurice Fitzpatrick of Chantrey Vellacott accountants, said the Government had failed to grasp its magnitude.

"In many ways this is the biggest single issue that the Labour government faces in its first term, although whether they are properly aware of that at the moment is hard to say," he said.

Mr Clark has said he cannot comment on details before his statement. However, a spokeswoman said the cost could be met from existing budgets and that the pounds 7bn figure was too high.