MPs said yesterday that the money could have been better spent on providing training for unemployed people.
Instead, it went on providing an information network for the department's Training and Enterprise Councils. So bad was the system that when it was installed in 1990, most TECs decided to use it only in part or not at all. Despite Department of Employment claims to the contrary, most TECs maintained it did nothing for their performance.
The details are contained in a damning report from the Tory-dominated Commons Public Accounts Committee. Coming so soon after the PAC's recent unprecedented onslaught against government waste, this latest attack is especially embarrassing for John Major. It also brings into sharp relief the Government's penchant for using expensive outside consultants.
In 1988, the department decided to set up a new computer in its offices dealing with training and enterprise programmes. Later that year, when the offices were reconstituted as TECs, the department decided to press ahead with tne computer, known as the Field System.
It was estimated to cost pounds 71m and by the time the TECs became responsible for looking after their own information technology requirements in spring 1993, the department had spent pounds 48m.
The MPs said officials did not bother to test a pilot scheme to see if the computer worked. And the project was handled by staff 'who did not possess the necessary background and experience'.
The department's solution was to employ 'some 200 individual consultants or consultancy firms'. Robert Sheldon MP, chairman of the PAC, said: 'I would have thought they were all treading on each other's toes there were so many of them.'
Mr Sheldon questioned whether the Government made sufficient use of its own in-house experts. Nick Monck, permanent secretary at the department, said: 'There was a shortage of such people.' It was a choice between hiring extra staff or allowing the project to be delayed or go wrong.
But the consultants, the MPs said, were also engaged in a 'haphazard manner' and were not made subject to penalties for failing to deliver.
In 1989, the department reckoned on spending pounds 1.3m on consultants. In the event, by September 1992, the bill had risen to pounds 11m.
But at no stage, despite being so well rewarded, did the consultants ever say to the department that the project was going wrong and the system would not work.
The department told MPs that it was now writing to the TECs setting out guidance for hiring consultants and managing computer projects. This did not satisfy Tony Lloyd, a Labour employment spokesman, who condemned the debacle 'as the latest example of Conservative waste and incompetence'.
He added that if David Hunt, the Secretary of State for Employment, 'was a company director he would be fired'.