Whitehall forced to shelve £320m computer system

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A prestigious computer project designed to slash bureaucracy in the court system has been shelved after running more than £130m over budget.

The Libra system, which is being developed with the computer giant ICL under the private finance initiative (PFI) scheme, was designed to speed the transfer of information between courts and police.

The Lord Chancellor, Lord Irvine of Lairg, had intended to introduce the system next month, but has quietly been forced to postpone it after it encountered serious technical problems. His department confirmed last night that the project's cost had leapt from £183m to £319m and could give no firm date when it would eventually be rolled out.

The collapse, revealed today by Computer Weekly magazine, is the latest in a series of embarrassing failures to hit plans to upgrade Whitehall computer systems. And – with Tony Blair embarking on efforts to attract more private finance into the public sector – it leaves a fresh question mark over the Government's dedication to PFI.

The main element of the Libra project would have enabled courts to prepare cases electronically, streamlining communication with police databases and other parts of the criminal justice system. It would have dramatically cut the time to complete the process, which can currently take up to three weeks.

However, the recent introduction of Libra's first stage has sparked a mutiny in the courts, which have complained that the system is flawed and slows down their computer systems. In fact some were threatening to boycott the introduction of the main part of the new technology.

Rosie Eagleson, the general secretary of the Association of Magisterial Officers, said: "People are concerned. In some cases the technology has had the opposite effect to that intended – users have lost functionality and flexibility."

Edward Garnier, the shadow Attorney General, said: "We have a government overseeing the waste of £319m at a time when it has slashed access to justice on cost grounds.

"The people who used to benefit from legal aid may wonder how this Government, which claims it is a government of delivery, has been able to preside over this appalling episode of bungling and incompetence."

A spokesman for the Lord Chancellor's Department confirmed the cost had risen by 74 per cent, but explained that the rise had been caused by the extension of ICL's contract from eight to 12 years. He said the renegotiation of the deal was permitted under plans presented to Parliament in 1998.

Explaining the postponement, he said the development of software for a "large, complex project covering the work of all the magistrates courts throughout England and Wales" was taking longer than envisaged.

He said an announcement on the timetable for the project's introduction would be made in August.