Technicians were battling to deal with what was thought to be the biggest computer crash ever to hit a government department last night.
Tens of thousands of civil servants at the Department of Work and Pensions (DWP) were either "twiddling their thumbs" and staring at blank screens or attempting to deal with a mounting backlog of work by resorting to pens and paper.
The contractor involved is the American company EDS which is responsible for the ramshackle electronic system at the Child Support Agency whose chief executive, Doug Smith, resigned last week after a series of technological problems.
The Government had tried to keep the electronic meltdown at the DWP under wraps, but last night was forced to concede that it had been facing a major "category one" incident since Monday. A "crisis management center" (sic) had been formed to deal with the computer meltdown, which has caused delays to services provided for some of Britain's poorest people.
Child benefits, income support and pension payments were all affected, according to civil servants.
Some 80,000 screens in around 1,000 DWP offices throughout Britain were said to be affected to one degree or another by the crash. Around 80 per cent of the network in Whitehall's largest department was paralysed.
An internal memorandum, seen by The Independent, said that it had been "incredibly difficult" to find out the extent of the problem and that technicians faced a "massively complex challenge" in attempting to bring screens back up.
A "major incident report" was issued on Monday by senior staff to managers as desktops began to go blank. It said that EDS had advised that resolution of the problem was "imminent" and staff would be able to use the network "very soon". Later it was admitted that there was "no known solution" to the difficulties.
A senior troubleshooter from the Microsoft computer company was said to be on his way from Seattle in an attempt to get to the bottom of the problem.
Sources at the DWP said that EDS blamed Microsoft for the crash, which in turn claimed that the fault lay with EDS.
On Tuesday, EDS advised users to log off and "reboot", but the advice was subsequently rescinded because it was reportedly making the situation worse. Icons that normally appeared on screens enabling users to click into various parts of the system were absent. Glitches began to appear as technicians were attempting to upgrade Windows operating system.
Mark Serwotka, general secretary of PCS, the biggest civil service union, which is involved in industrial action over job cuts, said: "Yet again we are seeing thousands of hardworking staff, many of whom face the axe, trying to deliver essential services with one hand tied behind their back.
"The department and the government are hellbent on axing thousands of civil and public servants, saying IT will enable them to do so. But yet again we are seeing IT systems come to a grinding halt and fail. For the Government and the department to contemplate axing thousands of jobs when the IT clearly isn't delivering is not only irresponsible and foolhardy, but some would argue pure madness."
A spokesman for the DWP said it hoped the problem would be solved by today and that while it had a major impact on staff, the effect on pensioners and other claimants was "minimal".
The worst impact would be on new clients and where claims were being amended, the spokesman said.
Child Support Agency
Problems with a £400m computer system in March resulted in 95,000 of the poorest lone parents facing an accumulated shortfall of £45m a year. The system, installed last year after an 18-month delay, was meant to simplify calculation techniques and payment methods.
Department for Work and Pensions
A glitch in the Department for Work and Pensions' new computer system last August left more than a million elderly people without their cash payments. Problems arose in post offices across the country when the system refused to authorise payments. It was fixed after one day.
Customs & Excise
The Government admitted last year that a new computer system aiming to simplify export procedures had produced inaccuracies of at least £2bn in official trade figures. While Customs & Excise admitted that the system had had teething problems, it attributed this to the fact that exporters were not filling in forms correctly.
More than 10 million workers discovered in April last year that they were facing an unexpected shortfall in their state pension as a result of a computer blunder caused by a changeover to a new Inland Revenue computer system. Four months later, the Inland Revenue's tax credits system also descended into chaos when a computer glitch in the new software stopped crucial payments.
Student Loan Company
Tens of thousands of university students began their academic term this year without their loans due to a malfunctioning computer system. Local authorities complained that software installed by the Student Loan Company last year had extended the time to process applications from 10 minutes to as long as two hours.
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