The Parliamentary Public Accounts Committee (PAC) this week slammed the Libra project to upgrade IT in the magistrates' courts as 'one of the worst private finance initiative deals that we have seen'.

The then Lord Chancellor's Department (LCD) received one bid to supply the system from ICL (now called Fujitsu Systems), and signed a ten-and-a-half-year deal costing 194 million.

ICL later said it could not continue with the whole contract and agreements were recently signed with others to provide the core software application and systems integration (see [2003] Gazette, 30 October, 11).

The project is now estimated to cost 390 million for eight-and-a- half years of service.

The PAC criticised the LCD for procuring a contract to provide services to 42 magistrates' court committees over which it did not have real authority or control, adding: 'It ran a poor competition, attracting only one bidder, and it failed to take decisive action when ICL did not deliver what was required.' It was also critical of ICL.

The report advised government departments that they will not gain the benefits of IT if they do not redesign parallel business processes.

The LCD's decision to develop IT to support existing processes 'contributed to the project's difficulties', it said.

One of the reasons the LCD decided not to terminate ICL's contract when it was in breach was because it considered such action might have led to costly litigation and counter-claims from ICL.

The PAC said: 'The department might consider whether its lack of confidence in the prospects of redress has anything to say about the effectiveness of the court system, for which it is responsible.'

A spokeswoman for the LCD's successor, the Department for Constitutional Affairs, said it welcomed the report and will address all the issues raised in a full response, which it has two months to produce.

Neil Rose