The Driver and Vehicle Licensing Agency's (DVLA's) new database system rollout was riddled with problems and took twice the anticipated time to finish, a report to the Government has revealed.

The system avoided the millennium bug but ran into a series of difficulties which affected vehicle licensing and caused problems with the police IT infrastructure, said Sir John Bourn, head of the UK's National Audit Office.

The DVLA contracted EDS, which had taken over the DVLA's IT division, to replace its 25 year-old vehicle database in 1996. The £5m fixed-price deal set a date of October 1998 for replacement of the Agency's computer system.

EDS had claimed 85 per cent of the money by June 1998, with the DVLA retaining £560,000 against undelivered products or functions. About four per cent was retained until completion.

But the final stage of development slipped first to March 1999, then to August 1999, due to a series of problems:

• The DVLA's contingency plan if any of the systems failed involved bringing in 400 temporary staff to manually process information. Delays were caused by trying to avoid doing this
• When the decision was taken to go live, several services had still not even been tested, and still haven't. EDS plans to complete all testing by October this year
• Because the system had not been tested, the processing of excise duty refunds to drivers hit problems, which resulted in a three-day backlog of 100,000 applications
• Corrupt data was found in the Police National Computer, although no wrongful arrests were made
• EDS did not accept that it could not meet the October 1998 deadline until August.

"EDS and the DVLA have acknowledged delays in completing this complex project. But the DVLA stayed within the budget agreed by the Treasury, which was agreed at the outset of the project," a spokeswoman for EDS told Computing.

"The DVLA achieved this by taking firm action to prevent costs escalating, and negotiated reduced running costs with EDS. The new system was in place throughout the millennium, enabling the DVLA and EDS to enter the year 2000 without problems," she added.