The Department for Transport's shared services scheme has been criticised in the strongest possible terms by the Public Accounts Committee (PAC) after it suffered a catalogue of setbacks including an IT system that issued help messages in German.

The project was intended to save the department £57m by sharing hardware and software resources, but now looks like costing the taxpayer £81m.

"The Department for Transport planned and implemented its shared corporate services project with stupendous incompetence. This is one of the worst cases of project management seen by this committee," said PAC chairman Edward Leigh MP.

The department set overly tight deadlines on the project and as a result systems were not procured or tested properly, resulting in an unstable setup when the system was switched on.

IT support arrangements were not subjected to full competitive tender, requirements were not specified precisely enough or suppliers managed sufficiently closely.

So far only the central department and two of seven satellite agencies are actually using the system, despite the original aim that all agencies would be using it by April 2008.

The report highlights that the concept of shared services is not invalidated, and that the scheme went wrong only because of poor management.

"There are three ways in which implementation can fail: through delay in introducing planned developments; increased cost; or by providing poorer services," says the PAC report. "The department has suffered all three in implementing its shared services project."

Users of the system have little confidence in its abilities, and the department's performance indicators show a very poor and variable level of performance for the whole of the first year of operations - in some cases worse than the incumbent systems.

Leigh called for action over those to blame for the problems. "The senior managers responsible for this failure, as in the case of other recent large-scale project failures to come before this committee, have not been properly held to account," he said.