DSS signs blank cheque for systems renovation

Transformation of the systems behind the UK's #90bn-a-year benefits payments will come a step closer next week when the Government announces the vendors shortlisted to supply a revolutionary IT infrastructure to the DSS.

The department's Accord project - part of a business process re-engineering project which should save #1bn annually - will provide a massive shared systems infrastructure (SSI) for delivery of benefits.

The system will handle about 50 million transactions a week, making payments to 24 million people.

The full implications of the project are only now becoming clear. Accord is effectively a contract without a fixed price tag. This is because many of the IT systems that currently handle benefit payments will have to be rewritten to plug into the new central infrastructure.

Estimating the costs involved is difficult, if not impossible. A spokesman for Itsa, the DSS' IT agency, said: 'We cannot determine how the SSI will impact on other benefits until we know what the SSI will be. Even predicting the costs of it is impossible until this has been evaluated.'

It is expected that the contract winner will be asked to transform the systems that run Income Support benefit. Changes to the Child Benefit system, which will see its Tyne & Wear headquarters operations outsourced, are expected to follow. The Government will probably want the ageing IT system to be replaced as part of that contract.

Other benefit systems, such as those of the Child Support Agency and the recently developed Job Seekers Allowance, will also need altering, although the latter will probably be one of the last to be changed.

The nearest value placed on the Accord contract, to be signed next summer, is 'hundreds of millions of pounds'. Stage one should go live in late 1998. The contract is likely to be won by a consortium led by one of the big outsourcing vendors.

Richard Hardy, agency trade union sidechair at Itsa, said: 'We've been told there will have to be re-engineering of the systems to run on the new infrastructure. If the architecture is rewritten, then the current benefit systems will not function and there would need to be some re-engineering to make them work.'

The shortlist of three or four companies for the Accord contract, which is expected to include EDS, was whittled down from the 30 vendors which replied to the tender issued in late July.

Union officials fear that the Private Finance Initiative deal will result in some 1,500 Itsa staff moving to the private sector, and a diminishing role for the department in future IT developments.