Watchdog: We’ve wasted £3.2m on useless software
CITY watchdog the Financial Conduct Authority has admitted wasting £3.2 million of taxpayers’ money on computer software it never used.
Officials at the FCA were forced to reveal that the software it originally required had a cost of just £1 million. However, the final payment that was handed over came to a total of £4.2million.
US software giant Oracle, based in San Francisco, had offered the FCA discounts on one-year licences to use a range of sophisticated computer programmes on the condition that it paid in advance.
The FCA shelled out the cash only to realise later that it had miscalculated its requirements and had paid out unnecessarily for software products which were surplus to requirements.
Officials had to reveal their mis- take when they published their accounts.
The FCA refused to reveal details of its deal with Oracle – which last year had a turnover of more than $38 billion (£25 billion) – claiming that disclosing the information might harm its interests when negotiating for software in the future.
One of the watchdog’s roles is to ensure that banks and other financial organisations play by the rules and do not rip off customers.
Jonathan Isaby, chief executive of the TaxPayers’ Alliance, said: ‘Taxpayers will be furious that bosses have been suckered into such a terrible deal.
‘The crushing inevitability of a government IT project going horribly over-budget doesn’t make it any less painful, especially at a time when we’re trying to make savings.
‘We have to improve procurement across the whole of government, from the smallest quangos to the biggest departments.’
The FCA declined to comment. But in response to a recent Freedom of Information Act inquiry it said: ‘The value of the licences that the FCA estimated it would require during this one-year deal proved to be incorrect for three key reasons.
‘The assumptions underpinning the agreement did not anticipate that some projects that originally required Oracle licences would be de-prioritised by the FCA thus reducing demand; some projects would be implemented later than anticipated and hence fell outside of the agreement’s one-year timeframe; and some projects would adopt an alternative technical solution.’