Council finally terminates ITNet contract

Hackney Borough Council has finally ended its housing benefits and council tax systems contract with UK outsourcer ITNet, nearly three months after it voted to terminate the deal.

The London council voted to end the £70m, 10-year contract with ITNet in October last year, two years after it started, following complaints from Hackney residents and councillors about payment and claim processing backlogs.

In November ITNet was given two weeks to produce a recovery plan and 30 days to remedy faults in the service identified by the council. An Audit Commission report into Hackney Council had revealed council tax collection rates of just 50 per cent and a backlog of 17,000 housing benefit cases.

ITNet, which has written off £10m-£11m as a result of the troubled contract, said it received notification of the contract termination from Hackney on Friday evening.

A spokeswoman for ITNet said: "It has been a very difficult contract and [ITNet] has been in discussions with the council to try to agree ways for performance improvements. Both sides could not agree on a way forward and the lawyers will now have to discuss the end of the contract."

"We expected it to happen. It was a matter of when it was going to be ended," she added.

Last week ITNet announced an agreement with London's Islington Council to provide a revised benefits administration system. The agreement, which extends the contract term by 3.5 years to 2009, includes "clear performance targets", said ITNet.

"ITNet and Islington have worked together to improve performances - the complete opposite situation to Hackney," said the ITNet spokeswoman. "They have agreed what extra services will need to be brought in to manage any backlog."

Hackney council announced last week that it had agreed a five-year contract, worth £10m, with IT contractor Northgate Information Solutions. Northgate said it will consult with the council over ways to improve efficiency with its software and infrastructure.

See also:

Benefits contract row hits stalemate

Islington Borough Council and outsourcer ITNet are deadlocked over the revision of a £22m contract to run the borough's benefits system.  06 Jul 2001

Council set to axe outsourcing deal

Lambeth Council is seeking legal advice before scrapping a £48m outsourcing deal to run its housing benefits system. The council has voted to end most of the contract with Capita, but the company wants immunity from any current or future compensation claims.  07 Jun 2001

Outsourcers can't please all the people, any of the time

Existing outsourcing deals have not been seriously affected by themillennium crisis, with most users still satisfied, the largest Europeansurvey of outsourcing customer satisfaction concluded today.  02 Dec 1999

ITNet takes the tube

  06 Aug 1999

Outsourcer helps council free up staff

  19 May 1998

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