A 拢2 MILLION hole has appeared in the British government鈥檚 income
because an Inland Revenue computer system has failed to collect direct debits
for national insurance from self-employed people. With no quick fix in sight,
some people are facing unexpected bills of more than 拢500.
The Inland Revenue鈥檚 new National Insurance Recording System (NIRS2), which
holds records on 65 million individuals, has been plagued by problems. Andersen
Consulting designed the 拢143 million system to record the history of
people鈥檚 national insurance payments for the government鈥檚 Contributions Agency.
An incomplete history of payments can affect certain benefits, including
pensions. 鈥淚t鈥檚 the largest computer system in Europe,鈥� says David Martin of
Andersen Consulting.
The commissioning of the computer system was delayed for 18 months and
finally introduced in July 1998, when the problems began for self-employed
people. The Contributions Agency鈥檚 responsibility for NIRS2 passed to the Inland
Revenue in March 1999. Andersen Consulting has the contract for running the
system.
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Many self-employed people pay their national insurance contributions
automatically by direct debit. This means the Inland Revenue has to request
payment from each person鈥檚 bank account.
The Inland Revenue says that about 5000 people have been affected. Most of
their problems are caused by the software wrongly identifying a problem with the
direct debit. The customer then gets lost in what the Inland Revenue calls 鈥渁
loop鈥濃�攁nd no request for payment is ever made. Andersen Consulting does
not yet know what is causing the problem. The Inland Revenue tells those
affected that no remedy is yet in sight for this 鈥渞ecurrent fault with our new
computer system鈥�.
In the meantime, some people may be blissfully unaware of their mounting
debts. This may not bode well for their pensions, says David Willetts, shadow
minister for social security. 鈥淚t will affect the newly retired who won鈥檛 get
their proper benefit.鈥�
The NIRS2 has also failed to produce the contributions records of employed
people. Some 83 000 pensioners are not getting the right benefit. Says Willetts,
鈥淲e鈥檝e had assurance that it is about to be sorted out but it is still dragging
辞苍.鈥�