The Home Office has been told to pay £224M to Raytheon, a
major US corporation it sacked for failing to deliver the
secure borders programme.
The order to make the payments comes from a binding
arbitration tribunal. Home Affairs Committee chairman Keith Vaz called
it a "catastrophic result".
The e-Borders programme launched by Labour in 2003 was a £1BN attempt to reform border controls.
In 2007 Raytheon won a nine-year contract for the programme.
Three years later, the coalition government terminated the
contract, after claiming it was failing. It said it had lost confidence in Raytheon to deliver the programme after it fell a year behind schedule.
Raytheon threatened to sue ministers for £500M, blaming the
UK Border Agency (that name will ring a bell with loyal readers) for the failings, before the two sides entered into
binding arbitration to reach a settlement.
notes that in its ruling, the arbitration tribunal did not pass
judgement on whether Raytheon had failed to meet its contractual
obligations - but it criticised UKBA officials for failing to properly
brief the home secretary on whether the company had an arguable case to
hold on to the deal.
The full ruling has not been made public, but the tribunal said the Home Office should make the following payments to Raytheon:
- £50m in damages for ending the contract
- £126m for assets the company delivered prior to being sacked, such as IT systems
- £10m to settle complaints relating to changes to the original contract
- £38m in interest payments
In a letter to the chairman of the cross-party Home
Affairs Committee, Home Secretary Theresa May says:
stands by the decision to end the e-Borders contract with Raytheon. This
decision was, and remains, the most appropriate action to address the
well-documented issues with the delivery and management of the
The situation the government inherited was therefore a mess
with no attractive options. All other alternatives available to the
government would have led to greater costs than the result of this
Mrs May is writing to the National Audit Office to ask it review how the e-borders scheme was managed from its inception.
"This is a catastrophic result.
Minister after minister and successive heads of the UKBA told the select
committee that the government was the innocent party and that Raytheon
had failed to deliver.
It is now clear that the UKBA didn't know what they wanted from the e-Borders programme.
It is important that those who have
responsibility should be held to account for failing the taxpayer in
such a costly way."
Can you tell me children who was in charge of the UKBA and its predecessor during this period?
Yes, that's right Lin Homer!
She was appointed Director-General of the Immigration and Nationality Directorate in August 2005.
The Home Office was re-organised in 2008, with the formation of the Border and Immigration Agency, later renamed the UK Border Agency, of which Homer became the first chief executive until 2011.
It is a sad fact of corporate and civil service life that in order to remove some senior managers who are deemed to be so incompetent and useless that their presence threatens the organisation itself, instead of firing them, they are promoted far far away.
Thus we may expect in the coming months another promotion for Homer, in order that she be removed from HMRC before she completely destroys it and fingers those who were responsible in the first place for putting her in charge of it.
Tax does have to be taxing.
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