Rates System Rates Very Poorly: Audit Office

The NI Government is facing criticism as news of arrears of £130m in the rates system has emerged.

The huge sum has built up because a new multi-million pound computer system is said to be "inadequate", the Northern Ireland Audit Office revealed.

The auditors found the Rate Collection Agency's £10.5m IT system was unable to send out final notices last year.

Landlords received prompt payment discounts totalling £5m whether or not they had paid them on time.

In one case, the computer calculated Disabled Persons Allowance of £2.9m for just one single ratepayer - so great were the errors - the Audit Office said.

In fact, the mistake was only identified and the payment stopped as part of a manual supervisory check.

It emerged that less significant errors could easily go unnoticed by manual checks, the report said.

The Abbacus IT system was introduced in October 2006 to improve rate collection and housing benefit.

Inadequacies in the original specifications were blamed in part and more than £1m extra has already been paid out to the installers for improvements.

Auditor General John Dowdall said: "Some basic functionality of the new IT system has not been adequate to meet the operational needs of the Agency."

He said: "One of the deficiencies in the original financial specification is the inability of the system to provide an analysis of account balances such as arrears distinguished between domestic and non-domestic property."

Arrears rose from £35m at March 2005, to £48m the next year and jumped to £88m by March 2007, said the report.

By March this year, auditors found this figure had risen to £130m by March 2008.

The new system began operating in October 2007 but it did not have the ability to issue final notices or process debt proceedings.

As a result no computer generated recovery action was taken between June 2006 and September 2007.

The report said: "This resulted in a fall in rate collection from 96.19% in 2005-06 to 91.7% in 2006-07 - compared with a key ministerial target of 98% for both years - and a rise in rate arrears to £88 million in the same years."

(BMcC)