MPs last week released a report on the disastrous failure of the Inland Revenue's tax credit system.

The report, Inland Revenue Matters, describes how IT errors meant that 220,000 claims were left unresolved more than 10 months after they were submitted, and 400,000 claimants received their money late.

The computer failures which disrupted the launch of tax credits came like "a bolt from the blue", according to the Treasury sub-committee's findings.

As Computing first reported, supplier EDS now faces a hefty compensation claim.

We look at the major players in the highest-profile government IT disaster this year.

The Revenue chairman: Sir Nicholas Montagu
Sir Nicholas Montagu's job is under threat following a damning report by MPs on a year of chaos in the department.

His leadership was questioned by the House of Commons Treasury committee. It set out "a catalogue of administrative failures by the Revenue, which Treasury ministers must address as a matter of urgency".

The MPs' report highlights "a growing list of failures of communications between ministers and officials", and condemns Montagu and Paymaster General Dawn Primarolo for failing to meet between late autumn 2002 and March.

It has also raised serious questions about how the department has been led. Conducted by a special sub-committee of the all-party group chaired by former Tory minister Michael Fallon, the report demands that the 400,000 applicants for tax credit who received late payments be "compensated swiftly and in full".

It condemns the failure of the helpline service to cope with demand, and said that the company responsible for the IT failures should be pursued vigorously for compensation.

The minister: Paymaster General Dawn Primarolo
David Ruffley, a Conservative member of the Treasury committee, said that Dawn Primarolo should quit, and the committee is tough on her failure to liase properly with Sir Nicholas Montagu.

"The real thrust of our report is a failure of leadership by the chairman and minister," said Michael Fallon.

There are serious managerial questions to answer. But Primarolo is blaming the IT systems.

"The system has not been working as well as we expected, and there had been unscheduled downtime as a result," said Primarolo in response to a question in the House of Commons by Conservative MP David Lidington.

"We have temporary measures in place, while we are making the system more robust, where people can go to their local Revenue enquiry centre and get a giro."

Resignations are unlikely, but the government has seemed reluctant to accept the role of managerial issues in the breakdown of projects.

The supplier: EDS
The report criticises Inland Revenue evasiveness over the extent to which supplier EDS will be asked to pay for the cost of the IT, which caused delays paying tax credit to some of the UK's poorest families.

The government is demanding compensation from EDS. The supplier has remained silent, but the pressure is mounting.

MPs want to know how tough talk is going to translate into an appropriate punishment that will act as a warning to others.

Montagu promised only that there would be talks with the Revenue's IT partner over the cost of compensation, and the administrative costs of 200,000 interim payments.

Revenue deputy chairman David Hartnett suggested that the IT problem was one of data flow in a component-based application involving several different computer systems.

Hartnett compared the problem to "a sort of arterial sclerosis" constricting the flow, which was "something like a clot".

He told MPs in evidence: "There is something which triggers this that cannot be replicated in testing, and was not picked up in testing. It triggers in live running and what our IT partners have been able to do, crudely, is work around it for the minute, so that we can get everyone into payment.

"It is working out what is constricting the flow and has caused queues in the past, and what causes the clot to appear and really build queues. That is the key issue in relation to this IT."

There were daily consultations with senior EDS technicians and its board in the US to find out what was going wrong and how it could be put right.

Hartnett revealed that EDS had not realised the scope of the failures because extensive testing had failed to reveal the slow running that had built up.

"It was only as we were processing more and more claims that the difficulties we had experienced over the last weeks began to emerge," he said.

"It was only by pressing our IT partners really hard that we received more information from them. I do not think that initially they fully understood everything about the difficulties."

Additional reporting by Accountancy Age.