Members of the the Public and Commercial Services (PCS) Union are to strike today following the revelation of plans by the Ministry of Justice to axe a £127m IT project and opt for an 'outsourced solution'.
The project was intended to join the department's back office services into a 'single system'. As a result of the cancellation the MoJ has written off £56.3m in staff and contract costs for 2013/14.
The department said it intends to sign a contract with outsourcing company Steria later this year and will transfer £60m worth of assets and infrastructure from the old programme to be used under the new contract.
Some 400 PCS members who work on the MoJ's shared services centres in Newport, south Wales, and Bootle, Merseyside, are to strike against the staff cuts today.
Mark Serwotka, head of the PCS, said: 'This shows again how private companies are raking it in on the backs of taxpayers and being rewarded for failure. This contract should now be cancelled and a proper in-house bid given serious consideration to prevent millions of pounds more of our money being squandered.'
An MoJ spokesperson said the new contract will save millions of pounds a year. He said: 'We will work with staff, trade unions and other stakeholders to assess any impacts on staff.'
The MoJ's shared services project began in 2010 and was supposed to join the department's human resources, finance and procurement services in a single system by June 2013. But the deadline was extended to December 2014 after the ministry identified a number of serious issues.
Under the new plans the MoJ will join Steria's existing shared services joint venture, in which the Cabinet Office has a 25% stake.
Shared Services Connected Limited also runs systems for the Department for Work and Pensions, the Department for the Environment, Farming and Rural Affairs and the Environment Agency.
Shadow justice minister Andy Slaughter critcised the decision not to use a British supplier. 'Once again [Chris Grayling] is outsourcing major contracts to foreign firms at great cost to the taxpayer,' he said. 'The amount squandered is roughly a quarter of the amount he has savagely cut from the legal aid budget, leaving thousands without proper access to justice. Another promise broken from an increasingly out of touch lord chancellor.'
In February 2014 the Gazette asked the MoJ if the shared services project was still on track for the December 2014 deadline for completiuon.
A spokeswoman at the time said: 'We are still considering options for the future delivery of our back office functions to ensure they provide the best possible value for taxpayers' money.'