Concerns about Highland Council’s IT deal with a computer giant deepened last night after it emerged the firm had been stripped of a multimillion-pound government contract.
The Department for Work and Pensions confirmed it has terminated an agreement with Fujitsu which would have been worth £330million to the Japanese company over the next six years.
Civil servants said the decision was taken because the business had missed deadlines – a problem which has dogged the £66million Highland project.
Fujitsu has already been forced to apologise after being accused of “letting down” school pupils across the north and the local authority has taken legal advice about what sanctions it could take if the programme falls further behind.
Lawyers will give a report to councillors before April 6.
But the council’s resources committee chairwoman, Carolyn Wilson, said yesterday that despite her frustrations, pulling the plug on Fujitsu was “not an option” until the company had been given time to fix the problems.
She added: “A lot of people are unhappy with Fujitsu’s service at the moment.
“Fujitsu is well aware we are taking legal advice and they need to start pulling this together. It won’t take a lot to check to see whether projects are behind.
“What Fujitsu is doing for us is at the centre of everything we do at the council. It dictates how we teach children in our schools. We need to have that service in place.”
Highland Council’s SNP group leader, John Finnie, said he was “very concerned” about the UK Government’s decision and its potential implications.
He said last night: “This multinational company is responsible for delivering computer equipment to support our children's education and we cannot afford any further under-performance on this contract.
“I have written to the council's chief executive asking for his views on this latest development and, given the potential similarities, what implications, if any, this news has for Highland Council.”
Fujitsu signed a five-year contract to supply all computer services for the council in April 2010.
Just six months later, Eithne Wallis, managing director for Fujitsu’s UK government division, was summoned to appear at a Highland Council meeting to explain what had gone wrong.
She told the committee the company had not “fully appreciated the complexity and difficulty” of delivering the project and blamed a lack of staff on a promise the company had made to hire local people.
Nearly £2million has been withheld from the council’s capital programme as a result of delays in the project.
A spokesman at Fujitsu’s Inverness office said: “We remain on track to meet our commitments to Highland Council.
“We have a very positive relationship with the council and have also recently announced an extra 10 jobs for the Highlands as a result of our operations here. We will continue to work to deliver the many benefits of the contract.”
The company’s six-year deal with the Department for Work and Pensions involved managing 140,000 desktops for the department's entire workforce.
Under the deal Fujitsu was to replace ageing computers with more energy-efficient models.
But it is understood the company has missed three start dates since the end of August.
A spokesman for Fujitsu said: “We can confirm that we have received notification from the DWP that they wish to bring the desktop contract, awarded in February 2010, to an end.
“We are not able to provide any further comment at this stage.”
A DWP spokeswoman confirmed last night that the contract had been ended.