Council to pull plug on EDS agreement

Services Authority claims company failed to satisfy standards.

Electronic Data Systems (EDS) is set to be suspended from a large public sector contract, worth #3.2 million per year, following accusations that it has consistently failed to deliver the required standards of service in two key areas.

London's Wandsworth Borough Council will hold a special meeting on 17 September of its policy and resources committee to decide whether to resume direct control of the payment of housing benefit and council tax benefit to more than 30,000 households. EDS has been responsible for these and other services since July 1996.

A report compiled by Simon Heywood, director of finance at the council, claimed the services giant failed to meet minimum service levels during the 1997/98 financial year, creating a huge backlog of claims. The report said EDS's performance further deteriorated during the past three months and concluded: 'Suspension from most of the services seems the only reasonable course open to the council at this stage.'

When the suspension goes ahead, more than 100 EDS staff will become council employees.

Maurice Heaster, chairman of the policy and resources committee, said: 'I am fed up apologising for this contractor's below-par performance. Taking the work back is the best option for getting a decent service in the quickest possible time.'

EDS maintained that it would not comment directly on allegations that it had mismanaged the contract until a formal decision has been reached.

But in a prepared statement, it expressed disappointment that Wandsworth had chosen to publicise its grievances and said it had met or exceeded more than 90 per cent of the contract's service level agreements.

It added: 'We believe the targets in the current contract are not completely achievable within the current framework of the contract.'