My right honourable friend the Minister for Housing and Planning has made the following Written Ministerial Statement.

The Government have decided to terminate their agreement with Scout Solutions Projects Limited to deliver mobility services for social tenants.

The new services to be provided under the contract were a new website providing access to existing schemes such as LAWN and Seaside and Country Homes, and a link to the Jobcentre Plus Internet Job Bank. The cost for the development of the new software and IT infrastructure was £1.2 million and the department has paid £1.06 million to date.

The department has decided to terminate this agreement in the interests of the public and the taxpayer because of serious concerns about the performance and fitness for purpose of the software developed by SSPL to provide those services. The software was delivered by the contractor in final form more than a year behind schedule; and independent final testing which replicated SSPL's own test criteria discovered an unacceptable level of faults. Departmental officials worked with the company throughout the contract to address shortcomings, but came to the conclusion that this strong course of action wasthe only one available. This decision was communicated to SSPL on 20 July 2006. The department will be seeking to recoup the £1.06 million spent on the development of the new software as well as the associated costs.

Scout Solutions Projects Limited has also been providing existing mobility services alongside the development of the new services. They will continue to be paid to provide these services under the terms of the contract for a transitional period. The funding for these existing services which were delivered has been £9.7 million. Mobility services are important to tenants, and the department will be seeking to put alternative provision in place building on the success of choice-based letting schemes.

Throughout this period, social housing applicants and tenants have continued to use direct methods to move within social housing. For example, in 2004-05 alone, over 15,500 LA tenants completed mutual exchanges.

The matter is now the subject of discussions between DCLG and the contractor.