British Gas to sue IT firm

May 11 2008

British Gas today confirmed it is to sue the firm that designed its household billing IT system that it claims was behind a costly customer service debacle.

The Centrica-owned group is taking legal action against Accenture for a reported £182 million to cover the costs incurred in sorting out the billing mess.

British Gas claims that glitches with the system developed by consultancy giant Accenture - which cost £300 million to design - “severely impacted” its customer service operations and saw the group employ swathes of staff to help to resolve the problems.

The utility giant was condemned over its customer service standard amid the new system’s roll-out in 2006 and 2007.

British Gas was last year voted the “worst provider” for the second year running in a survey for online price comparison site uSwitch.com, while shareholders also lambasted the group for its billing issues at last year’s annual general meeting.

The group is said to have hired 2,500 staff to improve its customer relationships and sort out the billing problems.

British Gas claimed today that it has since stabilised customer service levels, with complaints to watchdog energywatch down by 85% in the past year, said the group.

But it said in a statement that it has been “left with no option” but to pursue legal redress against Accenture to compensate for losses.

The group said in a statement: “In 2001 British Gas employed Accenture to undertake the design and implementation of a new customer billing system. However, when this new system was rolled out during 2006-07 it became apparent that there were problems with the system which severely impacted on British Gas’ customer service operations.”

It added: “A subsequent independent analysis of the billing system has concluded that Accenture was responsible for fundamental errors in the design and implementation of the system. As a direct consequence British Gas was forced to make significant investments to address the system failures and these investments are ongoing. It also incurred significant additional staff costs to manage the customer service issues.”

Accenture strongly denies the allegations and said it will “vigorously defend” itself against the claims when the case goes to the High Court.

“We are confident based on the facts of the situation that this claim is baseless and without merit,” an Accenture spokesman said.

“The system we delivered met all of our commitments and the specifications that Centrica set; it was delivered on the agreed upon timeline and budget. Centrica conducted extensive testing of the system before formally accepting it and they have been using and maintaining the system for two years. Centrica has no basis for a warranty claim.”

Meanwhile reports today suggest that British Gas is to update on rocketing wholesale gas prices in its AGM tomorrow, which is suggested could forecast a 30% leap in the average annual household gas bill next winter.

Consumers, already under pressure from soaring petrol and food prices, are expected to be told that the leap in wholesale gas costs could see the average yearly energy bill top more than £1,200, according to the Mail on Sunday.

Wholesale gas prices are predicted to rise to 85p a therm next winter, compared with 47p last winter.