The abrupt cancellation of a vaunted upgrade for collecting historic criminal debt cost the government £12.1m, it has emerged.

The Ministry of Justice and HM Courts & Tribunals Service suspended the Transforming Compliance and Enforcement Programme (TCEP) last year because it was no longer affordable within their 2015 spending review settlement. At the time the ministry said it had spent £18m on the system.

HMCTS's annual report, published last week, states that cancelling the programme 'has resulted in the recognition of a constructive loss of £12.1m, of which £8.5m relates to the impairment of the TCEP intangible IT asset which was under construction'. The report says that since its inception in 2016, the programme, through its historic debt project, has recovered more than £37m in fines 'which were previously thought uncollectable'.

The Public and Commercial Services Union (PCS), which represents court workers, warned the government early last year against implementing TCEP until more information was known about the plans. A few months later the National Audit Office warned that the scope of change may be ‘undeliverable’ and said the business case depended on approval from HM Treasury to plug a potential £177m funding gap.

TCEP was supposed to increase the level and efficiency of collecting criminal financial impositions through improved business processes and IT systems. HMCTS said the programme would 'consolidate administrative activity through a reduced number of sites and headcount'. The improved IT systems would 'increase the levels of collection through improved verification and data segmentation functionality'.

While one part of the government's £1bn court reform programme hit the buffers, another is pressing ahead.

Today HMCTS announced that its fourth courts and tribunals service centre will be located in Greater Manchester, opening in 2021 with around 250 staff. There are already two centres in Birmingham and Stoke-on-Trent, which opened at the start of the year. A third, in Loughborough, will open next year.

HMCTS says half of its workforce will continue to be based in courts and tribunals.

Mark Serwotka, PCS general secretary, said: 'Our members are concerned about the impact on access to local justice the move towards centralised CTSCs will have. Centralisation of these services is not about improving efficiency in our justice system, but about delivering the unprecedented 40% budget reduction and the resulting job cuts that the Ministry of Justice is expected to deliver.

'The move towards online justice rather than physical, face-to-face engagement with the justice system is already causing significant delays. If management continue to refuse to consult with the union, then we will consider all options, including a consultative ballot for industrial action.'