The cost of an online claims processing system being introduced by the Financial Services Compensation Scheme has spiralled by two thirds to £20.4m.
The project has also been delayed by several months and will now launch in April.
The system, Connect, will allow consumers to make claims and check their progress online. The FSCS says it will deliver efficiencies and is “the single biggest business and systems transformation FSCS has ever undertaken”.
In its 2015/16 plan and budget, published this week, the FSCS says its current predicted spend on the project is £20.4m.
This is up from an initial estimate of £12.2m in 2013, which rose to £15.7m in 2014 “due to additional design requirements”.
An FSCS spokeswoman says: “Although Connect will cost more than originally estimated, the additional cost has been contained within the existing budget for 2014/15.”
The FSCS says it is being funded by savings in other projects and the reprioritisation of work, as well as lower spend on recoveries, including its legal battle with advisers over Keydata. It spent £4.4m on Keydata recoveries in 2014/15, down from an expected spend of £7.2m.
Connect was originally due to go live in late 2014.
But FSCS chief executive Mark Neale says: “During the course of 2014, we identified a number of existing and potential design and testing issues with Connect that we needed to address. We knew this would result in delay, so we revised our plan and have moved our launch date to April 2015.”