The Financial Services Compensation Scheme has ordered an independent inquiry into the rising costs of its online claims processing system.
The system, Connect, will allow consumers to make claims and check their progress online.
In January, the FSCS said the total cost of the system had spiraled from an initial estimate of £12.2m to £20.4m.
It also said the launch of Connect had been delayed from late 2014 to April 2015.
In the FSCS’s 2014/15 annual report, published today, chief executive Mark Neale says the project will cost £3.6m in 2015/16 and will be subject to an independent review.
He says: “Connect is a major project that will bring benefits to consumers and the industry.
“It is not surprising, therefore, that its implementation has, at times, proved challenging.
“Connect cost more than we expected during 2014/15. We contained much of the additional cost within our budget for 2014/15. For the next phase of Connect, we have budgeted £3.6m for 2015/16.
“I understand the frustration expressed by some industry members about these higher costs. That is why I have commissioned an independent review into the project.”
An FSCS spokeswoman says the system “soft launched” in April, but online claims processing is not yet available to consumers.
The annual report also reveals the FSCS spent £661,000 on redundancies in 2014/15m as a result of “major restructuring”. In the previous year the lifeboat scheme spent nothing on redundancies.
Over the course of the year, the FSCS made 10 compulsory redundancies, plus a further 35 agreed departures.
FSCS director of central services Rommel Pereira left under redundancy terms on 31 July 2014.
He received £52,802 for 2014/15 in basic salary, plus £42,025 in lieu of notice and £5,172 in lieu of holiday.
The FSCS also contributed £7,800 towards Pereira’s legal fees in respect of the compensation arrangements, and £5,290 for “career transition coaching”.