Sad but not surprising. I've seen many of these big projects go bad. I'm convinced it boils down to people, process and skill risks more than anything to do with technology. The guilty parties in this case are Fujitsu and ICL but it could have been any of the big consulting firms.
The MPs' report found: "The department... ran a poor competition, attracting only one bidder, and it failed to take decisive action when ICL did not deliver what was required. For its part, ICL did not understand the department's requirements, took on excessive risk and underpriced its bid."
Of course the requirements and specification would have been incomplete and the costs estimates fictional. That's how it works. You get the work and then patch up everything after the contract is signed. The really sad bit is the poor sods who have to give up evenings and holidays in order to implement a bad design under a bad process to an unrealistic budget. And often without training.