FAILING benefits firm Atkins has been cut loose from Swindon Council with a golden handshake worth £250,000 of taxpayers' money.

The penalties for non-per-formance that the firm has accrued during its three years in charge of the council's revenues and benefits service are being written off.

The secret deal has been struck with Atkins which this year reported profits topping £35m in order to ensure the severance happens quickly.

In exchange, the cash-strapped council is keeping some of the company's IT equipment and soft-ware as it hands over the service to another private firm, Liberata.

The terms of the negotiations were agreed at Monday night's special committee meeting behind closed doors but the Advertiser today saw secret papers containing the conditions of the deal.

Outgoing council leader Sue Bates said that all three political groups were signed up to the move.

She admitted that she had proposed delaying the decision to allow the committee members to visit the London Borough of Hack-ney, which has successfully taken its service back in-house.

But finance director Ian Thompson warned that the deal had to be done quickly because Atkins has already started laying off staff.

Coun Bates explained: "The advice given was that we didn't have a week or two to wait. If the decision wasn't taken as a matter of urgency, the current awful situation could have gone from bad to worse."

She conceded: "There may be seen to be some gains for Atkins, but I believe the council gains more.

"The money is not being written-off as such there are some compensatory gains for the council in way of IT hardware and software."

The Advertiser has also learned that it was Atkins that first requested the £2m-a-year contract be severed early not the council.

It made a direct request in May this year, several months after the firm discovered that the Swindon contract was losing it £500,000 a year.

It was losing money largely because it had to bring in extra staff to try to bring down the backlogs of un-processed benefits claims and uncollected council tax.

The papers seen by the Advertiser also show that the council considered resuming the service back in-house last September, but chose not to as Atkins appeared to be improving.

Atkins spokesman, Richard Scrase, said today: "The agreement that was reached was very amicable and was accepted by all parties concerned.

"We are disappointed to lose the contract but have to accept that we have fallen short of the agreed targets."

Now Liberata, formerly known as CSL, will take over for the remaining four and half years of the contract at a cost believed to be around £800,000 higher.

Its contract includes a target to clear the benefits backlog by January.

John Fynn, Liberata's sales director, said: "We are delighted to be awarded this contract. We will do everything we can to improve the service and want to agree targets with the council for progressive improvement over time."

Coun Bates said she hoped the new provider would enable a "rapid improvement" in services.

"You can never be 100 per cent sure, but on the evidence provided to members, we felt this was the best option for the council and the taxpayers.

"Atkins clearly did its sums wrong and underestimated the cost of running the service. Hopefully this decision will rectify that situation."