A new IT platform for army recruitment is to be built at a cost of £47.7 million, Defence Secretary Philip Hammond told MPs today.
The Ministry of Defence has taken up an option with contractor Capita to have a new system built because the existing one is causing too many problems.
Workaround solutions will cost about £1 million a month until the new system is up and running in 2015, Mr Hammond said as he responded to an urgent question in the Commons.
He told MPs the alternative system, known as Atlas, would have cost about £43 million in any event.
Mr Hammond said the decision to work on a new platform with Capita was taken in October and documents detailing the decision were deposited in the Commons library last month.
Outlining the situation, he told MPs: "Having visited the Army's recruitment centre in Upavon on October 30, it was clear to me despite the Army putting in place measures to mitigate these problems in the near term, further long-term action was needed to fix the situation.
"It was agreed in principle at that point the Atlas system was not capable of timely delivery of the Capita-run programme and we would need to take up the option to revert to Capita to build a new IT platform specifically to run their system that will be ready early next year."
Shadow defence secretary Vernon Coaker called the situation a "debacle".
Mr Hammond said short term measures make it "progressively easier and quicker" for applicants both regular and reserve to enlist.
These include a new web application for applicants which will go live later this month, a simplified online application form and streamlined medicals.
Reserve unit recruitment targets will also be reintroduced, Mr Hammond said.
"Recruits should see a much improved experience by the end of this month," Mr Hammond said.
"As we move forward we are looking at further ways of improving the management of the recruiting process in the intervening period before the introduction of the advanced IT system which is now being developed in partnership with Capita and is expected to be deployed in February 2015."
Answering questions about costs, Mr Hammond said: "The Capita solution will cost about £47.7 million to produce a full new IT platform. The alternative Atlas IT proposal would have cost about £43 million, so the additional cost of the Capita solution is around £4.5 million.
"Of the (£15.5 million already spent) figure, our initial estimate is about £6.7 million represents costs that will have to be written off but that will be subject to proper audit process.
"The running costs of the interim solutions we have in place... this comprises additional payments that have to be made and the cost of the additional manpower delivered into the system.
"That is running currently at about £1 million per month.
"The solution we have adopted and have now approved going ahead with - the Capita platform, placing the integration risk back on to Capita - is judged to be the quickest way of eliminating that ongoing expenditure and the best of delivering a permanent solution for the benefit of the Army and of the taxpayer."
Mr Coaker said: "It might be a new year but isn't it the same old story of complacency, inefficiency and a lack of transparency at the Ministry of Defence? Here we go again.
"You have been forced to come to the House to try and explain catastrophic failures costing millions of pounds of taxpayers' money; this time it is an IT fiasco.
"It didn't have to be like this this. Will you acknowledge many in this House, myself included, warned the Government was taking risks with Britain's security by not fixing the reserve recruitment crisis before reducing numbers in the regular Army, and now we have the IT debacle?"
According to reports in today's Times newspaper, a confidential report by technology research company Gartner said the Army's recruitment wing picked the wrong bidder to build the IT system after failing in 2011 to challenge an MoD policy that favoured the less suitable of two competing offers.
The project management team was inexperienced and under-resourced and when delays started, the Army failed to take charge and put in a suitable contingency plan, the reports said.
A briefing note sent from the MoD's director general of finance David Williams to Mr Hammond in December recommended scrapping the flawed IT system and paying Capita to build its own model.
He wrote: "If the ICT hosting solution is not put in place, then the MoD risks not gaining the appropriate number of recruits needed. Given recent criticism of army recruitment . . . and the use of reserves, this would lead to further negative media reporting and reputational damage for MoD."
In his Commons statement today, Mr Hammond added: "I should make it clear to the House the Army has not outsourced its recruitment. The Army remain in overall charge of recruitment and will continue to play a major role in attraction and mentoring of recruits.
"Capita's role is to manage the supporting processes by which a would-be recruit becomes an enlisted regular or a fully-trained reservist.
"As I have explained previously, there have been initial difficulties with this recruiting process as we transition to the new recruiting arrangements with Capita and in particular we have encountered difficulties with the IT system supporting the application and enlistment process."
Mr Hammond said the decision to use the existing Atlas system, rather than replace it from the outset, was thought at the time to be the "quickest and most cost-effective way of delivering the new recruitment programme".
But he said today: "I was made aware in the summer of last year the Army were encountering problems with the integration of the Capita system to the Atlas platform and since then we have put in place a number of workarounds and mitigation measures to the old IT platform to simplify the application process and have reintroduced military personnel to provide manual intervention to support the process."