Manchester City Council has cancelled hundreds of fines for drivers caught on camera in bus lanes, after the Conficker worm hit its fine processing systems.
The council's IT systems were hit by the virus in February, and meant that 1,609 tickets could not be issued within the legal time limit of 28 days, it has been reported.
The council will now lose £43,000 in revenue from bus lane fines, the Manchester Evening News has reported.
More significantly, the Conficker worm problem will cost the council £1.5 million in total, the paper stated. The IT department spent £1.2 million fixing the problem, including £600,000 on external IT consultants, including Microsoft staff, £169,000 on staff to process a backlog of benefits claims and council tax bills, and compensation payments to families awaiting benefits.
The council's disaster recovery strategy has also come under fire, after staff were forced to keep paper records. They were unable to send emails and open computer files.
A report from the council said the systems problems caused by the virus resulted in "major concerns" on risks to "vulnerable adults and children through degraded social care activity" as well as delays to school admissions, the newspaper reported.
But the council said the risks were managed and that services were still delivered. Nevertheless, it has now banned staff from using memory sticks, and disabled all USB ports.
Steve Park, IT head at the council, said: "I'd like to reassure the public that we've built on and improved our disaster recovery strategy, which covers all our main networks. This means that in the event of an emergency those key systems can be recovered with minimal disruption to the services involved."
A week ago, it emerged that the council had breached the Data Protection Act after the theft of two unencrypted laptops, one of which contained personal details relating to 1,754 employees at local schools.