HM Revenue and Customs (HMRC) ‘has made little progress’ and is ‘overly complacent’ over plans to replace its £10 billion Aspire contract with Capgemini, according to the Public Accounts Committee (PAC).
The deal was signed in 2004 and is due to expire June 2017, by which point it will have cost £10.4 billion, making it the most expensive technology contract in government, according to the National Audit Office (NAO).
HMRC decided to replace the single-supplier contract with short contracts with multiple vendors three years ago. It says this will cut ICT costs by 25 percent, equivalent to about £200 million a year.
However since then the department “has made little progress in defining its needs and still has not presented a business case to government”, despite promising to produce one by July 2014, the PAC said.
'An enormous challenge'
The report warned HMRC “faces an enormous challenge” moving off Aspire, which supported collection of more than £500 billion in tax last year. It added: ‘failure to collect taxes efficiently would create havoc with the public finances’.
HMRC has just two years to engage the market, recruit the skills, procure and manage transition before the contract finishes in 2017.
The department has options to extend Aspire beyond 2017, and government CTO Liam Maxwell has said he is prepared to do so if he is unconvinced HMRC is ready to replace its current contract.
Appearing in front of the committee in October 2014, Maxwell said he was “confident they’ve taken the right approach and understand the risks”. He added he was prepared to be held accountable if the replacement goes wrong.
The MPs report warned an extension “could prove costly” and delay plans to digitise tax collection and move off legacy platforms.
MPs claimed HMRC had little experience of managing multiple IT suppliers or integrating systems inhouse and not managed the costs of Aspire well.
Committee member Richard Bacon MP said: “HMRC’s record in managing IT contractors gives us little confidence that HMRC can successfully achieve this transition or that it can manage the proposed model effectively to maximise value for money.”
The department was due to submit the business case to HM Treasury before Christmas and will publish plans to replace Aspire ‘during the spring’, HMRC’s chief digital and information officer Mark Dearnley told ComputerworldUK last month.
Dearnley dismissed claims the department lacks the necessary skills to run more of its IT internally and said HMRC is responsible for running about 40 percent of the nation’s tax inhouse already.
He said: “I think most people underestimate how much talent we have within HMRC and it would appear we actually have more than some other parts of government.”
An HMRC spokeswoman said: “We are making significant progress in preparing for a smooth and effective transition from the Aspire contract, which will give HMRC control over the development and delivery of digital services and enable us to make efficiencies of up to 25 per cent by 2021."
Julian David, CEO of IT suppliers association techUK, said: "We share the Cabinet Office’s desire to see the widest available supplier base made available to public sector organisations."
He added: "We also believe many of the challenges raised in the report can be addressed by bringing together best practice and experience that both government and industry can provide to improve commercial capability and skills across the public sector.
"Industry has a key role to play here and we are engaged with departments and have recommended a framework for effective engagement in our Three Point Plan, which reflects civil servants' own belief that better engagement with industry at the earliest stages and throughout the life cycle of a project is critical to successful project delivery."
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