Cost of Revenue computer system soars to £8bn
Tuesday, 6 March 2007
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MPs are concerned that the cost of running the IT system used by HM Revenue & Customs has run out of control after the payments the Government department pays its technology suppliers ballooned to £8bn from £4.5bn.
The French IT services company Capgemini runs the department's IT system that supports services in areas such as child benefit payments, income taxation, tax credits and minimum wage enforcement.
Conservative MP Richard Bacon, a member of the Public Accounts Committee, said: "There are serious questions to be answered as it looks like the cost is running out of control. I don't think the department has given an adequate explanation as to what they're getting for the extra money."
He described the £3.5bn rise over the 10-year life of the contract as "stratospheric", and said the department's explanation of the increase had been "vague".
The Public Accounts Committee is likely to publish a formal document detailing its concerns in May.
Capgemini won the tender to supply the Inland Revenue in 2004 when it won a £2.9bn deal to replace incumbent EDS. However, the Inland Revenue department was merged with Customs & Excise in 2005, and the size of the contract was increased to £4.5bn.
HR Revenue & Customs has defended the so-called "Aspire" contract, arguing that the cost of running the enlarged department's IT system over the next three years is about £100m lower than if the systems had been run separately. It said the increased cost reflects the implementation of major new IT contracts deployed by the combined department, and that the department needed sophisticated and flexible IT systems to combat issues such as tax fraud and smuggling.
