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HMRC’s management of IT contractors comes under fire

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A panel of MPs have been assessing HMRC’s plans for the replacement of one large technology supplier with a series of smaller IT contractors, and their verdict is less than reassuring about the ability of the department to manage the changeover effectively. The taxman is not planning to renew their contract with Capgemini, their current IT provider, as part of an attempt to reduce their running costs by 25 per cent.

The panel has warned HMRC that the launch of their new system will cause significant upheaval, and their track record with implementing this kind of change has made the panel understandably unsure about how effectively the process will be managed. This is supported by the fact that, despite proposing this change three years ago, the department has so far failed to produce an in-depth business case to explain their reasoning behind the planned change.

The plans would involve the employment of around 400 different IT suppliers, ranging from larger companies to small businesses. The current contract with Capgemini has been administered through its IT contract Aspire and has cost £7.9 billion over the ten years for which the contract has been in place. However, the fact that it is impossible to assess the level of risk or the value of the benefits that this contract has offered makes it difficult to compare the current model with the one proposed effectively.

MPs involved in the process have expressed concern that HMRC has not left enough time to recruit and hire the specialist IT contractors necessary to implement the changes proposed in the two years before the change is supposed to take effect. The department believes that the proposed changes could provide some appealing opportunities for IT contractors to work with them, citing the sheer scale of the proposed project as an ideal way for graduates and apprentices to get involved.

However, this apparent enthusiasm has yet to be matched by actual recruitment on the part of HMRC who have so far failed to recruit any new staff, even those who will be in charge of designing and integrating the technology that will be needed. This means that the employment opportunities for contractors may be available much closer to the deadline than originally planned. The committee has expressed concern that a failure to find appropriately qualified and skilled staff could lead to instability in the tax system which could be disastrous to the department and have a long-term impact on public finances.

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