HMRC plans to break up multi-billion IT contract

A plan by HMRC to split its multi-billion pound IT contract into smaller parts may worsen the service, the Public and Commercial Services (PCS) Union has said.

The Times reported this week that the tax department is planning to reorganise one of the world’s largest outsourced IT projects into 100 parts.

Experts told the newspaper that the Aspire contract is “heading for disaster” and would put billions of pounds of taxpayers’ money at risk.

HMRC’s poor management of the Aspire contact, which is run by IT company Cap Gemini, has resulted in its cost more than doubling since it began in 2004. The cost could reach £10bn by 2017, the National Audit Office said in July.

Peter Middleman, revenue and customs group secretary at the PCS, which represents the majority of staff at HMRC, said although the Aspire contract had not provided good value for money he was sceptical about the ability of smaller companies to handle the work if the contract is split into smaller parts.

“This exposes the false economy of privatising public services,” he said.

HMRC said in a statement that it will renew its Aspire contract within Cabinet Office guidelines and on time.

"The recent National Audit Office (NAO) report recognised the Aspire contract played a key role in helping the department to collect almost £506bn for the UK in the last year alone as well as improving services to customers.

"The NAO also recognised the progress we have made over the last two years in developing in-house technical skills so that we are less dependent on external suppliers… We will continue to improve the performance of the contract over the next three years.”