MPs Alarmed At Poor Management Of Customs IT Project

by Robert Lee, Tax-News.com, London

23 June 2004

The UK Customs and Excise department has been criticised in a report by a cross-party parliamentary committee of MPs for wasting huge sums of public money attempting to implement its IT strategy with no guaranteed benefits.

The Public Accounts Committee’s report noted that the expected savings from the move to introduce electronic VAT filing and computerise the department’s services in general had fallen from £4 billion to £1.2 billion from the £100 million scheme.

"It cannot be acceptable that Customs has already spent huge sums of public money without being confident about the scale of the likely benefits," commented the committee chairman, Edward Leigh.

While continuing to offer paper-based systems, Customs has Public Service Agreement targets to offer 100% of its services electronically by 2005 and achieve 50% take-up by March 2006 as part of the wider governmental agenda of making all departmental services available on line by 2005.

The project aims to generate increased revenue and improve efficiency with better information and analysis to target tax compliance and anti-smuggling work.

However, the department has an undistinguished track record thus far regarding IT projects, and its first attempt in 2001 at an electronic VAT return was a failure. After two years, less than 1% of traders were using the system, which was regarded as more complex than the completion of paper returns.

The committee’s report also expressed concerns about the department’s “poor control” over the commissioning and management of consultancy contracts, and the lack of a contingency plan in the event of an IT systems failure.

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