MPs Attack Inland Revenue's Handling Of IT Contracts

by Jason Gorringe, Tax-News.com, London

08 August 2002

After all the UK Government's disastrous IT involvements, many of which have resulted in abandoned developments and heavy losses for private sector partners who were rash enough to get involved, it's reassuring to know that there's at least area in which a contractor is winning in spades through its Government work.

The Westminster public accounts committee says it's quite likely that there will be no competition for a UK£4bn government contract to run the Inland Revenue's national insurance computer system. MPs on the committee said that consultants Accenture may be handed the renewal of the national insurance element of the contract on a plate in 2004.

The committee says that a series of rushed changes to the national insurance system (payroll taxes, in effect) elbowed through by successive governments without any regard for the IT consequences of their brilliant ideas have forced the Inland Revenue to offer very generous terms when extending systems contracts originally issued in a simpler, less challenging universe.

David Rendel, a Liberal Democrat member of the committee says that government were over a barrel in 1999 when a first contract came up for extension, and that Accenture "is now sitting on a very lucrative contract extension . . . they've got an extremely good deal and now they're in a very, very powerful position when it comes to renegotiating the contract for 2004."

The Inland Revenue denies that the competition for the renewed contract will be a cosmetic exercise, saying: "We are committed to it being open and fully competitive; the contract is certainly not predestined to go anywhere." Well, it would say that, wouldn't it?

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