HMRC criticised for IT overspend

News Article - 12 June 2007
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The UK's tax body has been criticised by the public accounts committee (PAC) about the rising cost of its IT infrastructure.

Since 2004, the bill for the new computer system has tripled and the PAC has concluded that HM Revenue & Customs (HMRC) awarded the service contract while failing to take into account that its IT needs may change throughout the duration.

The tax body also came under fire for subsidising bid costs of firms competing for the contract, amounting to a £52 million bill to secure competition.

Investigations by the PAC began after the government said last year that the cost of the IT system could reach £8.5 billion over the ten-year contract.

"Before concluding the deal, the department should have evaluated bids against a range of demands for IT services," the PAC report suggested.

French IT services company Capgemini now runs the department's IT system after winning the contract for £2.9 billion in 2004.

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