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HMRC confirms agreement to exit £10bn Aspire IT contract

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HM REVENUE & CUSTOMS has announced it has reached a final agreement with its major IT suppliers on the phased exit of the £10bn Aspire IT contract – one of the UK’s biggest single public sector tech contracts – which ends in 2017.

HMRC and IT have been uncomfortable bedfellows in recent years, with the Public Accounts Committee warning in the last parliament that its approach to computing could leave its systems in “havoc” as it seeks to replace the Apsire system. HMRC rejected that assessment at the time, stating it was “making significant progress in preparing for a smooth and effective transition” from Aspire.

Last year, it emerged an outsourced IT company engaged by HMRC to provide additional capacity to tackle tax credits fraud and error fell £284.5m short of its savings target due to an IT failure that meant its 600 staff could not work for three months, while still being paid.

Synnex-Concentrix UK was hired on a payments-by-results basis with the aim of increasing the number of compliance interventions. So far, the benefits of the contract have been “lower than anticipated”, according to an assessment by the National Audit Office.

Under the agreement reached with Capgemini and Fujitsu, HMRC will complete the phased exit from the single, overarching Aspire contract by “breaking it into to a series of smaller, more flexible contracts” with existing and new suppliers. It expects that the contracts will be of interest to smaller and medium-sized companies, as well as the larger providers.

Starting next month (April), HMRC confirmed it will be going to market for a number of IT services.

The tax authority is also bringing some existing IT services and staff in-house before the end of the contract in 2017, which it says will provide stability during the phased exit from Aspire.

HMRC expects to save around 24% (£200m) a year by 2020/21 on the provision of like-for-like IT services, against a £854m total IT spend in 2014/15.

It will also be investing an additional £1.3bn over five years in its transformation programme, with the aim of making it quicker and easier for the majority of individuals and businesses to manage their tax affairs online – a key plank in the government’s Making Tax Digital drive.

HMRC’s outgoing chief executive Lin Homer said: “HMRC’s ambition is to be one of the most digitally-advanced tax authorities in the world, and the agreement we have reached to exit the Aspire contract brings that a huge step closer.

“Our new approach enables HMRC to secure the adaptable, cutting-edge IT services we need to transform our services to customers and modernise the way we work, at much better value for money for the taxpayer.”

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