HMRC lacks 'the capability' to deal with Aspire switchover, NAO finds

HMRC is at risk of not being able to complete the switchover of its Aspire contract in time, while HMRC’s internal IT organisation and revenue & custom’s Digital Technology Services may fail to work together productively, a National Audit Office report has found.

HMRC calculates that its programme to replace Aspire, called Columbus, will deliver recurring savings of around £200m a year (around 25%). Due to be completed in 2020, the programme has a budget of £700m.

Not managed the costs

In January 2015, the previous NAO committee reported that the Aspire contract had provided stability but HMRC had not managed the costs of the contract well. The committee was concerned about HMRC’s progress in preparing to replace Aspire, which was due to end in June 2017.

The committee was also concerned that replacing the Aspire contract with separate contracts with many suppliers would put tax collection and customer service at risk

The committee found that changing to a new IT model required HMRC to:

• Manage risks to tax collection and customer service;
• Ensure long-term objectives are articulated and supported; and
• Acquire the necessary commercial, technical and operational skills

In March 2016, HMRC ranked the highest risks that could come from the Aspire switchover, including HMRC’s internal IT organisation not having the capability to transform into the future operating model. The risks are included in the new NAO report.

Poor track record

Aspire (Acquiring Strategic Partners for the Inland Revenue), one of the UK’s biggest single public sector tech contracts, was established by the Inland Revenue to manage the competition to re-let its previous IT outsourcing contract with EDS.

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 Aspire 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.