HMRC merger tops government IT spending

A massive chunk of government IT spending over the next three years will come
from the newly merged HM Revenue & Customs as the two departments are
consolidated into one.

According to figures from the research group Kable, central government IT
spending is set to grow by more than a fifth by 2007/08.

In fact the group claims expenditure will increase from £2.6bn in the
financial year 2004/05 to £3.2bn three years later, of which just over 60%, or
£1.9bn, will be outsourced, says the report, published last week.

Much of the growth will come from the three biggest-spending departments:
HMRC; the Department for Work and Pensions; and the Department of the
Environment, Food and Rural Affairs.

Document management systems and e-procurement are the most common projects
being planned by in the near future.

Government IT projects have proved immensely controversial in the past. In
June, Accountancy Age revealed that HMRC could seek £100m in compensation from
EDS for its handling of the child and working tax credits system.

The company and the Revenue have held extended negotiations over the issue,
with insiders claiming the taxman is now ready for a High Court fight.

The merged department is expected to bring together its two IT services
contracts won by Capgemini and Fujitsu, during the autumn. Chief information
officer Steve Lamey is overseeing the integration of HMRC’s IT systems.

Government spending watchdog the National Audit Office (NAO) is considering
reporting on public sector IT successes, rather than failures.

‘A number of our reports have drawn attention to projects that experienced
problems,’ says the NAO’s Focus newsletter. ‘Not every government IT project,
however, experiences difficulties; many are successful.

‘To understand why these projects avoided the pitfalls that befell others,
the study will examine successful IT-enabled business change projects in both
the public and private sectors.’

If the report goes ahead it will be the first time that the body has looked
at how successful schemes achieved their aims.

Learning from successful projects is a key aim of Ian Watmore, head of the
eGovernment Unit in the Cabinet Office.

‘We are already doing a lot of good things,’ he said earlier this year. ‘The
question is how we can make that more ubiquitous.’