The £71m deal EDS struck with HM Revenue & Customs over the tax credits system always seemed a bit fishy. Described from the outset as an ‘aggregate’ payment, it was always likely there would be some devils in the detail.
Now it emerges that the deal is not only tax deductible (a feature of such payments), but that part of it is made up of deductions against future contract wins.
The terms of the deal were confidential, and HMRC and EDS have been confidently batting off questions about it ever since the deal was signed in November.
So how did it emerge now? Apparently Sir David Varney told MPs in December in a private meeting of the Treasury Select Committee. Private enough, apparently, to mean that some senior members of HMRC themselves had to leave the room. But not private enough for someone present to disclose the details elsewhere.
Sir David is before a Treasury committee again today. What are the odds he’ll say the confidentiality terms mean he can’t talk about it? And will he make any reference to those who most likely leaked it? We’ll see.
As for suggestions the government could be tempted to hire EDS just so it can be sure of getting its cash, I think the best one can say is the government hardly needs any more encouragement on that front. EDS has always attracted government contracts and cash by the bucketload. The £30m they are thought to need to pay back on top of payments already made is truly a drop in the ocean.
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