Experts condemn Revenue outsourcing

The Revenue adopted an outsourcing strategy in the 1970s to develop the PAYE collection and payment system, but after numerous problems the deal, with ICL, was scrapped.

In 1994 it signed a deal with EDS to manage the mainframe-based PAYE system, but got bogged down by multiple administrative problems.

Further trouble came when the Revenue merged with the Contributions Agency in 1999. It inherited an outsourcing deal with Accenture, and faced a troublesome integration of PAYE with the Unix-based National Insurance database – NIRS2.

‘We’re stuffed. If the public understood how many hazards outsourcing is causing, it would be difficult for politicians to justify,’ said Peter Sommer, computer security research fellow at the LSE.

Sommer argued that national security suffered from outsourcing Revenue services.

‘Outsourcing the Revenue is just as bizarre as outsourcing the armed forces,’ he said. ‘The only way out is to invest in IT skills, but that is hugely expensive and would only work if civil servants got paid in line with the industry. We would need a huge catastrophe before the Government would consider it.’

Helen Margetts, a political science professor at University College London, argued in her book Information Technology in Government that the government rapidly discovered that ICL was not up to the job and the technology was pushed to its limits. The result was the loss of all IT development skills within the Revenue.

The outsourcing contract with EDS expires in 2004 and the Revenue has started to tender for a new deal covering 73,000 desktops, 200 systems, 20 ICL mainframes, and 177 IBM and HP Unix boxes.

The Inland Revenue refused to comment.


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