EDS's contract with Revenue under threat
EDS looks set to lose its lucrative contract with the Inland Revenue following the tax credits debacle that is being investigated by the Public Accounts Committee.
The 10-year contract to run the Inland Revenue’s tax and national insurance systems, worth between £4bn – £5bn, could be rewarded to Cap Gemini Ernst & Young and Fujitsu, according to reports.
EDS will argue that it is not a good time to change to another IT services provider, as the Revenue is dealing with new tax and tax credit initiatives.
However the company has been heavily criticised during the Committee’s investigations. Edward Leigh, chairman of the PAC, pointed out that EDS made a ‘fat profit’ after ‘unleashing’ an unready system on society’s most vulnerable.
Inland Revenue chairman Sir Nicholas Montagu told the Committee: ‘I expected EDS to provide a system that was stable and fit for the purpose.’