Sir Nick’s assertion, to the House of Commons Public Accounts Committee this week, that the deal offered the best value for money (backed by a recent NAO report) was strongly question by MPs on the committee.
The committee said the only reason for the deal was that it would have cost the Revenue Pounds 44m to break its contract with Accenture.
Sir Nick accepted the cash penalty was a factor, but said the original contract had been held up by the NAO as a model deal. In addition, he said early problems with NIRS2 had been sorted out and the system was now working well.
According to the Revenue chief, these problem had been partly caused by the ‘explosion of legislation’ under the new Labour government after 1997.
And he rejected claims by Tory MP George Osborne that these changes should have been foreseen and factored in by civil servants.
Sir Nick and Accenture partner Elizabeth Astall agreed the consulting group’s pay rates were high, but said that was because it recruited the best people.
In terms of continuity of service, quality of staff and value for money, Sir Nick said the Accenture deal – without an open competitive tendering procedure lasting up to 18 months – was clearly the best option.
But Labour MP Gerry Steinberg told him: ‘I think Accenture had got you by the short and curlies and the taxpayer lost out as a result.’
Sir Nick also firmly rejected suggestions the deal with Accenture was illegal under European Law.
This despite doubt from National Audit Office boss Sir John Bourn over suggestons Accenture did not breach EU regulations.
Sir John made plain this concern, saying: ‘It’s not clear whether its legal or illegal under present law.
‘What would be needed would be some disappointed rival company to mount a legal challenge to see whether it was right or not,’ he added.
But Sir Nick was adamant that the contract was a legal deal and remained convinced that it was most unlikely unlikely to face any court challenge.
If any such legal proceedings did arise, he said, they would fail.
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