Computer Weekly's revelation that the Inland Revenue "lost" five
million tax records was the latest in a catalogue of IT problems.
Mike Simons reports on the measures the Revenue is taking to get
back on track
Nick Montagu, chairman of the Inland Revenue, is the very model
of a modern Whitehall mandarin.
Educated at Rugby and New College, Oxford, Montagu has none the
less been enthusiastic in his efforts to break down the "old school
tie" culture in the civil service, embracing Prime Minister Tony
Blair's Modernising Government and Electronic Government agendas
with equal enthusiasm.
To this end Montagu has stoutly defended the Revenue's
partnership with its IT outsourcer EDS and with Andersen
Consulting, which runs the Nirs2 National Insurance records
computer, before the House of Commons Public Accounts
Committee.
In May the Revenue chairman invited scores of journalists to the
Revenue's grand Somerset House headquarters and told them of his
determination to place the Inland Revenue at the head of the
wired-up Government league tables.
So it must have been a considerable disappointment when
Computer Weekly last week revealed that more than five
million income tax records were missing, prompting a flurry of
national media attention.
The news followed a string of less well-publicised IT related
cock-ups at the Revenue. These included delays in the online filing
of self-assessment tax returns (News, 25 May) and the re-keying of
self-assessment data returned online (News, 13 July).
Butthe Revenue's IT problems do not end there. It is also having
difficulty with its internal infrastructure, particularly last
year's millennium bug-driven Infrastructure 2000 (i2k) project,
which saw new desktop systems rolled out to the UK's 600 tax
offices.
The i2k programme was the largest roll-out of Windows NT4.0 in
Europe. It was completed in time for the millennium, but it was
pushed through very quickly, very close to the end of the year and
many tax office staff were extremely critical of the new system's
quality.
The Revenue itself has acknowledged the resentment. Montagu told
staff, "I am fully aware that, as more projects come on stream and
we demand more and more of our IT systems in an increasingly
complex world, the amount of downtime may increase, causing
frustration and delays for everyone."
A briefing, titled What's Happening to IT?, spelt out the
problems and what the Revenue, with EDS, was doing to put them
right. However, it told staff bluntly, "We can't promise you an
easy ride."
Explaining the current difficulties the briefing stated, "When
we release IT systems they should be free of major problems. But
that is not the same as problem free. No software producer achieves
this."
The Revenue claimed that the complexity of the IT it uses means
it cannot test for "every possible eventuality for every user in
every office".
It added, "The Inland Revenue is not alone in experiencing IT
problems. No other organisation with an IT environment as complex
as ours has all their IT working perfectly all of the time. The
recent difficulties with the air traffic control and stock exchange
systems are two examples."
EDS has drafted in additional staff to work for the Revenue, but
employees battling with problematic systems have been told the
Revenue "needs to be realistic about what we can achieve".
The briefing stated, "It is not simply a question of money. It
is more a question of how we match the scale and complexity of work
with the skilled resources available."
However, in the July issue of ReveNews, the newspaper for Inland
Revenue staff, Montagu appeared to contradict this. He said the
roll-out of the i2k infrastructure to National Insurance
contributions staff had been turned down because "the budget for
this stage is not available. Money is tight all round this
year".
Priority areas have been identified, including systems for new
tax credits, the development of new electronic services, including
Web-enabled contact centres and preparations for euro
compliance.
Staff have been told, "This means IT changes outside these areas
may not be implemented. But even this represents a massive
programme of IT development by anyone's standards."
No wonder the briefing told staff, "We can't promise you an easy
ride."
Problem programmes:
Local Data Capture
Local Data Capture is the system which allows tax officers to
enter data onto the main systems. The Revenue told its staff,
"Local Data Capture and the online function of SA [self assessment]
mainframe systems have had to be completely redesigned to work
effectively on the i2k IT platform. This has been a complex
exercise both technically and from a business requirement point of
view."
The new systems were tested, "but because of time constraints it
was not possible to correct all the problems identified in the
trial before national roll-out.
"We wanted to let offices start processing stockpiled returns as
soon as possible. This meant the product went live with a number of
known problems. In addition to those, further problems came to
light when the new software was rolled out nationally."
The Revenue said many of the bugs were fixed by a software
release on 10 July and it is confident that it will be able to cope
with the flood of tax returns ahead of the 30 September deadline
for the Revenue to carry out self assessment calculations.
Computer Support for PAYE
The Revenue has frozen development of the Computer Support for
PAYE (CSP) system, which was planned to replace the 15-year-old
Computerised Operation of PAYE (Cop) system, a mainframe system
holding 30 million PAYE records.
The first release of CSP, the Employer Maintenance Schedule, was
installed at the end of May after being delayed from April. A
second release planned for this year may be delayed indefinitely,
while other parts of CSP, including Coding and Taxpayer
Maintenance, "will not be developed until resources become
available".
The Revenue has had trouble with the interface between the Cop
system and the Nirs2 National Insurance records system, which may
account for many of its missing tax records.
The Revenue said it is "very clear that Cop must be replaced",
but a revised timetable for development and deployment of CSP has
not yet been agreed.
Compliance Quality Initiative Workbench
The Compliance Quality Initiative (CQI) Workbench was launched
on 17 April to provide inspectors with an electronic "search
engine" that highlighted tax returns warranting further
investigation.
The Revenue admitted that it was rolled out with "a range of
problems" that made it "extremely difficult to use".
The briefing explained, "Many of these problems were technical
deficiencies within the system. Despite extensive testing a number
of these problems did not show themselves until the Workbench was
used daily by people across the country.
"Frankly we didn't understand and properly test the interaction
between the Workbench and other systems."