The history of government IT projects has led senior
opposition MPs to warn that the rationalisation of complex IT
systems could prove more difficult and risky than the chancellor
has anticipated.
Conservative Chris Chope questioned whether the government was
right to attempt the merger of Inland Revenue and Customs and
Excise IT systems when MPs are already inundated with complaints
caused by the failure of the government to link the national
insurance and Inland Revenue databases.
"They have not proved they have been able to succeed in doing that.
And here they are, planning and indeed budgeting for job cuts on
the basis that they are going to succeed in doing something much
larger and more complicated," Chope said.
Liberal Democrat MP Vincent Cable said that experience in the
private sector has already shown that merging two organisations
with different cultures is difficult and often fails.
"Trying to achieve the double feat of managing IT and integrating
two very different organisations could be beyond the government's
capability," he said.
Although the departments have been working to reduce duplication of
electronic information, a merger between the two departments will
be difficult, a report by permanent secretary to the Treasury Gus
O'Donnell. Records are still held in electronic "silos" in each
department, with little cross-linking.
A merger between IT systems could prove more complex if the Inland
Revenue's decision to replace EDS with Cap Gemini as its preferred
supplier in the Aspire contract to modernise tax and national
insurance systems next month runs into unexpected
difficulties.
Bob Forthrop, chief executive of IT outsourcing consultancy Morgan
Chambers, said it would be a major challenge for Customs and Excise
and Inland Revenue to rationalise their IT systems while still
providing a normal service.
"One of the biggest problems will be transferring data. It will
mean having to do data cleansing. Having records of one person on
the Inland Revenue and the same person on Customs and Excise and
bringing them together is a major challenge," he said.
The new department could achieve some quick wins by rationalising
basic infrastructure, such as desktops, telecoms and networks. But
there are important questions to answer first.
Will the Inland Revenue or Customs and Excise systems take
precedence? Will the government decide to mix and match? Which
outsourcing supplier will win the business?
The Inland Revenue said no decisions would be made about merging IT
systems until the appointment of a new management team. It said the
Aspire contract would be no obstacle to a merger.