HMRC has spent £552m on IT transformation costs in the last 18
months, a
report from the National Audit Office has revealed.
The spending represents almost two-thirds of HMRC's spending on
its transformation programme, designed to deliver a more efficient
tax service and raise collection rates for the chancellor.
As part of its attempt to cut its technology costs by 10% by
2010-11,
HMRC revised its "Aspire" contract with Capgemini at the end of
last year. In return, the supplier was given a three-year contract
extension, taking the deal to 2017.
Under the revised deal, Capgemini has agreed to deliver
guaranteed savings of £658m by the end of the contract, says the
NAO report.
Overall, the report says, HMRC spent £851m on transformation
costs in the first 18 months of the programme, and achieved
estimated savings of £2.4bn.
The NAO points out, however, that most of these savings were
achieved as a result of activities already under way when the
programme began.
Over the life of the programme, HMRC expects most benefits to
come from an increased tax yield, estimated at £6.3bn, and from
transaction savings of £4.1bn.
Tim Burr, head of the National Audit Office, said, "This is an
ambitious programme of change with the potential to provide
significant benefits in terms of tax yield and improvements for the
department's customers.
"To succeed, the department must determine what it expects the
programme to achieve with the resources available. It should also
establish that the planned benefits are realistic and confirm each
year that those achieved are robust."