Computer Weekly has put a series of questions to HM Revenue and Customs on issues arising from last week's Public Accounts Committee report into the administration of the tax credits scheme. We will analyse their replies in future issues. Here we define the questions and set out the background to them.
By submitting your personal information, you agree that TechTarget and its partners may contact you regarding relevant content, products and special offers.
Why was the tax credits system allowed to go ahead when it is now recognised to be too complex and has inaccuracy built in as part of the design?
Background: The tax credits system relies on paying claims one year and correcting overpayments the next. Overpayments become routine - but so do wrangles between families in hardship who in many cases cannot afford to repay the sums. The systems have also failed to stop recovering overpayments during disputes.
Did suppliers and consultants try to alert ministers and the department to the questionable feasibility and over complexity of the system?
Background: Did the chancellor Gordon Brown receive any warning about the overly complex system when he approved the legislation? Why did the department accept responsibility for implementing a system mired in complexity?
Independent Gateway reviews of high-risk projects are supposed to prevent flawed systems going into service, so why did they not stop the tax credits system at the feasibility stage or later?
The Office of Government Commerce introduced Gateway reviews so that medium and high-risk projects in the public sector could be assessed at six stages during their lifecycles.
The aim was to stop a succession of failures of IT-related programmes and projects. Gateway zero, for example, tests the feasibility of major government projects at inception, before public money is committed.
The OGC introduced Gateway zero in 2001, nearly two years before the new tax credits system went live. But it has not published the findings of any Gateway reviews. Problems with tax credits and the MPs' criticism of the complexity of the scheme raises questions of whether the Gateway review scheme has done its job in this case.
Should HMRC and its suppliers have accepted work on new tax credits while still trying to cope with unprecedented backlogs of work after the delayed introduction of a national insurance recording system?
Background: When the tax credits system was introduced in 2003, the department was trying to recover from dealing with a record number of "open cases" - unreconciled accounts - after difficulties posting national insurance details onto taxpayer records. Should the department have taken on enormously complex new IT work when it was still firefighting on another major IT-related project?
What assurance is there the service to the public, the administration and the reliability of the tax systems will get better, not worse?
Background: The Revenue has given assurances to parliament for more than 15 years that it is forging ahead with IT innovation, improving service to the public and making its operations cheaper to run and slicker.
To these ends it has spent more than £2.5bn on IT services. But there have been a succession of reports by public spending watchdog the National Audit Office and the Public Accounts Committee on the administrative and system failures within the department.
To the public and some MPs, the Revenue is a department that sails from one crisis to another. But has anything changed in the department's culture or accountability over 15 years which gives an assurance the future will be any better than the past?
Should the paymaster general Dawn Primarolo continue to proclaim the benefits of the tax credits regime in the face of evidence it is too complex to administer?
Background: In June 2005, Primarolo told BBC's Money Box programme, "I have confidence that the tax credit system is the way to proceed."
Is HMRC's data so poor that it has no real idea whom it has as customers?
Background: The Public Accounts Committee report said, "The department does not have sufficient information about the claimant population to enable it to provide a good service to the public and avoid disruption to its own main business of tax administration." This raises questions about what plans the department has to build up an accurate and comprehensive view of its customers.
Will the department publish specific measures against which its performance over tax credits can be checked?
Background: This will improve accountability and transparency.
Does anyone in the department have responsibility for ensuring there are back-up records of tax files?
Background: Some MPs are amazed that a routine programme could delete up to one million records, some of them live cases, without there being any copy.
How will the moving of staff to deal with the problems of tax credits affect the day-to-day work of the Revenue?
Background: The Public Accounts Committee report said problems with tax credits have "adversely affected tax administration". The report said the transfer of staff from other duties to firefight over tax credits has created a backlog of work.
This diversion of staff also hit "processing quality and accuracy", and the department missed its target for dealing with tax inquiries to a "fully satisfactory standard", said the report. But what staff have been moved from where, and how does this affect the service to the public?
How many open, unreconciled files are there on the Revenue's accounts and how do the numbers compare to previous years?
Background: The number of open cases can be a useful indication of how well the department is coping with backlogs of work. But it has so far refused Computer Weekly's requests for figures on open cases.
Should the Revenue take on any new government work while it is firefighting over tax credits, online filing of tax returns and other problems?
Background: This is the fundamental question ministers and civil service leaders must face if they are to put right systemic failures in the department on which the rest of government depends.