HMRC to outsource sensitive tax work to India?

So far the Government hasn’t allowed sensitive tax, health, or DWP welfare benefit data to go abroad for routine processing, though batches of tax records may go overseas in emergencies, to fix problems. 

That could change. A set of documents seen by Computer Weekly shows that the potential for off-shoring future HMRC work is being considered as part of an internal project called Quantum. A report on the findings of the Quantum team is expected next month.

Quantum is looking at savings of up to £205m a year.

One of the documents we’ve seen says that project Quantum is focusing on six things:

•    Alternative Delivery Arrangements – review of contractual constraints on Aspire’s outsourcing activities.
•    Commercial Restructuring – putting in place revised commercial terms with Aspire
•    Supplier Service Delivery Improvement – renegotiating the servicesprovided by IMS [Information Management Solutions] and the supplier to focus on delivering IT in the mostefficient manner.
•    Organisational Restructuring of IMS  – putting in place the mostappropriate structure for IMS to ensure high quality services aredelivered to our customers that are cost effective and efficient.
•    Service Standardisation – IMS aligning to industry standards, bybenchmarking services more simply and reducing operating costs.
•    Customer Focus – IMS need to improve the ways in which it works with HMRC the customer

This is a memo sent to HMRC staff by the Public and Commercial Services union on Quantum:

All members,

A debate has now begun within HMRC circles about project Quantum, so we believe the time is right to communicate with PCS members within Aspire regarding our concerns about the possible impact of this HMRC initiative.

In the first major Parliamentary review of the Aspire Re-tendering exercise in 2007 the Public Accounts Committee (PAC) gave the newly formed HMRC a pretty rigorous examination. It reported that HMRC had not taken sufficient steps to monitor the cost of the Aspire contract.

Partly as a result of these findings HMRC launched Project Quantum to establish whether Aspire did indeed constitute value-for-money for the taxpayer and to identify potential cost savings, including the viability for the potential off-shoring of some future work.

HMRC has asked Capgemini to draw up proposals outlining how they could contribute to the demands for better value. The HMRC Quantum Team has been working now for about six months, and is now due to produce its report in September.

However Quantum has taken place against a backdrop of demands for public service cuts, made worse by the cost of rescuing the banking sector. The indications are savings of roughly £200M p.a. may be imposed on Aspire regardless of whether Quantum found Aspire delivered value for money.

PCS therefore has raised with management our concern that Quantum is no longer simply about establishing value for money but is really a push to achieve swathing cuts in government spending.

At Forum Capgemini has stated this cut in funding would not lead to job cuts in 2009 and they do not foresee job cuts in the immediate future because they believe that in return for cutting expenditure Aspire will gain greater commitment and certainty on HMRC funding, whilst some unnecessary services will be de-commissioned, we will have greater access for future work from the rest of HMRC.

The PCS concern is how far beyond that is foreseeable? Both government and the opposition are making very hard line statements about the cost of future outsourcing projects; you can only imagine it is unlikely that HMRC will have any certainty on funding any time soon.  In the mean time the cost cutting will be shared by Capgemini and its partners and suppliers.

PCS inside IMS is launching a campaign against the cuts. They believe their work is likely to be moved away from Telford and their other existing locations to local HMRC Business Units (BU), the head office for the NTC [New Tax Credits] BU for example is Preston.

This will lead they believe to the gradual dismantling of the respective customer sites and loss of public control of the contract, which of course the PAC specifically criticised HMRC for in the first place.  

What is clear is that huge savings are expected, and there is a PCS campaign starting up in HMRC against them. PCS are not convinced that Aspire can deliver 30% savings to the customer, whilst maintaining service to the public, let alone securing our jobs, our careers and our pay rises.

PCS in Aspire is engaged in talks with our PCS colleagues in IMS, and we will support them in their campaign. In the meantime we are hoping to set up more transparent talks with Capgemini to gain the assurances you will want us to seek on the long-term viability of Aspire in its current form.


Sensitive tax work may go abroad as HMRC seeks to cut outsourcing costs –