Online tax filing suspension undermines e-government strategy

The Inland Revenue's decision yesterday (30 May) to suspend its flagship online tax filing system following a security breach is...

The Inland Revenue's decision yesterday (30 May) to suspend its flagship online tax filing system following a security breach is a huge embarrassment for prome minister Tony Blair.

The service was halted after users told the Revenue last weekend that when they logged they had access to other people's tax details.

The Inland Revenue prides itself on pioneering e-government and the online self-assessment service, launched in 2000, was supposed to be the flagship of new interactive government services.

However, the service, provided by outsourcer EDS, was delivered late, was quickly suspended for upgrades, and was heavily criticised for its complexity.

The latest security failing adds weight to a National Audit Office warning in April that Tony Blair's e-government efforts could be a waste of money unless Whitehall departments improve sharply.

The NAO attacked Whitehall for its failure to deliver interactive online services. It reported that only seven services, just 3%, were truly interactive, providing grants or benefits online, while none collect payments.

Auditor general Sir John Bourne said: "The major challenge is to get services online and to encourage and enable people to use them. Otherwise the considerable potential gains in departments' efficiency will not be delivered and large amounts of public money will have been wasted."

However, Chas Roy-Chowdhory, head of taxation at the Association of Chartered Certified Accountants, said the failure to deliver a secure online tax filing system cast doubt on the wider e-government strategy.

"If the Inland Revenue has problems when a small percentage of people file electronically, I seriously doubt its ability to handle anything bigger."

He added that if the pioneer of e-government has had such problems, it must call into doubt the ability of other government departments, with less experience than the Inland Revenue, to deliver effective, secure online services.

The Inland Revenue last month launched a competition to select a new technology partner from 2004 when its contract with EDS runs out.

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