Customs extends PFI contract

Customs & Excise is to pay an extra £249m to Fujitsu Services in an extension of a Private Finance Initiative contract signed in...

Customs & Excise is to pay an extra £249m to Fujitsu Services in an extension of a Private Finance Initiative contract signed in 1999.

Last month a Treasury report said the government would "adopt a presumption" against the use of PFI in future IT projects. However, PFI will continue to support Customs' e-business programme and the 10-year contract with Fujitsu (formerly ICL) will now increase in value from £680m to £929m.

A Customs & Excise spokesman said, "Since the contract has been agreed, we have purchased more services from Fujitsu, and to this extent the value of the contract has increased." New services include the infrastructure to support Customs' e-business programme, which was launched in 2001.

Concerns about the demands of Customs' e-business strategy were expressed in a draft strategy document in 2000, which said its IT infrastructure was "unsuitable for e-business" and the upgrade was "the area of greatest risk" in its e-government plans.

Officials said the revised contract will enable the department to move to the next stage of its e-business programme and integrate with other departments.

Liberal Democrat economy spokesman Matthew Taylor called on the government to explain the massive rise in the value of the contract. "Customs must explain how it has got into a situation where it has no choice but to spend hundreds of millions of pounds rather than providing these services in-house," he said.

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