NAO Criticises HMRC Aspire Contract

Jul 24, 2014

HM Revenue and Customs (HMRC) has had “limited success” with its Aspire contract with outsourcing firm Capgemini, according to the National Audit Office (NAO).

The deal in question is the government’s largest technology contract, costing £7.9bn between July 2004 and March 2014.

The agreement was meant to ensure continuity of the Department’s IT services, improve performance and facilitate change in line with its business strategy – all while providing fast access to the most modern technologies.

However, the NAO claims that HMRC is placing itself in danger of failure if it does not replace the contract with a new one that meets these objects by 2017 when the existing deal expires.

It adds that Aspire is not in line with current government technology procurement practices – earlier this year, Cabinet Office Minister Francis Maude announced that IT contracts could no longer exceed £100m in value or two years in length.

In 2011, HMRC agreed with the Office’s ruling that the Capgemini agreement was no longer providing value for money and changes were needed, but NAO reports that negotiating changes with potential suppliers has so far been unsuccessful.

Some Success Achieved, But More Work Is Needed

Although the public spending regulator acknowledges that Aspire has allowed HMRC to collect around £500bn of tax each year with little incident, it says much more work is needed to reduce operating costs, increase tax yield and improve customer service.

“HMRC faced complex, long-term technology challenges and Aspire provided an appropriate means of working through them and limiting risk,” said Amyas More, NAO head.

“However, there has been a lack of rigour in HMRC’S commercial management of the contract. It is essential in any contract that the client retains the independent expertise to challenge the supplier.

“We welcome HMRC’s recognition of this part way through the Aspire contract and its efforts to now rebuild its capability.

“HMRC now faces a considerable challenge in a limited amount of time to reform the contract while at the same time defining its technology strategy for post-Aspire,” Morse added.

The NAO claims that HMRC has commissioned much more work through its contract with Capgemini than was discussed when the deal was awarded.

It also claims that research indicates the Department has been paying above market price for the IT work carried out – although it did manage to recoup some of this during 2007 and 2012.


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