HMRC is due to shake up its IT systems in a move that has MPs seriously worried. The news comes in the wake of a string of super-expensive IT gaffes by public sector organisations, who seem incapable of getting it right but eminently capable of spending billions getting it wrong. As a result of the proposal MPs have warned HMRC they risk becoming the latest government IT disaster.

650 programmes, an £800m a year contract, £1.2 billion profit for Capgemeni 

HMRC’s current Aspire computer system delivers a remarkable 650 different IT programmes, all designed to help the government collect our taxes. A recent National Audit Office analysis reveals it hoovers up a massive 84% of the revenue’s IT spend and the system was instrumental in collecting £506 billion in tax last year.

An NAO report earlier this year revealed how the Aspire system had led to Capgemini’s profits on the ten year contract rocketing from £500m to a horrific £1.2 billion, mostly because HMRC had added more complexity to the contract and, at the same time, failed miserably to get value for money. The existing Capgemeni contract expires in 2017 and the revenue is planning to replace them with a series of smaller contractors.

Like so many public sector computer systems, it seems almost obscene that it costs so much to maintain and run. How on earth do they spend 500 million pounds on services from a contractor, let alone £1.2 billion? But that’s another story…

Wasting taxpayers’ money on obscenely expensive IT systems and crazy contracts 

Whatever the reasons for HMRC’s vast IT spend, it’s clear they are not very good at commissioning IT services and are already far too profligate with taxpayers’ money.

MPs and other experts are concerned that their lack of capability might mean the system becomes even more chaotic and expensive. In the words of the Public Administration select committee chairman Bernard Jenkin, “It would be a mistake to run before you can walk. Unless there are people in HMRC with the necessary skills in managing a number of smaller contracts then you will be jumping out of the frying pan into the fire.”

On the bright side, the Cabinet Office has published a series of so-called red lines, including a £100m limit on IT contracts unless there is “an exceptional reason”. Should think so too.