A shortage of skilled IT specialists and outstanding questions about the future IT model when HMRC replaces the annual £700m CapGemini Aspire contract with the cheaper Columbus setup from 2017, are key risks for the tax authorities
The latest National Audit Office (NAO) report into current progress on the move to Columbus highlights the need to hire a more skilled and senior IT workforce as a matter of urgency as well as appointing a permanent commercial director for Columbus, the system replacing Aspire.
Leading up to the final phase of the Aspire contract, NAO recommends that HMRC has to determine the IT model it will adopt and improve its capacity to manage new services.
The new programme replacing Aspire – Columbus - will save around £200m a year. It is estimated to cost £500m a year to run. The last phase of the replacement is due to be completed in 2020, to coincide with the completion date for the rollout of digital tax accounts for all individual taxpayers and businesses, except for multinationals.
IT model
HMRC has until 2017 to decide on the IT model it will operate and identify what the model will need to do with extended services as well as its plans to transform and provide a fully digital tax system by 2020.
Earlier this year in March 2016, HMRC announced agreements to extend some Aspire services beyond the contract’s June 2017 end date, bring some services in-house before then and re-procure others with replacement services starting in July 2017.
Developments within IT and technology will follow so that by 2017, HMRC ‘will be better informed with more thorough information and a better understanding of their existing IT services so that they can make the best decision’, the NAO report says.
Skill development
The NAO added it is important for HMRC to develop its commercial, technical and operational skills so that it is able to introduce and manage the new IT model effectively.
To manage the replacement of Aspire and its wider IT services HMRC has taken five main actions:
- Recruited senior staff
Since the start of 2015 HMRC has made 18 permanent appointments to the 20 senior IT posts that will replace Aspire and HMRC’s other internal IT teams. Eight of these recruits were external.
- Established Revenue and Customs Digital Technology Services (RCDTS)
RCDTS employs the people transferring from Aspire suppliers to provide the services HMRC is bringing in-house, including 228 staff and contractors that transferred in December 2015.
HMRC’s ability to manage depends on the number and quality of people coming from Aspire suppliers.
The phase of recruiting 228 staff into RCDT was seen as successful by NAO.
- Assessing the skill of HMRC IT staff
The skills of all IT staff including those of RCDTS were assessed to inform team and individual development plans.
By April 2016 HMRC had assessed 1,061 staff which is two thirds of its total IT workforce.
- Reviewed the Columbus programme’s capacity and capability
Full-time staff needs to be increased by 50% to an average of 240. Around 100 of these should come from the private sector to provide a range of expertise.
- Engaged consultancy support
In September 2015, HMRC hired management consulting firm Bain & Co to assist it in managing the move to a new IT service provision model. HMRC estimates that it will spend between £5m and £20m on this contract over a three-year period.
IT skills
There is a 25% gap in the skills of HMRC’s IT workforce. When assessed it was discovered that staff need to become better in a quarter of skills that are needed for their role. There are also issues around management of multiple IT suppliers.
HMRC has to review the size, profile and experience of commercial teams. There needs to be more senior and less junior roles to increase experience.
The IT team needs to be increased by a fifth for it to be moved into Columbus.
HMRC is currently recruiting a permanent commercial director for Columbus. The role has been held by an interim since February 2015.
HMRC CEO Jon Thompson, chairman Edward Troup and Mark Dearnley, HMRC’s chief digital and information officer, are due in front of the Public Accounts Committee on Monday 13 June at 4pm to provide an update on progress with managing and replacing the Aspire project.
The NAO report on replacing the Aspire contract is here.
