PAC chair: Who's naughty or nice? The 3 IT mega projects that had better watch out

'We still have a supplier oligopoly'

The biggest tech projects to be scrutinised by the UK government spending watchdog next year will be an overhaul of tax IT, the Rural Payments Agency's troubled systems, and the Ministry of Justice's court transformation project.

Speaking to The Register at the Global Tax Summit, Meg Hillier, chairwoman of Parliament's Public Accounts Committee, highlighted those three IT projects as the areas of biggest concern for her cross-party panel.

The MoJ’s transformation plan - which include a £1bn programme to digitise courts - has already been identified by chief exec of the civil service John Manzoni as one of the biggest projects "keeping me awake at night".

Hillier also said the troubled Rural Payments Agency’s Common Agricultural Policy tech system was something the body was still worried about.

"The Rural Payments Agency has promised it will be fine next year. But then you have to wrap Brexit into that."

The Common Agricultural Policy IT system (CAP-D) was intended to be a digital exemplar under the new Basic Payment Scheme payments system.

But following the botched implementation of the digital interface last year, the system went over budget by 40 per cent to £215m, and will incur penalties from the EU of £180m per year in the early years of the CPA-D system.

Hillier noted that the Department for Environment, Food and Rural Affairs - which is responsible for the RPA - has also done the least to prepare for Brexit. That is despite the pressing issue of how the CAP payments will be affected.

She said while Brexit might solve the issue of the disallowance fines from Europe, the more immediate problem of farmers "is down to the British government" and its failure to implement a fit-for-purpose IT system.

By contrast, she said HMRC is the government department to have done the most to prepare for Brexit.

However, HMRC’s plans to move off its £10bn mega Aspire deal - the largest project in Europe - were still outlined as an area of concern.

The system underpins £500bn of annual tax revenues is currently run by Capgemini and Fujitsu and is to be transitioned to 400 small suppliers.

At the same time HMRC is cutting its headcount by 16 per cent, while the PAC has simultaneously criticised its lack of an “adequate plan” to digitise the tax system.

“Every they have assumed they were going digital, the service dropped.”

She said HMRC also needs to develop its own systems to keep up with technology companies, as well as implementing changes in law.

“We need to have an adaptation to our tax law, that takes account of the digital world. We as legislators have a responsibility to look at that.”

"It has to be much clearer about where trade takes place and identifying that in the digital ether. The laws were set up to deal with commodities.” She says the system is so opaque some companies may not really be paying much tax anywhere.

On the subject of the government’s target of channelling 33 per cent of its business through SME she says that is one of those political figures plucked out of the air and “is not there yet”.

“One of the things is they are very risk averse the civil service and if they know a big supplier they will probably keep giving it more contracts. And the big supplier knows how to bid.”

She said: “We still have an oligopoly of large suppliers. It’s not got any better.” ®