Revenue rejects EDS cost claims
A massive 60% increase in the forecast contract cost of running the nation’s tax systems has been brushed aside as a ‘fuss over nothing’ by the Inland Revenue.
The Revenue will now pay US services company EDS u1.6bn over ten years – #600m more than when the contract was originally signed in 1994. Self-assessment and IT support for the Statistics and Economic Office were blamed for the huge hike in cost.
The extra cost fuelled fears that the Treasury was pouring more money into the project to meet Chancellor Kenneth Clarke’s tight deadline for self-assessment. Labour has called for an urgent inquiry.
A Revenue spokesman said: ‘It is a fuss over nothing. The cost is u1.6bn over ten years because we have given them more work and there is always a gap between tendering and post-contract verification.
‘It was never a fixed-price contract and tax does not stand still. The contract remains under constant review and we will always be looking for the best price possible.’
Parliamentary questions last week revealed that EDS has already received #416m in just two years for its work, which has involved taking over 2,000 civil servants into the private sector.
EDS, which is the biggest IT supplier in Whitehall, pledged to save the Revenue #225m this year. It has won contracts with several Government departments, including the ministries of defence, environment and transport.
