By Andy McCue, 27 October 2005 14:20
NEWS
The government has revealed that a total of £236m – exclusive of VAT – has been paid to both EDS and Capgemini for the IT systems behind the disastrous new tax credits system.
HM Revenue and Customs (HMRC) is currently in a stand-off with EDS over compensation for a litany of IT problems that led to massive overpayments and is threatening to take the supplier to court.
The tax credits system has been called a "nightmare" by MPs and a report by parliamentary watchdog the Public Accounts Committee has questioned HMRC's ability to rectify the problems.
The tax credits IT system went live in April 2003 under an outsourcing contract with EDS and when this contract ended Capgemini took over the running of the system from 1 July 2004.
Paymaster general Dawn Primarolo has now revealed the full cost of the IT system in answer to a Parliamentary Question this week.
She said: "The identifiable costs paid to these suppliers for running the IT tax credits system up to 31 August 2005, including costs in the pre 'go-live' stages, was £236m, exclusive of VAT."
Earlier this month HMRC repeated its threat to take legal action against EDS over the IT problems. The software errors are estimated to have resulted in overpayments to 455,000 households in 2003 totalling almost £100m.
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Comments
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1. anonymous
I wonder how many companies would spend £236,000,000.00 on a computer system if it had to come out of profits?
It just goes to show how much CG, EDS and the hanging-on consultants can bump-up the price when no-one has to ask where the money is coming from...
It wouldn't have cost that much to give every household a PC and BroadBand, so I don't see how a few servers and a databse did....
2. PAYE SUCKER
Have any MP's or Whitehall bosses or Quango participants got shares in EDS or any of the other benefactors of the public sector IT gravy train ?
3. anonymous
Everyone expects that the private IT sector is more professional, than the public, it just goes to show that if you put public systems in the hands of the private sector you get cowboy systems.
The private sector is governed alone by profit, as soon as they get the money they leave town, leaving you with rubbish systems, which don't meet the task at hand. The testing of this system is just one of many IT systems developed by large IT outsourcing firms that have failed i.e. passport system a few years ago.
That is why decent In house public sector IT services should be in place when doing these type of important projects, not out sourced, as these private consultants only like fat wages, fat sandwiches and coffee in useless project meetings. In other words Fat Cats eating the cream. Who will pay for it at the end us tax payers along with the court cost, as the government idots have signed a contract, where they have not read the small print.