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The Revenue’s own IT system is now beginning to creak under the strain as a Revenue source acknowledged that they are suffering from a shortage as its suppliers, EDS, has a shortage of suitably-skilled people.
A leaked IR memo read 'As we run increasing numbers of complex IT systems, the risk increases of those systems performing less well than expected. The department can reduce that risk by using skilled people to develop and test the systems thoroughly before they go live. But at present there is a shortage of skills to do this.'
End users are already criticising some of the new systems as unsatisfactory and all e-service projects will now undergo a rigorous risk assessment to ensure they meet the department’s priorities. The leaked notices from the Revenue’s intranet site say that directors have been asked 'to trim the extent of current IT development work to increase the success rate of future programmes.'
At the same time the Revenue has additionally admitted the cut-backs will mean that a project to reduce the risk of tax or NI losses in insolvencies will be put on hold for the time being. Also affected are the new systems for the collection of student loans and NI contributions as well as the policing of arrangements that allow taxpayers time to pay - all of which are being deferred.
Despite the skills shortage, the IR has a 10 year contract with US supplier EDS for £2.4bn, (double the figure announced when the deal was settled in 1993). The figures are leading to widespread speculation that the Inland Revenue whose 50,000 workstations and an annual IT budget of £250m make it one of the largest IT sites in Europe, cannot rely on EDS to find the members of staff it needs to operate efficiently in the midst of the skills crisis.
The Inland Revenue is regarded as the flagship site in the drive for an e-government which was expected to have: given taxpayers access to their records online, initiated correspondence by email as opposed to post, launched the Tax Credits scheme as an e-service and cut the number of internal paper forms by up to 75%.
A spokesman for the Inland Revenue told Shout99 "The Revenue wants to provide realistic and robust IT services for staff and customers alike. As we run increasing numbers of complex IT systems, the risks increase of those systems performing less well than expected. The Department aims to reduce that risk by using skilled people to develop and test the systems before they go live. At present there is an acknowledged shortage of people to do this, both within the department and EDS as well as globally.”
"It has recently been agreed (inter- alia):
· Area management and regional reorganisation schemes will be planned taking into account the availability of IT resources to support them.
· Call/contact centre plans will give 50% of our customers access to that service by 2002 but at the same time place fewer demands on Revenue and EDS IT resources.
· To make sure that future e-services projects will be subjected to rigorous risk assessment and checked against Departmental priorities."
Commenting on the news, Kevin Miller the PCG's Finance Director said: "At the Professional Contractors Group we have argued long and hard with the Revenue that their legislation on intermediaries (IR35) will drive highly skilled knowledge based contractors overseas. They have often challenged us to provide evidence that this is happening. It is not easy to do this. Contractors tend not to send parting post cards to advertise their departure. However, shortages such as you report and evidence that rates in some areas are leaping ahead, tend to suggest that there are forces at work which could well include going overseas."
This update comes in the shadow of the Inland Revenue’s Nirs2 computer system blunder, which has left 120,000 pensioners underpaid by £41m. Pensions minister Jeff Rooker has called the current IT system ‘rubbish’ and a Liberal Democrat spokesman added: “This is a problem the government has known about for years. It simply is not taking it seriously enough.”
An EDS spokeswoman said: "We would acknowlegde that over the last 12 months there has been a shortage of some skills. We've lost people from local offices to e-consultancy firms in London and dotcom ventures. However, now we're continuing to recruit skilled people and are finding it easier recently.
"We are on track to deliver the current programme of work for the Revenue and intend staying on track."
Related stories:
£500m Government contract for EDS
The Good, the Bad and the Ugly...of Government IT
EDS forced to pay IR £2.5million in Financial Remedies
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Richard Powell
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