There is something profoundly dispiriting about a government department promising to break up an old outsourcing relationship, and then continuing to hand the same supplier billions of pounds.
That is the uncomfortable lesson from HM Revenue & Customs and Capgemini.
The figures are extraordinary. Research by The Register, using HMRC's own published transaction data, found that the tax authority paid Capgemini at least £4.2 billion across 15,726 transactions between 2014 and July 2026. Sixteen months of data are missing, meaning the true figure could be higher.
And this is not simply an argument about one contract. It is about the ability of the state to learn from its own experience.
HMRC's original Aspire outsourcing arrangement with Capgemini began in 2004. It was supposed to be a ten-year deal. Instead, it became a sprawling technological dependency. By the time Aspire was due to end in 2017, the National Audit Office estimated that HMRC would have spent £10.4 billion, against the £4.1 billion figure used when Capgemini's bid was evaluated. The NAO said HMRC had not market-tested significant elements of the arrangement and that benchmarking indicated it had paid above-market prices for some work.
The lesson appeared obvious: disentangle the department from the contractor, bring greater control in-house, diversify suppliers and make future contracts shorter and more flexible.
HMRC itself said precisely that.
Its 2015-16 annual report described a phased exit from Aspire, with more development and delivery brought under HMRC's direct control. It said this would provide greater flexibility and control over its digital strategy.
Yet the divorce has proved remarkably amicable.
Capgemini continued to win lucrative work supporting systems associated with its former empire. In 2022, HMRC awarded it a £51 million contract for tax-system support. It subsequently received a deal worth up to £214 million for maintaining legacy applications, followed by a contract worth up to £245.5 million in 2024. A separate five-year agreement to operate two major tax platforms runs to 2029 and is valued at between £403 million and £574 million.
Then came the latest twist. In 2026, Capgemini won HMRC's contact-centre contract, worth up to £500 million, with a basic term running to 2034 and extensions capable of taking it to 2036. The official procurement notice confirms the two possible one-year extensions.
So much for breaking up!
HMRC is entitled to say that these are new procurements, not simply Aspire being quietly extended through the back door. It says its awards comply with procurement law and that it has moved from a handful of large legacy contracts towards a more diverse supplier base.
That defence may be legally correct. It does not make the broader picture any less troubling.
The central question is not whether every individual contract was technically lawful. It is whether the taxpayer has escaped the dependency that HMRC itself identified as a problem.
There is a particularly revealing example. In 2022, HMRC awarded Capgemini a contract without prior publication, arguing that, for technical reasons, only Capgemini could provide the required services and that there was no reasonable alternative. The official procurement notice says those services were necessary to maintain business-critical systems while they were replaced, modernised or decommissioned.
That is precisely how technological dependency perpetuates itself.
The incumbent built the system. The incumbent understands the system. The incumbent is then needed to keep the system running while the government replaces it. The replacement takes time. The government cannot risk disrupting the tax system. Another contract follows.
Repeat.
This is not an argument for pretending that government can simply rip out complex computer systems overnight. HMRC collects hundreds of billions of pounds in tax and the NAO acknowledged that Aspire provided continuity of service with few significant failures.
But that is precisely why the department should have been so determined to avoid recreating the dependency.
There is also a wider political embarrassment here. Ministers increasingly talk about using the enormous purchasing power of the state to support British businesses. Yet one of the government's biggest technology purchasers remains deeply reliant on a multinational supplier whose relationship with the tax authority stretches back more than two decades.
The issue is not that Capgemini is foreign. Nor should nationality become a substitute for value, competence or competition.
The issue is choice.
A government department should be able to say: this is our system, this is our data, these are our skills, and here are several suppliers capable of competing for the work.
It should not repeatedly find itself saying: this system is too complicated, too important or too dependent on its incumbent supplier for anyone else to take over.
That is the real scandal here; not that Capgemini keeps winning contracts, but that HMRC appears to have found it extraordinarily difficult to make itself genuinely independent of one.
The taxpayer deserves better than an outsourcing relationship that refuses to die.
And if ministers really mean what they say about competition, resilience, British capability and better value from public procurement, HMRC should be among the first departments required to demonstrate exactly how it intends to end this cycle.
Because a contract that was supposed to end in 2017, yet leaves its incumbent potentially embedded until 2036, is not much of a break-up.
It is a very expensive long-distance relationship.
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