The Humongous Turning Circle

Changing some of HMRC's strategies, policies and long term contracts with suppliers seems at times equivalent to trying to divert the course of a supertanker which has a humongous turning circle.

Computer Weekly recently reported that HMRC has started to reassess its £8BN IT contract with Capgemini.

Will we see immediate changes?

No, unfortunately not, because the contract does not expire until 2017 (three years after this particular government ends its current term of office).

HMRC CIO Phil Pavitt has submitted a proposal to the departmental board for reforming its IT outsourcing contract. He told Computer Weekly that a renewed deal would conform with government ICT strategy, up to a point. However, it would not open the door to any more SMEs than were already subcontracted to work for HMRC by Capgemini.

"You can sense the mood of the current strategy. I can't tell you what will happen. It will be more in line with government strategy today than perhaps this contract that was let seven years ago.

If you are asking if SMEs will have a higher value of the contract. Then yes I can assure that will be the case. Will the volume of SMEs go up, probably not."


The above also implies that HMRC's current contract was negotiated and signed with a happy disregard for the then government policy of the day.

That being said it seems that, despite the government's stated desire to place 25% of public expenditure with SMEs, reality is proving to be a strict and unyielding mistress. The Cabinet's Chief Procurement Officer, John Collington, subtly shifted the targets by vainly boasting that the volume of contracts awarded to SMEs had gone up from 5% to 44% between January and September 2011.

Volume of course is not the same as value!

The fact is that the government does not know how much business it does indirectly with SMEs, because the large suppliers (who hold the head contract with departments such as HMRC) will not reveal the data and indeed don't even bother collecting it.

It seems to me that the large suppliers have HMRC and the government by the gonads here.

Or am I being far too harsh on the suppliers?

As to whether HMRC, and other government departments, are actually able to negotiate future contracts that do not put them at the mercy of the large suppliers, cost the taxpayer dear and leave SME's out in the cold remains to be seen.


Whatever the outcome, 2017 is a hell of a long way off, and not every supertanker turns in time to avoid collision or running aground!

Tax does have to be taxing.

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