Three Year Managers For Ten Year Projects - Dearnley's Binary Revolution

My thanks to the loyal reader who penned this most excellent analysis about Dearnley and the "binary revolution" in HMRC:

"Dearnley is a probably being economical with the actualité like so many members of HMRC’s Ex Com.

The constant shouting of the word 'Digital' to describe their IT strategy should immediately ring alarm bells since by their very nature all the Departments computers have been digital (ie using binary compiled code) since the date the Inland Revenue bought their very first LEO machine second hand from Joe Lyons in the 1960s. As a consequence the Revenue could claim to have digitised most of its work decades ago. It would be nice to see such obvious bullshit occasionally challenged at places like PAC.

More seriously, while Dearnley frequently likes to boast about his speedy roll out of Windows 7 to all HMRC desktops he negelects to mention that in the process it has broken loads of applications, created many problems and generated thousands of lost man hours of work

With regard to the problem of 'legacy' systems Dearnley seems to fail to understand or deliberately ignores the basic issue that all IT applications fall into that category the moment they hit the live metal and start running in anger. It does not matter whether they are 5 minutes old or 5 years old they all have to be maintained and they all face the issue that the software and hardware on which they were designed and run is sooner or later out of date. Moreover, political events and changes to legislation will mean the functionality is going to have to be constantly updated and enhanced.

It is certainly true that HMRC over the years has wound up with a huge IT estate running a wide range of different platforms, operating systems and applications. However, the people largely responsible for that situation are not the Revenues IT suppliers but the Board of HMRC itself, including individual like Dearnley and Pavitt who have constantly changed the core IT strategy. For example, a few years ago the mantra coming out of Ex Com was that HMRC was to buy not build its software so they invested massively in various proprietary COTS packages, many of which were costly and often incompatible with the Revenues needs so had to be expensively customised. Now the pendulum has swung completely the opposite way and HMRC now are betting the whole shooting match on Open Source systems and bespoke applications written in house. That punt may come off but it is a very high risk strategy particularly as much of the software being used is largely untried and unproven for running major government systems and the in house HMRC 'Digital' Teams in Newcastle and elsewhere have no experience of delivering and supporting systems on that scale. In addition, there is the very real worry that Dearnley appears to be funding his ambitions by stripping out investment in maintaining and supporting the existing legacy estate which still runs 99% of HMRC systems. If his grand schemes come to nothing then the Revenue could end up with the worst of all worlds with new systems not fit for purpose and old applications needing costly large scale upgrades to keep them running.

The suspicion is that Dearnley who spent a mere three years at Vodafone before cutting and running to HMRC in 2013 will do exactly the same thing to the Revenue when his contract expires in 2016. Unfortunately, by then HMRC may find its IT has been well and truly scuppered."

Ironically Accountancy Age, on the very same day as my article about Dearnley, wrote about outsourced tax credit Concentrix staff in Belfast being paid millions (approx £72M) to do nothing for three months as a result of a systemic HMRC IT failure.

Let us trust that Dearnley (if he is actually competent) doesn't regard this as merely a two/three year stepping stone role on his career path.

Tax does have to be taxing.

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Outsourcing

Cleaners, activists and some members of the civil service gathered outside HMRC's London HQ last week with placards and had “Don’t wash your hands off us, Lin Homer” written on their palms.

The cleaners have previously written to the HMRC asking for a meeting to discuss the Living Wage, which is now £8.80 an hour in London.

HMRC raised the wages of its cleaners in 100 Parliament Street, yet wages of cleaners elsewhere at Euston Tower, Custom House and Bush House remain the same (minimum wage of £6.50 an hour).

In a letter to Lin Homer, chief executive of HMRC, the Whitehall cleaners argue that although they are subcontracted through a cleaning company, it is ultimately the responsibility of the government department to ensure a just wage.

The cleaners state in the letter sent in July, as per the Guardian:

"We work hard to keep the offices clean, but we are paid less than it costs to live. Due to our low pay many of us have two or even three jobs to make ends meet, working long hours, leaving the house at 4.30am and not returning until past 9pm.”

In an email seen by the Guardian, Lin Homer refused to meet with the cleaners and last month replied:

"I understand your concerns about wage levels and the cost of living but these are matters for employees and employers. HMRC is not the employer so I do not believe that a meeting would have any impact on the issue at this point. You are employed by an external contractor so any concerns you have about your terms and conditions is better dealt with by them.”

She is technically correct. However, the real issue is the fact that HMRC is outsourcing some/many of its functions.

The question therefore is are these outsourced functions being performed as well/better/securely (and at no greater cost) than when they were done in house?

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Solar Tax Investigation Insurance



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Delays II - Run Out of Paper

Last week I wrote about HMRC delaying sending out some of the mid-year self assessment statements to taxpayers. Some of my loyal readers at the time posted comments explaining that the delay was down to the fact that HMRC (or rather the organisation that prints the statements) had run out of paper.

I am gratified to see that the Telegraph and the Mirror have picked up on this and written about the paper shortage as well.

My thanks to the loyal readers who brought this problem to the attention of the outside world.

Well done the Mirror and Telegraph for following this site so closely:)

Tax does have to be taxing.

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Tax Investigation for Dummies, by Nick Morgan, provides a good and easy to read guide for anyone caught up in an HMRC tax investigation. A must read for any Self Assessment taxpayer.

Click the link to read about: Tax Investigation for Dummies

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Debt Collection III

I understand from a loyal reader that the HMRC Field Farce saga continues.

HMRC debt collection agents out in the field are now forbidden from contacting HMRC offices to validate the debts that they are being asked to collect.

For why?

It seems that the support teams back at base do not have the time to take phone calls.

That at least is the official explanation given to the field farce. However, it is widely suspected that the real reason is that HMRC is preparing the ground for this work to be given to private debt collection agencies. These private agencies, quite correctly, will not be able to phone up HMRC offices and ask for details from confidential records.

FYI, the budget announced that another £500M of debt would be handed over to private debt collection agencies to chase.

For why?

Well it seems that a pilot scheme went very well for the debt collection agencies.

The agencies were given a tranche of work to do, and a control tranche was left with HMRC teams (but was left completely untouched).

Can you guess what happened?

Yes, that's right, the debt collection agencies won!

Simple!

Anyhoo, why does it matter if field farce teams (or for that matter private debt collectors) cannot contact HMRC support offices?

Surely a debt is a debt, which should be collected, and that is the end of the matter?

Not quite, for I am also given to understand that the field farce estimate that a large percentage (maybe up to 60%) of the debts they are given to chase up are in fact incorrect.

The field farce have been told that, if challenged by a "customer" (taxpayer to you and I), the onus is on the "customer" to prove that HMRC are wrong.

Guilty until proven innocent is the motto!

How can there be such a large percentage error in debts being chased up?

Due to delays in processing returns, field farce are regularly chasing estimated debts which have been, or should have been, displaced by returns submitted. The returns have either gone down the online black hole, again a regular occurrence, or are sitting in an office somewhere waiting to be dealt with.

Additionally, when they are chasing current PAYE, their cases are sometimes prepared up to 3 weeks in advance.

Guess what?

Most have been paid by the time they get to them.

I won't say what I was told about the validity of New Tax Credit debts!

Things will only get worse!

Tax does have to be taxing.

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What is TAXWISE?

TAXWISE is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Taxwise

Tax Investigation for Dummies, by Nick Morgan, provides a good and easy to read guide for anyone caught up in an HMRC tax investigation. A must read for any Self Assessment taxpayer.

Click the link to read about: Tax Investigation for Dummies

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IT Matters - £10M Accenture Deal

The Supplement to the Official Journal of the European Union (11 March 2010) states that HMRC has singed a £10M deal with Accenture to improve the capabilities of its in house IT development team, IMS Solutions Development and Delivery (SDD).

Accenture will support "the transformation of SDD into a highly effective IT development and delivery organisation" and "improve the quality, availability and delivery of SDD developed applications/services".

The value of this contract (which has a fixed and variable portion) was initially estimated to be in the range of £18M to £36M. The variable portion could not be estimated at the time of publication of the contract award.

Therefore the final value of this contract is £10M, which is the value of the fixed price portion of this contract.

Tax does have to be taxing.

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What is TAXWISE?

TAXWISE is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Taxwise

Tax Investigation for Dummies, by Nick Morgan, provides a good and easy to read guide for anyone caught up in an HMRC tax investigation. A must read for any Self Assessment taxpayer.

Click the link to read about: Tax Investigation for Dummies

HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

Security and Outsourcing II

As a result of media reports about the possibility of tax work being outsourced to India, the following internal memo was issued by the CEO of Capgemini to all of its staff:

"To all Capgemini Aspire employees

Response to media reports today

You may well have read - or watched - media reports today about Project Quantum, the work initiated by HMRC to streamline and reduce the cost of all its IT services.

As HMRC's strategic IT partner, we are working closely with the Department to continue achieving sustainable value for money for the work we do.

Discussions about the Aspire aspects of Project Quantum have been underway for some time, and although good progress is being made between Capgemini, Fujitsu and HMRC no firm agreements have yet been arrived at. Once we have agreed any changes, we will naturally share them with you.

The media coverage included reference to offshoring sensitive data. HMRC has strongly refuted claims that UK taxpayer data could be processed in India and most press reports carry this correction.

As you are all aware our contract prohibits delivery of any aspect of Aspire from outside of the UK.

Although the concept of offshoring has been debated and explored, there are no plans to change this contractual position as part of Quantum.

I should like to take this opportunity to remind you that, if contacted by the media, you should not make any comment, but ask the caller to contact the HMRC Press Office directly ..."

Aspire is worth about £8.5BN in total over its estimated life.

The key phrase in the memo is this:

"Although the concept of offshoring has been debated and explored, there are no plans to change this contractual position as part of Quantum."

There is a clear desire to outsource, to my view, as they would not have wasted time and money debating and exploring it. There may well be no plans at the moment (were they nixed as a result of the leak and media reports?).

However, plans and contracts can change.

Here, by way of information, is some further background on Project Quantum, a plan to cut costs at HMRC by at least £205M a year, and Aspire.

"Mutual collaboration" between HMRC, Capgemini and Fujitsu is deemed to be the "most expedient route to success".

"Success is predicated upon complex dependencies - so any arrangement has to be treated as a bundle. Many things need to be done in parallel - need do-ability check when choices [are] clear.

We need to create headroom to fund essential change - neither HMRC or [sic] Aspire has additional cash to do this.

We believe there is a solution but it complicates the dependencies.

Early savings drive investment pot for subsequent work. Timing [is] critical again."

The background (extracts of leaked papers) can be read on Computer Weekly.

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

What is TAXWISE?

TAXWISE is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Taxwise

Tax Investigation for Dummies, by Nick Morgan, provides a good and easy to read guide for anyone caught up in an HMRC tax investigation. A must read for any Self Assessment taxpayer.

Click the link to read about: Tax Investigation for Dummies

HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

Security and Outsourcing

It seems that the government and HMRC are considering outsourcing certain IT functions to processing offices in India, in an attempt to save £205M per annum.

HMRC and its main IT contractors Capgemini and Fujitsu are considering outsourcing certain IT functions to India under the Quantum cost reduction project.

Staff, the media and politicians speculate that this may mean that tax records will be sent abroad. HMRC deny this.

However, a leaked memo states that the Quantum project included looking at the "potential off-shoring of some future work".

That would indicate that some records will be sent offshore.

Given the lax security standards of Asian processing centres, this proposal needs to be nipped in the bud ASAP.

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

What is TAXWISE?

TAXWISE is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Taxwise

Tax Investigation for Dummies, by Nick Morgan, provides a good and easy to read guide for anyone caught up in an HMRC tax investigation. A must read for any Self Assessment taxpayer.

Click the link to read about: Tax Investigation for Dummies

HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

Cost Savings

Capgemini performs outsourced work for HMRC on its Aspire contract, at its Telford site in the Midlands.

The company has a clause in its contract that stipulates that all work must be done in the UK.

No doubt Gordon "British jobs for British people" Brown would be happy with that. However, the Mail reports that Capgemini is in fact importing workers from Asia whose contracts are only for a few years.

I wonder if the savings that Capgemini are doubtless making from this scheme are being passed on to HMRC and the taxpayer?

Tax does have to be taxing.

Tax Investigation for Dummies, by Nick Morgan, provides a good and easy to read guide for anyone caught up in an HMRC tax investigation. A must read for any Self Assessment taxpayer.

Click the link to read about: Tax Investigation for Dummies

HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

Debt Collection II

HMRC, in the face of mounting opposition from the unions, business and finance professionals to their plans to outsource debt collection have told Accountancy Age:

"We will only proceed with a pilot once we are satisfied that the benefits outweigh the risks."

Two points that people need to bear in mind:

1 Benefits to whom? HMRC or the taxpayers?

2 The risks include the loss of taxpayers' personal data handed over to private firms.


Tax does have to be taxing.

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But For a Ha'peth of Tar

I understand that in the aftermath of HMRC's Datagate scandal last year, when HMRC lost the personal details of 25 million taxpayers, HMRC management have instructed all HMRC staff to remove customer correspondence from desks and lock it in a secure drawer/cupboard when they leave the office.

I am not quite sure how that will prevent another Datagate. However, it is a good security measure.

Unfortunately, there is one problem.

A large number of staff in number of offices do not have lockable drawers.

Fair enough, buy some locks then!

Unfortunately, HMRC cannot afford to do that.

Therefore staff have been instructed in at least one office to remove all customer correspondence from their desks when they leave the office, and put it in a large unlocked cabinet!!

Ehh?

A brilliant solution is it not?

Not only does the correspondence remain unlocked, but it is helpfully gathered together in one place so that anyone (eg cleaners, journalists working under cover etc) wishing to have look can do so with ease.

Quite why the powers that be think that this is more secure is beyond me.

A cynic might suggest that the "clear desk" policy has nothing to do with security, but is in fact a means of making HMRC processes seem more "outsource friendly".

Clear desks, in theory, mean easy and simple processes!

Tax does have to be taxing.

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Fujitsu Fired

Back in February/March of this year I wrote about the contract between HMRC and Fujitsu, whereby HMRC have outsourced various processing functions to Fujitsu.

I was interested (purely at an academic level) to see that another organ of the state, the NHS, has fired Fujitsu the other week from the £12.7BN National Programme for IT (NPfIT).

NHS Connecting for Health (CFH) fired supplier Fujitsu, which was responsible for the southern region of the scheme, after 10 months of contract re-negotiations broke down.

CFH, which runs the NPfIT, said that the move was in the best interests of the taxpayer, and that Fujitsu would help ensure a smooth transition to any
new supplier.

Quote:

"NHS CFH has to continue to protect the interests of the taxpayer and preserve the basis of contracts which ensure payment on delivery. Work has started immediately on planning the necessary arrangements."

Tax does have to be taxing.

The New Statesman, Britain's leading political magazine is delighted to announce that HMRC Is Shite has been nominated for a New Media Award in the category of Campaign For Change. The campaign for change award will go to the individual or organisation that has most effectively influenced opinions and behaviour through the use of new media technology. The winner of this award will champion a cause and provide information and tools to instigate change.

The full press release can be downloaded here.

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A Nice Little Earner - The Fujitsu Contract

You may recall a while ago that I wrote about a comment on Youtube, alleging that there were security shortcomings relating to the processing work on tax credit forms that had been outsourced by HMRC to Fujitsu in Netherton.

I have been given a little more background information about this.

New Tax Credit forms are processed in Netherton, Merseyside, by the IT services provider - Fujitsu Services.

The process is relatively simple:

-each page of an application is captured and stored using image character recognition

-when the system can't recognise the text, it is sent to a human keyer (for manual input)

I am advised that Fujitsu (as at April 2007) charged HMRC 16p per image/per page. This charge, I understand, will decrease each year that the contract runs.

The NTC form used to be 16 pages long, it has now been reduced to a "mere" 12 pages. Therefore each form, using April 2007 charges, earns Fujitsu £1.92.

Multiply that by the number of forms being submitted, and you have a very nice income stream.

The same system is used to process CIS forms, and possibly will also be used for child benefit.

My contact advises me that manual keyers should be security cleared. However, I am advised that during a busy period anyone who can type at a reasonable rate is employed. This apparent security weakness, if true, needs to be looked into by HMRC.

Has HMRC conducted an internal audit of the process?

If not, why not?

A question also arises over the top heavy organisation chart of Fujitsu, seemingly there are five site managers for a site that contains less than 200 staff.

Is this really necessary?

Have HMRC conducted a cost benefit analysis, comparing outsourcing costs to in house processing, that justifies the outsourcing of this process to a third party?

I wrote to Fujitsu asking for their comments on the draft of the above story, they have not answered. In the event that they do comment, I will post it on this site.

Tax does have to be taxing.

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Security Issues

There is an interesting comment that has been posted on Youtube, relating to outsourced processing activities allegedly being carried out by Fujitsu in Liverpool for HMRC.

The post, if it is true, alleges some pretty serious security shortcomings wrt the processing of tax credit forms.

Here is the comment in full, I have not corrected the grammar or spelling:

"It isnt HMRC but Fujitsu Services currently have the contract for supplying IT services to HMRC that is at fault. In netherton(liverpool) where they process tax credit forms & CIS forms the managers there employ users to key this data into their system without even security checks & people who claim newtax credit have their details sent over email by IT staff without any security enabled, plus peoples details are recorded on CD-roms and left lying around in unlocked cupboards

Also there was newtax claiments details internally copied by users but breaches like this are never highlighted to HMRC and covered up! HMRC should be made aware of the sloppy practices of Fujitsu services and if they renew the contract with them, it will cost them dearly both in money and security.
Be aware Mr Gordan Brown!"

Does anyone have any more information about this?

Please get in touch if you do.

Thanks.

Tax does have to be taxing.

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