The National Audit Office (NAO) says that delays to a single tax and pensions system cost HM Revenue and Customs £33m in procurement costs. In a report (pdf) published on 20 July 2010, the accounting watchdog says that difficulties with the National Insurance and PAYE Service system led to it being deferred twice before it was …
Don't Mess with IT
HMRC has been very naughty, they should take their punishment, like the selfish little boys and girls they are. In fact funding should really come out of their wages (pocket money).
system totally screwed by complexity and rate of change
Anyone who has ever specified and developed a complex system will know that the more complex the rules it has to work by and the greater the rate of change of these rules, the more expensive the system becomes and the less likely it will be completed on time, or to budget, or that it will function correctly when in use.
On the BBC they showed the size of the documentation of the tax allowance rules yesterday - up from one thick volume in the seventies, now half a dozen needing a trolley to shift them. The problem here isn't the IT systems or developers, it's the politicians at the top managing news headlines rather than their departments with too many so called "initiatives", created without significant thought for the implications.
More complex systems are theoretically fairer, but only for those who can obtain an army of advisers and accountants to guide them through the maze.
Here's a personal example showing how bad these systems now are in practice: The advisers employed to man the telephones at the Inland Revenue simply were not up to the job when they advised me to claim a tax credit which I did in good faith several years ago. When I claimed I annotated the claim form with the issue concerned. The people processing the claim then presumably had deadlines to meet, so couldn't read or handle my annotations at the time the claim was processed. Later review by the IR then suggested I wasn't entitled to the benefit claimed. I've been throwing spanners in their works by contesting the repayment demanded by them for years to try to get them to accept responsibility for the mess which they have created. They just seem to delay doing anything and then rewind the appeals process every couple of years. The whole thing then just ends up as an exercise of who can grind whom down first - what a waste of public money and citizens' time.
My only advice to anyone who needs advice from the IR is to record all telephone conversations with them and keep these recordings on file. Also any bunch of politicians that don't intend radically to simplify this system don't deserve your vote.
Why? You take Tax from people then give it back if they have a compelling reason, children dependants.... etc.
Surely this is just political dogma just increase the tax allowance for those people who have children etc. Where they then earn a bit more money, they then get over the tax allowance and pay errm more tax. Less fraud, less administration, simples.
@ AC 11:42
Yes OK, on a generic and generalised point about the problems with complex systems - point taken.
But ultimately the problems at HMRC are the result of what happens when you hand your project resourcing and delivery lock stock and management barrel over to Crapita on the basis of believing that they are capable of delivering what they say they will.
Change of purpose
From the article the issue appears to be backwards compatibility with old data formats. It;s an age old problem - you have a system, you put data into it, then something changes so you need to record extra information, but the database doesn't really cater for it so you start kludging e.g. recording it in general areas like memos etc.
Trouble is not everyone records the data in exactly the same way. Then you get a replacement system that can handle the new data, but how the hell do you migrate 20m peoples records to the new system when the new data isn't uniform?
I agree with Aristotle above that relying on Crapita / Fujitsu / EDS to do the job properly is ridiculous. The "solutions" they provide and the costs they charge are both a joke. I've been harping on for what seems like ever to break such contracts down into units and have smaller UK IT firms tender for them which would provide better results and better value for money. However, no matter who produces the software, if it's job changes substantially it still needs a re-write. The speed that happens, and the change management leading up to that are both vital, and in this case are the job of HMRC management who apparently failed. I imagine it's the front line staff who are taking the abuse for it too.
The Gov really needs to look at IT procurement - they could save hundreds of millions if they stopped taking bribes from EDS / Fujitsu etc.
Oi! That hurts.
EDS, then Cap Gemini/Fujitsu/BT but never, NEVER Crapita. Not yet, anyway.
Ross, backhanders aren't necessarily the issue per se.
The key reason these projects always fail is because the civil service have a vested interest in their failure. HMRC have no competition, and so no amount of inefficiency will drive it under. That being the case efficiency drives have no benefits for the senior civil servants who run things and for whom the only direct result of effective cost saving is a smaller empire and fewer minions.
Because of this, and because the people in charge have no interest in successful project completion, the rules of any public sector IT project change with such blurring regularity that any participants who didn't understand the game beforehand soon realise that by accepting a constantly changing scope they'll get open-ended work at an hourly billing rate with no need to deploy their best resources.
In return for that the quid pro quo is that when everything goes wrong the consultancy firms will take the lion's share of the blame in the unlikely event that anyone ever actually notices that the project isn't going to plan. No story I've ever seen asks questions about the procurement process or the actual workings of the civil service and, if anything, their empires grow as a result of the project.
I don't rule out the possibility of backhanders, but they certainly aren't necessary to explain why public sector IT projects so consistently fail or why the same companies that screw them up are routinely re-employed.
Check those numbers
650 locations, 23 business units (WTF this?) and 28,500 staff.
£27.3bn in tax credits. It estimates that, based on 2008-09 awards, error and fraud resulted in incorrect payments of between £1.95bn and £2.27bn.
So what they have recovered so far is roughly equal to the *error* band of wrongly paid, leaving at *least* c£1.6Bn wrongly paid. With a *minimum* error rate of 7.14% of *all* payments.
Note that in the mid 80's an expert system to diganose what benefits people were entitled to was part of the UK Gov's "Alvey" programme for R&D. It was *that* complicated this was viewed as a fairly cutting edge piece of AI research.
25 Years on the rule base would presumably need to be *much* bigger. Although the merging of the taxation and benefits systems *should* have simplified and merged things together.
2 things *never* seem to be factored in to *any* of these government IT projects.
There are *always* legacy systems. It is *highly* unlikely *any* UK Gov system will be populated *solely* from pristine authenticated data collected specifically for that one database. Extraction, cleansing, re-formatting and load will *always* be involved.
*Everything* changes. These kinds of system cry out for a good data dictionary and table driven methods not just of the values (tax rates, allowances etc) of various fields but the actual business *logic* itself. The $6.4Bn question. *Does* it?
These systems show both the strengths and weaknesses of bespoke systems. In *principal* able to deliver exactly what the government wants, in practice once they have taken so many staff hours to build it becomes *impossible* to re-build (and I bet that won't take long with staff hours charge to HMG at con-tractor rates).
What an *enormous* opportunity to save British taxpayers *billions*.
What a fail.
But that doesn't matter
Because the penalty clauses in the contract recovered the costs from the suppliers*. What do you mean, there weren't any penalty clauses?
* Or, more likely, it was down to HMRC's terminal inability to reach a firm decision.
Love to find out how many HMG contracts *have* penalty clauses
How stringent are they and how often *have* they been invoked.
FOI request probably won't work (the last lot used the "It's *commercially sensitive" ploy) but an MP's question *might*.
Note. *Not* asking for details (who they are with, size, duration) , just rough *proportions*, and if there is any pattern to which ministries use them or not.
I have an idea what the answer for a well run company *should* be. I'd just like to know what it is.
Just asking. If you don't measure things it's just an opinion.