HMRC extends IT contract

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HM Revenue and Customs (HMRC) has restructured its IT outsourcing contract in order to help reduce costs by 2011.

The outsourcing relationship between HMRC and suppliers including Capgemini - called Acquiring Strategic Partners for the Inland Revenue (Aspire) - was extended by three years to 2017. It was originally signed in 2003/04. The new deal will cut HMRC's IT costs by 10 per cent by 2010/2011.

Such cost savings are necessary, not just for budgetary reasons. The HMRC was criticised by MPs earlier this year for spending too much - some £52 million - to ensure competitiveness surrounding tenders for Aspire after Revenue merged with Customs and Excise in 2005.

Deepak Singh, HMRC's chief information officer, said: "I am delighted that we have been able to secure such a positive outcome that further strengthens our commitment to working with Aspire over the coming years.

Singh added: "The restructuring of the Aspire contract balances the need for HMRC to meet its commitments to cost reductions under the 2007 Comprehensive Spending Review without compromising our joint drive to become a world class IT function."

Capgemini's group chief executive Paul Hermelin said: "This is a further landmark in Aspire's successful history. The unique nature of our strategic collaboration with HMRC sets the benchmark for all outsourcing partnerships."

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