A massive restructuring of the UK’s biggest IT contract could cost the taxpayer millions, according to industry insiders and a Conservative MP. HMRC’s Aspire contract, responsible for the infrastructure behind the UK’s Income Tax and Self Assessment systems, and the collection of over £500 billion in tax revenue every year, is due to be split into around 100 component parts in 2017 under new plans to limit public sector contracts to £100 million or less.

The new rules on contract value, implemented by the Cabinet Office earlier this year, are designed to break huge public sector IT contracts into more manageable chunks to allow small and medium-sized providers to bid on the projects, which have previously been so large that only a handful of large outsourcing firms have had the resources to table a bid.

The current Aspire contract is held by Capgemini, an IT behemoth with around 130,000 employees internationally. The contract was originally estimated to be worth between £3.6 billion and £4.9 billion when it was tendered in 2004, however costs have since mushroomed to £7.9 billion for the period until March 2014, with the total expected to reach £10.4 billion when the contract expires in 2017.

Richard Bacon, Conservative MP for South Norfolk and member of the Public Accounts Committee, told The Times:

“This is one of the biggest IT contracts in the world. There is nothing more critical than getting tax in, and you can’t start relying on hundreds of experimental startups taking this over. The potential for another disaster is huge.”

“I am a great believer in getting smaller companies in, but if you split the project up into 100 pieces, you need 500 skilled people to manage it. You cannot afford to get this wrong.”

HMRC is not known for its technical prowess, having suffered numerous problems with its online Self Assessment service and, more recently, the problematic launch of RTI. It is thought engaging multiple IT providers rather than one central contractor will further complicate the procurement process and could put taxpayer data in danger.

Image by Jean-Etienne Minh-Duy Poirrier