Legacy IT kit is behind 80% of UK taxman's pandemic costs, says spending watchdog
- Reference: 1611320588
- News link: https://www.theregister.co.uk/2021/01/22/hmcr_pandemic_cost_are_45/
- Source link:
In [1]a review of the tax authority's performance for 2019-2020 , the Public Accounts Committee (PAC) found HMRC spent too much of its IT budget on patching up legacy systems rather than modernising them.
[2]
"The COVID-19 pandemic has shown the importance of an effective tax administration system. There is a strong case for investment in a modern IT system. Of the additional costs incurred by HMRC as a consequence of the pandemic, the largest element, as of 11 September 2020, was the cost of IT," the report said.
That came to £53.2m, or 80 per cent of the total.
[3]
"HMRC told us that it spends too much of its IT budget on maintaining its legacy estate and not enough on investment for the future and modernisation," the report continued.
UK taxman waves through £168.8m Fujitsu contract because no one else can hold up 30-year-old infrastructure [4]READ MORE
The department accepted it needs to redress the balance between spending too much on legacy systems and not enough on investing for the future. In the November 2020 spending review, it got £268m from the Treasury to fix outdated IT and ensure its core systems are secure and support better administration.
"It remains to be seen whether this is sufficient to urgently address the long-standing issues the Department has identified," the PAC said.
The report highlighted areas of particular concern. For example, in systems supporting self-employed residents' tax data, technology infrastructures had not kept pace with developments since they were put in place in the mid-1990s.
'One of the most digitally advanced tax administrations'
The culprit for the unreasonably vast legacy estate, according to the spending watchdog, is previous cost-cutting. "HMRC has recognised that, due to the need in the past to forgo operational maintenance and upgrades to its systems to secure cost savings, its IT systems now constitute a significant risk to the department," the report said.
HMRC told the PAC it would seek funding opportunities, such as Spending Reviews, to modernise its systems.
In 2015, HMRC put plans in place to "become one of the most digitally advanced tax administrations in the world."
A withering line from the report said: "HMRC considers that, although it is not the most digitally advanced tax administration in the world, it has made significant digital advances since 2015."
Speaking to the committee hearing last November, the tax agency's boss, Jim Harra, said he had commissioned a review of the technical debt and plans for tackling it since he became HMRC chief executive in October 2019.
"As a Department, we spend an excessive proportion of our IT spend on live running of the legacy estate and an insufficient proportion on investment for the future and on modernisation. I want to see that change," he said.
And yet that other mega issue smacking the HMRC right in the face, the country-splitting decision to leave the EU, is ensuring the tax authority clings to its legacy systems.
In October, it [5]waved through a £168.8m Fujitsu contract because no other vendor could hold up 30-year-old infrastructure supporting, among other things, the Customs Handling of Import and Export Freight (CHIEF), which was supposed to retire in January 2019, but was needed to handle EU trade after Brexit.
In November, [6]Harra admitted there was no end in sight for the CHIEF system.
In its report, the PAC said HMRC should write to it by the end of March 2021 explaining how it would "refocus IT investment on modernisation for the future."
[7]
With that date following shortly after the March budget, in which UK chancellor Rishi Sunak is expected to make those classic "tough choices" for public finances decimated by the COVID-19 pandemic, it would be a fool who bets that HMRC IT modernisation is anywhere near the front of the queue. ®
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[1] https://committees.parliament.uk/publications/4329/documents/44391/default/
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_datacentre/servers&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2YAsEp0YqKslxmBgHdccDmQAAAJE&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_datacentre/servers&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33YAsEp0YqKslxmBgHdccDmQAAAJE&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[4] https://www.theregister.com/2020/10/13/fujitsu_hmrc_contract/
[5] https://www.theregister.com/2020/10/13/fujitsu_hmrc_contract/
[6] https://www.theregister.com/2020/11/24/no_end_in_sight_for_chief_customs_system/
[7] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_datacentre/servers&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44YAsEp0YqKslxmBgHdccDmQAAAJE&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[8] https://whitepapers.theregister.com/
I don't see the problem
Now that Britain is no longer subsidising Europe, I am sure some of that freed up cashcan be allocated to funding the development of new IT for HMRC.
Oh no, wait!
It's all been spent on PPE.
Re: I don't see the problem
It's all been thought through. The British government's Brexit negotiating positions were [1]ideologically designed to wreck JIT logistics between the UK and the EU so transactions will drop to such a level that the 30-year-old paper-driven CHIEF can cope with it.
Anything the current rabble in charge say blaming business or the EU is just a charade, they know full-well what they did and what's anyone going to do about it, write a strong letter to their MP or hope for Labour to ride to the rescue? Relax, grab your stockpiled popcorn and watch from the safety of your bunker.
[1] https://t.co/rZWwtkNhIO?amp=1
You pays your money...
Even without knowing which government department this was it would be plain that said department was run by accountants.
In this case they seem to have confused capital expenditure with operating expenditure and from vague memories of the numerous accountancy courses I was forced to attend that would seem to be a real schoolboy type of howler.
There is an old saying that "An accountant knows the price of everything and the value of nothing." or alternatively "Penny wise and pound foolish."
Idiots the lot of them, and to think that they are in charge of forcefully parting us from our money to give to another bunch of fools, the Government.
Re: You pays your money...
My experience of accountants is very different from yours. All the accountants I've known have had a very clear understanding of the difference between Capex and Opex - the main difference being that Opex is easy to authorize and Capex is impossible to authorize.
Re: You pays your money...
"Penny wise and pound foolish."
I think that saying needs to be updated to take into account modern accountancy. "Penny foolish and pound fucking insane" springs to mind.
Come to think of it, "An accountant knows the price of everything and the value of nothing." should be
"An accountant knows the grossly inflated price of everything and the value of nothing."
Re: You pays your money...
"Even without knowing which government department this was it would be plain that said department was run by accountants."
Most are, but their budgets are set by the accountants the departments work for. In the end it is Treasury that determines what funding a department will get and it often works out that it is not enough. For the past decade HMRC has had to give up a huge amount to meet the Austerity Challenges the government set. This delayed even further any plans for modernising and only just about let development go ahead to meet new requirements from government.
Not that long ago there were numerous dependent legacy systems still running on NT4.0 let alone Windows 2000 or Server 2003. Can't guess how many still are. These all need bringing up to date to be able to run on later OS. But it's not a simple matter of switching over as many of the services running on the old kit are interlinked and need to run 24 hours a day.
Perhaps it would have been better if the government had paid for system integration when HM Customs initially joined with the Inland Revenue than let it drag on for a couple of decades, retaining separate systems then slowly merging when the string holding them together started to unwind.
Big trouble now is that many of the folk who knew the systems, network and code have left. So it costs another arm and leg in getting network surveys undertaken, then understand the interdependencies and critical nature of system use.
Another bite on the bum
Re: You pays your money...
I am sure there will be various interested parties lining up to make them agile by moving everything to "the cloud".
That appears to be the default answer to everything now.
If the stuff is that old then it is legacy hardware & software but as others have said, the Tax system is so complicated that it is no surprise that the systems behind it are an issue to upgrade/replace/migrate.
What pisses me off most is the number of shysters that are using the term "legacy" to cover anything that is not running in a public cloud, usually needing their very expensive software (on subscription of course) to make it work. This then frightens managlement into thinking that perfectly viable and happily running systems on prem (not old but the latest OS and applications versions) are going to fail at any minute so they most do something.
Re: You pays your money...
>Even without knowing which government department this was it would be plain that said department was run by accountants.
This is more than a little unfair. HMRC are fundamentally a competent department on the technology front. Self Assessment never falls over, RTI (almost) always works and they delivered the CJSS under pretty challenging circumstances. This is despite FJS rinsing the department for everything it's worth.
The problems are principally the result of an accumulation of two decades of political decisions, not departmental operations. There's still enormous technical debt hanging around from when HMRC was formed out of the old Revenue and Customs bodies. Since then they've been given no money to fix that, and have been forced to slash tens of thousands of jobs and have had their budget cut in half, all while being forced to deliver on Brexit and now COVID response. All the while the tech debt just kept piling up and piling up.
I dread to think how bad things would have been if the CHIEF decommissioning project had actually been seriously started prior to the brexit vote. If you think the border is bad now - there were real plans almost enacted that would have left us with _no customs system whatsoever_ for our european border. Only budget cuts and GDS incompetence caused it to be delayed.
Don't panic!!!!
When IR35 comes in April, there will be a lot of highly skill and experience individuals available to fix this, I wonder if the roles will be outside?
And before the who permie/contractor debate kicks off, why is any company in the future going to employ anyone who they need to pay sick and holiday pay for, training, pension contributions etc. when they can just employ someone inside IR35 and legally not have to provide any of those contributions/benefits or provide any notice period.
The days of permie staff are coming to an end!
Having spent 6 months as a Vendor SME onsight with HMRC I can honestly say that most of the issues are based around Fudgeit, sorry, Fujitsu taking the absolute maximum amount of urine for costs against idiot senior management at HMRC. £60 to plug in a LAN cable to an appliance and no you wont get your money back if the Datacentre troll plugs it into the wrong port. This is after 6 weeks of project planning and general fannying around to get Fujitsu to plug said cable in. This is from the Aspire perspective anyway.
Short sighted madness
I'm constantly amazed at the number of times organizations will go out and purchase (or develop) a point solution, turn it on and then forget about it. There's never any type of roadmap to keep it current or to evolve it to meet changing business requirements. It's just left to run as is, until something becomes embarrassing (out of support) or it breaks. Unfortunately Government departments set the gold standard in this category.
Re: Short sighted madness
Universities are not far behind. Lots of clever people doing clever things in house, often reinventing the wheel may be great but it is an absolute bugger to support when said staff move.
At the point of implementation it may have been cheaper (though sometimes are really doubt this) but as time goes on the support overheads just keep increasing.
Well if the UK didn't have archaic tax codes written by KPMG, PWC, and, Co.
I dare say it could be run on a Rpi 4 and a Synology NAS