Original URL: http://www.theregister.co.uk/2007/01/26/hmrc_it_consultants/

HMRC splurges on IT consultants

Skills shortage costs £130,000 a day

By Kablenet

Posted in Government, 26th January 2007 11:16 GMT

HM Revenue and Customs (HMRC) is spending about £130,000 a day on IT consultancy fees because of internal skills shortages, a Treasury sub-committee has heard.

Acting chairman Paul Gray admitted to the parliamentary committee that HMRC was spending about £650 per day on approximately 200 consultants and secondees at its Southend office in a bid to improve its IT systems following its merger two years ago.

The consultants are being deployed because of a shortage of appropriate skills in-house needed to deliver change.

Gray said at the meeting on the merger between HM Customs and Excise and Inland Revenue, held on 24 January 2007, that the department is training inhouse staff to the right levels alongside the use of consultants, so that it can "become less dependent on consultants" in the future.

Meanwhile, he refused to answer MPs' questions over whether the implementation of a Strategic Integrated Desktop Environment (Stride) has helped push the merger over the estimated £75m budget, outlined in the Regulatory Impact Assessment over 2004-05 and 2005-06.

"It is difficult to calculate the cost of the merger," clarified treasury sub-committee chairman Michael Fallow. "You do not know if it (the merger) was £2m or £10m over budget?"

Gray replied: "It is difficult to know what is beyond the merger costs. Some of it (IT integration) was down to general updates."

The department is spending £500m a year on the Transformational Government programme on top of £300m over three years provided by the Treasury. But at the same time it plans to make efficiency savings of £500m accumulated over three years, mainly through the use of IT and a reduction in staffing of 3,200.

In a memo to the committee, the department said: "It was anticipated that these savings would initially come through the formation of single organisations for finance, human resources, large business IT and estates.

"In addition, integration has offered the opportunities to make savings in areas such as debt management, contact centres and specialist compliance areas."

Gray also admitted the department would not meet all its objectives by the 2008 deadline. That was likely to happen by 2011.

This article was originally published at Kablenet.

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