by Mark Chillingworth

HMRC is obsessed with legacy instead of modernisation

Feb 23, 20153 mins
IT LeadershipIT Strategy

“This nation has survived and brought in trillions of pounds worth of tax on these platforms,” says Mark Dearnely, head of technology and information at HMRC. A quote and in fact an entire interview that is tainted with the tone of  “we’ve always done it this way”.

In Charlotte Jee’s excellent interviewHMRC sounds like a department that refuses to face up to the need for change in the way major Whitehall departments operate. Especially given that the nation’s debt is the equivalent of 88.1% of our GDP.

It is troubling to think that survival is trumpeted whilst the Aspire outsourcing IT contract costs £813m per year. No one on this title underestimates the challenge for re-platforming an organisation, but in the last seven years HMRC has had four different heads of technology and all have remained focused on reducing the legacy and the impact of that legacy at HMRC. So to have the latest incumbent of the CIO’s chair at HMRC to quickly rely on the reasons of legacy and complexity is incredibly sad.

While organisations across the country struggle to make a margin, HMRC continues to employ over 70,000 staff on incredibly generous benefits. The recent revelations of tax avoidance by banking group HSBC under the noses of HMRC only highlights the problems within the culture of HMRC.

It is typical too that the Unions and the Labour party immediately claim that HMRC is under-resourced.  I’ve not met any business leaders who have 70,000 staff and can afford to operate an outsourcing contract to the annual value of £813m and none of them would have the audacity to claim they are under resourced. It just goes to demonstrate, as if needed, how out of touch Unions and the Labour party are.

Across the road from Dearnley’s department is the Department for Work and Pensions, it has not been out of the headlines since the coalition government came into power in 2010 and began to modernise the benefits system in the UK.

There is little doubt that not all of the reforms offered by minister Iain Duncan-Smith’s policy are well defined or fully understand the needs of the country. But the modernisation of the welfare system is needed and HMRC is instrumental to how that reform takes place. Sources close to this title have described numerous poor working and technical relationships between the departments, which in turn is creating the sort of excessively expensive and complicated landscape that costs £813million to operate.

I agree with Dearnley when he points out that batch processing is a valid system and that real-time would be an excessive technology for every process. I imagine stamp duty is well served by batch processing.

The overall tone of the interview is that HMRC is far too comfortable with its native ways and cannot accept the need to change.