The Mapeley contract is not the only example of waste and inefficiency. For example, the Revenue has paid out nearly £1 million in compensation since April 2003 to members of the public suffering delays and errors arising from the IT contract with Electronic Data Services (EDS). The PAC's report on the matter was published in April this year, indicated that 400,000 families had not received their child tax credit and working tax credit payments on time. Furthermore, one in five applications had been assessed incorrectly. The Revenue was forced to make interim payments, which were then clawed back, in many cases causing additional suffering and hardship to those who the credits were meant to help.
We regret that consideration is nevertheless being given to outsourcing further IT functions. We hope the lessons will be learnt, and that any such initiatives will be withdrawn. We refer to the HMRC Chairman's acknowledgement, in his evidence to the treasury sub- committee on 13 October 2004, of the pitfalls involved:
"I wish I could say that the private sector was incredibly better. The evidence in the US is that about 25% of the IT projects deliver value. In Europe we think it might even be slightly less."
The Institute for Public Policy Research has recently demonstrated that there is a marked tendency for public bodies to choose Private Finance Initiative (PFI) contracts so they can write assets and debts off their balance sheets, even if doing so is not cost-effective.
PCS also has major concerns about the extent of the use of private consultants in place of in-house staff who possess relevant qualifications, often acquired at public expense. We wish to see the government undertake a thorough review of the extent of this practice.