1.2 In 2006, we examined the procurement, transition to, and early operation of, the Aspire contract.2 We found that HMRC had successfully replaced its previous outsourced technology contract with EDS. It thereby reduced its ICT costs by £1.6 billion over the initial ten-year period of the Aspire contract.3
1.3 We also examined the contract's early operation and concluded that ICT services were performing well. However, the contract cost more in the first year than expected because HMRC commissioned more work than originally planned. HMRC's higher-than-expected demand for ICT came mainly from project work to develop and enhance its systems to significantly change its way of working. We said that HMRC needed to control costs and get value for money from any additional spending.
1.4 We estimated that if the higher spending over the contract's life continued, HMRC could spend more than £7 billion, rather than the £3.6 billion to £4.9 billion originally projected. In 2006, HMRC expected demand for ICT to fall and therefore spend to be less than our estimate.
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2 Comptroller and Auditor General, HM Revenue & Customs: ASPIRE - the re-competition of outsourced IT services, Session 2005-06, HC 938, National Audit Office, July 2006.
3 Unless expressly stated, amounts quoted in this report have been adjusted for inflation to 2013-14 values using the GDP deflator.