4.14 HMRC recognises the substantial challenge involved in the new model and the extent of the risks. If the programme does not progress according to plan, HMRC may experience several potentially damaging impacts. The risks include:
• Forced contract extension
The Aspire contract lets both parties extend it by agreement for up to eight years. HMRC says it does not intend to extend Aspire further. However, an overrun could force HMRC to negotiate an extension. An extension is unlikely to be value for money, since there will be no competitive pressure.
• Reduced ICT service
Delays or difficulties may require more senior management intervention, an increase or redirection of funding or another change in HMRC's management priorities. During the early years of the programme, this could lead to poorer ICT performance because of reduced funding, limits on capabilities or limits on projects. As HMRC changes suppliers (by 2017) transition issues may hinder the ICT service. Programme delays or difficulties will worsen these issues.
• Compromised speed or depth of digital ambition
HMRC's ambition is to digitise its services. It wants to offer straightforward services which are designed around the citizen rather than its own operations, and are more efficient and cost-effective.25 HMRC's in-house capability and ICT suppliers are vital parts of digital services, and programme delays or poor progress could constrain or delay this ambition.
• Reduced service quality for taxpayers, and less tax collected
Part Two of this report showed that Aspire has provided a stable and predictable service. This service is core to HMRC's business and service to taxpayers. Significant problems in moving to a new operating model could have effects beyond HMRC's business. For example, HMRC only recently resolved problems with the new National Insurance and PAYE Service.26 By March 2013, these issues had significantly affected millions of taxpayers, cost HMRC an extra £78.9 million and lost an estimated £953 million of tax.
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25 HM Revenue & Customs, Digital Strategy, December 2012.
26 Comptroller and Auditor General, HM Revenue & Customs 2012-13 Accounts: Report by the Comptroller and Auditor General, National Audit Office, June 2013.