Source · Select Committees · Public Accounts Committee
Recommendation 22
22
HMRC told us that it spends too much of its IT budget on maintaining its...
Conclusion
HMRC told us that it spends too much of its IT budget on maintaining its legacy estate and not enough on investment for the future and modernisation. The Department will seek funding opportunities, such as Spending Reviews, to modernise its systems. HMRC’s experience of implementing the COVID-19 schemes showed the importance of having up-to-date technology and data in overcoming any constraints in supporting those in need.60 Of the extra costs incurred by HMRC on COVID-19-related work, as of 11 September 2020, the largest element was the cost of IT at £53.2 million (80%).61 HMRC highlighted self-employed taxes as an area where data and technology infrastructures had not kept pace with developments since they were put in place in the mid-1990s.62
Government Response
Acknowledged
HM Government
Acknowledged
5.1 The government agrees with the Committee’s recommendation. Recommendation implemented 5.2 The department has been addressing its legacy technical debt since 2019 and received funding of £268 million at the 2020 Spending Review to continue the work to improve the agility, resilience and security of its IT estate. The estate comprises over 6,000 servers and over 550 associated IT systems so is an extremely complex and inter-dependent one. The plan to tackle legacy technical debt has focused on a number of areas: • Rationalise/Streamline: Rationalising the department’s IT estate – to date 20% of the department’s total services have been de-commissioned or retired; • Remediate: Addressing high priority technical debt to replace out of support and old components, so that the core system security is enhanced, together with strengthening perimeter controls protecting the department’s IT systems. The department has spent £36.3 million on this activity in Financial Year 20-21; • Migrate: The next step in this programme of work is to migrate these systems to the Cloud. Hosting savings will be delivered, thus reducing baseline IT spend. These systems can then be further transformed as part of full service transformation (multiple IT systems grouped together form a service such as Personal Tax or VAT), which is agreed industry-standard practice; and • Transform: Focusing on defining and consolidating system delivery centred around strategic components, reducing operating cost and concentrating management activities around a reduced set of components which support HMRC operations. This both reduces the operating cost and the security attack surface area, which helps HMRC defend its systems. 5.3 The ODP details the plans on how the department is remediating technical debt and the work HMRC have done to develop core foundational structure elements for HMRC.