Welfare Tax Credits: ICT

Treasury written question – answered on 27th March 2007.

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Photo of David Laws David Laws Shadow Secretary of State for Work and Pensions

To ask the Chancellor of the Exchequer how many service credits he has made Capgemini liable for in each month since they took over the tax credit IT system; what the value is of these credits; and how many hours of online service disruption there have been to the system.

Photo of Dawn Primarolo Dawn Primarolo Paymaster General (HM Treasury)

Under the terms of the Aspire contract, service credits are administered on a quarterly basis. The Aspire contract is the contract by which information technology is provided to the Inland Revenue and its successor department, HMRC.

Capgemini assumed responsibility for the management of the Aspire contract in June 2004. The following table shows all service credits and their value since Capgemini took over the contract.

The amounts represent a very small proportion of the annual cost of the Aspire contract and are commensurate with the low-level technological problems that are typically experienced in a service delivery of this size, complexity and value.

It is very difficult to make comparisons with other public IT contracts where details are available due to widely differing approaches in the use of service credits and liquidated damages.

The Aspire service credit figures are proportionately larger than Capgemini experience in their other outsourcing work in the UK, reflecting the tougher contractual conditions in a second generation outsourcing contract.

Quarter Number of service credits Value of service credits (£)
Q3 2004 0 0
Q4 2004 4 1,504,000
Q1 2005 1 40,000
Q2 2005 2 1,082,000
Q3 2005 2 320,000
Q4 2005 4 220,000
Q1 2006 2 117,000
Q2 2006 5 868,000
Q3 2006 9 297,000
Q4 2006 3 37,000

In March 2006 HMRC paid £270,000 back to Capgemini for overpayments made by Capgemini on service credits in previous quarters.

Since Capgemini took over the tax credit IT system in June 2004 there have been 18 hours and 30 minutes of unscheduled online service disruption against a contracted time of 13,962 hours and 30 minutes. This represents 0.1 per cent. of unscheduled online service disruption. Of these 18 hours and 30 minutes, 15 hours and 45 minutes fell in the first year. In calendar year 2006 no hours were lost.

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