HMRC digital lead quits at critical juncture in breaking free of the old outsourcing ways

Profile picture for user slauchlan By Stuart Lauchlan July 31, 2016
On a dark day for digital government transformation in the UK, the confirmation that the digital lead at HMRC is quitting is just another blow that wasn't needed.

Remember when we were emphatically told that all those big old, bad old outsourcing contracts in the UK public sector definitely wouldn’t be renewed or extended, no siree, no way, no how?

My first cynical thought upon hearing about the appalling digital ‘night of the long knives’ going on today in Whitehall was, ‘How long before we hear Aspire’s being renewed?’. Aspire is the outsourcing arrangement in place at HMRC, set up in 2004 and due to wind down and be replaced by a digital tax service.

Today as the civil service old guard seized back lost ground from the digerati, up pops an announcement that Accenture has signed a new contract with HMRC up to 2020, the same time period that Capgemini already had its deal extended to after the planned 2017 exit date slipped away. It's not quite the Aspire renewal - yet-  but on a day like today such fear may be forgiven. 

Accenture will develop, implement and maintain a secure cloud-hosted platform for individual taxpayers. Services will be provided from the Accenture delivery centre in Newcastle and will see the outsourcing giant transition HMRC from a batch-oriented architecture to real-time processing and modernising its legacy user interface with cloud technology, to provide what Accenture describes as ‘a transformed HMRC user experience’.

This came on top of the news that HMRC’s Chief Digital and Technology Officer Mark Dearnley will be quitting in September to return to the private sector.   This matters a lot as Dearnley is the Senior Responsible Officer for the Aspire contract.

Last month the Public Accounts Committee (PAC) warned that the success of transitioning away from Aspire was heavily dependent on senior management remaining in situ. As the job title suggests, they don’t come much more senior when it comes to Aspire than Dearnley.

The PAC noted:

HMRC is now making progress in replacing the Aspire contract, but moving to a new model of IT provision remains a substantial undertaking which will require firm and consistent leadership. As we have seen from elsewhere in government, one of the main factors that determines the success of complex programmes such as this is the quality and stability of their leadership.

HMRC must ensure continuity in the leadership of the Aspire programme to maximise its ability to design and introduce a new IT model successfully.

This came on top of concerns from the Infrastructure and Projects Authority about aspects of the programme, including:

The willingness and ability of Aspire suppliers to make the required improvements in delivery performance and value for money, and the capability of HMRC to manage this process.

During the PAC hearing in June, HMRC Chief Executive Jon Thompson was urged to ensure that Dearnley stayed on after his fixed term contract ends in September, to which he replied:

We all share the same aspiration. We are in negotiations.

Well, for whatever reason, they didn't work out.

For his part, Dearnley’s today made a public statement of support for HMRC:

We have replaced our outdated internal IT, launched digital tax accounts for individuals and businesses, and have successfully concluded negotiations to dismantle the Aspire IT contract, taking more direct control of the design and delivery of our digital technology services at huge cost savings for HMRC.  We have also built one of the strongest digital technology teams in the world, and I am confident that they will continue to deliver HMRC’s IT transformation at pace.

But despite this, he will be gone at the end of September and the all-important consistency of leadership will be undermined. 

My take

Giving evidence to the PAC hearing in June, Dearnley explained his reasons for taking up the reins at HMRC in the first place:

There were two challenges that appealed to me. One was the opportunity to do what we have just discussed, which is: how do you take one of the largest IT contracts and safely transform it into what it needs to be? The second…is the digital transformation of HMRC. We have gone from something that worked really well for self-assessment to something where now 65% of all the things people want to call us about can be answered if you go to your personal tax account. The digital transformation was the hugely exciting thing that brought me here as well.

For all the faults that the HMRC experience still has, that’s a sentiment and enthusiasm that’s necessary to bring about genuine change.On a dark day for digital in the UK public sector, Dearnley’s departure is another hefty blow.

Meanwhile, it’s increasingly clear that the so-called oligopoly of big suppliers were right to bide their time.  The troublesome priest of former Cabinet Officer Minister Francis Maude is gone. In Civil Service Chief John Manzoni, they have the kind of man they can do business with.  Their day could yet come again. Champagne all round.