Management Toolkit

Customs criticised for £100m spend

Kablenet.com

Published: 22 Jun 2004 11:25 BST

Customs & Excise has spent more than £100m on online systems without a clear idea of their benefits.

The Public Accounts Committee (PAC) has criticised HM Customs & Excise for spending millions on its e-government programme without being confident of the benefits for either itself or for UK businesses.

In a report released on 22 June 2004, the PAC said the department, currently being merged with the Inland Revenue, has already spent £100m on its e-government programme and is spending £327m in total over the 10 years to 2010, plus a further £250m to enhance its existing ICT infrastructure. But businesses are still paying their VAT using a paper-based system, because the Customs' e-VAT service, launched in March 2000, offers them no tangible benefits.

The report says Customs is only now considering a strategy to achieve the 50 percent level of take-up needed to make the new e-VAT service viable. It says Customs must ensure it offers a good quality service that a high proportion of businesses are willing to use before proceeding with a possible plan to make it mandatory for businesses to submit VAT returns electronically.

The committee said it is "unsatisfactory" that Customs has so far spent more than £100m without having a "rigorous business case".

Edward Leigh, chair of the PAC, welcomed the use of new technology by Customs, but said it was unacceptable that huge sums of public money have been spent without confidence in the scale of the likely benefits. He pointed out that estimates of financial savings have already been cut from £4bn to £1.2bn and possibly less.

Leigh said the department must complete a proper and comprehensive business plan, identifying clearly expected benefits and when they will be delivered.

The committee also said Customs should find out how different customer groups are likely to use online services, including the e-VAT service. It said it did not follow good practice in managing its e-programme, with poor control over aspects such as managing consultancy contracts.