Revised Revenue contract will save £1bn

Taxpayers could save up to £1bn over the next 10 years as a result of the Inland Revenue's new outsourcing contract, says incumbent supplier EDS.

The Revenue is evaluating proposals from consortia led by EDS, BT and Cap Gemini Ernst & Young (CGEY) for the £4bn Aspire deal, which is expected to be signed in December.

EDS is bidding alongside Accenture to retain the contract it has held since 1994. The head of the supplier's bidding team, client executive Craig Wilson, said that the anticipated savings have vindicated the Revenue's decision to ask vendors to compete for the new deal.

"There is nothing like competition to force you to re-evaluate what you're doing, no matter how successful the formula has been," said Wilson.

"If you look at what the new deal will cost, even on the most conservative estimates it should save more than £1bn over 10 years.

"Despite all of the Revenue's critics saying it was a foregone conclusion, it looks like it has the competition that will yield massive savings for the taxpayer."

EDS has submitted what it believes to be a "fantastic offer" for the Revenue, according to Wilson.

"Our strategy is to put a deal on the table now that we regard as best and final. We are not expecting to change our pricing. We spent a year getting the company expecting to dig deep at the first time of asking," he said.

BT and CGEY declined to comment.