Customs told to identify savings

HM Customs & Excise's £929m electronic service delivery programme needs to clearly identify the cost savings it expects to achieve, says the Commons Public Accounts Committee (PAC).

The PAC report welcomes the programme as an 'innovative step forward in using new technology to deliver better quality public services'.

But questions remain about how the project came to spend £100m before producing a comprehensive business case.

And estimated savings from the eprogramme have dropped from £4bn to £1.2bn since the start of the project and could fall further.

'It cannot be acceptable that Customs has already spent huge sums of public money without being confident about the scale of the likely benefits,' said PAC chairman Edward Leigh.

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

The report notes poor management of consultancy contracts early in the programme, but says Customs has tightened controls and is applying Office of Government Commerce Gateway reviews to all new IT projects.

But it is unclear how, or even if, the eprogramme as a whole would have been able to pass the early Gateway stages without a fully comprehensive business plan.

Customs is unwilling to answer detailed questions before responding formally to the committee's report.

'While we have made good progress to date, we know that lessons need to be learned and more needs to be done,' said a spokesman.

'We will give serious consideration to the PAC's other conclusions with a view to publishing a detailed response and action plan in August,' he said.

The PAC report also emphasises the very low take up of the online VAT return service. The agency needs a 50 per cent take-up - 700,000 businesses compared with the current level of 2700 - to see a return on the investment.