HMRC awards £366m contracts for ERP cloud move

SAP and Deloitte are the big winners

The UK’s tax collection agency has awarded contracts to move a cluster of government departments’ systems to the cloud and upgrade legacy tools.

HMRC, the Department for Transport (DfT) and the Ministry of Housing, Communities and Local Government (MHCLG) - plus their various subsidiary bodies – are all covered by the new contracts.

Together, the departments form what is known as the Unity Cluster, one of five clusters across government.

SAP has won a £246 million agreement to provide cloud-based SaaS for 10 years, while Deloitte won a £120 million contract to oversee the technical delivery.

The specific focus is on upgrading the departments’ ERP, HR and finance systems.

The Unity cluster has also signed a separate 10-year deal, worth almost £15 million, with SAP-owned Concur.

The three government departments that form the Unity Cluster already use SAP back-office software, either directly through an SAP contract, or – in the case of DfT – through implementation partner Arvato.

In August last year the Infrastructure and Project Authority (IPA) branded the Unity programme’s aims undeliverable due to a lack of “critical skills and dedicated resources.” It also assigned the programme a red rating, indicating major issues.

We asked HMRC for specific details on what has changed between IPA’s assessment in August 2023 and today. In a statement, the department told us:

“A lot of hard work has been taking place within the Unity Programme and we’re confident a recent review by the IPA [the results of which are still to be published] will show the positive progress we have made since last year.”

Unity is the third government cluster to award its software and integration deals under the government’s shared services drive.

The Synergy Cluster (DWP, the Home Office, the Ministry of Justice and Defra) signed contracts worth £850 million with Oracle and IBM last month.

The Matrix Cluster, of eight different departments, chose Workday and Cognizant shortly after Synergy, with a total contract value of around £175 million.

The other two clusters are Defence and Overseas, which have yet to announce their agreements.