HMRC CDIO Mark Dearnley defends organisation's approach to exiting Aspire contract

'We're focusing on making sure the deals are clean, simple, easy to understand and don't mortgage the future," he tells Public Accounts Committee

HMRC's chief digital and information officer (CDIO), Mark Dearnley, has launched a staunch defence of the organisation's approach to exiting its £10bn Aspire contract.

Dearnley was quizzed at a Public Accounts Committee hearing this week, where he was asked whether HMRC had a good insight into its technology needs - something that comments made by former HMRC chief executive Lin Homer had cast doubt on.

Dearnley responded by stating that the organisation did have a good insight into its needs and that this was incorporated into its plan for breaking up the Aspire contract. He said that once the break-up of the contract was completed then the organisation would once again look at its requirements thereafter.

Richard Bacon MP also asked why HMRC had not decided to use small and medium-sized enterprises (SMEs) as contractors with shorter, flexible contracts, as part of its post-Aspire strategy.

Dearnley claimed that the department's strategy was to do this in "the most efficient way", but suggested that HMRC had to ensure there was no risk to tax revenue being brought in.

"There are many ways in which we could approach this... when the original Aspire contract was done, doing a large monolithic deal was the way things tended to be done because the pace of change was lower.

"As we've learned what's happened over this period, and as the industry has evolved, the skills have evolved and also the hour by hour importance of IT in our ability to collect tax [has come into play]," he said.

"We think there's a different model going forward that doesn't break it up into huge numbers of different pieces but breaks it up into chunks that can then be managed individually and optimised as we go through," he added.

Bacon questioned whether smaller contractors would be more vulnerable to future budgetary squeezing than larger contractors.

"Are you going to have the capacity there on the part of the contractor to take a bit of a hit because of budgetary pressure or are you losing that?" he asked.

But Dearnley said that relationships with more suppliers would force the organisation "to have much cleaner commercial conversations" and would mean that the company could not get into "traditional arrangements" as it had for the Aspire contract.

He said looking away from Aspire, most outsourcing contracts lost money in their first few years for the supplier, and the supplier would rely on making money in the later years of the contract.

"What that tended to mean was that as time moved on and you wanted to change the contract, the supplier wasn't particularly incentivised to want to change it because they wanted to make their money at the end. What we're focusing on is making sure the deals are clean, simple, really easy to understand and don't mortgage the future, so that we can change them as our environment evolves and as the world changes," he stated.