The Treasury is to review spending on government IT projects in an effort to halt a series of scandals as Gordon Brown’s ambitions to computerise public services were dealt another blow yesterday.
Hundreds of thousands of people were given an extra 24 hours to file their returns online after the HM Revenue and Customs (HMRC) computer filing system crashed hours before the annual deadline. The website failed to work for nearly six hours on the biggest day of the tax year, denting Mr Brown’s plans to make all taxpayers file online within four years.
A major review of public spending will seek to draw lessons from recent IT disasters, which have cost the tax billions, The Times has learn. The review, to be conducted by Yvette Cooper, the new Chief Secretary to the Treasury, will look at IT procurement in several areas.
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A Treasury source said that the review, across a dozen areas of government spending, would seek to “ensure better value for money” for future IT projects. A recent survey revealed that the cost to the taxpayer of abandoned Whitehall computer projects since 2000 had reached £2 billion.
This comes days after the Prime Minister asked Paul Murphy, the Welsh Secretary, to chair a new cabinet committee on IT and information security, suggesting renewed interest from No 10 in the area. This includes the Child Support Agency’s £486 million computer up-grade – which failed, causing a £1 billion claims write-off – and an adult learning programme subject to major fraud.
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Yesterday’s tax crash happened two months after HMRC lost two computer disks containing the details of 25 million child benefit claimants and follows other serious lapses, further undermining government claims that it can handle major IT projects.
About 100,000 people were unable to access the HMRC system after it collapsed shortly after 9am. It was out of service until the afternoon, leaving many unable to file by the midnight deadline and facing fines. HMRC was forced to issue an apology and cancel all fines for nonsubmission, postponing the deadline until midnight tonight.
Politicians and IT experts questioned why the Government had failed to run the system efficiently at a crucial period of the financial year and cast doubts on its ability to introduce an online system for all self-assessment taxpayers by 2012.It is thought that HMRC saves about £5 for each return filed online rather than on paper. It plans to save more than £450 million by 2014 by moving more of its tax collection online. However, the Treasury’s own plans for online filing are based on the proviso that HMRC’s systems can cope.
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Yesterday frustrated readers contacted The Times furious that they were spending hours trying to file. One said: “It just shows incompetence about a technical issue and causes unneccesary pressure. If they want people to file online, this system should be bullet-proof and it blatantly is not.”
A Revenue spokesman said: “HMRC takes any disruption of service very seriously and to reflect this no one who files electronically or by paper by midnight Friday 1 February will face a penalty.”
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About four million of the nine million people who pay tax via self-assessment are expected to file their return online this year, up from 2.9 million last year. Last night, 3.6 million people had already filed online, but hundreds of thousands are expected to have missed the initial deadline. About 900,000 missed it last year.
Philip Hammond, the Shadow Chief Secretary to the Treasury, said: “When will Alistair Darling get a grip? He’s happy to threaten taxpayers with £100 fines if they don’t send in their tax returns on time, but he can’t even provide them with the basic tools to do the job.”
Private firms were baffled about how the Revenue’s website was unable to withstand a surge of visitors. Rob Steggles, of NTT Europe Online, a web hosting company, said: “If an organisation’s web presence fails to perform at a critical time, both reputation and revenue suffer.
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“It doesn’t matter whether it’s in the private or public sector – a secure, reliable website is of crucial importance to an organisation’s ability to serve its customers and protect its revenues.”
Last week HMRC admitted that its system was not secure enough to be used by MPs, celebrities and the Royal Family, and that thousands of “high-profile” people had been secretly told not to use it.
Website weaknesses
—Potential problems include band width – the size of the pipe that connects a website to the internet. There is typically a peak amount of information that can be communicated. The site owner can, however, call upon its service provider to increase its width
—Another is the web server – the box that stores information on the site and fetches pages when a visitor requests them – which can only handle a limited amount of requests at once
—The could be a fault with the site’s app servers – like web servers but performing more complicated tasks
—A site aware that demand is about to increase can rent more servers or use a hosting company such as IBM to run its servers – known as on-demand computing
—Using a technique called content distribution, sites with global audiences can also store information around the world to ease pressure on the main server