Press Release - Transforming performance of HM Customs and
Excise through electronic service delivery
20 November 2003
Also available: 
Incentivization of e-government (404 kb), this and other
reports on e-government can be downloaded from http://www.governmentontheweb.org/.
HM Customs and Excise's major programme to use e-technology to
improve the efficiency of their business operations and services,
although at an early stage, is already showing signs of being able
to transform the department's performance. However, today's report
to Parliament by head of the National Audit Office Sir John Bourn
points out some big risks in implementing a programme of this size
and recommends measures Customs should take to address them.
Customs are in the early stages of implementing the £327 million
IT-based programme to improve services and efficiency mainly
through electronic service delivery. They have made good progress
in getting their core business areas to accept the new programme
and have set clear responsibilities for delivery. They are also
refining their business case to develop a detailed implementation
plan.
At this stage Customs expect most of the financial benefits from
the programme estimated by the department to be £1.2 billion over
the ten year period from 2001 to 2010 - to come from increased
revenue yield. This is in addition to the £2.7 billion extra that
Customs expect to collect by 2005-06 from the VAT strategy
introduced in November 2002.
Customs have gone a long way towards ensuring that they have
adequately assessed the capacity human and IT needed to deliver the
planned improvements. They have taken action to address some issues
surrounding the procurement and management of consultants for the
e-programme. Some of the Department's old IT systems need
replacing. After three years of a ten-year outsourcing deal with
their IT infrastructure provider, Fujitsu, Customs have negotiated
amendments to the contract to provide the enhanced technical
platform necessary to support the provision of new services and the
replacement of deteriorating legacy systems. The cost for these
additional services is some £250 million over the remaining six
years of the contract.
Custom's progress in making their services available
electronically and overall take-up levels to date compare favorably
with that of other government departments. However, take-up of the
electronic VAT return has so far been disappointing. Persuading
firms to use this e-service will be a major challenge, not least
because returns on paper are relatively cheap and easy to use. At
present, more than 99 per cent of VAT returns are still made on
paper. Customs are developing a strategy to encourage businesses to
use their services, and this will establish specific priorities,
detailed estimates and a plan for how benefits will be
realised.
Today's report also highlights other big risks to a programme of
this size. It recommends that Customs have contingency plans to
deal with any breakdowns in service to customers when the new
e-services go live. The report also highlights the need to address
the risk of new IT systems producing inaccurate information which
is then used as the basis for decision-making in other parts of
government. Moreover, the shape of the e-programme and decisions
taken on its IT infrastructure will have to be flexible enough to
handle any changes required as a result of the current major review
of Customs and the Inland Revenue (announced by the government in
July 2003).
The report recommends that Customs ensure that there are systems
to determine what benefits are being delivered by the new
e-programme and to enable the department regularly to review
progress. There are also a number of lessons for government
departments implementing IT-based business change programmes.
Sir John Bourn said today:
"Customs and Excise have made good progress in getting
their electronic service delivery programme underway. The programme
is, however, at the early stage of its development and there is a
long way to go to translate the strategy and plans into performance
improvements on the ground. An IT programme of this magnitude
inevitably presents some large risks and our report recommends to
Customs how to address these risks."
Notes for Editors
- Press notices and reports are available from the date of
publication on the NAO website at http://www.nao.org.uk/ Hard copies can
be obtained from The Stationery Office on 0845 702 3474.
- The Comptroller and Auditor General, Sir John Bourn, is the
head of the National Audit Office which employs some 800 staff. He
and the NAO are totally independent of Government. He certifies the
accounts of all Government departments and a wide range of other
public sector bodies; and he has statutory authority to report to
Parliament on the economy, efficiency and effectiveness with which
departments and other bodies have used their resources.
Press Notice 71/03
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