Corporate report

Accounting Officer Assessment Summary: Debt Transformation Programme

Published 9 February 2023

It is normal practice for Accounting Officers to scrutinise significant policy proposals or plans to start or vary major projects and assess whether they measure up to the standards set out in HM Treasury’s (HMT) Managing Public Money guidelines. From April 2017, the government has committed to make a summary of the key points from these assessments available to Parliament when an Accounting Officer has agreed an assessment of a project within the Government Major Projects Portfolio (GMPP).

Background and context

HMRC’s current Debt Management System is outdated and complex. It is also expensive to maintain and under significant strain to keep up with the need to provide a modern debt collection service.

Consequently, we need to reform the IT system that the department currently utilises to manage debts. The Debt Transformation Programme has been set up to build a new and modern Debt Management System to provide a holistic view of customers indebtedness and enable a modernised approach to debt collection.

Regularity

HMRC meets its regularity and legal requirements in respect of the Debt Transformation Programme. The Debt Transformation Programme falls within HMRC’s statutory tax collection and management functions (section 5 Commissioners for Revenue and Customs Act 2005 and, for any relevant taxes legislated since, the various specific other collection and management powers legislated for those taxes). The expenditure on the Programme is legal and regular. The Programme continues to comply with Parliamentary requirements for the control of expenditure, with funds being applied only to the extent and for the purposes authorised. The Programme adheres to the relevant HMT approval procedures.

Propriety

The Debt Transformation Programme adheres to the HMT’s Managing Public Money guidance and the HMRC Change Lifecycle Governance. It undertakes the appropriate assessments and reporting. Clear governance processes have been established for effective Programme management. A Programme Board chaired by the SRO is established as the main decision-making authority and key internal and external stakeholders are represented.

The Programme joined GMPP in Quarter 4 reporting for 2021 to 2022. As part of GMPP the Programme will report quarterly to the IPA on progress. An assessment of the Programme’s progress has been published within the IPA’s Annual Report and the HMRC Annual GMPP Transparency Publication on 20 July 2022.

A Treasury Approval Point (TAP) has been completed and agreed with HMT for spend for the financial year 2021 to 2022, with further review scheduled for September 2022 to cover the 2022 to 2023 period.

Upgrading the current debt management IT system, IDMS, will assist in the better collection of debt by HMRC and will reduce the risk of financial loss if the current system was to fail. This will provide better use of public money, modernising a key system utilised by HMRC, and enable debts to be collected online.

Value for money

The Debt Transformation Programme follows HMT’s Green Book methodology. The programme developed a longlist of options and conducted an appraisal to draw up a shortlist of options before completing a full economic appraisal of the shortlisted options. Value for money is recognised as a key factor in the commercial strategy within the Programme business case approved by HMT. The preferred option offers the highest potential to meet the Critical Success Factors.

To secure Value for Money, the Debt Transformation Programme will use a number of suppliers and partners to advise on and deliver specific areas of scope. It will use a mix of existing contracts, select suppliers from Crown Commercial Services (CCS) Frameworks, or run procurements in line with public contract regulations.

The Programme cost is predominately to build a replacement debt management IT system and service. The Debt Transformation Programme will give rise to several benefits including Additional Tax Revenue as a result of improved debt collection, and cost efficiencies as a result of automating manual tasks, meaning less HMRC resource is required.

Feasibility

The Debt Transformation Programme has already demonstrated feasibility when the Programme successfully went live with Automated Recovery and Collections in October 2021 and Time To Pay in May 2022, which have provided a solid foundation for a fully automated debt management service. Most recently, Field Collections functionality went live on 18 August 2022 and the Programme continues to define and refine the scope of customer journeys.

In February 2022 the Programme completed a Gateway 0 IPA review with an Amber confidence level given and the recommendations are being fully implemented. In July 2022, the Programme also completed a critical friend review.

Conclusions

As the Accounting Officer for HMRC I have considered my assessment of the Debt Transformation Programme, and on balance, the proposal is value for money and deliverable. I have therefore approved it as of 7 September 2022. I have prepared this summary to set out the key points which informed my decision. If any of these factors change materially during the lifeline of this Programme, I undertake to prepare a revised summary, setting out my updated assessment.

This summary will be published on the government’s website. Copies will be deposited in the Library of the House of Commons and sent to the Comptroller and Auditor General and Treasury Officer of Accounts.

Accounting Officer’s name: Jim Harra, Chief Executive HMRC.

Signature:

Date of signing: 7 September 2022