UK Tax Collector Puts Half A Billion On Table For Call Center Services

The UK's tax collector has confirmed plans to contract out call center services with an associated price tag of £500 million ($677 million).

In a "planned procurement notice" published last week, His Majesty's Revenue and Customs said the deal, expected to be awarded in December, would create a "contact center as a service (CCaaS) solution" to replace its current legacy process.

The winning vendor will be expected to design, implement and configure call center services. The contract is also for ongoing support services, including proactive maintenance and testing, as well running and "optimizing" said services for innovation and transformation. The deal will provide product licenses and any acquisition or development of associated add-on products.

The contract is expected to run until December 2033, and could be extended to 14 December 2035, according to a procurement notice published last week.

UK taxpayers might welcome any improvements in HMRC's call center performance that the new contract promises to provide.

In January, a committee of MPs said HMRC must "take responsibility for its own failings to offer sufficiently effective digital services to customers" after they accused the tax collector of overseeing a "deliberately" poor phone service that was aimed at pushing callers online.

Parliament's Public Accounts Committee found that in 2023-24, HMRC's phone service's performance reached an all-time low. In the first 11 months of the year, it cut off nearly 44,000 customers who had been waiting 70 minutes to speak to an adviser because its system could not cope with demand. Only two-thirds of calls were answered, and the average wait time was more than 23 minutes.

An earlier report from the National Audit Office (NAO), a spending watchdog, found that customers phoning in with inquiries were collectively left on hold for 798 years in fiscal 2023.

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The NAO found the time spent waiting in the 12 months to March last year was more than double the time wasted in fiscal 2020. It said digital channels intended to ease service pressures didn't help as expected.

Meanwhile, the cost of remediating legacy systems at HRMC continues to rise as it struggles to move on to modern platforms. An NAO report estimated IT costs associated with major tax-related digital change programs to be £482 million (c $653 million at today's rate) in 2023-24.

Three of HMRC's eight most costly tax-related digital programs in 2023-24 involved remediation of legacy systems. By March 2023, these programs had seen whole-life costs increase by between 60 percent and 390 percent, with their life extended by between 21 months and 36 months as their scope changed, the National Audit Office (NAO) said.

In February, its report "The administrative cost of the tax system," the spending watchdog said that one of the programs, dubbed Securing our Technical Future (SOTF), included migrating HMRC's critical IT services onto new platforms. The program has now closed, but has "cost more than initially expected and has underdelivered due to unforeseen technical complexities and some funding in 2023-24 being moved to higher priorities." ®