Full Breakdown
HMRC’s Ongoing Contracts with Capgemini Despite Earlier Break-Up Plans
By Drooid · · How we work
Core Event
Her Majesty’s Revenue and Customs (HMRC) has continued to award large-scale IT contracts to Capgemini, extending a relationship that began with the Aspire programme in 2004. The most recent award, a £200 million, five-year deal to migrate and decommission legacy data warehouses, was announced in August 2024, meaning the partnership will span more than three decades if current contracts run to their full terms.
Background and Policy Shifts
Aspire started as a ten-year, £10 billion contract that accounted for roughly 84 percent of HMRC’s technology spend between 2006 and 2014. A 2016 National Audit Office (NAO) review described the arrangement as “stable but expensive” and warned that it had left HMRC’s technology “out of date.” The NAO recommended a move toward multiple, shorter contracts with a broader supplier base, including SMEs. In response, HMRC announced a phased replacement of Aspire services, targeting completion by 2020 and projected annual savings of £200 million. The 2020 Technology Sourcing Programme (TSP) was launched to open HMRC’s £900 million annual IT budget to more suppliers, with the Cabinet Office estimating £824.6 million in cash-releasing and non-cash-releasing savings from modernization and contract disaggregation.
Contract Awards and Financial Scope
- January 2022: £51 million agreement to support tax systems built under Aspire.
- March 2022: £30 million contract to integrate a delayed customs platform.
- March 2022: £214 million non-competitive award to maintain legacy applications.
- May 2024: Up to £245.5 million to keep legacy systems running.
- June 2024: Up to £600 million contact-center deal, potentially extending the partnership to 2036.
- 2024 (later): £37 million contract to migrate Enterprise Tax Management Platform (ETMP) from SAP ECC to S/4HANA.
- Upcoming (by June 2025): Potential award of up to £500 million for a National Insurance and PAYE overhaul.
Official Statements and Procurement Rationale
The NAO noted that HMRC’s “phased approach” aimed to regain control over IT development and generate savings. HMRC officials have repeatedly asserted that each award followed “a rigorous procurement exercise” and a “competitive procedure,” emphasizing fairness and a level playing field. The Cabinet Office has highlighted the TSP’s expected savings and supply-chain improvements, while HMRC spokespeople have said the new contracts are part of a broader strategy to diversify suppliers and avoid extending existing deals wherever possible.
Future Procurement Outlook
HMRC is preparing to award a contract worth up to £500 million for the National Insurance and PAYE systems, with a decision expected by June 2025. The outcome will test whether overseas incumbents such as Capgemini and Accenture continue to secure major work from one of the UK public sector’s largest technology buyers.