HM Revenue & Customers (HMRC), the UK's tax collector, has spent £3.8 billion ($4.67bn) on contracts with tech suppliers over the last five years, of which £591 million ($726.85m) excluded competition.

As first reported by The Register, this is on top of the £10bn ($12.3bn) Aspire agreement which was intended to be completed by 2017. The new numbers come from research jointly conducted by The Register and government procurement researcher Tussell.

Aspire was a technology agreement made in 2004 with Capgemini and Fujitsu for HMRC's IT systems. Originally aimed to last for 10 years and with a budget of $7.9bn ($9.72bn), it was extended to 2017 with a total cost of £10bn ($12.3bn). The National Audit Office concluded it had provided "stable but expensive IT systems."

All Aspire contracts were said, by HMRC, to end by June 2022. The research, however, suggests that HMRC has ongoing contracts with the same suppliers, having awarded three suppliers £591m ($726.85m) in deals without going through competition processes.

HMRC told The Register: "We follow government procurement rules when awarding contracts and look for solutions that will improve services and get the best deals for taxpayers.

"For transparency, we publish contract awards along with contract variations... and recently published our commercial pipeline so that suppliers can see upcoming opportunities and engage appropriately with us."

The Register notes that, while HMRC has migrated or decommissioned a significant proportion of its services out of legacy data centers to the cloud or Crown Hosting, it is still seeking to modernize its IT estate for a digital tax system while using IT service providers it secured deals with now more than 20 years ago.

Specifically, The Register and Tussell's research found that HMRC IT spending for the past five years saw Fujitsu, Capgemini, and Accenture receiving a total of £3.8 billion ($4.67bn). £2.37bn ($2.91bn) of that was awarded via frameworks where competition among select suppliers is allowed, £839m ($1.03bn) was open competition, and the remaining was without competition at all.

Those include an October 2020 £168.8m ($207.6m) award to Fujitsu as no one else could hold up the 30-year-old infrastructure for the Customs Handling of Import and Export Freight (CHIEF) system - which was set to be completed by June 2024, March 2022 £105.6m ($129.9m) contract for Accenture (initially £70.4m ($86.6m), increased by £35.2m ($43.3m) in December 2024 due to an unenvisaged "significant increase in work") for the National Insurance and PAYE system introduced in 2009, March 2022 £215m ($264.42m) award to Capgemini for application decommissioning over three to five years, and an October 2022 £52m ($64m) contract for Fujitsu for application migration, and £50m ($61.5m) for Capgemini also for application migration.

In 2020, HMRC launched the Technology Sourcing Programme which broke up its five main contracts into 30 smaller ones, aimed to help bring IT up to date. According to HMRC in March 2023, TSP will be complete by December 2025.

In August 2024, HMRC stated that it was around 70 percent completed with its cloud migration process.

The issue of legacy IT in the government, and HMRC specifically, has long been known. The TaxPayers' Alliance, through a series of freedom of information requests in June 2023 found that many systems were so outdated they were no longer supported by Microsoft.

A former civil servant turned whistleblower who used to work on cybersecurity while in Whitehall told the TaxPayers’ Alliance: “The ongoing use of legacy systems in government is a disgrace and completely inexcusable. We move at such a slow pace that it seems only to get worse... The problem is so bad that some of these systems could be taken down by an enthusiastic child – the vulnerabilities are publicly known, and pre-made malware is readily available. It keeps me awake at night worrying that at any moment, a key HMRC system or a hospital might get taken down because we have not got the most basic protections in place."

HMRC began looking to migrate to the cloud in 2021, signing contracts with Microsoft and Amazon Web Services. In February 2022, the department signed a deal with IBM to help it exit its three Fujitsu data centers, and in September 2023 a $5.5m deal with Kyndryl for mainframe services.