Around £900 million of unpaid VAT did not appear on HM Revenue and Customs (HMRC) debt case management system because of a failure to transfer data from the main VAT computer system, MPs have been told.
Edward Leigh, chair of the House of Commons public accounts committee (PAC), highlighted a series of problems with major government IT projects in a parliamentary debate on the committee's inquiries.
He told MPs: "We found that not all information on VAT debt recorded on the main VAT computer system had been transferred to the so-called trader register.
"That may appear to be an obscure point, but it meant that some £900 million of debt failed to appear on the debt case management system. That is hardly a first-rate example of financial management by a department that should be at the forefront of such matters."
Leigh cited evidence given to the committee earlier this month by Ian Taylor, a past president of the Chartered Institute of Purchasing and Supply who is now director of the centre for procurement performance at the Department for Education and Skills.
Taylor had told the PAC, that “in his view, public sector people are every bit as skilled as those in the private sector, but the information systems in the public sector are so bad that no private sector firm could afford to put up with them. They would simply go out of business," Leigh said.
The committee chair added: "They do not provide the data that public sector leaders need to manage effectively or to develop robust strategies for delivery."
Leigh also hit back at the government after it attempted to deflect criticism of the National Health Service’s £12.4 billion IT programme by claiming that a damning PAC report was based on "out-of-date" findings by the National Audit Office (NAO).
The PAC warned that the NHS scheme was unlikely to deliver significant benefits, unless there was a fundamental change in the rate of progress on the 10-year project.
But Leigh said the government "should not use the excuse" that the NAO's findings had been published nine months or a year ago, "when, on certain occasions, the government, or rather accounting officers and their civil servants, have delayed the whole process".
He added: "The process relies on the National Audit Office reports being agreed between the National Audit Office and the Department and there is often a long period of negotiation."
The excuse was "particularly apparent" in the government's response to the PAC report on the NHS IT system, Leigh said.
The committee chair told MPs he had spoken to Sir John Bourn, head of the NAO, to put a timescale on the auditors' promised – and unprecedented – second examination of the project. "Following my encouragement, we are to have another NAO report on the NHS computer systems in the next year so that we can have an update to check whether all the excellent recommendations of the NAO and the PAC...are being carried out."
Responding to the debate – which also touched on the IT fiasco at the Rural Payments Agency that is estimated to have cost £500 million – Treasury minister John Healy gave an indication that the government might reconsider its hardline stance against making public the findings of Office of Government Commerce "gateway reviews" of major IT schemes.
Pressed on the question by PAC member, Richard Bacon, Healy said: "I confirm that I am considering the general approach to the release of information on gateway reviews."