The Driver and Vehicle Licensing Agency has signed a contract with the Capita Group to provide a national Vehicle Excise Duty system.

The five-year contract, an option for a further two years, is worth around £100 million, according to Capita. The outsourcer will begin running the service from 7 November 2011, taking over from incumbent supplier NSL.

Capita will manage the Vehicle Excise Duty system and may also operate a Continuous Insurance Enforcement system involving the enforcement notifications and removal, storage and disposal of unclaimed vehicles across the country

Simon Tse, DVLA's Chief Executive, said, “Capita has put forward an innovative proposal that supports DVLA in its commitment to reduce vehicle tax and insurance evasion and offers the best value for money

Paul Pindar, chief executive of Capita said, “We have created an innovative delivery model for a service that will reduce the overall cost of enforcement, and by reintroducing roadworthy and fully compliant vehicles back on to the roads, will lessen the environmental impacts associated with scrapping vehicles.”

The DVLA has struggled with it s IT in recent years. In 2009 the organisation issued 62,000 duplicate tax discs after a glitch in an IBM run system.