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IT Giant EDS - Poacher Turned Gamekeeper? (25 Nov 2005)
EDS has agreed to pay HM Revenue & Customs (HMRC) over £70m in compensation for its tax credits system’s failures from 2003. The system caused a massive backlog of applications and process miscalculations, resulting in £1.9bn of overpayments in the first year. HMRC blamed EDS as being responsible for the problems. 

An EDS spokesman responded that: 'We believe the settlement is in our best interests. We are content with the settlement and are pleased to have avoided the cost and uncertainty of a legal case”. In its September report the Public Accounts Committee chairman Edward Leigh said: 'The introduction and operation of the Inland Revenue’s new tax credits system have been a nightmare.' 

Meanwhile, responding to a National Audit Office (NAO) report that technology can reduce the complexity of the UK social security system,, rather than making it worse, EDS says it should be involved in policy simplification discussions to help ensure successful implementation.
The NAO report recommends a balance between an inflexible, one-size-fits-all benefits system, and one so detailed that it is inefficient and difficult to understand. As an example of the challenge the Department for Work and Pensions has 35 major IT systems, and is undergoing one of the largest modernisation programmes in Europe.
The NAO’s report states that ‘Rather than assisting staff in coping with the demands of a complex system, at present, aspects of the IT infrastructure act as a factor undermining staff efficiency, as staff may have to work around technology problems.’ Major current supplier EDS told the NAO that it would welcome the opportunity to participate in discussions about simplifying the technology underpinning the benefits system. It noted the benefits of stakeholders being involved from the outsey in evaluating the feasibility of proposals, timescales, risks and costs, thus increasing the chance of successful implementation.’