Scotland’s new tax collector has been accused of blaming telecoms firm BT for failings that saw technology costs double to £122 million, with millions more written off.
An MSP tasked with scrutinising “significant weaknesses” in Registers of Scotland’s technology procurement accused a senior official of insulting her when she asked him to clarify a suggestion BT was trying to “maximise profit” from the taxpayer.
RoS senior managers tried to distance themselves from the accusation in written evidence to Holyrood’s Audit Committee.
Chief information officer Iain Campbell attributed the statement to an external consultant, but committee member Mary Scanlon said it conformed with other allegedly accusatory remarks, adding: “Please don’t insult me in front of a committee.”
Senior RoS officials told the committee the BT contract was “clumsy”, “eviscerating”, caused “hassle”, left staff “wading through treacle” to get anything done, held them in a “straitjacket” and ultimately left its IT systems “behind a Wizard Of Oz curtain”.
While at pains to point out he did not blame BT, Mr Campbell said “slick and polished” big firms in search of “easy money” from the public sector can dominate “small-fry” public bodies in contractual negotiations.
RoS will collect stamp duty tax in Scotland from 2015, under new parliamentary powers.
Three months after RoS was officially appointed as Scotland’s new tax collectors in May, public spending watchdog Audit Scotland found “significant weaknesses” in RoS’s management of information and communication technology deals.
RoS paid £112m after reaching an agreement with BT in 2004 for ICT provision and work to update its IT systems, even though the original cost was estimated to be £66m. It then terminated the contract 20 months early, with £6.7m of taxpayers’ money written off. RoS Keeper Sheenagh Adams and deputy keeper and accountable officer Catriona Hardman appeared beside Mr Campbell.
Ms Adams told the committee costs were “intended” to rise, and that RoS “couldn’t possibly envisage” the full costs when it signed the contract. Ms Scanlon found this “worrying” given RoS’s new tax collecting role.
In written evidence, RoS said a “mismatch in motivation of the partners” created problems in the soon-to-end ICT contract.
RoS quoted an assessment by external consultants Gartner which found “fundamentally different motivations” between BT and RoS. “BT is there to maximise profit, RoS wants a good service at a reasonable price,” Gartner stated.
Ms Scanlon said: “That is a very critical point against an organisation. Rather than giving me the confidence you have learned lessons and are moving forward, to me you’re blaming all of these issues and problems on a private company who have no right to reply.”
Ms Adams said this is “unfair” and that she does not blame BT.