Select Committee on Treasury Written Evidence

Letter to the Chairman of the Treasury Committee from Dawn Primarolo MP, Paymaster General, HM Treasury

  I wanted to let you know that HMRC has today settled its claim for compensation for problems experienced with the IT system developed by EDS to support the launch of tax credits in 2003 and the ongoing operation. I attach a copy of a written statement I have made to Parliament and a press notice that I have agreed HMRC should issue.

  The settlement negotiated with EDS is unusual, if not unique, in that EDS has agreed to pay a significant sum and, acknowledged responsibility for the IT problems that arose.

  The aggregate settlement is £71.25 million including an up front payment and payments of additional amounts over time. I am sure that your Committee will want to know more about the settlement but the terms include a significant confidentiality requirement. It will therefore be important for us to think carefully about how the settlement is addressed if the Committee decide to ask me about it when I next appear before them.

22 November 2005

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