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