Select Committee on European Union Fortieth Report


Letter from the Chairman to Rt Hon Dawn Primarolo MP, Paymaster General, HM Treasury

  Thank you for your Explanatory Memoranda 15380/05 and 15381/05, which Sub-Committee A considered at their meeting on 14 March and decided to hold under scrutiny.

  The Sub-Committee note that your Explanatory Memoranda do not contain any details about the likely costs associated with the proposed changes. The Sub-Committee would like further clarification on both the likely financial costs and the potential operational difficulties associated with any implementation of these proposals.

15 March 2006

Letter from Rt Hon Dawn Primarolo MP to the Chairman

  Thank you for your letter dated 15 March 2006 in which you requested further details on financial costs and potential operational difficulties relating to the proposed changes to the Customs Code.


  HMRC has estimated costs for Multi-Annual Strategic Plan (MASP) related projects and I attach a table showing these under category headings. The table indicates which projects relate to which categories and I hope this will be more meaningful than the project names alone.

  I must stress that these are high-level estimates based on discussions with HMRC's IT supplier on a requirement that is not yet fully established. These estimates are therefore subject to change as we go through the project lifecycle. Each project will be subject to a robust business case and the HMRC approvals process and no investment decision will be taken until the business case is authorised. Delivery of the projects is scheduled between 2005-06 and 2012-13.


  The implementation of the EU Programme of Change will be via a series of Commission sponsored projects which together form the EU's MASP. Each Member State will be responsible for delivering the national element of each new system with the EU delivering common components. These are a complex set of changes but they are achievable as long as they are properly planned and managed. It is also essential that a full programme of consultation is undertaken with UK customers to ensure they are fully aware of the operational considerations and potential impact. The UK has a strong recent record of delivering complex information technology changes within EU specified timescales. A good example is the New Computerised Transit System (NCTS), which was introduced in 2003 and now has 100 per cent take up.

  HMRC will submit each of the MASP projects to a robust change management lifecycle process that will identify the key risks and issues and ultimately deliver fully costed delivery options. UK trade will also be engaged in all aspects of systems development to ensure overall impact on their commercial investment paths is fully understood and catered for.

  In order to progress these projects the UK needs to be in possession of full technical specifications from the EU. HMRC has made it quite clear to the Commission that we require three years from production of the requirements to full implementation. This line is supported by other Member States and provides us with sufficient time to assess the impact on the current infrastructure and identify dependencies. In particular we need to recognise the ability of the trade to invest and upgrade their systems within the same time frame.

  The EU implementation timetable requires delivery of all the projects within the same, or similar, timescales. This will raise a number of capacity and cope-ability issues for HMRC which will be managed under a carefully planned programme of change which will maximise opportunities and minimise risk.

25 May 2006

Annex A

MASP—Categories & Projects
Estimated Costs between 2005-06 and 2012-13

EU-wide Import Control systems:
  Import Control System
  Auto Import System
£8 million
EU-wide Export Control systems:
  Export Control system 1
  Export Control system 2
  Auto Export system
£10 million
EU-wide Standardisation:
  SAD Harmonisation
  Authorised Economic Operators
  MASP Trader Database
  Postal Programme
  EU Administrative Penalties
  Single Authorisation
£14.5 million
Improved Customer Service:
  International Trade Single Window
  EU Single Access Portal
  EU Common Info Portal
  EU Single Window Link
  EU Binding Decisions Extensions
£11 million
Community Transit System Improvements:
  NCTS 3.2
  NCTS XML Channel
  NCTS Upgrades
£2.5 million
Risk Management:
  Pre-Arrival/Pre-Departure Messages
  Risk Management Framework
£5 million
Business Process Re-engineering to Facilitate Simplified Electronic Processes:
  Centralised Clearance
  Guarantee Changes
  Special Procedures
  Simplified Procedures Changes
  Residual Customs Code Changes
£8.5 million
£59.5 million

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