Government Relies On Legacy IT For £480bn Of Revenue

At least £480 billion of the government’s operating revenues are reliant on old legacy IT systems, according to a report from the National Audit Office.

This is a problem because legacy IT is less flexible and more vulnerable to cyber attacks, whilst increasing reliance on long-term, costly contracts with large IT companies, which the government wants to move away from, the report noted.

Legacy IT concerns

Any failure of legacy IT “would have a significant impact on government”. “Failure would potentially endanger the payment of pensions and benefits and the collection of revenues,” it read.

The NAO found HM Revenue & Customs’ (HMRC) VAT collection service, which was introduced way back in 1973 and moved onto different hardware over time, cost £430 million to run from  2011 to 2012. It dealt with 1.9 million customers, processing 7.7 million VAT submissions.

The Department for Work & Pensions’ (DWP) pension service cost £385 million to run and was dealing with 13 million customers.

In its assessment of the Office for Fair Trading, the NAO raised concerns about security vulnerabilities as much of the software in use was no longer supported.

The NAO also warned about the lack of flexibility, extra complexity and additional cost burden that come with legacy systems, even though it admitted in some cases it would be more sensible to stick with older IT kit where the cost of switching would be high.

Nevertheless, if the government wants to truly revamp IT across departments, as part of its “digital by default” strategy, it needs to change its strategy, the NAO said.

“Government is changing the way it commissions public services, to make them digital, cheaper and more adaptable to user needs. The strategies that government bodies have been applying to legacy ICT are unlikely to be sufficient to deliver the level of transformation envisaged by the government’s digital strategy,” the report read.

“The lack of a full end-to-end view of the service, gaps in cost and performance information and the siloed working of ICT and business functions also restrict decision-making.”

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