HMRC approved for £112m Microsoft spending

Department was given central government green light for major outlay on licensing, newly published spending data reveals

So far this year HM Revenue and Customs has gained central approval for Microsoft licensing deals worth £111.75m, according to data published late last month. 

The department received the green light for spending of £106m on ‘Microsoft Licence E5’ on 25 March. Microsoft’s Office 365 Enterprise E5 licences usually include Skype for Business, security and compliance features and Power BI analytics, as well as the suite’s standard software. It also gained approval to spend £4.9m on Office 365 on 22 January, and a further £850,000 on the same on 22 March.

HMRC’s current chief digital and information officer Jacky Wright is on a two-year secondment from Microsoft, scheduled to end this October. The department’s annual report published in July said: “She does not participate in any commercial decisions specifically concerning Microsoft.”

An HMRC spokesperson refused to provide any information on the deals. However, similar data released by HMRC in March disclosed a £9m Microsoft enterprise agreement approved on 11 December, described as: “A five-month extension to the department’s existing Microsoft licences to allow time for HMRC to assess the ongoing strategic requirement and complete a full business case for a longer-term deal.” 

The newly disclosed licensing might be this longer-term deal.

Departmental data
Large ICT spending commitments are published by departments as they were one of five areas covered by a cross-government hold on spending announced by the Conservative-Liberal Democrat government in May 2010. The spending controls are still in place, although they were modified last year to allow for more self-certification of “business as usual” spending. Commitments are published online, with some departments doing so quarterly and others waiting until there is something to report.

Last year, HMRC only disclosed two such ICT projects in the first nine months of 2018, both approved in May last year: a future of child benefits programme costing £23m; and an API programme costing £4.7m.

In other disclosures made this July, the Department for Transport reported nearly £12m of ICT work for January-March 2019, including a £7.36m ‘Provision of IT Resource for IT Project Delivery and Support’ contract to provide Highways England with additional project capability. 

Spending on Microsoft licences for which HMRC was approved in the first three months of 2019

E5 and Office 365
Microsoft products acquired by HMRC

Year in which spend controls were first introduced

Cumulative worth of Defra tech-related spending that was approved in the first six months of 2018

15 months
Length of pipeline departments are expected to maintain under the latest version of spend controls

The same period saw the Department for Environment, Food and Rural Affairs reporting nine ICT projects, although these were all relatively small with an aggregate value of £9.35m. The largest, worth £2.95m, was an Environment Agency project covering the future of national telemetry, approved in January.

During the first six months of last year, Defra was given a green light for spending totalling £288m across six technology-focused projects related to its ongoing IT disaggregation efforts.

In April 2019, the Ministry of Defence disclosed a larger project than HMRC’s recent E5 deal, which also covers Microsoft licensing: a £142.92m one-year extension to its ‘Defence Information Infrastructure Services (DII)/New Style of IT Base (NSoIT B)’ contract from April 2019 to March 2020. This will continue provision of Modnet, a system based on Microsoft Office 365. 

The other projects disclosed by the MoD in 2018 were £8.75m over 36 months for provision and hosting of its Future Human Resources Solution; a £6.53m phase of work on a network used for training military personnel at Blandford Camp; and £6.2m for an airworthiness issues management system. It has not yet provided any data for 2019. 

The most recent data from the Ministry of Justice, covering July to December 2018 and published in March, disclosed four projects worth a cumulative £43.56m. Two were for phases of the ministry’s reform programme for HM Courts and Tribunals Service, both worth just under £17m, as well as £8.48m for wi-fi in courts and £1.4m for a new service for summoning jurors. 

HM Treasury, the Department for Education and the Department for International Development did not seek approval for any exceptional ICT spending in January to March 2019, and the Ministry of Housing, Communities and Local Government reported two small projects worth a total of £130,000. The Home Office does not appear to have published any data on this since a release in October 2018 covering July to September 2017.



Sam Trendall

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