Key contract awarded to part government-owned provider as tax agency enters final months of £500m programme to move data and systems out three Fujitsu legacy datacentres and into new environments

As it enters the final months of a £500m project to move data and systems out of three ageing facilities, HM Revenue and Customs has signed a long-term deal with Crown Hosting Data Centres – the part-government-owned entity that will serve as one of the department’s core providers going forward.

Freshly published commercial information reveals that, at the start of this month, HMRC entered into a £45m contract with Crown Hosting – which is a joint venture between UK firm Ark Data Centres and the Cabinet Office, which owns a 25% stake. The deal will run for seven years, concluding in August 2030.

It comes into effect as HMRC enters the closing six months of its Securing our Technical Future (SOTF) programme, on which work began in 2018 to enable the department to exit three legacy datacentre facilities operated by Fujitsu, while supporting wider tech modernisation. The intention of the programme – which forms part of the government major projects portfolio – is to migrate data and systems to a combination of Crown Hosting and public-cloud environments.

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In major projects data sets published over the summer, HMRC claimed that, as of March 2023, SOTF had “migrated 336 services – 61% of the total – and has successfully built three technology halls in Crown Hosting, our on-premises datacentre, ready to receive a large amount of the remaining service migrations before December 2023”.

Despite such progress, the final delivery date – which was originally scheduled for June 2022, when HMRC’s engagements with Fujitsu had been scheduled to expire – has recently been pushed back further still: from the end of December 2023 to March 2024. Over the course of the 2022/23 year, meanwhile, the projected overall cost of SOTF increased by 60%: from £312m to £499m.

“The whole-life costs for the programme have increased… following a revision to the platform migration approach,” according to HMRC’s major project data. “These costs represent the increased complexities across the programme and the challenges relating to the alternative migration approach which have resulted in the programme duration being extended.”

On government’s traffic-light system, the programme’s delivery confidence rating has improved from red to amber in the past year. But the data set indicates that significant challenges remain.

“The amber status is due to significant concerns regarding resource availability and a proposed reduction in funding for the next financial year,” it said. “The level of technical debt within the IT estate continues to result in significant challenges for the programme requiring a larger amount of effort than originally planned which caused an extension to the programme end date. To mitigate this, we do have the correct escalation routes in place to manage supply and demand issues. As the programme is facing a reduction to funding for the next financial year, we are currently working though the impact of this on programme scope to ensure the best value for money for HMRC whilst securing our IT services and datacentres.”