Tax reform project runs into difficulty

A leaked report has disclosed that a project to support far-reaching reforms of the tax system have ‘critical’ weaknesses that need ‘immediate attention’.

The project known as Real Time Information, has been given an 'amber' rating by Whitehall troubleshooters, who warn of possible further downgrades.

The project which has been designed to support Work and Pensions Secretary Iain Duncan Smith’s Universal Credit benefits reform, is supposed to give HM Revenue and Customs monthly financial readings. Currently, the tax authorities get the information only at the end of every financial year.

It will allow welfare claimants who work to keep more of their benefit payments, adjusting payments as earnings change.  A pilot project is to begin this month, with several companies expected to start supplying tax authorities with salary data every time they pay their staff.

Work on the project was recently reviewed by the Major Projects Authority, a team of Whitehall experts and a leaked document has uncovered that the team’s Project Assurance Review identified potentially serious problems.

Using a dashboard system of red/amber/green, the reviewers rated the project “amber”, for a significant risk of failure.  The amber reading “highlighted two critical recommendations which required immediate attention”.  Firstly, “the programme director role should be confirmed as a full-time appointment with immediate effect”. Tax authorities were also told that outstanding contracts should be “settled without further delay”. The projects authority is to review the project again “to reassess delivery confidence”.

If progress has not been made, the amber assessment “is likely to be significantly lowered”. The dashboard also showed that tax authority managers have identified a problem with data analysis.

The report could hamper reforms proposed by Mr Duncan Smith, the Work and Pensions Secretary. Ministers insist that the Universal Credit system can start next year.

Although a tax authority spokesman said that preparations for the pilot were ‘going well’, Stephen Barclay, a Conservative member of the Commons public accounts committee, said that the warnings should be taken seriously and that the projects authority must now “drive through the changes that need to be made.”

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