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Last Updated: Thursday, 11 December, 2003, 13:03 GMT
Inland Revenue dumps IT provider
Computer keyboard
A catalogue of computer errors stopped payments of tax credits
Embattled computer services group EDS has been ditched by the Inland Revenue after being blamed for a catalogue of errors over tax credit payments.

Instead, the 3bn contract to run the Revenue's IT services over the next 10 years has been awarded to Cap Gemini.

Serious delays in the payments of new tax credits this year were blamed by the Revenue on EDS' faulty computer services.

US-based EDS is the world's second largest computer services company.

'Too many errors'

EDS has run the Inland Revenue's tax and national insurance system since 1994.

The decision to ditch EDS follows a fierce campaign by opposition MPs to see heads roll over the tax credits fiasco.

EDS's loss of the contract comes as little surprise after a recent survey carried out by Accountancy Age found that over a third of accountants believed the Revenue's partnership with EDS should be reviewed.

Cap Gemini said that Fujitsu Services would be its main partner in delivering the contract, which has an option for an eight year extension, with British Telecom offering telecoms support.

Around 2,250 employees from EDS and Accenture - which also lost out in its bid for the contract - are expected to join Cap Gemini, the French company said.

"I am genuinely delighted with the outcome of this competition," said Nick Montague, chairman of the Inland Revenue.

The bidding process for the contract lasted for 21 months.

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