Key Takeaways
- HM Revenue & Customs (HMRC) has awarded three low‑code contracts worth up to £657 million to Atos, Cognizant, and Coforge under the Digital and Legacy Application Services (DALAS) framework.
- The contracts cover specialist leadership, build, configuration, DevOps, and live‑service management for HMRC’s low‑code technology estate, which includes platforms such as Pega, ServiceNow, Microsoft Dynamics, and Power Platform.
- Despite the push toward low‑code solutions, the initiative underscores that empowering users with tech skills does not guarantee low cost; the DALAS framework’s total potential value is estimated at up to £4.5 billion.
- HMRC’s legacy IT estate remains large, complex, and costly to modernise, a challenge highlighted by the National Audit Office (NAO) which noted remediation is taking longer and costing more than anticipated.
- The awarded contracts reflect a strategic effort to manage and evolve HMRC’s low‑code ecosystem while confronting entrenched legacy systems that hinder agility and increase operational risk.
Background and Scope of HMRC’s Low‑Code Initiative
HM Revenue & Customs, the UK’s tax collection authority, recently concluded a major procurement exercise aimed at bolstering its low‑code capabilities. The department, which collected £938.8 billion in tax during the latest reported financial year, recognised that modernising its IT estate requires both strategic oversight and hands‑on development expertise. To achieve this, HMRC issued calls for specialist low‑code services under the Digital and Legacy Application Services (DALAS) framework, ultimately awarding three substantial contracts that together could reach £657 million in value.
Atos Wins the Leadership and Oversight Lot (Lot 3)
The first contract, valued at £78.2 million, was granted to French consultancy and outsourcer Atos for “specialist low‑code leadership services.” This lot, designated Lot 3 of HMRC’s low‑code procurement, falls under Lot 4a of the DALAS framework, which focuses on multi‑product configuration. Atos’s responsibilities will encompass programme oversight, supplier management, governance, assurance, and delivery support for HMRC’s entire low‑code technology estate. The agreement runs for an initial three‑year term, with the option to extend for two additional one‑year periods, providing flexibility to align with evolving project timelines.
Structure of the DALAS Framework and Associated Lots
The DALAS framework is a strategic vehicle designed to consolidate HMRC’s application services, encompassing both legacy and emerging technologies. Lot 4a, where Atos’s contract resides, was originally estimated at £700 million but later revisions assigned a combined estimated value of £2.8 billion to the second phase of DALAS, which includes framework Lots 1, 4a, and 4b. The framework explicitly covers support for a range of low‑code platforms—Pega, ServiceNow, Microsoft Dynamics, and the Power Platform—ensuring that HMRC can leverage multiple tools according to specific business needs.
Cognizant Secures the Build and Development Lot (Lot 1)
Cognizant, a global IT services leader, was awarded Lot 1 of the low‑code call‑off, valued at £360 million. Mirroring the term structure of the Atos contract, Cognizant’s engagement spans an initial three years with two possible one‑year extensions. The vendor is expected to deliver “specialist low‑code build, configuration, DevOps and live service management services” for HMRC’s low‑code estate. This includes the full lifecycle of low‑code products: design, development, testing, deployment, operation, and continuous improvement. By handling both construction and ongoing operational support, Cognizant aims to ensure that HMRC’s low‑code applications remain stable, secure, and aligned with evolving tax‑collection requirements.
Coforge Awarded the Complementary Build Lot (Lot 2)
Indian technology services firm Coforge obtained Lot 2, valued at £219 million, under the same contractual terms as the other two lots. Coforge’s scope mirrors that of Cognizant: providing specialist low‑code build, configuration, DevOps, and live‑service management for HMRC’s low‑code technology estate. The duplication of similar service bundles across two separate contractors reflects HMRC’s strategy to distribute risk, foster competitive pricing, and maintain flexibility in scaling development capacity as demand fluctuates across different programmes and platforms.
Comprehensive Service Delivery Across the Low‑Code Estate
Collectively, the three contractors will cover a broad spectrum of activities essential to a healthy low‑code ecosystem. Atos will focus on governance, oversight, and assurance, ensuring that projects adhere to architectural standards, regulatory compliance, and risk management frameworks. Cognizant and Coforge will handle the technical execution—building applications, configuring platforms, establishing DevOps pipelines, and managing live services. This division of labour allows HMRC to separate strategic leadership from hands‑on delivery, potentially improving transparency and accountability while leveraging specialised expertise from each vendor.
Legacy System Challenges Facing HMRC
Despite the push toward modern low‑code solutions, HMRC continues to grapple with a substantial legacy IT footprint. The National Audit Office (NAO) warned in its latest report that “remediating legacy systems is taking HMRC longer than it had expected and is costing more.” HMRC operates one of the largest and most complex IT estates in the United Kingdom, comprising numerous ageing applications that support core tax‑administration functions. These legacy systems often suffer from technical debt, limited scalability, and integration difficulties, which impede the department’s ability to respond swiftly to policy changes, digital service demands, and emerging cybersecurity threats.
NAO Findings and Financial Implications
The NAO’s critique underscores a persistent mismatch between HMRC’s modernisation ambitions and the reality of its inherited technology landscape. The watchdog highlighted that remediation efforts have exceeded both time and budget forecasts, raising concerns about value for money. This context explains why the UK government initially valued the wider DALAS framework at up to £4.5 billion—a figure intended to encapsulate not only low‑code development but also the substantial effort required to retire, replace, or integrate legacy components. The current £657 million in awarded contracts represents a significant, yet partial, allocation toward addressing this expansive challenge.
Strategic Outlook for Public Sector Technology Modernisation
HMRC’s low‑code procurement illustrates a growing trend within the UK public sector: leveraging external expertise to accelerate digital transformation while managing risk through structured frameworks. By separating leadership oversight (Atos) from build and operations (Cognizant and Coforge), HMRC aims to create a balanced model that can adapt to shifting priorities and technological advancements. However, the success of this approach will hinge on effective contract management, clear performance metrics, and the ability to integrate new low‑code solutions with existing legacy assets without disrupting critical tax‑collection operations. Continued scrutiny from bodies like the NAO will be essential to ensure that the anticipated benefits—greater agility, reduced maintenance costs, and improved service delivery—are realised without incurring prohibitive expenses.
In summary, HMRC’s recent low‑code contract awards signal a substantial investment in modernising its IT estate, yet they also underscore the enduring difficulty and expense of overcoming entrenched legacy systems. The combined value of the contracts, while significant, represents only a fraction of the potential £4.5 billion DALAS framework, highlighting the scale of the modernisation task ahead.