Her Majesty's Revenue and Customs (HMRC) service is attempting to cut the amount it spends on IT by extending an outsourcing contract.

A deal with Capgemini will now run three years longer than originally planned to 2017 as the government department looks to hit a ten per cent saving on its IT running costs by 2010.

HMRC chief information officer Deepak Singh told ComputerworldUK: "The restructuring of the... contract balances the need for HMRC to meet its commitments to cost reductions... without compromising our joint drive to become a world class IT function."

The IT outsourcing relationship had seen "significant improvements in service quality and delivery capability", he added.

Outsourcing is used by organisations large and small to remove the technical hassles and maintenance costs of IT from the workplace and place it under the care of experts.

Some efficiency benefits may be gained from such a switch as there should be fewer system outages in theory, while working with a progressive contract in a similar way to HMRC could allow IT work processes to be further improved and upgraded over time.