Secret documents show the scramble to protect vital public services from the potential collapse of tech giant Atos, which handles billions of pounds worth of government contracts.
Files seen by the BBC show work with consultants has been underway since January to limit the “serious impact” on essential services by lining up alternative IT providers.
The UK government is outsourcing IT services, including NHS records and disability benefits, to the UK arm of the French IT giant, which admitted in April it was more than £3bn in debt and is now undergoing financial restructuring.
The risk assessment, which was first reported by the news, shows that the Cabinet Office and the Ministry of Justice have hired consultants PwC to carry out an audit of the company, which is described as “in financial distress” to “ensure the continuity of vital public services”.
The BBC saw the unredacted files that were accidentally released into the public domain by the Cabinet Office in May, although they were hastily replaced with blank pages.
The documents show that PwC was hired earlier this year to work on a risk assessment project codenamed “Project Aztec.”
Project Aztec is understood to refer to Atos, with Aztec Group understood to be its Paris-based headquarters and Aztec UK understood to be its London subsidiary.
Shares in Atos plunged in January when the group replaced its boss amid ongoing debt struggles, missed financial targets and reportedly looked to open talks with creditors.
Last week, the French government made a £600 million (€750) bid to buy the company’s most sensitive businesses, and Atos accepted an eleventh-hour financial restructuring plan led by French investor David Layani.
In January, the Cabinet Office asked PwC to assess what would likely happen to government contracts if the wider company were to collapse, and whether restructuring options being considered by the French government would include bailing out the UK arm of Atos.
According to the document, the government sought advice on “the likely impact on Aztec’s critical contracts in the UK and HMG should any part of the Aztec group enter insolvency proceedings…
“Review and comment on any financial support provided by the French Government and whether it could be earmarked from the British group ‘Aztec UK’ which provides services under HMG contracts.”
Since 2016, Atos has invoiced government contracts worth around £6 billion and currently has more than 40 government contracts worth almost £1 billion.
The firm deals with IT systems for the Ministry of Defence, the Ministry of Justice and the Ministry of the Interior, including:
- NHS health records in hospitals
- Disability Benefit Assessment for Personal Independence Payments (PIP)
- Student Loan Company Records
- Tax refunds from HM Revenue and Customs (HMRC)
Jonathan Ashworth, Labour’s shadow chief executive, said the documents showed ministers needed to focus on major issues “that are happening in the real world under their watch”.
He added: “The fact that such an extremely commercially sensitive contract was accidentally made public is not only evidence of breathtaking incompetence, it is also a worrying indication of the Government’s utter inadequacy in this matter.
“After 14 years of Tory chaos, it’s time to turn the page and rebuild Britain with Labour.”
A spokesman for the government office declined to name the firm, known to the government as Aztec, but said: “We carry out regular inspections of suppliers and occasionally undertake additional due diligence to ensure public services are maintained in various scenarios.
A spokesman for Atos said it could not comment on the matter.
On the wider question of the company’s financial affairs, he said: “Atos is currently undergoing a financial restructuring and has reached an agreement with the consortium and its creditors which will create a stable financial future globally and in the UK.
“The service delivery to our customers has remained intact and we will continue to provide a high quality service to the UK public sector as we have for over 30 years.”
The Conservative Party has not yet responded to requests for comment.