The Failure of EFI

New public management influenced policy reforms from the 1980s onwards where market-oriented initiatives that resemble commercial management approaches intended to increase the efficiency and effectiveness of public services.2 It was reflected in capped budgets, competitive procurement tenders, privatization of major utilities, e.g., TDC, DONG, Post Danmark, DSB, and Copenhagen Airports, and introducing choice in welfare offerings.3 The efficiencies were enforced by requesting similar, or increasing, levels of service output with decreasing budgetary resources allocated on a year-by-year basis.
By 2005 one of the focal areas became to improve efficiencies in the Danish Tax Authorities and increase processing capabilities for recovery of taxes and dues to the public sector from fines, SU loans, etc. The introduction of a new IT system (EFI = Ét Fælles Indrivelsessystem) was a major initiative in this direction, which was projected to improve tax collection and free up to 850 full-time employees. About ten years later, after more than eight years’ of delays, and total costs of almost DKK 700 million, the project was eventually abandoned.4 This followed a string of other IT and procurement failures, including the IT systems DeMars and POLSAS, and the purchase of modern IC4 trains that allegedly ended up as gifts to former Libyan dictator, Muammar Gaddafi, rather than the Danish railways.5
Despite the scrutiny of public policy-making, these initiatives failed to consider major risks associated with large-scale projects and an analysis of the EFI project attempts to understand the causes behind one of country’s largest IT scandals.