Category Archives: managing change

Stop filming! That’s the IBM exit strategy we’re discussing

By Tony Collins

Dave Orr, a former IT employee at Somerset County Council, is now a local taxpayer trying to see if public statements made aboutthe authority’s joint venture with IBM match up to the facts.

Some councillors don’t seem to welcome his scrutiny, or his campaigning which can attract the attention of the local press.

Somerset claims it is saving millions of pounds through the Southwest One joint venture – which is majority owned by IBM. But Orr has learned through FOI requests and council reports that once extra costs are taken into account the council has had a net loss of £53m on the contract. He points to:

- £52m of SAP and “transformation” costs the council paid upfront to IBM

- £4m of council bid costs

-  £2m for a written-off loan to Avon and Somerset Police for SAP

-  £3m interest on a £30m loan over 10 years

-  £3m in contract management costs

-  £5m in legal costs over a dispute with IBM

This totals £69m. Procurement savings to December 2013 were £16m – which gives a net loss of £53m. The contract is supposed to save £150m over its 10-year life. The deal was signed in 2007 by IBM, Somerset County Council, Taunton Deane Borough Council and Avon and Somerset Police. The authorities are considering what they will do at the end of the contract.

Stop filming

At a meeting of the council’s audit committee last month, the chairman of the audit committee asked Orr to stop filming. He was using a Panasonic compact camera. A vote was proposed and seconded that the meeting not be recorded.

Five councillors voted in favour and 3 Lib-dems abstained. Those supporting the motion to stop filming included Tory, Labour and UKIP members.  Somerset is Conservative controlled.

Orr says the discussion shortly before the vote was taken was on Southwest One and the council’s exit strategy from the contract.  Councillors also agreed that they may at a later date go into a secret “Part 2″ session to discuss a “lessons learnt” report about the collaboration with Southwest One.

A blow to local democracy?  

The government has issued guidance that states explicitly that councils should allow the public to film council meetings. Under the heading “Lights, camera, democracy in action” an announcement by local government secretary Eric Pickles  says on the gov.uk website:

“I want to stand up for the rights of journalists and taxpayers to scrutinise and challenge decisions of the state. Data protection rules or health and safety should not be used to suppress reporting or a healthy dose of criticism.

“Modern technology has created a new cadre of bloggers and hyper-local journalists, and councils should open their digital doors and not cling to analogue interpretations of council rules.

“Councillors shouldn’t be shy about the public seeing the good work they do in championing local communities and local interests.”

Before the meeting of the audit committee Orr had obtained informal consent from the council to filming.

Comment

Open government is not a party political issue – none of the parties seem to want it. Indeed councillors at Somerset seem at their most comfortable  when voting for secrecy.  Is this because it gives them a feeling of privilege – having access to information the ordinary citizens don’t have?

In central government one of the first things the civil service does after a general election is give new ministers access to state secrets. It distances the ministers from ordinary people. Ministers feel privileged - “one of us”.  Is this the main unspoken reason some Somerset councillors  love to have secret meetings?

Councillors may feel weighed down by Orr’s questions and campaigning. But his questions are arguably more important than those raised internally by deferential party politicians who don’t ask the most difficult questions.

If anything they should be asking themselves whether they should ask the questions he is asking.

It’s too easy on big outsourcing contracts for supplier and client to put a gloss on the relationship. It’s easier talking about unsubstantiated savings than explaining why the contract isn’t making the savings originally intended. And it’s even easier when you shun scrutiny from members of the public.

Minister didn’t lie over UC business case – but did officials deliberately mislead?

By Tony Collins

Comment

DWP minister Esther McVey is facing criticism that she misled Parliament by saying that the Universal Credit business case had been approved when it hadn’t.

A close look at the facts shows that the minister spoke the truth, and the DWP officials who wrote her Parliamentary answer also told the truth. But MPs were still misled, perhaps deliberately so.

The officials who wrote the minister’s reply knew that there is an early and very basic business case for Universal Credit,  the strategic outline business case, which had been approved.

All big projects in central government have strategic outline business case approval before they get underway. Universal Credit was the same as any other big programme in this respect.

What hadn’t been approved was the full business case which requires much more detail than the strategic outline case – and it requires plans and costs to be finalised among other things.

When, on 30 June 2014,  Rachel Reeves, Labour’s spokeswoman on work and pensions, asked the government whether the business case for Universal Credit had been approved officials wrote a cleverly deceptive answer.

They wrote that the strategic outline business case had been approved. They did not mention that the full business case had not been approved. It’s certain that the minister did not realise that this answer was deceitful.

That said, the  answer was in line with the DWP’s culture which is to project good news and conceal bad news (NAO report Universal Credit: early progress, September 2013).

This was the original Parliamentary question and answer on 30 June 2014.

Rachel Reeves (Shadow Secretary of State for Work and Pensions; Leeds West, Labour)  

To ask the Secretary of State for Work and Pensions … whether he has approved the Department for Work and Pensions’ business case for the implementation of universal credit.”

Esther McVey (The Minister of State, Department for Work and Pensions; Wirral West, Conservative)

“The Chief Secretary to the Treasury has approved the UC Strategic Outline Business Case plans for the remainder of this Parliament (2014-15) as per the ministerial announcement.”

It’s difficult to avoid the conclusion that the DWP, in drafting the minister’s reply to Reeves, intended to mislead.

That’s politics. On the other hand it is an extraordinary misuse of power by senior civil servants.

A strategic outline business case is very different to a full business case.

The strategic outline case merely sets out the strategic context and the case for change, together with the supporting investment objectives for the scheme. It sets out likely funding needs and speculates that the scheme is achievable and meets best practice principles.

The full business case has finalised arrangements including key contractual arrangements , costs,  agreed implementation timescales, main risks, constraints, dependencies, benefits and “dis-benefits”. It sets out an argument on the affordability of the scheme.

The controversy over whether Parliament was misled – which it was – shows the ease with which the senior civil service can protect the government of the day from embarrassment. Except that this time the truth came out; and it came out unexpectedly because a tenacious Margaret Hodge, chairman of the Public Accounts Committee, kept asking civil servants whether the business case for UC had been approved. Eventually, though with some reluctance, they told her the truth.

If a little truth comes out in such an unplanned way, one can only guess at how much other information on the Universal Credit programme is being hidden. Perhaps deliberately so.

Upper Tribunal refuses DWP leave to appeal ruling on Universal Credit reports

By Tony Collins

An upper tribunal judge this week refused consent for the Department of Work and Pensions to appeal a ruling that four reports on the Universal Credit programme be published.

It’s the third successive legal ruling to have gone against the DWP as its lawyers try to stop the reports being released.

The DWP is likely to request further consideration of its appeal. History suggests it will devote the necessary legal time and funding to stop the reports being published.

In March 2014, the first-tier information tribunal rejected the DWP’s claim that disclosure of the four reports would inhibit the candour and boldness of civil servants who contributed to them – the so-called chilling effect.

The DWP sought the first-tier tribunal’s leave to appeal the ruling, describing it as “perverse”. External lawyers for the DWP said the tribunal had wholly misunderstood what is meant by a “chilling effect”, how it is manifested and how its existence can be proved.

They claimed the misunderstanding and the perverse decision were “errors of law”. For the first-tier tribunal’s finding to go to appeal to the “upper tribunal”, the DWP would have needed to prove “errors in law” in the findings of the first-tier tribunal.

The judge in that case, David Farrer QC, found that there were no errors in law in his ruling and he refused the DWP leave to appeal. The DWP then asked the upper tribunal to overrule Farrer’s decision – and now the DWP has lost again.

The upper tribunal’s judge Nicholas Wikeley says in his ruling this week:

“This [chilling effect] is a well known concept, and I can see no support for the argument that the [first-tier] Tribunal misunderstood its meaning.

“The Tribunal was surely saying that whilst it heard Ms Cox’s claim that disclosure would have a chilling effect, neither she nor the Department provided any persuasive evidence to that effect.” [Sarah Cox is a senior DWP executive on the Universal Credit programme.]

“Indeed, the Tribunal noted, as it was entitled to, that Ms Cox did not suggest that frank discussion had been inhibited in any way by a third party’s revelation of the ‘Starting Gate Review’.”

In conclusion the judge says:

“I therefore refuse permission [for the DWP] to appeal to the Upper Tribunal.”

The DWP’s lawyers asked the upper tribunal for a stay, or suspension, of the first-tier tribunal’s ruling that the four reports be published. This the judge granted temporarily.  The lawyers also asked for a private hearing, which the judge did not decide on.

DWP too secretive?

John Slater, who has 25 years experience working in IT and programme and project management, requested three of the four reports in question under the FOI Act in 2012. He asked for the UC issues register, high-level milestone schedule and risk register. Also in 2012 I requested a UC project assessment review by the Cabinet Office’s Major Projects Authority.

The Information Commissioner ruled that the DWP should publish three of the reports but not the Risks Register.  In March 2014 the first-tier information tribunal ruled that all four reports should be published.

Excluding these four, the DWP has had 19 separate reports on the progress or otherwise of the Universal Credit programme and has not published any of them.

Work and Pensions minister Lord Freud, told the House of Lords, in a debate on Universal Credit this week:

“I hope we are as transparent as we can be.”

What happens now?

Slater says that as the DWP has been refused permission to appeal it will probably ask for an oral hearing before the upper tribunal. This would mean that the DWP would get a second chance to gets its point across directly in front of the Upper Tribunal rather than just on paper, as it has just tried, says Slater. There is no guarantee that the DWP would be granted an oral hearing.

Comment

If all was going well with the DWP’s largest projects its lawyers could argue, with some credibility, that the “safe space” civil servants need to produce reports on the progress or otherwise of major schemes is having a useful effect.

In fact the DWP has, with a small number of notable exceptions such as Pension Credit, presided over a series of major IT-based projects that have failed to meet expectations or business objectives, from  “Camelot” in the 1980s to “Operational Strategy” in the 1990s. Universal Credit is arguably the latest project disaster, to judge from the National Audit Office’s 2013 report on the scheme.

The”safe space” the DWP covets doesn’t  appear to work.  Perhaps it’s a lack of firm challenge, external scrutiny and transparency that are having a chilling effect on the department.

Upper Tribunal ruling Universal Credit appeal

My submission to FOI tribunal on universal credit

Judge [first-tier tribunal] refuses DWP leave to appeal ruling on Universal Credit reports – April 2014

 

 

 

2 councils cut costs of Capita deals, bringing hundreds of staff in-house

By T0ny Collins

Councils in Birmingham and Swindon are cutting the costs of their Capita outsourcing deals, in part by bringing hundreds of staff in-house.

Labour-controlled Birmingham City Council, the largest local authority in Europe, is bringing back about 500 staff after the council negotiated with Capita to cut £20m a year from the cost of running Service Birmingham, a contract which started in 2006 and has 7 years left to run, reports the Birmingham Post.

Service Birmingham is two-thirds owned by Capita and a third by Birmingham Council.

Deputy leader Ian Ward is quoted in the Birmingham Post as saying the changes would bring major savings and a greater degree of control over council communications.

“We have negotiated an agreement with Service Birmingham which provides a major step forward in reducing our cost base for ICT. On balance, the council considers the risk of changing ICT provider at this time too risky.

“It would take a considerable period of time to procure and would cost an additional tens of millions up front in early termination charges and re-procurement costs.”

The council will bring the call centre in house by the end of the year, as part of a “One Contact” vision to resolve queries at the first point of contact.

Councillors routinely face complaints from constituents about poor service when attempting to phone the council, according to a local political blog, The Chamberlain Files.

Ward said: “It’s not just about how quickly we can answer the telephone or how polite the person answering the phone is. These things are important but we need ensure that queries are resolved to the citizen’s satisfaction.”

The blog quotes Birmingham’s leader Sir Albert Bore as saying that Capita had taken a pragmatic view and recognised the changing circumstances faced by the council.

A clause in the existing contract enabling the council to withdraw ‘at will’ from the Capita agreement within 60 days will remain. A controversial 17% mark-up on purchases has been removed.

The council hopes to gain more value from the new contract by limiting the number of projects it requires Capita to oversee and reducing the number of IT applications run by the authority. Capita was appointed originally because the council did not have the expertise to develop a modern contact centre and had invested little in new technology.

Ward said he hoped the council’s relationship with Capita, which has not always been harmonious in the past, would improve.

“What I also want to see coming out of this challenge is for both parties to work harder to make the partnership work better than it has to date. We need to make sure we have an ICT strategy that is fit for purpose and that will improve our control and planning for projects.”

The contract’s cost has reduced from about £120m a year to £80m a year, says The Chamberlain Files.

Swindon Council

Conservative-controlled Swindon Council is set to save about £2m a year by renegotiating with Capita on back-office services, says the Swindon Advertiser. It says that around 200 Capita staff will move to the council’s employment.

A contract with Capita, worth more than £240 million, was signed in 2007 and was set to last for 15 years.

Council leader David Renard is quoted as saying: “A number of years ago we entered into a 15-year contract with Capita but we obviously now live in a very different world.

“The council has to find savings every year and that means nothing is off the cards, so we have asked to sit down and have a look at the contract.

“The potential saving of £2m is very significant so it is something we have to look at. In fairness to Capita, we have asked to look at the arrangement on a number of occasions and they have been receptive.

“We want to maintain a positive relationship with them because there are things, such as revenue and benefits, which they do very well.”

A Capita spokeswoman said: “Swindon Council has undertaken a thorough review of its budget and services, including those services delivered by Capita.

“The council is considering a range of options to ensure it delivers integrated and effective services and Capita is fully engaged in that process.

“Capita’s priority is to continue delivering high quality services to the council and residents in Swindon, and to keep our employees informed throughout the process.”

Since signing the deal with Capita seven years ago many of the services can now be provided in-house, said the Swindon Advertiser. The council has become less reliant on Capita for some of its services, it says.

The deal with Swindon Council has allowed the company to win contracts with other local authorities and there are now fewer specialists to dedicate their time to Swindon, it adds.

 

 

 

Has DWP suppressed a “red” rating on Universal Credit project?

By Tony Collins

The Cabinet Office’s Major Project Authority gave the Universal Credit programme a “red” rating which IDS and the Department for Work and Pensions campaigned successfully to turn into a neutral “reset” designation, says The Independent.

Universal Credit was “only given a reset rating after furious protests by Iain Duncan Smith and his department,” says the newspaper.

A “reset” rating is unprecedented. All major projects at red will need a reset. That is one of the reasons the Major Projects Authority gives a red rating: to signal to the senior responsible owner that the project needs resetting or cancelling. A “reset” designation is a non-assessment.

The MPA’s official definition of a red rating is:

“Red: Successful delivery of the project appears to be unachievable. There are major issues on project definition, schedule, budget, quality and/or benefits delivery, which at this stage do not appear to be manageable or resolvable. The project may need re-scoping and/or its overall viability reassessed.”

The suppression of Universal Credit’s red rating may indicate that the project, at the top, is driven by politics – the public and Parliamentary perception of the project being all-important – rather than pragmatics.

It is a project management aphorism that serious problems cannot be tackled until their seriousness is admitted.

Normally the Major Projects Authority will give even newly reconfigured projects traffic light ratings, to indicate its view of the risks of the revised plans.

The Independent calls for the replacement of Iain Duncan Smith as political head of the project.

Comment

The National Audit Office warned last September of the DWP’s fortress mentality and “good news” culture.

The suppression of Universal Credit’s red rating on top of the DWP’s repeated refusals to publish the Universal Credit project assessment report, risk register, issues register and milestone schedule shows that the DWP still avoids telling it like it is. That will make successful delivery of Universal Credit’s complexities impossible.

Well-run IT projects are about problem-solving not problem-denying.

The Independent is right to say that IDS is not the person to be running Universal Credit. He has too much emotional equity to be an objective leader. He sees himself as having too much to lose. The programme needs to be run by an open-minded pragmatist.

In asking the Cabinet Office to agree with a “reset” rating for Universal Credit IDS is acting like a schoolboy who has done something wrong and asks the school not to tell his parents. That’s no way to run something as important as Universal Credit.

IDS and DWP accused of hiding bad news on Universal Credit - The Independent

 

Survive a Public Accounts Committee hearing – a lesson for ministers and top civil servants?

By Tony Collins

Mark_ThompsonMark Thompson was Director General of the BBC for eight years from 2004 to 2012. He was one of the highest paid in the public sector, earning more than £800,000.  He’s now CEO of the New York Times Company.

When he went before the Public Accounts Committee in February 2014 he faced accusations he had mislead MPs over the BBC’s Digital Media Initiative which was cancelled in 2013. The BBC wrote off £98.4m on the project.

Thompson has emerged from the affair unscathed although he had presided over the project.  Indeed he seems to have impressed the committee’s MPs who are notoriously hard to please.

In today’s PAC report on the failure of DMI, MPs appear to have preferred Thompson’s evidence over that of other witnesses. So how is it possible to come to a PAC to answer accusations of misleading Parliament and end up winning over your accusers?

Today’s PAC report on DMI criticises the BBC for:

-  complacency in taking a “very high-risk” project in-house from Siemens

-  spending years working on a system that did not meet users’ needs

-  not knowing enough about progress which led to Parliament being   misinformed that all was well when it wasn’t

- ending up with a system that costs £3m a year to run, compared to £780,000 a year for the 40 year-old “Infax” system it was designed to replace. And Infax works 10 times faster.

In February 2014 Committee chairman Margaret Hodge began her questioning of Thompson over DMI by pointing out that, three years earlier, in 2011, he had assured the PAC that all was well with the project when it wasn’t.

Thompson told Hodge in February 2011 that DMI was “out in the business” and “there are many programmes that are already being made with DMI”. In reality, the DMI had been used to make only one programme, called ‘Bang Goes the Theory’ – and problems on the project at that time were deepening but, as in many public sector IT-based projects that go wrong, such as Universal Credit, bad news from the project team was not being escalated to top management (or the BBC Trust).

How Thompson won over PAC MPs

At the PAC hearing in February 2014 Hodge asked Thompson if he had misled the Committee when he spoke positively about DMI in 2011.

Thompson’s reply was so free of reserve that it appears to have taken the wind out of Hodge.

Thompson replied: “I don’t believe that I have misled you on any other matter, and I do not believe that I knowingly misled you on this one.

“I will answer your question directly, but can I just make one broad point about DMI before then? In my time at the BBC, we had very many successful technology projects—very large projects, some of them much larger than DMI. I believe that the team, including John Linwood [then the BBC’s Chief Technology Officer], who were in the middle of DMI, had many successes—for example, digital switchover, West One, Salford and BBC iPlayer.

“I just wanted to say … everything I have heard and seen makes me feel that DMI was not a success. It failed as a project. It failed in a way that also meant the loss of a lot of public money. As the director-general who was at the helm when DMI was created and developed and who, in the end, oversaw much of the governance system that, as we will no doubt discuss, did not perform perfectly in this project, I just want to say sorry.

“I want to apologise to you and to the public for the failure of this project. That is the broad point.”

Hodge (who would normally, at a point such as this, launch her main offensive) said simply:

“Thank you.”

Usually civil servants will deny that a big IT-based project has actually failed. Many times the archetypal civil servant Sir David Nicholson, when Chief Executive of the NHS, defended the failed NPfIT at PAC hearings.

But Thompson told PAC MPs:  “Here we are in the beginning of 2014—I am not going to debate with you whether or not this project [DMI] failed. I am sure we can talk about how, why, where and so forth, but it definitely failed.

“When I came to see you in February 2011, I believed that the project was in very good shape indeed. Why did I believe that? I had seen a number of programmes myself—I had been and seen parts of DMI working on ‘Bang Goes the Theory’; I knew that ‘The One Show’ had started to use elements of DMI a few weeks earlier; and I knew that a kind of prototype version of the technology had been used in the very, very successful ‘Frozen Planet’ natural history series.

“I have gone back and asked the BBC to look at all the briefing materials—I had a voluminous amount of briefing from the BBC—and there is a real consistency between the briefing I got – .”

Richard Bacon: Sorry, a real inconsistency?

Thompson: No, a real consistency between the briefing I got and the evidence that I gave. To be honest, some of this is going to go very much to the point Mr Bacon was making earlier on (about what is or is not a deployment).

Stephen Barclay: Just a second…So it was consistent, but consistently wrong, wasn’t it, because just the following month, after the consistent briefing, you were then aware that it was going to miss the key milestone? From March 2011 you knew it [DMI] was not going to hit the deadline.

Thompson: If I may say so, what I am trying to focus on at the moment is the question—I understand, given subsequent events, the perfectly reasonable question—about whether the testimony I gave in February 2011 misled you or not… My belief is that my testimony gave a faithful and accurate account of my understanding of the project at this point.

Hodge: But were you misled, then?

Thompson: Let me give you just a sense of my briefing. To be honest, there were echoes of this in John Linwood’s testimony a few minutes ago, and Mr Bacon has helped me to understand this by putting his finger on the use of one word in particular, which is ‘deployment’. This is the timeline …”

Thompson then did something civil servants rarely do, if ever, when they appear before the committee. He read from the internal briefings he had received on the project in 2010 and 2011 . Those briefings indicated all was well.

He was not even shown a draft Accenture report in December 2010 that said the elements of the DMI examined (by Accenture) were not robust enough for programme-making and that significant remedial work was required.

Thompson said that the day before he gave evidence to the PAC in February 2011 he was given an internal note which said:

“Our next release [of DMI], Enhanced Production Tools, entered into user acceptance testing this week. This release builds on the production tool we previously delivered in 2010, Fabric Workspace, and desktop editing and logging.

“We will deploy its release to pilot users in Bristol, the ‘Blue Peter’ production team, ‘The One Show’ current affairs team, ‘Bang Goes the theory’ — again — ‘Generation Earth’, weather and ‘Pavlopetri’ inside London Factual.”

Thompson had the firm impression that DMI was challenging but that the BBC was starting to deliver the system and users had been positive about the elements delivered.

Thompson said in February 2014, “Mr Bacon is right about the very bullish use of the world “deployed”, meaning, perhaps, elements that have been loaded on to a desktop but not really extensively used: that was the background to the remarks I made to you in February 2011. I am absolutely clear that at the time that was what I knew and believed about the project.”

Hodge: So you were misled?

Thompson replied, in essence, that the BBC’s business users tried to make DMI work but most of them gave up. There were tensions between the project team who were enthusiastic about DMI and the business users who, mostly, weren’t.

These were complicated, difficult issues, said Thompson. “There was a pronounced and, it would appear, growing difference of opinion between the team making DMI and the business users on how effective and how real the technology was.

“You will understand that I have been involved in a lot of projects at the BBC and in other organisations, and I can smell business obstinacy. I can smell when a business is unready, is not prepared to play ball or is constantly moving the goalposts.

“I absolutely understand John Linwood’s particular perspective, given what he was doing. He was a very passionate advocate of the project, and I understand all of that.

“In my time, which ended when I left in September 2012, I saw great efforts being made by the business—in other words, by colleagues inside BBC Vision, BBC North and elsewhere—to get DMI to work. Although there were tensions, I do not believe that those tensions, which frankly were more or less inevitable, were themselves a central and critical part of the project’s failure.”

Richard Bacon: … It sounds to me as if the people getting the business case through the main governance processes were technology and finance people. I want to be clear on what you are saying. It sounds to me as if the technology people were very gung-ho and the experience of the business people on the ground was that it was not necessarily working as well as they had been led to believe, so they probably lost faith in it. Is that a fair summary?

Thompson: “I believe that that was definitely what started to happen, certainly by the end of 2011 and through 2012. It happened for understandable reasons. This has been a troubled project…

“I thought great efforts were made in BBC Vision and in BBC North both by senior people and by some front-line programme makers to help us to get the thing to work.

“Where my perspective perhaps differs from John’s perspective – it is very easy for me to sit here and say that this project failed because some difficult programme makers refused to use it, although there may have been an element of that somewhere – is that I thought that, overall, this was a project on which there was a lot of work and effort to try to get it to work on the business side…”

Hodge asked again if Thompson had been misled when he assured the PAC in February 2011 that DMI was being used at the BBC.

Thompson: I believed it.

Hodge: You believed it?

Thompson: Yes.

Hodge:  You believed it, but were you being misled?

Thompson: “I think that the language that the team was using, combined to some extent with the fact that I had seen what looked like a very positive demonstration of it … I had heard that “The One Show” had also started using it, and I saw a list of other programmes that were also using it. That combined with the language in the briefing led me to believe that it was being more extensively used.”

PAC conclusion

The PAC could have concluded in its report today that the BBC had misled Parliament in February 2011. But MPs used the word “misinformed” instead.

“Neither the [BBC’s] Executive Board nor the [BBC] Trust knew enough about the DMI’s progress, which led to Parliament being misinformed. While [Thompson] assures us that he gave a faithful and accurate account of his understanding of the project at that point in early 2011, he was mistaken and there was confusion within the BBC about what had actually been deployed and used.

“In its reporting on major projects, the BBC needs to use clear milestones that give the Executive and the Trust an unambiguous and accurate account of progress and any problems.”

Comment

The PAC had every right to be angry.  So credible were the BBC’s assurances about DMI in February 2011 that the Committee published a report in April 2011 that reflected those assurances. It was wrong.

But there is a positive element in the failure of DMI – and that is the completely open and honest testimony of Mark Thompson.

MPs on the PAC are used to be being misled – usually by the sin of omission – when civil servants and ministers come before them. But when Thompson read from his internal briefings it was easy to see how he came to the view that DMI in February 2011 was showing signs of a success.

It was clear to MPs that Thompson had not set out to mislead.

Perhaps the moral of the story is that you can go far with honesty and openness. That’s not an easy lesson for the ministers and civil servants who have to appear before the PAC, but it has certainly served Thompson well.

BBC Digital Media Initiative – Public Accounts Committee report

 

BBC’s DMI project – another fine mess that was predictable

By Tony Collins

A National Audit Office memorandum published today on the BBC’s failed £125.9m Digital Media Initiative is a reminder – as in most failed big IT-enabled projects – that the causes have nothing to do with software and everything to do with management and people.

The NAO’s memorandum tells an all too familiar story with government IT (and the BBC is a public sector organisation):

- Over-optimism about the ability to implement

- Over-optimism about the ability to achieve the benefits

- Unclear requirements

- No thorough independent assessment of the technical design to see whether the DMI was technically sound

- The successful completion of the most straightforward of technology releases for the DMI, but these proved an unreliable indicator of progress.

- Technical problems and releases not meeting user expectations which contributed to repeated extensions to the timetable for completing the system, eroding user confidence and undermining the business case.

- Poor internal reporting. “The governance arrangements for the DMI were inadequate for its scale, complexity and risk. The BBC did not appoint a senior responsible owner to act as a single point of accountability and align all elements of the DMI. Reporting arrangements were not fit for purpose,” said the NAO.

- In the same way as the DWP failed with Universal Credit to take full account of recommendations in review reports, the BBC “did not adequately address issues identified by external reviewers during the course of the programme”.  The BBC had been aware that business requirements for the DMI were not adequately defined.

The BBC estimates that it spent £125.9m on the DMI. It offset £27.5m of spending on the DMI against transfers of assets, cash and service credits that formed part of its financial settlement with DMI’s previous developer Siemens. This left a net cost of £98.4m.

The BBC cancelled the DMI without examining the technical feasibility or cost of completing it, said the NAO.

The Corporation has written off the value of assets created by the programme, but is exploring how it can develop or redeploy parts of the system to support its future archiving and production needs.

Diane Coyle, Vice Chairman BBC Trust, said:

“We are grateful to the NAO for carrying out this report, which reinforces the conclusions of the PwC review commissioned by the Trust. It is essential that the BBC learns from the losses incurred in the DMI project and applies the lessons to running technology projects in future.

“The NAO’s findings, alongside PwC’s recommendations will help us make sure this happens. As we announced last December, we are working with the Executive to strengthen project management and reporting arrangements within a clearer governance system.  This will ensure that serious problems can be spotted and addressed at an earlier stage.”

Amyas Morse, head of the National Audit Office, said today:

“The BBC Executive did not have sufficient grip on its Digital Media Initiative programme. Nor did it commission a thorough independent assessment of the whole system to see whether it was technically sound.

“If the BBC had better governance and reporting for the programme, it would have recognized the difficulties much earlier than May 2012.”

Comment

The DMI project is exemplar of all that tends to go wrong in big government IT-enabled projects. Strong independent oversight and independent reviews that were published would have provided the accountability to counterbalance over-optimism.  But these things never seems to happen.

There are also questions about why the BBC took on the project from Siemens  and turned what could have been a success into a financial disaster.

NAO memorandum on the BBC’s Digital Media Initiative

Will Universal Credit be complete by 2020?

By Tony Collins

Comment

Much of what Iain Duncan Smith said at the Work and Pensions Committee yesterday made sense. In essence the DWP’s plan is to delay putting most of the  claimants onto the Universal Credit system until the technology is proven to work.

But there is little evidence it will work at scale, handling reliably and accurately millions of claimants and complex cases. It emerged yesterday that the DWP has still not yet agreed with suppliers a specification for the UC systems, and the latest business case has yet to be approved. How can anyone say on the basis of the limited work so far that the technology will work?

And Howard Shiplee,  Director General of Universal Credit, made the point yesterday that the technology is only part of the story. For UC to work there have to be changes in culture, operational procedures within the DWP and the retraining of tens of thousands of staff.

IDS is doing what various sets of ministers and officials did during the distended failure of the NHS’s £11bn computer programme, the National Programme for IT [NPfIT]: in assuring Parliament all was well they always used the future tense. The programme “will” give everyone in England an electronic patient record. But nothing was delivered that provided evidence the promises would be fulfilled. It took a new government to admit the NPfIT was a failure.

UC differs from the NPfIT in a crucial way. The NPfIT did not need to work. It was conceived at the top without support from the NHS. Many hospitals didn’t want centrally-bought IT foisted on them. The NPfIT was wanted, in the main, by a small number of politicians, officials and big suppliers. UC is needed and wanted. Simplifying the horrifying complex benefit systems has all-party support. Shiplee is right when he says UC has to work. But he didn’t yesterday commit himself to a timeframe.

The last major benefits computerisation project – called “Operational Strategy” – took about 10 years to finish. It did not achieve the promised financial benefits and benefit systems were not combined as originally intended but, in the end, the technology worked well for its time.

If UC does work there’s every reason to believe it will be in a similar timeframe to Operational Strategy: about 10 years. But could IDS keep his job while saying UC will be fully delivered in 2020 or beyond? I doubt it.

Did DWP mislead MPs and media over Universal Credit?

By T0ny Collins

Today’s report of the all-party Public Accounts Committee “Universal Credit: early progress” goes beyond criticisms of the scheme in a National Audit Office report of the same name on 5 September 2013.

Public Accounts MPs say the Department for Work and Pensions gave “misleading interviews to the press regarding progress after it became aware of difficulties with the programme”.

And as recently as July 2013 the “Department denied that there were problems with the programme’s IT when it gave evidence to the Work and Pensions Committee”.

These criticisms are against a background of the DWP’s refusal to publish any of the many internal and external reports the department has commissioned on the project’s progress, problems and challenges since 2011.

The Times today says that work and pensions secretary Iain Duncan Smith and members of his parliamentary team are “understood to have approached at least three Tory MPs on the cross-party [Public Accounts] committee to ask them to ensure that Robert Devereux, Permanent Secretary at the Department for Work and Pensions, was singled out for censure”.  In the end there was only limited criticism in the PAC report of Devereux – under his formal title of “Accounting Officer”.

Comment

If the DWP has been misleading the press, giving incorrect evidence to Parliament, and keeping secret its reports on the problems and challenges facing one of the government’s most important IT-based programmes – all of which seem to be the case – is it an institution that regards itself as uniquely outside the democratic process?

On big IT projects, officials are not motivated by money and concern for their jobs as are private sector boards of directors. When a private company gets it wrong and loses tens of millions on a project, the share price may fall, individual bonuses may be hit, and jobs, including the CEO’s, may be at risk.

In the public sector getting it wrong rarely has any implications for officials. They have only the threat of departmental embarrassment as a deterrent to getting it wrong. But they need not fear even embarrassment if they can mislead the press and Parliament and keep secret all their internal and external reports.

If a lack of transparency, culture of denial, and the misleading of Parliament continue to characterize big risky IT-based ventures in central government, one has to ask whether Whitehall is congenitally ill-suited to running such programmes.

The Public Accounts Committee warned in a report in 1984 about the risks of large public sector computer programmes. That report came after a series of project disasters.

So what has been learned in the last 30 years – other than that central departments are poorly equipped managerially – or democratically – to handle big IT-based programmes and projects?

These are some of the Public Accounts Committee’s findings:

MPs try to be positive

“We believe that meeting any specific timetable is less important than delivering the programme successfully. There is still the potential for Universal Credit to deliver significant benefits, but there is no clarity yet on the amount of savings it will achieve.”

Culture of denial

“The programme had also developed a flawed culture of reporting good news and denying that problems had emerged. This culture resulted from the desire of senior staff within the programme to show publically that they were able to push the programme forward, at the expense of ensuring that adequate controls were in place or listening to concerns raised about its delivery.

“Although the Department has tried to tackle this culture, it gave misleading interviews to the press regarding progress after it became aware of difficulties with the programme, and as recently as July 2013 the Department denied that there were problems with the programme’s IT when it gave evidence to the Work and Pensions Committee.”

Shocking absence of control over suppliers

“There has been a shocking absence of control over suppliers with the Department neglecting to implement basic procedures for monitoring and authorising expenditure…

“The Department recognises its supplier management has been weak, risking value for money.  Four main suppliers – Accenture, IBM, Hewlett Packard and British Telecom - have provided IT systems for Universal Credit, and by March 2013 the Department had paid them £265m out of the £303m spent with suppliers on IT systems.

“In February 2013 the Major Projects Authority found no evidence of the Department actively managing its supplier contracts, resulting in suppliers being out of control and financial controls not being in place.  The Department has yet to provide a comprehensive assessment of how much of this expenditure has proved nugatory, although the Major Projects Authority believes it will be a substantial figure running into hundreds of millions of pounds.”

Lack of oversight

The lack of oversight allowed the Department’s Universal Credit team to become isolated and defensive, undermining its ability to recognise the size of the problems the programme faced and to be candid when reporting progress…

“Oversight has been characterised by a failure to understand properly the nature and enormity of the task, a failure to monitor and challenge progress regularly, and a failure to intervene promptly when problems arose.

“Senior managers only became aware of problems through ad hoc reviews, mostly conducted by external reviewers, as inadequate management information and reporting arrangements had not alerted them that things were amiss.

“Given its huge importance to the Department, the Accounting Officer [Robert Devereux] and his team should have been more alert to identifying and acting on early warning signs that things were going wrong with the programme

Blinkered culture remains?

“Risk was not well managed and the divergence between planned and actual progress could and should have been spotted and acted upon earlier. The Department only reported good news and denied the problems that had emerged. The risk of a similarly blinkered culture remains as the Department will be working to tight timescales to get the programme back on track.”

Problems hidden

“It is extremely disappointing that the litany of problems in the Universal Credit Programme were often hidden by a culture prevalent in the Department which promoted only the telling of ‘good news’.

“For example, officials were aware that a critical report highlighting many of these issues had been discussed internally for months. Indeed, there are real doubts over when officials became aware of these problems and it is difficult to conceive, based on the evidence we were presented with, that officials within the Department did not know of them before July 2012.”

Shocking absence of financial and other controls

“There has been a shocking absence of financial and other internal controls and we are not yet convinced that the Department has robust plans to overcome the problems that have impeded progress.”

Did the DWP do anything well?

“The Department initially adopted a piecemeal approach to delivering the programme.

“In 2011 it identified over a hundred different types of users for Universal Credit, and initially sought to design IT solutions for each set of circumstances individually. It was only in early 2012 that the Department decided to stand back and try to establish a clearer picture of what the programme’s overall shape might look like.

“During the summer of 2012 the Department became aware of the problems that Universal Credit faced. It was first alerted by concerns raised in a supplier-led review, commissioned by the Secretary of State, which reported in July.

“The Department subsequently established that the programme’s progress was stalling because there were a number of unresolved issues which had become intractable, particularly relating to the level of security needed for identity assurance and protection against fraud and error and cyber-attack.

“The Department had been previously unaware of the programme’s difficulties because its internal lines of monitoring, intervention and defence, intended to identify and mitigate such problems, were not working properly. Governance arrangements were not remotely adequate, and the Accounting Officer [Robert Devereux] discussed progress with the head of the Universal Credit programme only every two or three weeks.

“The Department had inadequate performance information to scrutinise and challenge the programme’s reports of its progress, so internal reporting arrangements did not flag up that things were amiss. The Department’s corporate finance undertook insufficient work to ensure there was an appropriate control environment in place, and the Department’s process for ministers to sign-off higher-value contracts was weak.

“The Department’s senior management had relied on ad hoc reviews, mostly conducted by external reviewers, which only provided an occasional snapshot of the programme, instead of ensuring effective internal systems were in place to monitor and challenge progress. However, during 2012 the problems surfaced more clearly as the Universal Credit team became unable to respond to recommendations made by such reviews.”

Will Universal Credit ever work?

“The Department remains uncertain about key details of its final plans. It does not know how much can be delivered online, when this will be available, and what activities will continue to require face-to-face meetings.

“ The Department also does not know what the final cost of the IT will be, or the savings the programme is expected to deliver. Nor does it know when it will close down the other benefits that Universal Credit will replace.”

The Department has a target of enrolling 184,000 claimants on Universal Credit by April 2014 and has launched limited pilot schemes.”

Says the PAC report: “The current rate of progress is significantly below target, however. Only around 2,500 claimants were registered at the time of our hearing in September, and the Department was unwilling to speculate what number will be enrolled by next April.”

In a steady state Universal Credit is expected to deal with 10 million people in about 7.5 million households, making 1.6 million changes in circumstances each month.

Security versus usability

“The Department is aware that the system must include suitable security arrangements if Universal Credit is to operate effectively and deliver its intended benefits.  However, the Department has not yet finalised such a solution, and was unable to say when two key components – those countering fraud and error and confirming claimants’ identity- would be completed.

“The Department has found it particularly hard to establish the right balance between security and usability. The development of an effective security system has been hindered by security not being integral to the design of IT components from the outset, but instead being retro-fitted into systems, and suppliers working on different assumptions and to different standards. To address this, the Department told us it has now brought security issues together in one place, with one senior official responsible for overseeing this part of the programme.”

DWP response to PAC report

A Department for Work and Pensions spokesperson told the BBC

“This report doesn’t take into account our new leadership team, or our progress on delivery,” it said. “We have already taken comprehensive action including strengthening governance, supplier management and financial controls.”

The DWP said it did not accept “the write-off figure quoted by the committee” and expected it to be substantially less”.

A spokesman for Iain Duncan Smith told the BBC that he had “every confidence” in the team now running the programme, including Mr Devereux – whose position  some newspapers have suggested is under threat.

“Both the National Audit Office and the public accounts committee acknowledged a fortress mentality within the Universal Credit programme,” he said.

“Iain was clear back in the summer about how he and the permanent secretary took action to fix those problems.”

PAC report: Universal Credit: early progress

National Audit Office report: Universal Credit: early progress

Glasgow’s “major” health IT problem – a welcome openness

By Tony Collins

On its website this morning NHS Glasgow and Clyde, Scotland’s largest health board, has published an update about IT problems that technical staff have been unable to resolve. It says:

“Despite the best efforts of our IT technical staff who have worked throughout the night we have as yet been unable to resolve the problem. We have however been able to put in place a fix which we believe will ensure that chemotherapy patients are not affected by the continued IT issue.

“Unfortunately however there will still be some patients whose planned appointments today will be affected and we are currently in the process of assessing which patients this will impact upon. As soon as this has been identified we will contact the patients direct. Emergency care services are unaffected.

“We are continuing to work to get the system back on line as soon as possible and would like to apologise again to those patients who have been inconvenienced. A further update will be issued later this morning.”

The board issued its first bulletin yesterday evening.

“NHS Greater Glasgow and Clyde experienced a major IT problem this morning. Our technical staff are working flat out resolve this. However as a result, we have had to postpone a number of operations, chemotherapy sessions and outpatient appointments.

“There was also some delay in calls to our switchboard being answered. The problem relates to our networks and the way staff can connect to some of our clinical and administrative systems.

“We can reassure patients affected that their care will be rescheduled at the earliest opportunity. We are extremely sorry for the inconvenience that this has caused and we are doing everything possible to return services to normal as quickly as possible.”

The board issued statistics on those affected.

“In total we have postponed: 288 outpatient appointments, four planned inpatient procedures, 23 day cases and 40 chemotherapy treatments.”

The board told the BBC that the problems might have affected up to 10 major hospitals.

Comment

NHS Glasgow and Clyde’s timely statements over its problems would suggest that Scotland is much more open about IT-related difficulties than any trust in England where web bulletins, when there are any after IT problems, are usually about patients who have not been affected.

Scottish Conservative health spokesman Jackson Carlaw is right to say that NHS Greater Glasgow and Clyde “has been quick to admit to a serious problem”.

Trusts in England could learn something from NHS Glasgow and Clyde about openness and sound crisis management.

Croydon trust plans Cerner go-live in secret