Category Archives: managing change

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.”


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.”


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


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”.


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.


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

MPs dig hard for truth on Universal Credit IT

By Tony Collins

“Just answer the question … please!”

Rarely has any chair of the Public Accounts Committee pleaded so frequently with a permanent secretary not go round the houses when answering questions.

Margaret Hodge’s irritation was obvious on Tuesday [9 September] at a hearing of the Committee into a National Audit Office report on the Universal Credit IT-based programme: Universal Credit: early progress.

Before the Committee was Robert Devereux, the top civil servant at the Department for Work and Pensions. Beside him was UC’s latest project director Howard Shiplee who successfully led and managed construction contracts, budgets and timelines for all permanent and temporary venues for the Olympics. He has a CBE for services to construction.

It’s unclear how much experience Shiplee has had with IT-based projects and dealing with IT suppliers, though given his success as a big projects leader and construction expert,  IT leadership experience may be unnecessary.

There were signs from the hearing that Universal Credit project is following the events that have typically preceded IT-related disasters in government, especially in the way facts were interpreted in opposing and irreconcilable ways by the project’s defenders on one side and the “independents” on the other.

The “independents”, whose criticisms of the project have been withering, include a director at the National Audit Office Max Tse who led the NAO’s inquiry into the UC programme, and Dr Norma Wood, who has held several relevant positions in recent months, first as review team leader for a UC review in February, then as Transformation Director for the UC programme “re-set” in May 2013 and then as Interim Director General for the Cabinet Office’s Major Projects Authority. She is a consultant, not a civil servant. She appeared before the PAC on Wednesday.

Another “independent” is the auditor and consultancy PWC which reported to the government on financial mismanagement on the UC project. The NAO revealed the existence of the PWC report, which Hodge said was even more damming the NAO’s. [see separate blog post.]

A possible outcome of deeply conflicting views on the success or otherwise of a big and controversial project is that truth remains beyond anyone’s grasp within the life of the project and emerges only within the scheme’s post mortem audit report.

At Tuesday’s PAC hearing, the evidence given by Devereux and Shiplee on one hand, and Wood on the other was at times conflicting.

Wood’s evidence

Wood said that one of the lessons from the Universal Credit programme so far was that it was not conceived as a business transformation but was “very IT driven”. Of the £303m that has been spent on IT so far a sizeable part will need to be written off, beyond the £34m write-off so far.

Conservative MP Richard Bacon asked her how much could eventually be written off on the IT spend. “I think it will be substantial. I could not give you a figure,” she said.

When Bacon asked if it could be more than £140m she replied: “It will be at least that I would think.”

Her answer implied that the DWP will need to write off a large part of the £162m it currently estimates its IT assets are worth, after the £303m IT spend. Hodge said the write-off could be in excess of £200m – but this was later denied by Devereux, who also denied the write-off would be at least £140m.

Wood revealed that the figure for the write-off so far was derived from information given by suppliers, after the DWP asked them to judge how much of their equipment and software would be of use.

Conservative MP Stephen Barclay asked Wood whether suppliers were assessing the usability of their own work.

“Yes they were,” replied Wood.

Barclay: “So they were marking their own homework?”

“Yes they were.”

“Does that not carry a conflict of interest?”

“Yes it does.”

“Does it concern you?”

“It did,” replied Wood. “Therefore in the review we recommended an independent investigation.”

Barclay: “Building on Mr Bacon’s point, it is highly likely that with the initial write-off, if they have been marking their homework, comes a risk that the eventual figure is going to be bigger?”

“That’s true.”

Barclay’s questioning will indicate to some that the DWP and its IT suppliers were so close it could have been difficult for the department’s officials to be objective about what they were being told.

Steady-state solution

Wood spoke of how DWP and the Major Projects Authority had designed a “steady-state solution” which was a simplified version of UC , from which a more comprehensive system could be developed.

Said Wood: “There is a steady-state solution … with business requirements, that was handed over to the SRO [senior responsible owner] on 17 May, so there is a complete design and there is a multidisciplinary team working that design through to the next level.”

She said the steady-state solution is twin-tracked. “There is a piece that designs the interactive activity with the user and with the agents, and there is a part that uses existing systems, such as the payment system and the customer information system, but there are some 32 legacy systems in between, the utility of which we did not know at the time we completed the reset on 17 May.”

The interactive part is managed by a multi-disciplinary team that involves the GDS [Government Digital Service] and used agile, with waterfall for legacy systems.

“So yes, there is a design, and it is a very good design.”

On the use of agile she said the important thing is to apply rigour and discipline as you go through those methodologies. “It is not an issue of methodology; it is an issue of the rigour and discipline that is applied to those approaches.”


Instead of a national roll-out starting in October, which was the original plan, the DWP is running “pathfinder” projects which accept only simplified claims and use limited IT without full anti-fraud measures.

Wood said: “It [the pathfinder scheme] is not hopeless. As it was currently configured there was a limit to the volume of payments it could handle because of the manual interfaces required – the manual support it required. So there is a very limited number of cases it could handle …”

Bacon asked if she would describe the pathfinder as so substantially de-scoped it was not fit for purpose.

“At the time we did the review [earlier this year] that was our conclusion.”

“ Is it correct that the pathfinder technology platform will not support UC in the future – that it is not scalable?” asked Bacon

“Unless it can handle all the functionality we have just described I fail to see how it can be scalable,” replied Wood.


Liberal Democrat MP Ian Swales said: “We have exactly the same names of suppliers failing to deliver on government contracts time after time. Poor specifications, very vague penalties involved, and a sense that they have a vested interest, almost, in failure and we are again sat around this table discussing the same sort of thing. What can be learned?

Wood replied that there are some important lessons. “One is that this is not just a procurement exercise; this is actually a contract management exercise. It is really important that one understands what the business needs to deliver. That is why I stress that this was constituted not as a business transformation programme, but as an IT programme. It is important that the business drives the IT requirements and manages the contracts accordingly.”

Is 2017 feasible?

Wood: “It is feasible to deliver the whole thing by 2017.”

Bacon pointed out that there is no approval for further spending on UC until November 2013 and only then if criteria is met. He asked Wood on what basis approval for more spending would be given. Wood said it will be based on whether the project is affordable, value for money, deliverable within timescales, and has the appropriate management place.

DWP’s evidence

Hodge complained repeatedly that the civil servants before her were not answering questions directly – perhaps a sign of how hard it can be to establish the truth when an IT-based project goes awry.

“I would be really grateful if you would answer the question,” asked Hodge when questioning Devereux about whether Universal Credit had a proper business plan, a strategy.

At another point Devereux said: “Let me try and answer these questions which have been bandied around.”

Hodge: “You do go round the houses. Just answer them directly.”

Later in the hearing:

Hodge: “What you are so good at is giving us a whole load of stuff that is completely irrelevant to what we are trying to get at. Just answer the question.”

And another occasion…

Hodge: “No just answer the question … please.”

And again …

Hodge: “What would be utterly delightful is if you simply answered the questions. Just answer the questions.”

Again …

Hodge: “I just don’t get where this is going. I am honestly trying to be fair to you today. Ask the question again Meg [Meg Hillier MP] and then see if we can get an answer.” [Hillier’s question was about why the DWP has treated Universal Credit as an IT project instead of what it actually is, a business transformation programme which changes the way people work and act rather than introduces new technology. Devereux gave no clear answer.]

An exchange about the UC’s pathfinder projects characterised the relationship between Hodge and Devereux. Critics of the pathfinders say they are pointless because the claimants are atypical, much of the claims process relies on manual work, the technology is largely without any agreed anti-fraud measures, and it cannot yet handle everyday circumstances.

Supporters of the pathfinders, particularly Devereux, say they are a useful step in assessing the behaviour of people when making claims and testing the interfaces between new technology and the DWP’s legacy systems.

Hodge: “You are not answering any of the questions Mr Devereux. I don’t mind a little bit of history and a little bit of what you want to say but answer the questions. Do you think the pilot was fit for purpose – yes or no?”

Devereux: “The pathfinder is testing useful things that we have fixed.”

Hodge: “Was it fit for purpose?”

Devereux: “It has been useful.”

“Was it fit for purpose?”

“What purpose did you have in mind?”

“No – you.”

“Ok well, for my purpose it has worked fine thank you. “

“To do what?”

“To make sure I can construct some brand new software to connect it to a –“

“On which you spent £300m …”

“To connect it to a very complicated legacy estate and then demonstrate all of those things – let me give you one example; we will not get anywhere otherwise. I have sat in front of this Committee and we have talked about the Work Programme. You have grilled me on the—

“Please don’t talk about the Work programme.”

“In that conversation—

“Please talk about the pathfinder…”

And subsequently …

“Can I really plead with you, if you can answer questions without going off on a sideline it would be really really helpful – really really helpful.”

MPs kept uninformed

Stephen Barclay put it to Devereux and Shiplee that the DWP was aware of serious UC problems in July 2013 but the public, media and Parliament were being given the impression all was well. Said Barclay: “In July you realised there were problems. In September [2013] your Department’s press office was telling Computer Weekly:

‘The IT is mostly built. It is on time and within budget.’

Barclay said in July 2013 Shiplee was asked by the chair of work and pensions select committee[Dame Anne Begg]: “So rumours that there is a large chunk of the IT that simply do not work and has been dumped are not true?”

“No,” replied Shiplee.

Barclay told Devereux and Shiplee: “Parliament seems to be getting told two different things.” He referred to the DWP’s “culture of denial”.

IT supplier reassurances

Shiplee said he has spent 12 of the 16 weeks since he started reviewing the UC project in great detail with IT suppliers.

“That is something that hasn’t been done to this level before. I have spent with experts from within DWP and with external experts and we have reviewed in detail what has been produced, what works, where it has got to. There are a number of points to make –

Barclay: “Could you clarify you wrote to the chair of the DWP committee to clarify that answer if you have done further work …”

Shiplee: “I have not concluded the work. I believe that from that work already, it is my view, supported by reports, that there is substantial utility in what has been produced… The use of agile is by itself very iterative and therefore to a certain extent it is potentially high risk.

“I wanted to look at how we could de-risk this, this utilisation of agile, and one of the ways to do that is to look at what we have already spent a great deal of money on, and whether it was usable and would actually serve to de-risk the programme…

“What I have discovered is that the Pathfinder does not represent the amount of development work that has been undertaken by suppliers. It [Pathfinder] has been heavily de-tuned from where they have actually got to.”


“Mainly around security, said Shiplee. “This is a unique piece of work. It [the DWP] is the only bank anywhere – effectively a bank – in which customers do not put money it. They simply take money out. It is therefore attractive from all sort of fraud point of view and therefore security is very important. The key element of security is personal identification. Nobody has yet found a way to do that effectively and totally online.”

Hodge: “Are you telling us that the technology developed so far is capable of being scaled up for a national roll-out?”

Shiplee: “On the basis of what I have been told and what I have seen so far, I believe it has been demonstrated that the suppliers have got the capability to scale this up. They have, for example, dealt with couples [Pathfinder system deals now only with single people.]

“The suppliers have explained where they have got to. It is very interesting. Some of the challenges we are facing now the suppliers have already faced in the past and have resolved those issues. I am trying to make sure that we use all of this to the best good and we don’t have to relearn every lesson again.”

Replaced project leaders

Devereux told of how he had replaced project leaders who , he suggested, were not solving problems but pushing ahead regardless, and were not good listeners.

“People I put in place here had experience and confidence. The challenge they had was very large and there came a point in my judgment they were no longer on top of it. There were cumulative issues to be resolved.

“When the cumulative bow wave of things that had not been resolved was being called out as not resolvable by just pushing on through, that is the point at which we decided to change, because it was also then that the point the Chair made about a good news culture within the programme was crystallising. Those two things cannot work.

“I need people who will drive things through. Howard is very good at driving things through, but the person that drives things through and does not listen to anyone at all is not going to help me at all.”


Last week James Naughtie on BBC’s R4 Today programme, R2’s Jeremy Vine, journalists at the BBC World Service and at other news services asked me whether Universal Credit was another government IT disaster. I said in essence that it was a good idea badly executed. The IT project has been dogged by an over-ambitious timetable, poor control and validation of supplier payments and a good news culture that to some extent still exists.

In past government IT disasters such as the NPfIT, C-NOMIS and the Rural Payments Agency’s Single Payment Scheme, ministers were not given bad news until it could be hidden no longer. Senior officials gave ministers only good news because that’s what they wanted to hear.


Civil servants, perhaps, wanted to give ministers credible “deniability”. The less ministers knew of serious problems the more credibly they could deny in public the existence of them.

Thank goodness, then, for the scrutiny of the National Audit Office and the Public Accounts Committee on Universal Credit. Some important truths have now come to the surface. With the NAO and the Cabinet Office’s Major Projects Authority rightly breathing down its neck, the DWP is doing all it can to put the project back on track. But the DWP is still marred by a good news culture. Even after the NAO and PWC reports the DWP’s press office is still talking of the Universal Credit project as a success.

A DWP spokesperson told the Guardian this week:

“The IT for universal credit is up and running well in the early rollout of the new benefit.”

And Iain Duncan Smith and his senior officials appear to be dismissing the NAO’s report as historic – which it is to some extent – but much of it is also forward-looking.

Duncan Smith, Devereux and Shiplee are all very positive about the future of the project. But would it be better if they were genuinely sceptical, as would be a private sector board that was confronting a big and challenging IT-enabled change project?

Politics and IT don’t go well together and never have. There is every chance Universal Credit will follow what has happened with the last huge benefit computerisation project, Operational Strategy in the 1980s. It eventually worked but in a much more fragmented way than expected. It was several years late, cost several times the original estimate, and did not make the savings predicted. The likely fate of Universal Credit IT?

Learn from failure: the key lesson that Universal Credit should take from agile [Institute for Government]


Whitehall’s legacy ICT here to stay?

By Tony Collins

Well done to the National Audit Office for reporting in detail on some of central government’s legacy ICT. It’s clear the NAO found the research difficult, in part because some of the system performance information it was seeking had to come from suppliers because it was not held by departments.

This gives a hint of the extent to which departments such as HMRC and the Department for Work and Pensions are in the hands of IT companies.

The NAO report Managing the risks of legacy ICT to public service delivery suggests, but doesn’t say explicitly, that legacy ICT contracts are here to stay.

Attempts by the Cabinet Office to make large cuts in the costs of central government IT will be thwarted to some extent by the reliance of departments on big suppliers and big systems. Says the NAO

“A particular risk is that departments dependent on legacy ICT will find it more challenging to achieve the business transformation envisaged by the Government in its digital strategy.”

[But there appears to be little anyone can do about it.]

The NAO report says that major change that involves underlying ICT will “create a new set of risks which will increase as the degree of system change increases”.

HMRC and the Department for Work and Pensions still rely on Fujitsu mainframes with the VME operating system, which was originally developed in the 1970s to run ICL mainframes.

These are some of the NAO’s other findings:

- “We estimate that in 2011-12 at least £480bn of the government’s operating revenues and at least £210bn of non-staff expenditure such as pensions and entitlements were reliant to some extent on legacy ICT.”

- “Managing the risk of legacy ICT has also prevented some government bodies from reducing their dependency on a few large ICT suppliers, reducing competition and increasing the risk to value for money.”

- “Departments with the largest legacy ICT estates have found it challenging to achieve value for money and improve customer service. For example:

• In 2009, HMRC described its 600 systems as “complex, ageing and costly”… By the end of 2011-12, HMRC had switched off 65 legacy applications…”

• Within DWP, we have previously found that administrative errors within the benefits system were, in part, caused by poor communication between its network of some 140 systems.  However, the Department is now rationalising its ICT estate with a view to reducing the number of ICT applications by 2017.

- “The administration cost involved in using legacy ICT can be considerable. The cost of operating HMRC’s VAT collection service is £430m per annum and the cost of the DWP pension payment service is £385m per annum.”

- Eight key legacy ICT risks are:

• Disruption to service continuity. Legacy ICT infrastructure or applications are prone to instability due to failing components, disrupting the overall service. Failure of the legacy ICT may be more difficult to rectify due to the complexity or shortage of components.

• Security vulnerabilities. Older systems may be unsupported by their suppliers, meaning the software no longer receives bug fixes or patches that address security weaknesses. The system may not therefore be able to adapt to cyber threats.

• Vendor lock-in. Legacy ICT systems are often bespoke and have developed more complexity over time to the extent that only the original supplier will have the knowledge to support them.

• Skills gaps. Specific skills in old programming languages may be required that are not widely available. Staff working with legacy ICT over a long period will have often developed a depth of understanding of the system that is difficult to replace.

• Manual workarounds. More manual processing can be required due to the lack of functionality within the system or its inability to interface with other systems. Examples of workarounds include performing detailed calculations outside the system on spreadsheets; re-entering data on to other systems or having to manually check for processing and input errors.

• Limited adaptability. New business requirements may not be supported by the legacy ICT. These may include requirements such as the provision of digital channels, the provision of real-time information and not being able to process transactions in a new way.

• Hidden costs. The true cost of operating the system may not be known. Workarounds to the system and the cost of the additional manual processes may not be recorded. By not having all the information available at the right time, legacy ICT may not be able to provide real-time performance information which could lead to poor decision-making.

• Business change. Due to the complexity or the limited availability of the skills required, change may be difficult, lengthy to implement and costly. This makes it difficult for the business to be responsive and changes may have to be prioritised.

-  “A potential ninth risk is that legacy ICT may be less energy efficient than modern systems.”


-“ The legacy ICT we reviewed in DWP and HMRC both have origins that predate the internet and use technology based on Fujitsu’s Virtual Machine Environment (VME) operating system. Some of the applications using VME process the data in batches. Jobs are set serially such as checking the credibility of the amounts declared on VAT returns. Such a mode of operation would be incompatible with a fully digital service and so these applications may require replacement or modification. A fully digital service would then enable online end-to-end processes with systems that respond in real-time.

- “The current supplier of VME, Fujitsu, has announced that it will support the current version of VME until 2020. After this, organisations have the choice of moving to alternatives or extending VME applications by using Fujitsu’s planned managed service.”

Can legacy ICT be replaced?

-  “The scale and importance of both services, combined with the materiality of the public money they administer, have deterred both departments from replacing these systems. Neither department [HMRC or DWP] had considered replacing their legacy ICT with a completely new end-to-end service. Instead they built new functionality around existing processes or systems, replacing an existing paper-based system

“In both organisations we found that the ICT and business functions could have worked more closely together to develop a longer-term strategy for a complete end-to-end service. In addition, we found a lack of data that would enable management to assess the full cost of service and performance.”

Supplier lock-in?

- “HMRC has found it challenging achieving a ‘whole customer’ view, as its customer data is stored across a number of legacy ICT systems. Perpetuating the use of older systems creates challenges for sustaining the right technical skills, for improving customer service.”

-  “The scale, age and complexity of DWP and HMRC legacy ICT has meant that only a small number of large ICT suppliers are able to support them as they are far too complex for a small- or medium-sized business to maintain. This will be an important consideration when preparing for contract end points, even more than the age of the technology. The government has recognised the issue of vendor lock-in by announcing plans for the creation of common ICT infrastructure. Through greater separation of the business application from the physical hardware, the aim is to reduce reliance on individual vendors.”

Lack of data?

- The average number of major faults in the system is the number logged as severity 1 or 2 meaning that 10 per cent of users are unable to access the service or there is a failure of overnight processing or an inability to produce printed output for the public. DWP monitors the performance of its system on a four- or five-week period rather than calendar months. It was unable to provide us with detailed performance reports for the period under review but obtained the average quoted above from the supplier.

-  “Determining whether the management of legacy ICT within DWP and HMRC incurs hidden costs has proved challenging. DWP’s financial data was comprehensive but it lacked effective measures to assess overall service performance, quality of process activity and the reliability of its legacy ICT. This will make it difficult for DWP to robustly plan for the longer term.”

- “HMRC was still providing us with data in the very late stages of finalising this report and several months after it had originally been requested. For financial data, the late provision of data has prevented us from verifying that costs are on a consistent basis with other departments and forming clear conclusions. For performance information, we saw indications that HMRC has a good set of data that it uses in its day-to-day management. However, we were unable to fully confirm this finding or obtain sufficient data to allow us to conclude on the performance of the VAT service. The challenges we faced in obtaining data from HMRC suggest that it may face challenges in planning for the longer term robustly.”

NAO report: Managing the risks of ICT legacy to public service delivery

Universal Credit IT working well claims DWP

By Tony Collins

Staff in job centres working on Universal Credit system are writing jobseekers’ personal information down on paper because their IT systems are so “clunky and cumbersome”, Dame Anne Begg, chair of the Commons’ Work and Pensions Committee, told Civil Service World.

“When we visited the Bolton Jobcentre Plus the IT system seemed clunky and cumbersome,” Begg said. Staff making appointments for UC applicants at the Bolton pilot scheme “had to write out some of the [jobseekers’] personal details, just to transfer them from one computer system to another. That’s something that we would have expected to be ironed out.”

The handwriting of jobseekers’ details “could lead to transposing errors”, she said.  Further, the Universal Credit IT system doesn’t allow jobseekers to save their data midway through an online application, Begg said.  She warned that this will penalise those who don’t own computers, who will have to remember to take all of their personal details in one batch to open access computers such as those at local libraries.

But a spokesperson for the Department for Work and Pensions said:

“The IT supporting Universal Credit is working well and the vast majority of people are claiming online. Making a claim to Universal Credit in one session… helps ensure the security of a claimant’s information.”

Last month a leaked survey of staff at the Department of Work and Pensions who are working on Universal Credit programme found dishonesty, secrecy, poor communications, inadequate leadership and low morale.

Computer Weekly reports that the DWP placed just 0.5% of its Universal Credit IT spending directly with SMEs, and that the department's major suppliers – Accenture, Atos, BT, IBM, Capita, HP and SCC – subcontracted little to SMEs. "The Universal Credit supply chain flowed downstream mostly to multinational technology suppliers such as Oracle, Nuance, Genband and RedHat." Most Universal Credit IT spending has gone to Accenture, IBM and HP: £57m, £41m and £34m respectively, between January 2011 and May 2013.]


While keeping secret internal reports on the Universal Credit IT project, and while all the signs are that Universal Credit’s IT is in trouble – it’s easier to handle claims at least in part by hand – the DWP’s senior officials, spokespeople and Iain Duncan Smith are telling the public and Parliament that all is well.

Perhaps the next logical step is that they come onto the public stage in costume to tell us nursery tales, while playing stock characters who sing, dance, and perform skits. Maybe then they’ll be more believable.

The story of Southwest One

By Tony Collins

Dave Orr worked in a variety of IT and project management roles for Somerset County Council and retired in 2010. For years he has campaigned with extraordinary tenacity to bring to the surface the truth over an unusual joint venture between IBM, Somerset County Council, a local borough council and the local police force.

Now he has written an account of the joint venture and the lessons. It is published on the website of procurement expert Peter Smith.

Orr questions whether Southwest One was ever a good idea, since it was formed in 2007.

The deal has not made the savings intended, a SAP implementation went awry, the contract has been mired in political controversy and criticism, Southwest One has repeatedly lost money, and many of the transferred staff and services have returned to the county council, and some services returned to the borough council. IBM and the county council have ended up in a legal dispute that cost the county council £5.5m to settle. Southwest One was not exactly the partnership it set out to be.

The contract may show how an outsourcing deal that doesn’t have the support of the staff being transferred is flawed fundamentally from the start (which is one reason few people will be surprised if a 10-year £320m deal for Capita to run Barnet Council’s new customer service organisation [NSCSO]  ends in tears).

These are some of Orr’s points:

-  Like other light-touch regulators, the Audit Commission repeatedly gave Southwest One positive reports, without ever qualifying the accounts, even as problems with SAP implementation mounted in 2009 and procurement savings were not being made in line with forecasts.

 - The contract called for transformation based upon ‘world-class technologies’, yet all of the IT Service was placed into Southwest One with no IT expertise back in the Somerset County client (until after a poor SAP implementation in 2009). Was the lack of retained IT skills in the Somerset County client behind the formal acceptance of a badly configured SAP implementation?

- Large scale outsourcing over a long contract of 10 years or more requires an ability to foresee the future that is simply not possible to capture in a fixed contract. In a 10-year contract, there will be three changes of national government and three changes of local government. That is a great deal of unpredictable change to cope with via a fixed, long-term contract.

- Local Government will always be at a disadvantage in resources and skills, to a large multi-national contractor like IBM, when it comes to negotiating, letting and managing a complex multi-service contract.

- What was the culture of Southwest One (75% owned by IBM)? Was it private, public or a hybrid? The management culture remained firmly IBM, yet the councils and police workforces were seconded and remained equally firmly public sector rooted. There is such a thing as a public service ethos. In fact, Southwest One was run like a mini-IBM based upon global divisions, complete with IBM standard structures and processes. Southwest One seconded employees were not allowed anything like a full access to IBM internal systems, thus creating additional complexity, as “real” IBM employees relied entirely upon on-line systems.

-  Mixed teams in a single shared service were hard to amalgamate. This meant the IBM managers of Southwest One never really gained the sort of command & control of the multi-tier workforces that their bonus-oriented model needs to function. “I doubt that IBM would ever again contemplate the seconded staff model over the TUPE transfer model,” says Orr.

- Somerset County Council ran with a “thin” client management team that, in Orr’s view, did not have sufficient expertise or enough staff resources to effectively manage this complex contract with IBM. The councils relied upon definitions of “partnership” that meant one thing to the councils’ side and quite another thing to IBM, says Orr.

- In Southwest One, Somerset County Council handed their entire IT Service over lock, stock and barrel. “Can you really consider IT as wholly a ‘back office’ service? Many successful private Companies see IT as a strategic service to be kept under their own control.”

- The real savings might have been found in optimising processes in big departments (like Social Care, Education, Highways) that lay outside of Southwest One’s reach. “The focus on IT rather than service processes was another flaw in the model.”

Orr  concludes that nobody who played a major part in the Southwest deal has in any way been held to account for what has gone wrong.

Southwest One – the complete story from Dave Orr

Hospitals accuse Capita of failings

By Tony Collins

A nine-page letter written on behalf of eight health trusts is said to criticise Capita for “persistent minor failings” in managing payroll and other work formerly carried out by their human resources departments, says the Liverpool Post which has a copy of the letter.

The failings listed in the letter are said to include:

- overpaying staff, with trusts having problems recovering the monies paid out;

- breaching data protection by sending staff personal details to other employees;

- paying someone due to start work two months’ salary, despite their dropping out of the recruitment process;

 - delays in pre- employment checks, leading to highly valuable candidates withdrawing their application for a job;

- losing sensitive and confidential information

The Post says the letter threatens terminating the contract. “Health trusts stressed, unless they sort the problems out, they will not only deduct the cost incurred to them out of Capita’s payment but continued failure will result in them terminating its contract,” said the paper.

The letter was said to have been written by Debbie Fryer, director of human resources at Aintree UniversityHospitals, Fazakerley, on behalf of several trusts within the North Mersey Framework that have contracted out their payroll and human resources work to Capita.

It represents Fazakerley Hospital, Alder Hey Children’s Hospital, the mental health trust Mersey Care NHS Trust, Liverpool Community Health NHS Trust, Liverpool Women’s Hospital, Royal Liverpool and Broadgreen hospitals, Wirral’s specialist Clatterbridge Cancer Centre and the specialist brain hospital The Walton Centre.

In 2011 the Capita Group announced  that it had been appointed as preferred supplier by a NHS North Mersey collaboration to deliver HR, payroll and recruitment services for up to 12 NHS trusts in Mersey.

The seven-year contract was worth up to £27m, with an option to extend for a further three years.  The contract was  expected to involve the TUPE transfer of up to 150 employees to Capita and the set up of new shared service centre based in Liverpool.

Capita said at the time it was first time NHS trusts had come together in the way they did to collectively outsource their HR, payroll and recruitment functions. 

The Liverpool Post says the letter expresses concern that Capita displayed a “laissez faire” attitude to personal data which had the potential to be “extremely damaging” to the trusts’ reputations and employee morale.

Trusts were said to have had difficulties recovering sums overpaid to employees, particularly former employees. Examples of lost documentation were said to be “almost too numerous to mention”, with documents seemingly disappearing into a “black hole”.

Ms Fryer is said to have been alarmed at some of the content of a report on Capita by auditors Grant Thornton in May. The letter sought concrete proposals on how Capita was going to resolve the situation.

A spokesman for Capita told the Post: “Capita is under contract with 10 trusts in the north west of England as a part of a framework agreement to deliver transactional HR services, including payroll and recruitment.

“As a part of this contract, Capita has been consolidating each trust’s individual HR and recruitment processes moving these to one common process applicable to all trusts under the framework.

“The simpler, improved process will make HR services easier and quicker for staff to use, lightening the administrative burden so trusts can focus on patient care.

“In order to implement these valuable changes, Capita and the trusts are currently undergoing a period of transformation as individual, often paper-based, services move to this common process.

“During this period, some challenges have arisen for both the trusts and Capita. However, Capita is working closely with the trusts involved to overcome those issues identified in order to deliver an enhanced service for trusts and their staff.”

Liverpool Post article