What Google looks for when hiring staff … traits Whitehall’s culture abhors?

By Tony Collins

The contrast between what Google looks for when hiring staff and what Whitehall looks for when making some of its top appointments, could give clues as to why many government IT-based projects and programmes fail.

First, the strengths Google looks for.  These were set out yesterday on BBC R4 by Laszlo Bock,  human resources chief at Google for 10 years.

Google was named “Best Company to Work For” more than 30 times around the world and received over 100 awards as a top employer during Bock’s time.

In 2010, he was named “Human Resources Executive of the Year”. Under him, Google changed its clunky, arduous recruitment processes that relied on gimmicks like maths puzzles to those that helped the company grow to about 60,000 employees in less than two decades.

In 2015 he  published his first book, The New York Times bestseller Work Rules!, a practical guide to help people find meaning in work and improve the way they live and lead. He resigned from Google in 2016.

On the BBC  “Analysis” programme on Monday evening – which looked at intelligence and talent and what they mean, if anything, in job interviews –  Bock said the least important attribute Google screens for is whether someone knows about the job they are taking on. Crunching the data on successful hiring led Google instead to look for these characteristics:

  • Humility
  • Conscientiousness
  • A sense of responsibility not to quit until the job is done well
  • Comfort with ambiguity
  • A sense of fun
  • Courage

Why courage?

Bock said,

“It’s about the importance of people being able to raise their voices in organisations. One of the things that happens is, when organisations get large, people stop raising their voices and really bad things happen as a result. That’s where you get whistleblowing, insider trading, all kinds of things.

“Human beings are evolved, biologically, as social, hierarchy-seeking animals. We tend to conform. So courage is important because the really innovative, creative stuff comes from ‘I got this crazy idea’ and the bad problems get flagged by people who are willing to raise their hand and say ‘I don’t think this is a good thing to do’.

“Without that you can’t do great things.”

Comment

It’s too easy to generalise about the hiring and appointment of senior civil servants. But it’s possible to understand a little about the hiring culture within Whitehall’s biggest department, the Department for Work and Pensions.

An insight into DWP culture and thinking can be gleaned from the many Lever arch folders of documents filed by the DWP as part of an FOI case in which it spent several years fighting to stop the release of documents about the Universal Credit IT programme.

The documents include DWP witness statements on the “harm” that would be caused if the IT documents in question were published.

The judge in the case, Chris Ryan, challenged most of the DWP’s arguments.

In one of his rulings, Judge Ryan described the DWP’s claims as:

  • alarming and surprising
  • overstated
  • unconvincing
  • close to fanciful

He said that public confidence in the Universal Credit IT programme had been maintained for some time “on a false basis”; and he raised the possibility that an “unhealthily collegiate relationship had developed” between the DWP and private sector IT suppliers. [Campaign4Change will publish a separate blog post on this ruling in the next few days.]

As well as the insight into DWP culture that one can gain from the FOI case, it’s possible to gauge culture and thinking within Whitehall departments from the talented, free-thinking IT individualists who have joined the top layer of the civil service, quit and returned to the private sector.

It would be invidious to pick out some names as there are so many.

What all this suggests is that Whitehall’s culture appreciates conformity and consensus and shuns boat-rocking.

When top IT professionals who joined HMRC and the DWP spoke publicly at conferences about institutional problems that needed to be tackled, mandarins reacted quickly – and such disclosures were never repeated.

And after a leak to the Guardian about the results of a DWP staff survey of morale on the Universal Credit IT programme, the department launched a formal leak inquiry headed by a senior member of the security services.

At the same time, Universal Credit IT programme documents were no longer emailed but transferred around in taxis.

This bout of nervous introspection (the judge described the DWP’s arguments in the FOI case as “defensive”) when taken together with what else we know, indicate that Whitehall’s culture is insular, distrustful and inimical to open challenge and problem-solving (though there are some within the senior Whitehall ranks who successfully defy that culture).

When Bock talks of conformity being a danger within large organisations he would not have had the DWP in mind – but he aptly describes its culture.

When he speaks about the “importance of people being able to raise their voices in organisations” he was probably unaware of the extent to which Whitehall culture abhors raised voices.

As Bock says, when people don’t raise their voices “really bad things happen as a result”. Perhaps the lack of internal challenge was one reason the NHS IT programme – NPfIT – lost billions of pounds, and the DWP’s Universal Credit programme went badly awry for several years.

When Bock says the “really innovative, creative stuff comes from ‘I got this crazy idea’, he could have been describing the culture of the Government Digital Service. But that refreshing GDS culture is being slowly choked by the conservatism of traditional Whitehall departments.

As Bock says, “the bad problems get flagged by people who are willing to raise their hand and say ‘I don’t think this is a good thing to do’.”  But bad problems are things senior civil servants avoid talking about, even internally. A Disneyland”good news” culture pervades central departments.

A National Audit Office report on the Universal Credit programme referred to a “fortress mentality” within the DWP.

Maybe the consensus-seeking John Manzoni, head of the civil service, and his colleague Sir Jeremy Heywood, Cabinet Secretary, could seek to employ Bock as an adviser on appointments and recruitment.

Bock’s brief? To turn around the senior civil service’s culture of conformity, groupthink, denial, selective use of “good news” facts and a lack of open challenge.

Recognising the destructiveness within a big organisation of having the wrong culture – as Bock does – could be the start of a genuine Whitehall transformation.

BBC R4 “Analysis” on talent, intelligence and recruitment

Laszlo Bock steps down

Whitehall’s outsourcing of IT a “bad mistake” – and other Universal Credit lessons – by ex-DWP minister

By Tony Collins

Lord Freud, former Conservative minister at the Department for Work and Pensions – who is described as the “architect” of Universal Credit – said yesterday that outsourcing IT across government had been a “bad mistake”.

He announced in December 2016 that was retiring from government. Having been the minister for welfare reform who oversaw the Universal Credit programme, Lord Freud yesterday went before the Work and Pensions Committee to answer questions on the troubled scheme.

He said,

“The implementation was harder than I had expected. Maybe that was my own naivety. What I didn’t know, and I don’t think anyone knew, was how bad a mistake it had been for all of government to have sent out their IT.

“It happened in the 1990s and early 2000s. You went to these big firms to build your IT. I think that was a most fundamental mistake, right across government and probably across government in the western world…

We talk about IT as something separate but it isn’t. It is part of your operating system. It’s a tool within a much better system. If you get rid of it, and lose control of it, you don’t know how to build these systems.

“So we had an IT department but it was actually an IT commissioning department. It didn’t know how to do the IT.

“What we actually discovered through the (UC) process was that you had to bring the IT back on board. The department has been rebuilding itself in order to do that. That is a massive job.”

But didn’t DWP civil servants make it clear at the outset that there wasn’t the in-house capability to build Universal Credit?

“The civil service thought it had the capacity because it could commission the big firms – the HPs and the IBMs – to do it. They did not see the problem, and government as a whole did not see the problem of doing it.

“It’s only when you get into building something big you discover what a problem that was…”

Accountability needed

But it was known at the launch of Universal Credit that government IT projects had a history of going wrong. Why hadn’t people [the DWP] learnt those lessons?

“I agree with you. People have found it very hard to work out what was the problem… you need someone doing it who is accountable. But when you commission out, you don’t have that process.

“You need a lot of continuity and that’s not something in our governance process. Ministers turn over very regularly and more importantly civil servants tend to turn over rather regularly because of the pay restrictions – they only get more pay when they are promoted – so there is a two-year promotion round for good people.

“Effectively we had a programme that had been built outside, or with a lot of companies helping us build it.”

Lord Freud explained differences between the two Universal Credit systems being rolled out.

First there is the “live” system [built at a cost of hundreds of millions of pounds that interfaces with legacy benefit systems but is not interactive beyond the initial application form].

The DWP is also rolling out in some pilot areas such as Croydon a “full system” [built at a cost of less than £10m, run on agile principles and is interactive beyond the initial application form].

Lord Freud said,

“The difference between the two is that the live system has all of the essential features of Universal Credit – you get paid an amount at a certain time – but interaction with the system after the initial application is through the telephone or through the post.

“The interactive [“full”] system has the features of Universal Credit but interaction with it is much faster because it’s on the internet. That’s the difference…

“How would I have done it in retrospect?

“The other thing I have discovered about big organisations that I hadn’t understood was it’s very difficult for them to deal with something that’s purely conceptual.

“You need something on the ground. What you should do is get something on the ground quickly – small, maybe imperfect – but the organisation can start coalescing around it, understand it, and start working it.

“Oddly, not having an all-singing, all-dancing system that is now going out, was essential for the organisation to understand what it had and how to adapt it. The IT is only a very small element. Most of the work is around your operations and organisation and how you apply it.

“The second thing we introduced in the 2013 reset was “test and learn”. It’s a phrase but what it means is that you have a system you understand and then test and test, instead of going out with a big system at once. You test all the elements because it’s impossible to envisage how something as big (as Universal Credit) unless you do it like that.

Lessons for government as a whole?

“It was a mistake putting IT out. You have to bring it back in. It’s quite hard to bring it back in because the image of government with the IT industry is not great so you have to set up an atmosphere of getting really good people in, so it’s an attractive place to work; you have to pay them appropriately.

“Our pay scales are not representative of what happens in some of these industries.

Scarce skills

“There are three areas of specialisation that government finds it very hard to buy: various bits of IT, running contracts and project management. Those are three really scarce skills in our economy. We need in government to pay for those specialisms if we are to do big projects.”

Other lessons?

“There’s an odd structure which I don’t quite believe in any more, which is the relationship between the politician – the minister – and the civil service.

“The concept is that the politicians decide what their objectives are and the civil service delivers it. I don’t believe that you can divide policy and implementation in that way. That’s a very big issue because our whole government is built up with that concept and has been for more than 100 years.”

Where does project management fit?

“In theory the civil service produces the project management but it’s an odd circumstance. It didn’t quite happen with Universal Credit. In my first five years I had no fewer than six senior responsible owners and six project managers.

“You can imagine what that was like with something as complicated as Universal Credit when the senior people hadn’t had the time to understand what it was they were dealing with; and what that implied for the minister – me – in terms of holding that together.”

Lord Freud suggested that he was acting as the permanent project manager although he had his normal ministerial duties as well – including being the government’s spokesman in the House of Lords on welfare reform matters.

“As a minister you don’t have time to do project manage a big project. I was sending teams out to make sure we were on top of particular things, which were then reincorporated into the whole process. But it was a very difficult time as we built the department into a capability to do this. There is now a very capable team doing it.”

Comment:

Two of the questions raised by Lord Freud’s comments are: If outsourcing IT is now considered such a bad idea for central government, why is it councils continue to outsource IT?

Would it be better for taxpayers in the long run if the Department for Communities and Local Government intervened to stop such deals going ahead?

Lord Freud’s evidence on Universal Credit programme in full

 

 

 

Southwest One – a positive postscript

By Tony Collins

somerset county council2IBM-led Southwest One has had a mostly bad press since it was set up in 2007. But the story has a positive postscript.

Officials at Somerset County Council now understand what has long been obvious to ICT professionals: that the bulk of an organisation’s savings come from changing the way people work – and less from the ICT itself.

Now that Somerset County Council has the job of running its own IT again – its IT-based relationship with Southwest One ended prematurely in December 2016 – the council’s officials have realised that technology is not an end in itself but an “enabler” of headcount reductions and improvements in productivity.

A 2017 paper by the county council’s “Programme Management Office”  says the council has begun a “technology and people programme” to “contribute to savings via headcount reduction by improving organisational productivity and process efficiency using technology as the key enabler”.

Outsourcing IT a “bad mistake” 

It was in 2007 that Somerset County Council and IBM launched a joint venture, Southwest One. The new company took over the IT staff and some services from the council.

In the nine years since then the council has concluded that outsourcing ICT – thereby separating it from the council’s general operations – was not a good idea.

The same message – that IT is too integral and important to an organisation  to be outsourced – has also reached Whitehall’s biggest department, the Department for Work and Pensions.

Yesterday (8 February 2017) Lord Freud,  who was the Conservative minister in charge of Universal Credit at the Department for Work and Pensions, told MPs that outsourcing IT across government had proved to be a “bad idea”.  He said,

“What I didn’t know, and I don’t think anyone knew, was how bad a mistake it had been for all of government to have sent out their IT…

“You went to these big firms to build your IT. I think that was a most fundamental mistake, right across government  and probably across government in the western world …

” We talk about IT as something separate but it isn’t. It is part of your operating system. It’s a tool within a much better system. If you get rid of it, and lose control of it, you don’t know how to build these systems.

” So we had an IT department but it was actually an IT commissioning department. It didn’t know how to do the IT.

“What we actually discovered through the (Universal Credit) process was that you had to bring the IT back on board. The department has been rebuilding itself in order to do that. That is a massive job.”

Task facing Somerset officials

Somerset County Council says in its paper that the council now suffers from what it describes as:

  • Duplicated effort
  • Inefficient business processes
  • A reliance on traditional ways of working (paper-based and meeting-focused).
  • Technology that is not sufficient to meet business needs
  • Inadequate data extraction that does not support evidence based decision making.
  • “Significant under-investment in IT”.

To help tackle these problems the council says it needs a shift in culture. This would enable the workforce to change the way it works.  

From January 2017 to 2021, the council plans “organisation and people-led transformational change focused on opportunities arising from targeted systems review outcomes”.

The council’s officers hope this will lead to

  • Less unproductive time in travelling and  attending some statutory duties such as court proceedings.
  • Fewer meetings.
  • Reduced management time because of fewer people to manage e.g. supervision, appraisal, performance and sickness.
  • Reduced infrastructure spend because fewer people will mean cuts in building and office costs, and IT equipment. Also less training would be required.
  • Reduction in business support process and roles.
  • Reduction in hard copy file storage and retention.

 The council has discovered that it could, for instance, with changes in working practices supported by the right technology,  conduct the same number of social services assessments with fewer front- line social workers or increase the level of assessments with the same number of staff.

Southwest One continues to provide outsourced services to Avon and Somerset Police. The contract expires next year.

Comment

Somerset County Council is taking a bold, almost private sector approach to IT.

Its paper on “technology and people” says in essence that the council cannot  save much money by IT change alone.

Genuine savings are to be found in changing ways of working and thus reducing headcount. This will require very close working – and agreement – between IT and the business end-users within the council.

It is an innovative approach for a council.

The downside is that there are major financial risks, such as a big upfront spend with Microsoft that may or may not more than pay for itself.

Does outsourcing IT ever make sense?

Somerset County Council is not an international organisation like BP where outsourcing and standardising IT across many countries can make sense.

The wider implication of Somerset’s experience – and the experience of the Department for Work and Pensions – is that outsourcing IT in the public sector is rarely a good idea.

Thank you to Dave Orr, who worked for Somerset County Council as an IT analyst and who has, since the Southwest One contract was signed in 2007, campaigned for more openness over the implications of the deal.

He has been more effective than any Somerset councillor in holding to account the county council, Taunton Deane Borough Council and Avon and Somerset Police, over the Southwest One deal.  He alerted Campaign4Change to Somerset’s “Technology and People Programme” Somerset paper.

One of Orr’s recent discoveries is that the council’s IT assets at the start of the Southwest One contract were worth about £8m and at hand-back in December 2016 were worth just £0.32m, despite various technology refreshes.

Somerset County Council’s “Technology and People Programme” paper

Whitehall’s outsourcing IT a “bad mistake” – and other Universal Credit lessons, by a former DWP minister

Birmingham Council to “close down” contract with Capita when it ends in 2021

By Tony Collins

Birmingham City Council has said in a job advert that it plans to “close down” its joint venture contract with Capita when it expires in 2021.

The advert was discovered by Government Computing which has reported the job requirements in detail.

Capita and Birmingham City Council have one of the largest and longest IT-based outsourcing contracts in the public sector.

It began in 2006 when the council and Capita set up a joint venture “Service Birmingham”. The council has spent about £85m to £120m a year on the contract which puts the total cost of the deal so far at more than £1bn.

Government Computing reports that the council is seeking an assistant director ICT and digital services and CIO role. The job will include a task to “oversee the effective closedown of the current Service Birmingham ICT contract”.

This suggests the council is unlikely to renew the existing contract. It could decide to sign a new outsourcing deal but the signs so far are that the council will bring services in-house in 2021.

The council says in the job advert it wants to move to an “increasingly agile state of continuous business transformation”.

Nigel Kletz, director of commissioning and procurement for Birmingham City Council, told Government Computing,  “The current Service Birmingham contract has four years still to run (until 2021), so this role will lead the implementation of the ICT and digital strategy, which includes developing a transition programme to identify and then implement ICT delivery options going forward.

“Decisions on how ICT support is provided from 2021 onwards are yet to be taken.”

Capita did not add to the council’s statement.

Alan Mo, research director at public sector analysis group Kable, is quoted in Government Computing as saying,

“When it comes to ICT, Birmingham is the largest spending council in the UK. Given what’s at stake, we cannot over emphasise the importance of early planning…

“As we know, Service Birmingham has been under a huge amount of scrutiny over the past few years. Given the trends in local government, it would not surprise us if Birmingham prefers to go down the in-sourcing path; the council has already opted to take back contact centre services.”

Projected savings of “£1bn” 

Service Birmingham lists on its website some of the benefits from the joint venture.

  • Projected cost savings of £1bn back to the Council over the initial 10-year term, for reinvestment in services
  • £2m investment in a new server estate
  • Rationalising 550 applications to 150
  • Consolidated 7 service desks into 2
  • 500% improvement in e-mail speed
  • Help desk calls answered within 20 seconds increased from 40% to nearly 90%

Service Birmingham provides Birmingham City Council’s IT, along with a council tax and business rates administration service. The council has discussed taking back in-house the council tax  element of the contract. 

Capita has run into trouble on some of its major contracts, including one with the NHS to supply services to GPs.

Comment

It appears that Capita has served its purpose and put the council into a position where it can take back ICT services now that are in a better state than they were  at the start of the contract 2006.

Austerity is the enemy of such large public sector IT-based outsourcing contracts.  When councils can afford to spend huge sums – via monthly, quarterly and annual service charges – on so-called “transformation”, all may be well for such deals.

Their high costs can be publicly justified on the basis of routine annual efficiency “savings” which do not by law have to be verified.

The downfall for such deals comes when councils have to make large savings that may go well beyond the numbers that go into press releases. It’s known that Birmingham City Council has been in almost continuous negotiation to reduce the annual sums paid to Capita.

Capita is not a charity. How can it continue to transform ICT and other services, pay the increasing salaries of 200 more people than were seconded from the council in 2006, accept large reductions in its service changes and still make a reasonable profit?

It makes economic sense, if Birmingham needs to pay much less for IT, to take back the service.

It’s a pity that austerity has such force in local government but not in central government where IT profligacy is commonplace.

Job spec for senior Birmingham IT post looks towards end of Service Birmingham ICT deal – Government Computing

 

Can Birmingham City Council afford this jargon-laden Big Data project?

By Tony Collins

Birmingham council’s “Big Data Corridor” commits multiple offences against the English language. Could its jargon-heavy justifications threaten the usefulness of the project?

Birmingham City Council is running a budget deficit expected to be £49m in 2016/17. That hasn’t stopped it from pushing forward with plans to invest in a “Big Data Corridor” that has left at least one leading councillor confused as to its purpose.

Councillor Jon Hunt, leader of he Lib-Dems on the Labour-run council,  told a cabinet meeting that the project was “potentially exciting” and he thanked Aston University for its involvement but he added,

“I was a bit confused about the purpose of it.”

Birmingham City Council will be contributing hundreds of thousands of pounds towards the research project – money that Hunt said the council cannot afford.

He said Birmingham City Council may be best placed as an “enabler” of such projects rather than “putting in money it doesn’t have”.

A report to the council’s cabinet said,

“The proposed Big Data Corridor (BDC) project at a total cost of £2.568m will support Small/Medium Enterprises (SME’s) to understand the benefits of using data to design new services and products that will respond to specific challenges in East Birmingham, as a demonstrator.”

Quite what that means is unclear in the report; and leading councillors gave no direct responses to Hunt’s points about the unclear purpose of the project and  whether the council can afford it.

Birmingham Council says the Big Data Corridor is a “new initiative led by Birmingham City Council in partnership with Aston University, Future Cities Catapult, Centro, Telensa, Innovation Birmingham, local SMEs and community groups of the Eastern Corridor Smart Demonstrator.

The project is part funded by its participants, including Birmingham council, and the European Union’s European Regional Development Fund.

A report to the council’s cabinet said the project would “address specific challenges such as creating a healthy happy city”.

Comment

Birmingham City Council’s Big Data Corridor may be a fun research project to work on – but what’s its point?

The council says the aim of the project is to

 “create an innovative, connected data marketplace – a new disruptive economy – where SMEs use data to create new applications, services and experiences to serve personalised demand for businesses and communities in the Corridor, generating social and environmental value alongside hard economic impacts”.

But what’s its purpose for the citizens of Birmingham?

“SMEs will be supported to use data and technologies to create new services, and products that will respond to specific challenges in East Birmingham to deliver to beneficiaries in the Corridor, generating social, environmental and economic value….”

How is that useful to residents?

“Working with the Smart City Commission, we are exploring how the wider deployment of smart city / future internet-based technologies and services can help drive innovation and accelerate delivery of city outcomes bringing together both needs of public services, community and private sector.”

Which means?

“The demonstrator will aim to tackle local problems in a more holistic, layered and integrated way.

” It will drive greater connectedness along urban clusters – connecting assets, data, talent, location, infrastructure to combine innovative design, use of community and social spaces and services with housing and infrastructure developments; new models of commissioning and service delivery enabled through civic and social enterprise.”

Actual uses please?

“The demonstrator which links into existing City development plans e.g. Birmingham Connected City (formerly the Birmingham Mobility Action Plan); Birmingham Development Plan; East Birmingham Prospectus for Growth will focus on:

  • Mobility & connectivity – Improving how people travel around across all modes and enabling access to employment opportunities;

  • Health – Healthy ageing; improve quality of life / mental health & wellbeing indicators;

  • Skills & Enterprise – Manage supply and demand; Upskill local population and talent for innovation; grow level of enterprise and sustainable start-up & business growth

  • Information Marketplaces – enabling programme of activity creating conditions for data to be extracted and /or exchanged by multiple partners & stakeholders prioritised around above themes; creating the supply chain that may include business / developers that can create value with this new data

Yes, but one specific purpose?

“The Big Data Corridor will utilise a data platform provided by Birmingham City University, which will act like an address book to access a range of public and commercial service data sets, which will enable Small/Medium Enterprises with support through this project, to create new products and services to help address challenges faced by the Greater Birmingham and Solihull Local Enterprise Partnership.”

Its benefits for Birmingham council tax payers who would help fund the project?

“[The Big Data Corridor] aims to accelerate the digital capabilities of businesses to capitalise on the exponential growth of the Internet Of Things and Data Economy by developing solutions with citizens to address city in the areas of health, mobility and sustainability. This will be enabled through 3 key strands. All support for SMEs will be provide free of charge based on meeting eligibility criteria.”

Yes but specific benefits?

“[The Big Data Corridor] will host technology and data rich demonstrator activities to enable GBSLEP SMEs to develop new services and products enabled by the new data streams and tested in East Birmingham in response to specific challenges identified through work with stakeholders and communities. Note that this project will not compile data sets, but accesses those available openly or if will purchase them if necessary through this project.”

Specifically?

“[The Big Corridor will] provide technical and business support utilising the Serendip Incubator (a space for businesses to collaborate) at Birmingham Science Park – Aston to engage SMEs, manage their involvement, support rapid prototyping and commercialisation of products and services.”

Yes, but …

“To address congestion …”

Aha! A specific purpose. In what way will the Big Data Corridor reduce congestion?

“[It] could be for SMEs to access Telensa’s smart lighting application network, Centro transport data, personal data such as schemes that are already operating to enable individuals to share data voluntarily, as well as social media data to develop new products to incentivise behaviour change of citizens from cars to public transport to reduce congestion.”

Rarely before have so many offences against plain English been committed within one IT project.

The serious point is that unclear, abstract English and unclear thinking go hand in hand.

Orwell said that the “slovenliness of our language makes it easier for us to have foolish thoughts”.  He would probably have described Birmingham council’s phrases such as “accelerate delivery of city outcomes” and “generating social, environmental and economic value” as avoidably ugly.

Such phrases suggest that their author was indifferent as to whether the words meant anything or not. They are easily written – because they don’t require any thought.

Orwell could have been looking at Birmingham Council’s words on its Big Data Corridor when he wrote,

“This mixture of vagueness and sheer incompetence is the most marked characteristic of modern English prose, and especially of any kind of political writing.

“As soon as certain topics are raised, the concrete melts into the abstract and no one seems able to think of turns of speech that are not hackneyed: prose consists less and less of words chosen for the sake of their meaning, and more and more of phrases tacked together like the sections of a prefabricated hen-house.

Indeed it’s hard to see how Birmingham council found the money for the Big Data Corridor, based on the poor quality of information it has provided so far.

One explanation could be that finance councillors and officials watched in awe as the river of ostensibly worthy phrases flowed in front of them – phrases such as “greater connectedness along urban clusters”.

Possible big data uses

One possible specific use of the big data corridor would be to “develop a service to enable citizens to find the healthiest and safest walking routes to local chemist”.

How many Birmingham citizens will take the time to use such an app rather than get to the chemist in the shortest possible time?

Another potential app would show air quality in real-time. This would be useful.

Big data could also be used for street lighting – to allow for the manual brightening of lights when required – and for triggering CCTV and a local response when certain noises are detected.

But would such potential uses be forgotten while project professionals wriggle furiously to try and stop themselves sinking into the Big Data Corridor’s mudflats of jargon?

It’s possible the project will create 56 jobs, which would be one tangible benefit. But what the new recruits will do for local residents is unclear.

Ideally, perhaps, they’d have the skill to translate abstract words and phrases into jargon-free English so that Birmingham’s residents would know how their Big Data Corridor money is being spent.

Perhaps the project may even win an award. Campaign4Change nominates Birmingham’s Big Data Corridor for the Golden Bull award 2017. It’s an award for the year’s worst written tripe.

This is from Orwell’s essay “Politics and the English Language”,

“A speaker who uses that kind of [abstract] phraseology has gone some distance toward turning himself into a machine. The appropriate noises are coming out of his larynx, but his brain is not involved …”

He added,

“This invasion of one’s mind by ready-made phrases (lay the foundations, achieve a radical transformation) can only be prevented if one is constantly on guard against them.”

In a report on the use and abuse of official language, the House of Commons’ Public Administration Committee criticised  “unlovely” words and phrases such as “step changes”, “stakeholder engagements”, “win-wins”, “level playing fields” and “going forwards”.

It concluded that a poor use of language by officials can amount to “maladministration”. The committee said,

“In our view, using confusing or unclear language that is so bad that it results in people not getting the benefits or services to which they are entitled, or which prevents them from understanding their rights or the choices available to them, amounts to ‘maladaministration’.

The Parliamentary Ombudsman at that time agreed with this view.

She said,

“I think if it got to the point that it was actually incomprehensible, then it would be in contravention of my principles about providing information that’s clear, accurate and not misleading.”

Click here to generate gobbledygook similar to Birmingham Council’s (Plain English Campaign’s gobbledygook generator).

 

Use and abuse of official language – House of Commons Public Administration Committee

Big Data Corridor bid goes through to the next stage

Big Data Corridor report

Big Data case studies

Birmingham council savings too ambitious and too many uncertainties.

Birmingham blog

Digital Birmingham

 

 

is London Ambulance Service’s back-up system “public endurance”?

By Tony Collins

In November 2016 London Ambulance Service had its busiest week for seriously ill and injured incidents in the history of the Service.

“The Service is …expecting demand to increase even further throughout December,” said London Ambulance Service at the time.

A few weeks later, on one of the busiest nights of the year, the systems went down, from 12.30am to 5.15am on 1 January 2017. The result was that 999 calls were logged  by pen and paper.

When systems are working normally  an incoming 999 call displays the address registered to that number – if the address is registered.  The London Ambulance operator confirms the location, assesses the severity and an ambulance can be despatched within seconds, with the address on its screen and a satnav pointing the way, according to a comment on The Register.

Pen and paper takes longer because the address and other details need to be given over a radio, which can take minutes.

But pen and paper is the London Ambulance Service’s back-up for IT failures.  Whether it can cope with unprecedented demand – or with a major incident in London – is in doubt.

A former London Ambulance Service paramedic told the BBC there had been waits of an hour for ambulances on 1 January 2017. He said call handlers had been “amazingly helpful”, but it was “easy to become overwhelmed especially in the midst of high call volumes”.

London Ambulance Service declined to answer any questions on its latest system failure.

Malcolm Alexander of the Patients’ Forum for the London Ambulance Service said: “We want to know why it is that this system that cost so much money and is supposed to be so effective is not fail-safe.”

He added: “If this system fails at a time when there is huge pressure in the system, for example if there was a major disaster or a terrorist attack, we are going to be in trouble. We really need to make sure it doesn’t collapse again.”

1992

A report into the collapse of London Ambulance Service systems found that they had had failed for many reasons. The Service had taken a “high-risk” IT approach and did not test systems thoroughly before putting them into service.

(Some may question how much has been learned since then.)

2006

In 2006 the London Ambulance Service systems crashed nine times in a fortnight. Each time staff reverted to pen and paper.

2008

In 2008, when systems failed,  repairs took 12 hours. Again the Service reverted to pen and paper.

2011

In June 2011 an IT upgrade caused the system to go down for about three and half hours. Pen and paper was again the back-up “system”. At the time the London Ambulance Service was upgrading the Commandpoint system, supplied by Northrop Grunman, which the Service deployed in 2010 and still uses.

2013

In 2013 on Christmas Day and Boxing Day the systems went down for separate reasons for several hours each day, with staff reverting to pen and paper.

2015

The Chief Inspector of Hospitals, Mike Richards, recommended that the London Ambulance Service be placed into special measures.

He said at the time,

“The Trust has been performing poorly on response times since March 2014. This is a very serious problem, which the trust clearly isn’t able to address alone, and which needs action to put right.”

Comment

It’s becoming the norm for parts of the public sector to regard the public as captive customers when it comes to going live with new IT or upgraded software.

Rather than test new systems, procedures and upgrades thoroughly before introducing them, some parts of the public sectors are going live with a “let’s see what happens and fix things then” approach.

This has become the semi-official approach to the introduction of Universal Credit – with long delays in payments for some claimants.

Within the NHS, at some hospitals introducing new patient record systems, there has been an internal acceptance that patients may suffer from delays,  perhaps with tragic consequences, at least for three year-old Samuel Starr.

The NHS e-referral service was launched with nine pages of known problems.  And when NHS England launched a streamlined GP support service with Capita, officials knew of the possible problems. But it launched anyway.

After the London Ambulance Service’s IT failure on New Year’s Day, it’s clear that many emergency workers did their best to give a normal 999 service. St John’s Ambulance helped.

But to what extent does senior management at the London Ambulance Service have a “stuff happens” mindset when IT goes seriously wrong?

There’s no individual accountability and no commercial imperative to learn lessons from any of the failures.

And there’s no fervent business or political will to ensure the same or similar mistakes don’t recur.

Every time systems fail, the London Ambulance Service promises an investigation. But where are the results published so that lessons can be learned?

Pen and paper is tried and tested. But demands on the London Ambulance Service are much greater than in the past.

With an unprecedented demand for its services how is it London Ambulance Service’s senior management can comfortably rely on pen and paper as its back-up system?

It can – if nobody in power requires an earnest answer to the question.

Another wider question is whether it’s acceptable to use the public as guinea pigs for new or upgraded IT, with potentially serious or even tragic consequences.

London Ambulance Service suffers New Year’s crash – Computer Weekly

London Ambulance Service hit by new year fault – BBC online

 

 

Main themes from 2016’s IT events

By Tony Collins

Below are some of the main points (lessons, perhaps) from posts on this site in 2016.

One recurring theme was the amount of evidence that came to light, partly as a result of material released under FOI tribunal papers,  on the extent to which an internal “good news” culture is inimical to IT project success.

If your organisation doesn’t welcome being told about actual or potentially serious problems – and views constructive criticism as nay-saying – how can it solve problems that could floor the project? An example:

Universal Credit IT programme

The so-called digital Universal Credit system – using agile development principles – is going better now than in the past.

The Universal Credit IT programme still faces big challenges – partly around delays in paying people, leaving them destitute despite the promise of emergency loans.

And it’s unknown whether the system can operate at scale, the current number of claimants being in the low hundreds of thousands [339, 000 in September 2016], not millions of people as originally envisaged.

But the DWP is gradually facing up to  problems on the Universal Credit IT programme – probably because it has no choice, given the high level of external scrutiny.

The National Audit Office reports regularly on its progress, as do councils, the Citizens Advice Bureau and many others.  As a result, the DWP cannot hide from scrutiny, as it did in the fraught early years of the Universal Credit project.

External scrutiny vital?

Perhaps a lesson from this website’s 2016 posts on Universal Credit IT is that genuinely independent and fearless external scrutiny can make the difference between IT programme success and failure.

If that’s true, the onus is on the DWP’s talented senior officials to thwart the department’s “good news” culture.

Instead of quitting – which is what most of the best IT executives in central government seem to do – they could stay in post and work harder to thwart a lumbering, hierarchical, unredeemably secretive internal culture that has dogged Whitehall (and particularly the DWP) for decades.

[The DWP would argue it is more open today than ever, but it’s open about matters that throw no light on its own performance. Arguably the DWP’s self-claimed openness is a mask behind which the introspective, good-news culture hides.]

3 February 2016

The National Audit Office and the Public Accounts committee found that the Department for Work and Pensions was “selective or even inaccurate” when giving information to the committee on the Universal Credit IT programme.

In answering some questions, the committee found officials “evasive”.

The Public Accounts Committee’s report on Universal Credit said,

“We remain disappointed by the persistent lack of clarity and evasive responses by the Department to our inquiries, particularly about the extent and impact of delays … the Department’s continued lack of transparency makes it very difficult for us and the public to understand precisely how its plans are shifting.”

9 February 2016

Another NPfIT scandal in the making?

After behind-the-scenes lobbying by some major suppliers, the government announces £4bn to be spent on IT in the NHS.

He announces a “Wachter” review on how – not whether – the money should be spent.

The eventual Wachter review report focuses on  technologies to be introduced into the NHS with barely a mention of the health service’s most urgent IT need: to make existing systems talk to each other.

18 February 2016

The Department for Work and Pensions is in Leicester magistrates court next week to stop Universal Credit IT reports being published.

Do the costs of the case border on a criminal waste of public money?

After several years of hearings and appeals, the DWP eventually releases the reports in question, leaving everyone wondering why public money was spent suppressing them in the first place.

Was it because of a cultural obsession with secrecy – because that’s the way it has always been? Ministers including Lord Freud fell into line and signed off DWP requests for IT reports on Universal Credit to be kept secret.

19 February 2016

The DWP’s legal case in fighting to stop IT reports on Universal Credit being published bears a striking similarity to Parliament’s case for stopping reporters covering proceedings of the House of Commons in 1738.

In April 1738 the House of Commons passed a resolution declaring that it was a “high indignity and a notorious breach of privilege” to report what was said in the Chamber, even when it was in recess.

16 March 2016

Judge orders DWP to release Universal Credit IT reports. Judge Chris Ryan says in his ruling that that disclosure of the documents,

“might have corrected a false impression, derived from official government statements by revealing the very considerable difficulties that were beginning to develop around the time when the information requests were submitted.”

18 April 2016

New minister’s momentous FOI decision on Universal Credit IT reports?

On 3 April 2016 the Sunday Times reported that new DWP secretary of state Stephen Crabb had ordered officials to stop refusing FOI requests and come clean with him and the public about problems on the Universal Credit programme.

Three days later the DWP publishes the reports in question, after spending years and untold sums of public money on a legal fight to stop the reports being published.

19 April 2016

Hidden for four years – a review of Universal Credit IT.

17 May 2016

Could all councils open up like this please – even Barnet? Somerset County Council publishes a useful audit report.

8 June 2016

Capita NHS contract under scrutiny after “teething problems”.

A seven-year £330m contract signed by NHS England and Capita last September has run into problems.

The difficulties and complaints by GPs raise a question about how officials at NHS England considered it possible that Capita could save 40% in the first year, transform services for GPs, and make a profit – all concurrently.

NHS England’s claim that the problems were teething proves to be misleadingly optimistic.

20 June 2016

After years of proclaiming the success of its outsourcing deal with IBM and Southwest One, Avon and Somerset Police announces it will not be renewing the contract when it expires in 2018.

A “new” chief constable Andy Marsh believes he can save money by finding a different way of delivering services, including IT.

Public sector organisations do not have to publish detailed accounts on their outsourcing deals so public statements on the “success” of these contracts can be seen, usually, as public relations exercises.

22 June 2016

Aspire: eight lessons from the UK’s biggest IT contract.

  1. Your IT may not be transformed by outsourcing.
  2. You won’t realise how little you understand your outsourced IT until you look at ending a long-term deal.
  3. Suppliers may seem almost philanthropic in the run-up to a large outsourcing deal because they accept losses in the early part of a contract and make up for them in later years.
  4.  Expect suppliers to top up their profits by negotiating contract extensions. It’s naïve to expect a large IT contract to transfer risks to the supplier (s).
  5. Few organisations seeking to end monolithic outsourcing deals will have the transition overseen by someone as clear-sighted as Mark Dearnley.
  6. Be prepared to set aside millions of pounds – in addition to the normal costs of the outsourcing – on exiting.
  7. Projected savings from quitting a large contract could dwarf the exit costs.

12 July 2016

Another public sector IT project disaster – but a useful failure if lessons are disseminated.

The procurement approach to the Scottish Police i6 project is described as exemplary, but still it ends in disaster. A Holyrood minister later blames the supplier.

13 July 2016

NHS “Wachter” digital review is delayed – but does it matter?

The Wachter review of NHS technology was due to be published in June but has been delayed. Would it matter if it were delayed indefinitely?

In the Wachter’s review’s terms of reference (“Making IT work: harnessing the power of health IT to improve care in England“)  there is a final bullet point that refers, obliquely, to a need to consider patients.

Was the Wachter review commissioned for the benefit of suppliers, clinical administrators and officialdom more than patients?

20 July 2016

Evidence submitted to an FOI tribunal by a senior DWP official concedes that there was a “lack of candour and honesty throughout the Programme and publicly”.

The official was referring to the Universal Credit IT programme.

The same official admits to paranoia within the DWP about the accidental leak of information about the Universal Credit IT programme.

The official said Programme Board members ceased to receive their papers electronically, which meant twenty packs of up to 200 pages delivered by hand every month.

All programme documents were marked securely, numbered and signed for, any that were sent were ‘double-enveloped’, and any papers that needed to be retained were ‘signed back in’.

Even documents that did not contain sensitive information were password protected and had official security markings.

After the Guardian reported the results of a survey of the morale of staff working on Universal Credit IT, the DWP’s secretary of state organised a leak investigation headed by a former member of the security services.

“People also stopped sharing comments which could be interpreted as criticism of the Programme, even when those comments would be useful as part of something like an MPA [Major Projects Authority] review,” said the DWP’s paper to an FOI tribunal.

“People felt they could no longer share things with colleagues that might have an honest assessment of difficulties or any negative criticism – many staff believed the official line was ‘everything is fine’.”

The paper appeared to confirm that the DWP’s “good news” culture is departmental policy, raising questions of whether it is hard-wired for project failure.

Inside Universal Credit IT – analysis of document the DWP didn’t want published.

3 August 2016

Is Sir Humphrey trying [slowly] to kill off the Government Digital Service and the innovations it stands for?

It’s a question that remains unanswered today.

6 September 2016

The Institute for Government publishes one of the most incisive – and revelatory – reports ever produced on a big government IT project.

It reveals that when Cabinet Office officials sought the views of DWP staff on Universal Credit’s progress, the officials found that staff had been scared to tell the truth.

The Cabinet Office assured staff that their comments would not be attributable. And under nearly every stone officials found there was chaos.

“People burst into tears, so relieved were they that they could tell someone what was happening,” said the Institute’s report.

7 September 2016

DWP derides claimant complaints over digital rollout of Universal Credit.

Less than 24 hours after the Institute for Government criticised the DWP’s “tendency not to acknowledge bad news”, the department’s press office has poured scorn on complaints to an MP about problems with the rollout of Universal Credit’s “digital” system.

A spokesman for the Department for Work and Pensions has described as “anecdotal” complaints by the public about the “full” digital Universal Credit system in south London.

The DWP has declined to publish reports that would give a factual account of the performance of the Universal Credit digital system during rollout.  Its spokespeople can therefore describe claimant complaints as “anecdotal”.

21 September 2016

Capita and NHS England apologise after continuing problems on £330m contract.

The problems are not entirely Capita’s fault.  Will anyone at NHS England be held accountable for ignoring the warning signs before outsourcing the contract for GP support services?

No.

21 October 2016

The venerable and charismatic Jonathan Green-Armytage dies. He was a journalist at Computer Weekly in the 1980s and 1990s and later joined Gartner.

He was proof of the old adage that the better you understand a complex subject the more simply you can explain it.

24 October 2016

Post Office Horizon IT – for Julian Wilson time ran out on justice. He carried on campaigning against a Post Office injustice until he had no strength left to fight.

His campaign – and that of more than 150 other subpostmasters – was to clear their names. The Post Office branded them criminals after the central Horizon computer system showed discrepancies on local post office accounts.

Lawyers acting for the Justice for Subostmasters Alliance have issued a High Court writ on behalf of the subpostmasters. An initial hearing is planned for January 2017.

The Post Office could settle the cases now, and not put the families of so many subpostmasters through any more suffering.

Julian Wilson discovered last year he had terminal cancer.  This summer he deteriorated rapidly.

4 November 2016

Well done to Unite for challenging council’s joint venture “savings” claim.

When councils make unexplained (and self-congratulatory) claims that they have made savings at the end of a joint venture, it will usually raise a series of questions.

So well done to Nigel Behan of the Unite union for putting a series of FOI questions to Taunton Deane Borough Council about its joint venture with IBM, as part of Southwest One.

Without people like Nigel Behan and Somerset campaigner Dave Orr, and organisations like Unite, councils would get used to saying publicly whatever they liked, possibly without challenge.

9 November 2016

Capita adds 500 staff to boost recovery on “unacceptable” NHS contract

Health minister Nicola Blackwood describes failings on Capita’s GP support services contract as “entirely unacceptable”.

She tells MPs at an adjournment debate on failures relating to Capita’s £1bn Primary Care Support England contract,

“It was always clear that Capita’s services needed to be at least as good as those that they replaced…However, it is evident that Capita was inadequately prepared for delivering this complex transition.”

But the minister does not acknowledge that officials failed, before awarding the contract, to understand what Capita was capable and not capable of delivering.

Is it good enough for officials to take the pre-contract sales claims from suppliers at face value?

10 November 2016

Another village post office closed over Horizon IT controversy?

17 November 2016

Birmingham City Council is set to take back the “Revenues” – council tax – element of its £1bn Service Birmingham contract with Capita.

Local officials expect to make “savings” by bringing the revenues collection service back in-house, which raises a question of whether the council made a mistake by outsourcing the service in the first place.

When councils claim to save money by outsourcing, and again when they take the same services back in-house, they are not required to prove their claims by publishing audited figures.

The result is that councils, when outsourcing or taking back the same services, can define the word “savings” in any way they choose.

22 November 2016

Days from taking back outsourced IT, Somerset County Council is unsure what it’ll find.

That Somerset County Council laments setting up the Southwest One joint venture with IBM is not new. What continues to surprise is the extent of the difficulties of ending the joint venture cleanly – despite more than a year of preparations.

I December 2016

Barnet Council claims £31m savings with Capita – and not an auditor in sight

8 December 2016

Capita share price falls to new 10-year low as it lowers profit forecast. The company’s share price of 513p at lunchtime today was 9% down on yesterday’s close.  A year ago it was around 1200p.

 

 

 

 

 

 

 

 

Central buying of IT and other services is a bit of a shambles – just what Sir Humphrey wants?

By Tony Collins

Cabinet Office entrance

Cabinet Office entrance

Like the Government Digital Service, the Crown Commercial Service was set up as a laudable attempt to cut the huge costs of running central government.

The Cabinet Office under Francis Maude set up the Crown Commercial Service [CCS] in 2014 to cut the costs of buying common products and services for Whitehall and the wider public sector including the NHS and police.

It has a mandate to buy commodity IT, other products and services and whatever can be bought in bulk. It has had some success – for example with negotiating lower prices for software licences needed across Whitehall. The skills and knowledge of its civil servants are well regarded.

But, like the Government Digital Service, CCS has had limited support from permanent secretaries and other senior officials who’d prefer to protect their autonomy.

It has also been hindered by unachievable promises of billions of pounds in savings. Even CCS’s own managers at the time regarded the Cabinet Office’s plans for huge savings as over-optimistic.

Yesterday [13 December 2016] the National Audit Office published a report that questioned whether CCS has paid its way, let alone cut public sector costs beyond what civil and public servants could have achieved without it.

CCS employed 790 full-time equivalent staff in 2015/16 and had operating costs in one year alone of £66.3m

This was the National Audit Office’s conclusion:

“CCS has not achieved value for money. The Cabinet Office underestimated the difficulty of implementing joint buying for government. With no business case or implementation plan CCS ran into difficulties. Net benefits have not been tracked so it cannot be shown that CCS has achieved more than the former Government Procurement Service would have.

“However, the strategic argument for joint buying remains strong and CCS is making significant changes to improve future services.”

Some of the NAO’s detailed findings:

  • The public sector spends £2.5bn directly with CCS – £8bn less than originally forecast.
  • Seven departments buy directly through CCS – 10 fewer than originally forecast
  • The forecast of £3.3bn net benefits from the creation of CCS over the four years to 2017-18 are  unlikely to materialise.
  • The National Audit Office says the actual net benefits of CCS to date are “unknown”.
  • The Cabinet Office did not track the overall benefits of creating CCS.
  • Most of the planned transfers of procurement staff from central departments and the wider public sector to CCS haven’t happened.
  • Where some of the workforce has transferred, some departments have rehired staff to replace those who transferred.
  • Departments continue to manage their own procurement teams, although they use CCS’s frameworks.
  • CCS was set up with the power to force central departments to use its bulk buying services. But that power wasn’t enforced.
  • The National Audit Office says it is “no longer clear whether CCS has a clear mandate that requires all departments to use it for direct buying… it no longer has a clear timetable or expectation that further departments will transfer staff or buying functions to CCS”.

It’s all a far cry from the expectations set by a Cabinet Office announcement in 2013 which said that CCS will “ensure maximum value for the taxpayer is extracted from every commercial relationship”.

The then Cabinet Office minister Francis Maude said at the time,

“The new Crown Commercial Service will ensure a step change in our commercial capability, giving government a much tighter grip on all aspects of its commercial performance, from market engagement through to contract management.”

Comment

Why CCS has failed so far to make much difference to Whitehall’s costs is not clear. It seems to have been hit by a combination of poor management at the outset, a high turnover of senior officials and ludicrously high expectations, combined with a civil service reluctance in central departments and the wider public sector to cede control over procurement to CCS –  even when it comes to common products and services.

The NAO report is a reminder of a fundamental flaw in the way government works: central departments can’t in practice be forced to do anything. They are a power unto themselves. The Cabinet Office has powers to mandate a change of practice and behaviour in central departments – to which Sir Humphrey can shrug his shoulders and change nothing

Even the Prime Minister is, in practice, powerless to force departments to do something they don’t want to do (except in the case of the miscarriage of justice that involved two Chinook pilots who were eventually cleared of gross negligence because the then defence secretary Liam Fox, through a series of manoeuvres, forced the MoD to set the finding aside).

The CCS may be doomed to failure unless the Cabinet Office rigorously enforces its mandate to make government departments use its buying services.

If the Cabinet Office does not enforce its power, Sir Humphrey will always protect his turf by arguing that the products and services his officials buy – including IT in general – are specific and are usually tailored to the department’s unique and complex needs.

Much to the relief of Sir Humphrey, Francis Maude, the battle-hardened enforcer at the Cabinet Office, has left the House of Commons. He has no comparable replacement.

Are all central initiatives aimed at making  a real dent in the costs of running Whitehall now doomed to failure?

Sir Humphrey knows the answer to that; and he’s wearing a knowing grin.

Crown Commercial Service – National Audit Office report

 

Capita share price falls to new 10-year low as it lowers profit forecast

By Tony Collins

Capita’s share price has fallen to a new 10-year low today (8 December 2016) after chief executive Andy Parker warned that “near-term headwinds” would hit trading performance in the first half of 2017.

The company’s share price of 513p at lunchtime today was 9% down on yesterday’s close.  A year ago it was around 1200p.

It’s the lowest price since July 2006.

The “headwinds” warning may cause some customers, particularly officials and ruling councillors in some local councils, to wonder whether their arrangements with Capita for outsourcing “transformations” and future IT-related investments will be affected.

Capita announced today that it intends to dispose of the majority of the Capita Asset Services division and a small number of other businesses which no longer fit Capita s core business strategy.

It says these actions will consolidate Capita’ s position as the UK’ s leading provider of customer and business process management services, while underpinning the company’ s balance sheet.

Chief executive Andy Parker said: ” We are committed to delivering good returns to shareholders, supported by a strong capital structure and a clear growth strategy. In recent months, we have reviewed our management structure, operating model, business portfolio and our leverage to ensure we are in the strongest position to support future profitable growth.

” In November, we announced changes to our management and business structure and today we are announcing our intention to sell the majority of our Capita Asset Services division and a small number of other businesses.

“We have also commenced a programme of cost reduction and investments to position the Company strongly for renewed future growth. Together, these actions will create a leaner Capita, focused on its core strengths and with a much stronger balance sheet.

” I am confident that the markets Capita addresses offer long-term structural growth. We are however currently facing some near-term headwinds, which continue to make 2016 a challenging year and will affect trading performance in the first half of 2017.

“Our long-term contracts provide us with good revenue visibility across the year and the structural and cost reduction actions we are taking now will support progress in the second half of 2017 and into 2018. We therefore currently expect a similar trading performance to 2016 in the full-year 2017.”

Capita expects revenue to be around £4.8bn and underlying profit before tax to be “at least” £515m, excluding the cost of restructuring, for the full-year to December 2016.

The company had previously forecast underlying full-year pre-tax profits to be between £535m and £555m.

” Our new divisions are now fully aligned to the markets in which they operate and the divisional sales teams are working seamlessly with the central major sales team to better address these markets and fuel greater organic growth in 2018 and beyond.

” The decisive steps we have recently taken and those we are announcing today make us a more resilient business, committed to generating organic growth, maintaining and then growing our dividend and delivering sustained value for shareholders. ”

He added, “The headwinds we have faced in the second half of 2016 will affect trading performance in the first half of 2017.

” Our long-term contracts provide us with good revenue visibility across the year and the structural and cost reduction actions we are taking now will support progress in the second half of 2017 and into 2018.

” We therefore currently expect a similar trading performance to 2016 in the full-year 2017. Our average cost of debt in 2017 will continue to rise as a result of the rolling off of our interest rate swaps.”

Its pipeline of work remains well below what it was earlier in the year, at £3.8bn today compared with £5.1bn in July.

Capita has a number of problem contracts which have yet to be fully resolved.

The Telegraph quotes Parker as saying today that he had put a £50m programme of cost reductions in place in order to stem some of the losses.

The firm’s IT Enterprise Services division has been particularly weak in the last three months, leading the company to make “extensive” management and structural changes. It has reduced its 78,000 staff by almost 3% and moved some services to India.

Parker told Reuters, “There’s been a fallaway in what we would call discretionary spend, like training and (providing) employee benefits. People are delaying making decisions on implementing technology, so there is a whole host of things going on.”

Today’s lowered profit forecast follows a profits warning in September that full-year underlying pre-tax profits would be £535m to £555m for 2016, instead of a previously forecast £614m.

The Guardian quoted analysts at Barclays as saying,

“So another outsourcer bites the bullet in order to deliver.

“Is it just unfortunate coincidence that nearly all the big UK outsourcers have suffered the indignity of having their accounting policies scrutinised, a string of contract disputes or issues resulting in multiple profit warnings, or is there a systemic issue across the sector?

“The latter is a function of contract complexity and risk – both of which have increased over the years, at a time when competitive tension has increased forcing the major players to offer more for less. What is also very clear is that big is not beautiful in this market.

” Both Capita and Serco increased their scale and scope through aggressive M&A in order to access broader market opportunities in adjacent market areas away from their historical core. That strategy is now in reverse.

“Sadly for Capita, they are selling the wrong bit, in our view.”

Record one-day fall in Capita’s share price – will customers care?

Barnet Council claims £31m savings with Capita – and not an auditor in sight.

By Tony Collins

capita

It’s commendable that Barnet Council has published much material on its three-year review of a £322m 10-year outsourcing contract with Capita.

More than a dozen council reports and appendices cover every aspect of the contract.

The quantity of material seems, on the face of it, to answer critics of the outsourcing deal, among them local bloggers, who have pointed to the lack of reliable evidence of the savings achieved. The suspicion is that costs have increased and council services including ICT have deteriorated since Capita took over in 2013.

Now the council has ostensibly proved that the opposite is the case. Barnet’s press release says,

Barnet Council and Capita contract delivers £31m savings

“A review of a contract between Barnet Council and Capita has demonstrated it is delivering significant benefits to the borough with overall savings of £31 million achieved alongside increased resident satisfaction…

“In terms of satisfaction with services provided, the review, showed 76 per cent of residents were satisfied with the outward-facing customer services, up from 52 per cent before the contract was established.

“This increase was even more significant in respect of face to face services, as 96 per cent of residents who engaged with the council in this way said they were satisfied compared with a previous 35 per cent.

“The review also showed that the cost of delivering the bundle of services provided in the contract is now £6m a year less than before the contract was signed and that 90 per cent of the contract’s key performance indicators being met or exceeded.”

The press release quotes two leaders of the council saying how pleased they were with the contract. Capita calls it a “positive review”.

The review has various mentions of items of additional spending including £9m on ICT and it’s not clear whether the extra sums are taken into account in the savings figures.

Among the review’s suggestions is that the council pay Capita’s annual management fee of £25m up front – a year in advance – instead of every quarter in return for extra savings.

The review also raises the possibility of extending the contract beyond the 10 years in return for additional savings. Capita is “keen” to explore this suggestion (though it could tie the hands of a future council administration).

The review reports were compiled by council officers who reported to a working group of Tory and Labour councillors, under a much-respected Tory chairman. By a small margin, Conservatives run the council.

Lack of independent challenge?

It’s unclear why the council did not commission its audit committee, or auditors, to review the contract. In the past the audit committee has been critical of some aspects of the contract.

For this reason the reports are unlikely to silence critics of Barnet’s outsourcing deal. Council officers compiled the review’s findings, not auditors.

As a result, despite the volume of published written material, there is no evidence that the figures for savings have been independently verified as accurate.

Neither is there independent verification of the methods used by officers for obtaining the figures.

Further, some observers may question the positive tone of the review findings. The “good news” tone may be said to be at odds with the factual neutrality of, say, reports of the National Audit Office.

There are also questions about whether the council is providing enough effective challenge to Capita’s decisions and figures.

At a council committee meeting in November 2016 to discuss the review reports, the most informed challenges to the findings appear to have come not from Barnet councillors but two local bloggers, Mrs Angry and Mr Reasonable, who questioned whether the claimed savings could be more than wiped out by additional spending – including an extra £9m on ICT. They appear to have received no clear answers.

Concerns of some officials

The body of the review reports outline some of the concerns of staff and directors. Mrs Angry quotes some of the concerns from the review reports:

“Transparency of costs, additional charges and project spend were raised as key concerns. It was felt that CSG [Barnet’s Customer and Support Group, for which Capita is responsible] are often reluctant to go above and beyond the requirements of the contract without additional charges.

“Directors reported that the council needs to be more confident that solutions suggested by CSG, particularly for projects and capital spend are best value.

“Concerns were raised that CSG has a disproportionate focus on the delivery of process and KPIs over outcomes, creating a more contractual rather than partnership relationship between CSG and the council. Directors noted that many KPIs are not relevant and their reporting does not reflect actual service performance.”

The Capita contract began in September 2013, under which it provides finance, ICT, HR, Customer Services, Revenues and Benefits, Procurement, Estates and Corporate Programmes.

Comment

On the face of it, Barnet Council’s review of the Capita contract looks comprehensive and impressively detailed.

Looked at closely it’s disappointing – a wasted opportunity.

Had the council wanted the review’s findings to be widely believed, it would have made it uncompromisingly independent, in line with reports by the National Audit Office.

As it is, the review was carried out by council officers who reported to a working group of councillors. The working group comprised Labour as well as Tory councillors but the facts and figures were compiled by officers.

Nearly every page of every Barnet review report has a “good news” feel. There’s an impression that negative findings are played down.

Example:

“It should be noted that the failure to meet the target for KPI 30 related to one quarter only [my italics] and discussions are continuing regarding the application of the above service credit.”

Some negative findings are immediately countered by positive statements:

“CIPFA benchmarking data shows that the cost of the ICT service is slightly above the median, but below upper quartile in terms of the cost of the service as a percentage of organisational running costs.”

Another example of a negative finding immediately countered by a positive one, which may be said to be one hallmark of a non-independent report:

“One key area of concern in terms of overall performance is internal customer satisfaction… Survey results in respect of the financial year 2015/16 were universally poor, with all services failing to meet the target of upper quartile customer satisfaction. As a result, service credits to a total value of £116k have been applied in respect of these KPIs.

“To some extent, a degree of dissatisfaction amongst internal service users is to be expected, given the fact that cost reductions have been achieved to a large extent through increased self-service for both managers and staff, along with more restrictive processes and controls over things like the payment of invoices and the appointment of staff.

“Despite the survey outcomes indicating a low level of satisfaction, the interviews conducted with staff and managers as part of this Review suggest that services are generally considered to be improving.”

Integra ERP financial system a “success” – ?

The review report describes Capita’s introduction of the Integra financial system as “successful”. Elsewhere, however, it says,

“Many users raised issues with the Integra finance system, describing it as clunky and not user-friendly or intuitive.”

Double counting?

There’s no evidence that savings figures have been checked for possible inadvertent double counting on overlapping services. Double counting of savings is regularly found in National Audit Office reports.

“There are no standardised way for departments to evidence the reductions in ongoing expenditure,” said the National Audit Office in a report on Cabinet Office savings in July 2014. “Departments provided poor evidence, and double counting was highly likely as projects reduced staff or estates requirements.”

In a separate report on claimed savings in central government, the National Audit Office quoted the findings of an internal audit …

“A number of errors (instances where the evidence did not support the assertion) were found during our review and total adjusted accordingly … In addition, a number of savings were double counted with other savings categories and these have now been removed…

“We assessed some £200m of other savings as Red because they were double counted due to the same savings having been claimed by different units or, for example, because savings on staff were also claimed through reductions in average case costs.”

Omitted costs?

The omission of relevant costs could skew savings figures. It’s unclear from Barnet’s review reports whether extra spending of millions of pounds on, for example, ICT have been taken into account. Barnet blogger Mr Reasonable, who has a business background, raises the question of whether £65m of additional spending has been taken into account in the savings figures.

Reverse Sir Humphrey phenomenon?

The biggest single flaw in the review reports is that they appear worded to please the councillors who made the decision to outsource – the reverse of the “Sir Humphrey” caricature. The positive tone of Barnet’s reports implies that officers are – naturally – deferring to their political leaders.

In a BBC Radio 4 documentary on Whitehall, former minister Peter Lilley talked about how some officials spend part of their working lives trying to please their political leaders.

“Officials are trying to work out how to interpret and apply policy in line with what the minister’s views on the policy is …. They can only take their minister’s written or spoken word for it and that has a ripple effect on the department far greater than you imagine… Making speeches is the official policy of the department and that creates action.”

Another former minister Francis Maude told the BBC he found that too few officials were willing to say anything the minister did not want to hear.

“The way it should work is for civil servants give very candid well informed advice to ministers about what it is ministers want to do – the risks and difficulties,” said Maude. “My experience this time round in government, 20 years on from when I was previously government, is that the civil service was much less ready to do that.

“There were brilliant civil servants who were perfectly ready to tell you things that they thought you might not want to hear but there were too few of them.”

Barnet’s reviewing officers might have been dispassionately independent in reporting their findings and double checking the supplied figures – but who can tell without any expert independent assessment of the review?

The US Sabanes-Oxley Act, which the Bush administration introduced after a series of financial scandals, defines what is meant by an “independent” audit. The Act prohibits auditing by anyone who has been involved in a management function or provided expert services for the organisation being audited.

That would disqualify every Barnet officer from being involved in an independent audit of their own council’s contract with Capita.

The Act also says that the auditor must not have been an employee of the organisation being audited. Again that would disqualify every Barnet officer from an independent audit of their own council’s contract.

Review a waste of time and money?

It would be wrong to imply that the review is a pointless exercise. It identifies what works well and what doesn’t. It will help officers negotiate changes to the contract and to key performance indicators. For example it’s of little value having a KPI to answer phone calls within 60 seconds if the operator is unable to help the caller.

What the review does not provide is proof of the claimed savings. Barnet’s press release announcing savings of £31m is just that – a press release. It does not pretend to be politically neutral.

But without independent evidence of the claimed savings, it’s impossible for the disinterested observer to say that the Capita contract so far has been a success. Neither does evidence exist it has failed.

Capita share price at 10-year low

What is clear is that fixing some of the more serious problems identified in the report, such as obsolescent IT, will not be easy given the conflict between the continuing need for savings and Capita’s pressing need to improve the value of its business for shareholders, against a backdrop of difficulties on a number of its major contracts [Transport for London, Co-op Bank, NHS] and a share price that was yesterday [30 November 2016] at a ten-year low.

The review also raises a wider question: are most of a council’s busy councillors who come to council meetings in their free time equipped to read through and digest a succession of detailed reports on the three-year interim results of a complex outsourcing contract?

If they do glance through them, will they have enough of a close interest in the subject, and a good understanding of it,  to provide effective challenge to council officers and their political leaders?

If nothing else, the Barnet review shows that councillors in general cannot provide proper accountability on an outsourcing contract as complex as Capita’s deal with Barnet.

Either council tax payers have to put their faith in officers, irrespective of the obvious pressure for officialdom to tell its political leaders what they want to hear, or council taxpayers can put their faith in an independent audit.

Barnet Council has not given its residents any choice.

It’s a pity that when it comes to claimed savings of £31m there’s not an auditor in sight.

Barnet declares its contract a success – Barnet and Whetstone Press

Mr Reasonable – important questions on the Capita review

Mrs Angry – who writes compellingly on the council meeting where the review reports were discussed.