Whitehall’s changing truths over the “success” of the smart meters roll-out

By Tony Collins

Whitehall’s culture of over-optimism that has contributed to high-profile failures including the NHS IT scheme has also affected the smart meters roll-out programme.

Ministers and civil servants have regularly referred to the success of the roll-out and how smart meters will cut energy costs for consumers and reduce costs for suppliers. Radio and TV commercials urge people to install smart meters.

But a report published today by the National Audit Office – Rolling out smart meters – refers repeatedly to over-optimism and, in diplomatic wording, urges the civil servants responsible for the smart meters roll-out to “make sure the team culture does not become defensive, and resistant to inconvenient truths”.

The National Audit Office concludes that the programme is late and costs are escalating. It raises questions about whether millions of “SMETS1” smart meters installed by energy companies in recent years are already technologically obsolete.

It is uncertain whether the Capita-run data communications network that underpins the roll-out programme will ever work as well as originally intended.

Costs have been underestimated, benefits overstated and Whitehall’s attempted rushing of the roll-out programme has left energy companies having to support two different designs of smart meters, known as SMETS1 and SMETS2, as well as “legacy” meters. This is likely to add to capital and operational costs, says the National Audit Office.

Some who have chronicled the failures of some major government IT-related projects and programmes over decades may conclude that the smart meters roll-out follows the usual pattern of over-optimistic initial design and planning assumptions followed by a ministerial and civil service dismissal of all serious independent criticisms.

Although the Treasury has urged departments to include an “optimism bias” in their business case costings, officials responsible for the smart meters roll-out programme removed provision for optimism bias in their estimate of Data and Communications Company costs for the 2013 business case.

The National Audit Office warns that the Department for Business, Energy and Industrial Strategy, which is responsible for the roll-out, may still have a culture of over-optimism in its assumptions and forecasts. The NAO said,

“The Department’s cost–benefit analysis has been updated on several occasions throughout the life of the programme, but the last update took place two years ago.

“We have examined some of the main assumptions in the Department’s 2016 analysis and considered, in light of available evidence, whether there is a risk that these assumptions will prove over-optimistic.”

There is coverage of the National Audit Office today by Computer Weekly, the BBC, Guardian and Daily Telegraph among others.

Comment

It’s easy to conclude from today’s National Audit Office report on rolling out smart meters that the civil servants responsible for the programme have been over-optimistic to the point of deliberately misleading the public and ministers about the benefits and success of the programme.

But they were only doing their jobs. Whitehall’s culture on most of the major government IT-related programmes over the last 25 years has required over-optimistic design assumptions, over-optimistic business cases and over-optimistic timetables supported by over-optimistic ministerial and departmental statements.

Now any ministerial or civil service statement on the smart meters roll-out cannot be trusted.

This is not the fault of any individual. To succeed in their working relationships, senior Whitehall officials find they are expected to comply with an unwritten code that requires what the National Audit Office calls a resistance to inconvenient truths.

Business cases are written and regularly re-written on this basis. Regular departmental reports on the progress of the scheme are written on this basis.

It is only when the National Audit Office investigates and publishes its reports that the truth emerges – and then ministers and Whitehall officials, in their media and Parliamentary statements, quote selectively from the NAO’s reports to underline the department’s successes.

Until Whitehall ceases to operate within a bubble-like culture of over-optimism and resistance to inconvenient truths, the high-profile IT-related project failures will continue.

Meanwhile ministers and officials at the Department for Business, Energy and Industrial Strategy will continue to proclaim the success of the smart meters roll-out programme and will continue to ignore all inconvenient truths in making their case.

Whitehall’s “good news” culture requires that they do so.

Even if ministers and officials distrust their own public statements on the smart meters programme they know the charade must continue.

It’s an all-year pantomime that nobody has the power or will to stop.

Rolling out smart meters – National Audit Office report

Smart meter benefits cut by old technology and rising costs – Computer Weekly

Government will miss smart meters deadline watchdog warns – BBC

Smart meters rollout labelled a fiasco as consumers face extra £500m bill – Guardian

Smart meter roll out could cost households an extra £100 and means homeowners won’t feel the benefit for five years – Daily Telegraph