Familiar mistakes, wasted millions, big pay-offs and nobody accountable – yes, it’s the public sector IT-led transformation project

By Tony Collins

There’s no money to pay for bus services into Taunton at the weekend but local council officials have found £6.3m for unnecessary pay-offs to employees.

Unhappy residents can do nothing: when council officers are involved in a botched IT-led transformation scheme, the electorate cannot vote them out of office.

The costliest IT-led transformation failure in history was the £10bn NHS’s National Programme for IT [NPfIT], when unelected officials made wrong decisions in secret.

More than £7bn was wasted and nobody held to account.

Numerous other IT-led transformations have failed. A Cornwall Council report on a transformation by BT said, “Service Transformation anticipated at the time of contract commencement has not reached anything like the intended levels”.

An IT-led transformation at Birmingham Council, Europe’s biggest local authority, led to a spend of billions of pounds with Capita. Exactly how the money was spent councillors are unsure.

A leading Birmingham councillor John Clancy said, “The biggest problem we have is with transparency. We have little idea what is going on.”

Now a detailed report has been published on a failed IT-led transformation in Somerset in which familiar mistakes were made, millions spent unnecessarily, decisions made in secret and nobody held to account.

To local residents, the “transformation” meant unanswered phones, uncut grass and increased council tax and parking fees.

As happened in the planning for the NPfIT, potential savings were overestimated and the risks underestimated.

The plan was to merge two councils, Taunton Deane and West Somerset, using simplified business processes  and new technology. But officers made voluntary redundancy available to all staff before new ways of working had bedded in – although it has been well known in the business world for decades that major changes in ways of working need more staff at the outset.

Planning for the merger therefore contravened one of the most basic rules in any IT-led transformation: don’t make staff cuts until business change has bedded in.

Officials planned a redundancy scheme so attractive that many more  staff took pay-offs than expected  – including officers.

Short of staff because of the pay-offs, the merged council had to bring in agency and additional staff – perhaps including those it had made redundant.

Mike Rigby, executive member of the new council, said: “Clearly the so-called transformation programme had not worked.”

Thanks to local media coverage of the project failure, the merger is better known locally for the £6.35 worth of pay-offs to public servants than any benefits to local residents.

What went wrong is revealed in a cautiously-worded but thorough audit report by a not-for-profit audit team in Somerset called “Swap”.  The Swap report has the optimistic title “Transformation – Lessons Learned”.

As the Swap report puts it (politely) …

“The voluntary redundancy option for all staff within the organisation was not in the best interests of the organisation.”

It goes on to say that there was,

“little or no control over redundancy costs and little or no control over the ability to retain certain individuals with specialist knowledge and skills”.

To what extent were experienced, well-paid and professional officers in a position to dissuade ruling councillors from making well-known business mistakes?

Ruling councillors make policy decisions with advice from their permanent professional team of officers, led by the chief executive, on what is and what is not feasible. Officers also make the decisions on how to implement policy.

Will any officer be held accountable for the botched Somerset transformation scheme?  It is not a question being asked by officers in the new council.

The council’s new leader says the problems are in the past and lessons will be learned – but similar messages were given out after nearly every major IT-led transformation project failure over the past 30 years.

A lack of transparency was singled out as a common factor in “Crash“,  a book on the lessons from the world’s worst IT disasters published in 2000.  Its chapter on “concealment” urged those responsible for scrutinising an IT-led project to,

“…continually seek assurances that a major project is under firm and successful control and if you believe what you are told without independent verification expect to discover a disaster only when it is self-evident.”

The Somerset Swap report in 2020 report said,

“We are aware that a number of Members did not feel they were adequately kept informed on what was happening with the transformation programme.

“This would suggest that the engagement with Members was not as effectively managed as it could have been.

“… for a period of time we are not clear on what information Members were receiving as part of their ‘oversight’ …

“It was not until the later part of 2018 and early 2019 that the level of reporting and engagement seemed to increase, which was too late.”

The book Crash said it was the job of anyone responsible for scrutiny to “pry into computer schemes and not to be beaten back by assurances that everything is OK”.

Crash was not an obscure book on the lessons from big IT-related failures. Its findings were reported by national newspapers and specialist publications including Computer Weekly and New Scientist.

The Times Educational Supplement said of Crash that its case studies “illustrate so many general principles worth taking note of when looking at systems”. The New Scientist said of Crash that it is “essential” reading for “any organisation thinking of investing in a computer system”.

Why then were Crash’s lessons apparently ignored in Somerset’s transformation project and why isn’t anyone being held accountable?

Footnote:

A consultancy, “Ignite”, that received more than £1m for help with the transformation in Somerset has been the subject of an Advertising Standards Authority ruling.

Former Somerset IT professional David Orr, who has sought to hold local councils to account over botched schemes, complained to the Advertising Standards Authority over Ignite’s sales claims.

Ignite had published an unremittingly positive case study on the Somerset transformation scheme saying that the “operating model delivered all financial benefits identified in the business case …”

Orr told the Advertising Standards Authority that Ignite’s claims were “demonstrably false and unachieved”. He said other councils could be misled. The Advertising Standards Authority investigated, ruled in Orr’s favour and Ignite removed the case study from its website.

Orr says of the Somerset debacle,

“What is it about the word ‘transformation’ that causes so many councillors to lose their critical faculties?

“We were promised in 2016 that Somerset and Taunton Deane Councillors had learned lessons from the failed joint venture South West One with IBM that lost at least £69m.

“By 2019, we now learn that many of the same councillors have watched an all too similar failure in the ‘transformation’ project to merge two district councils into a new one called Somerset West and Taunton Council.

“Yet again the hubristic promises of ‘magic IT’ and electronic self-service have led to expensive failures.”

Orr referred to large pay-offs for some senior executives. “We need to stop paying for failure and why can’t we claw back some of these huge payouts…” he said.

Comment

Nobody has ever claimed democracy is perfect; and local democracy is particularly imperfect. Audit reports on IT-led transformations rarely – if ever – identify the real underlying cause of failures: the absence of public reporting of ongoing problems.

Such reports could deter failure because civil and public servants have no fear of elections, shareholders, losing money or going bust but they fear embarrassment.

They do not want their mistakes known while they are still in post. Hence no council, government department,  police force or NHS Trust will publish usefully detailed reports on their IT-led transformations while the officials responsible are still in post.

Three possible solutions:

a) Publish detailed progress reports on the IT-led transformation.

b) Elected representatives agree an IT-led transformation only after identifying everyone (or anyone) who has “skin in the game” – that is, a credible reason to fear failure.  If, in the event of failure, officers stand to receive large pay-offs, that’s a good enough reason not to proceed.

c) Simplifying and standardising business processes is usually a good idea if (i) staff numbers involved are doubled until new ways of working have bedded in (ii) realistic calculations  are made of potential costs and savings and (iii) those costs are doubled and the savings halved. If the cost-benefit analysis still looks good, you may have a workable plan.

Thank you to David Orr whose extraordinary tenacity has helped to expose poor decision making, squandered public money and repetitions of familiar mistakes by some councils in Somerset.  

Ignite consultants “probably” breached advertising code

Slapped wrist for Ignite

Merger disaster – critics speak out