Author Archives: ukcampaign4change

Another MoD IT-based project in trouble – same old, same old

By Tony Collins

A 43-page report obtained by The Times says that a Ministry of Defence IT network modernisation programme that provides “mission critical” services is about £210m over budget and more than two years late.

The global connectivity programme underpins almost every significant information service used by the MoD.

In 2015 Fujitsu announced that it had won a five-year contract worth more than £550m to provide core global connectivity services.  It was one of two contracts that would “bring savings of £1bn which will be directly reinvested by the MoD in defence capability”.

Fujitsu said at the time (2015),

“The new network will underpin the delivery of current and emerging MoD services both in the UK and overseas. The Fujitsu solution replaces Defence Fixed Telecommunications Service (DFTS) and the LAN services provided by the ATLAS Consortium, with a modern, agile and robust set of network (LAN/WLAN and WAN) services designed to improve service levels and align to the new ways of working demanded by the modern users wherever they operate.”

But a 28% cost overrun is forecast and the project is 26 months behind schedule. The report noted that “cost and time overruns could well worsen”, said The Times.

A race is on to ensure that key networks stay online beyond June, when BT’s contract ends. An extension to the original contract is likely.

The MoD ordered the review by Actica Consulting and PA Consulting last autumn. It identified 66 factors that contributed to the problems and noted that there was no evidence that these had been eliminated. 

It appears from Army IT contractors and the report that the problems have been caused, in the main, by the MoD’s changing specifications.

The Times said that MoD officials were accused of a “failure to understand what is mission- critical”. The report said, “To be clear: current military operations would cease without the network services that the programme is replacing. These services are mission critical.” The authors said of the programme’s services: “Without it the MoD cannot operate. This, however, appears to have been overlooked at key points.”

 Problems were identified early but “permitted to persist until time pressures had become critical”. Other problems included senior team “overstretch” and a “failure of leadership to listen to ‘real world’ technical realities”.

 An MoD spokesman told The Times, “Maintaining a modern military network that is fit for the future and can withstand intensifying cyberthreats is complex but we are already implementing our plan for the way forward.

 “There will be no interruption to network services during this transition and no operations will be at risk.”

Thank you to openness campaigner David Orr for alerting me to The Times’ article.

Comment:

The MoD has a history of failed IT-based projects and programmes. Its multi-billion pound Defence Information Infrastructure was described at one point as an “unmitigated disaster“.

More recently, the MoD hired Capita to provide an army recruitment system that proved disastrous.

Now a Fujitsu IT network modernisation programme that provides “mission critical” services is about £210m over budget, is more than two years late and the problems have not been eliminated.

It’s tempting to blame the failures on the MoD’s age-old convention of awarding oversized contracts to the same old major suppliers.

But MoD IT-based project failures recur for the same reason governments and the public sector generally continue to have major project failures: civil and public servants – and contractors – work in a bubble. They have no fear of the consequences of failure.

In the private sector,  directors care and sometimes worry about the bottom line. In the public sector there is nothing to worry about. Protected from outside scrutiny or even individual identification, senior civil and public servants  have no real accountability.

Success or failure, departmental leaders always get their knighthoods.

If the MoD had to publish progress reports on its major IT-based programmes things would be different. Departments are untroubled by failure. They are bothered by publicised failure. Senior civil servants do not welcome justified bad publicity.

If the MoD had to publish its progress reports on the Fujitsu contract, its senior officials would have an incentive to avoid failure.

As things stand, there is no incentive or disincentive to avoid failure. They have no reason to care, particularly if close to retirement.

Francis Maude, when he was Cabinet Office minister, tried to introduce accountability and openness. Once he left, things went back to normal. The Whitehall bubble re-emerged.

Thus, continued IT-related disasters at the MoD and within the public sector are inevitable and eternal. Why would Whitehall officials try hard to avoid them?

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Do some councils serve their own officials and councillors better than they serve the public?

By Tony Collins

Increasing numbers of local government and NHS officials are paying themselves salaries of £100,000 upwards, and some more than £500,000, but competence in handling public money appears to be diminishing.

Today, the outgoing head of the National Audit Office Amyas Morse expresses “shock”. He said,

“I am shocked by the persistent high level of qualified audit reports at local public bodies.

“A qualification is a judgement that something is seriously wrong, but despite these continued warnings, the number of bodies receiving qualifications is trending upwards.

“Let us hear no cries of ‘where were the auditors?’ when things go wrong. The answer will be ‘they did the job, but you weren’t listening’.

“This is not good enough; local bodies need to address their weaknesses, and departments across government should ensure they are challenging local bodies to demonstrate how they are responding.”

Today’s National Audit Office report “Local auditor reporting in England 2018″ says that the number of NHS and local government bodies with significant weaknesses in their arrangements for delivering value for money for taxpayers is “unacceptably high and increasing”.

The report makes no comparison between how well or badly NHS and council organisations are run in comparison with the salaries paid but it makes a point of saying that there are no consequences for councils and other public bodies of having a poor grip on how they spend public money.

Says the National Audit Office,

“There is no direct consequence of receiving a ‘non-standard’ report from a local auditor.

“While departments responsible for the oversight of local bodies may intervene in connection with an issue, such as failure to meet expenditure limits, there are no formal processes for reporting publicly whether bodies are tackling these issues.

“Departments use information from local auditors’ reports to differing extents to inform their understanding of the issues local bodies are facing, but they also need to be able to challenge local bodies to demonstrate that they are taking appropriate action where necessary.

“Given increasing financial and demand pressures on local bodies, they need to take prompt and effective action to strengthen their arrangements and improve their performance when issues are raised.

“The proportion of bodies with insufficient plans for keeping spending within budget or who have significant weaknesses in their governance, is too high.

“This is a risk to public money and undermines confidence in how well local services are managed. Local auditors need to exercise the full range of their additional reporting powers, especially where they consider that local bodies are not taking sufficient action.”

Comment

Anyone who reads the National Audit Office latest findings together with the numerous reports about poorly-run council IT-based outsourcing deals, including ones at Somerset County Council and Barnet Council, and an IT-related fraud involving Barnet council that was spotted by chance,  is entitled to ask: are some council officers and councillors serving themselves better than local communities?

Alongside amounting evidence of poor decision-making – or worse – in local government and the corporate NHS, there is a general lack of openness and, as the National Audit Office points out, widespread failures to act diligently on auditor findings.

Council taxes are rising, spending on important local services is diminishing yet the amounts paid to layers of senior management at councils and within the NHS and NHS England are rising without any link to competent decision-making.

For the most part, top officials cannot be fired. Their jobs are not appraised or at risk as they would be in the private sector.   Indeed some councils change senior job titles regularly and increase the salaries they pay themselves.

There is no sign of austerity when it comes to the pay of departmental leaders in local government.

Published figures indicate that at least 2,500 council officials were paid more than £100,000 each last year — and about 500 of them grossed in excess of £150,000, more than the prime minister earns.

The number whose total remuneration was in six figures has also risen. A report by the Taxpayers’ Alliance found that 16 local government CEOs received more than £300,000 and four grossed in excess of £500,000 in 2016-17.

All of which raises the question in the headline of this post: do some councils serve their own officials and councillors better than the public?

Local government officers defend their pay levels by saying that if you pay peanuts you get monkeys.

But some primates with large brains work remarkably well in their local communities. Do council departmental chiefs on unjustifiably large salaries always work well for their local communities? Or do they serve their own interests rather better than they serve the public?

Local auditor reporting in England – NAO report

 

Two contrasting New Year stories: an honour for Post Office CEO and misery for a former sub-postmistress

The Post Office says it is delighted to announce that its Group Chief Executive, Paula Vennells, has been awarded a CBE in the New Year’s Honours list.

The citation accompanying her honour recognises her work for the Post Office and away from it. She is an ordained minister in three local communities, a trustee of the Hymns Ancient and Modern charity, which supports hundreds of smaller charities, and she is committed to a number of other voluntary causes.

Post Office chairman Tim Parker said: “This is well deserved recognition for Paula, who has led the turnaround of Post Office Ltd with great skill, passion and determination.

“She cares deeply about the business, its people and its customers, and it is wonderful to see her commitment and success marked in this way. On behalf of everyone at Post Office I send her my warmest congratulations.”

Paula Vennells said: “I am delighted to be receiving this honour. It is a privilege to lead a business that matters to people as much as the Post Office does; in truth, this honour is recognition of the hard work and commitment of so many colleagues across the organisation.”

Paula Vennells has worked for Post Office Limited since 2007 in a number of senior roles, including managing director, becoming chief executive in 2012. She is a non-executive director of Morrisons.

A contrasting New Year’s story – “I am broken”

Another New Year’s story is about Wendy Martin, who ran the Crichton Lane Post Office in York until December 2017.

She is more than £30,000 in debt, suffers anxiety attacks and has been diagnosed with depression. For this, she blames her ordeal while running the local Post Office.

Her tells her story on a blog run by campaigning journalist Nick Wallis who, with crowdfunding, is covering a High Court case in which hundreds of former sub-postmasters are seeking compensation and damages from the Post Office.

Wendy Martin says she is an “empty shell” – not the same person she was  four years ago.

“I am on a waiting list for post-traumatic stress counselling. Even saying that doesn’t sound right. I am not a soldier. I should not need counselling. I was a postmistress working in a post office. I am destroyed both inside and out.

“I started out my career working in an accountants and became a credit controller, but I never really knew what I wanted to do with my life until I found a job in my local post office in February 1999.” She worked at various post offices until she ran one in York.

For a refurbishment of the branch, she borrowed from her family and £22,000 from the bank. She also ploughed her life savings into the branch. “I was stupid. I thought I was securing my future.”

After the refurbishment, which included changes to the communication lines, problems with the Horizon branch accounting computer system began. Horizon is run centrally by Fujitsu under contracts with the Post Office.

“Each day when I checked my cash I had massive discrepancies, sometimes hundreds or even thousands of pounds.

“You could input the same figures and the discrepancy would alter each time. We were experienced staff and each one of us could not balance our tills. We kept getting told Horizon was not causing our problems…

“I knew Horizon was the problem. I could not believe what they were telling me. To make matters worse they kept closing my case and refusing to send anybody…

“The worry and stress was killing us and we were getting no help from the Post Office …

“I could not even go to the doctors as I spent each day fighting at work and each night phoning and sending emails trying to rectify my problems.”

She closed the local post office in December 2016. “I could no longer deal with the stress. The Post Office responded by keeping my last three months remuneration which amounted to nearly £7,000. They still say I owe them more than £8,000. I am broken. My credit is ruined as I owe more than £30,000 which I cannot repay as I have no income.”

Her health has suffered, her relationship with her partner has broken down, she is awaiting counselling, is in debt and is struggling to find work.

“It has been just over a year since I closed and I still feel exhausted. I am out of fight. I am still shocked by lack of press coverage and lack of concern by the government who own this institution.

“I am still hopeful this will change. I am not alone. Hundreds of postmasters are like me. I hope the Post Office will be brought to account soon.”

The Post Office told Nick Wallis it does not comment on individual cases but its legal position, as explained in court during the recent “common issues” trial, is that what happens in a branch is the postmaster’s responsibility.

Problems with Horizon have to be proved by individual sub-postmasters. The Post Office says that Horizon’s general reliability means that the Post Office can safely assume it is reliable unless a subpostmaster proves otherwise. It has no contractual obligation to investigate its own computer system.

Comment

Paula Vennells is not responsible for the problems suffered by individual former sub postmasters but as the successful Post Office CEO, whose work is recognised in the New Years Honours List, she may have the ability to influence the Post Office’s decision on whether to settle a High Court case that involves hundreds of former sub- postmasters and sub-mistresses whose lives have been ruined.

Some MPs regard the injustices suffered by the sub-postmasters as a national scandal. Paula Vennells has more influence than most within the Post Office. She could try and persuade her board and the Post Office’s lawyers to settle.

A settlement would not end the misery for sub-postmasters whose health has been affected and whose relationships have broken down.

But it would be the right thing to do.

Nick Wallis’s High Court trial blog

 

Capita: where are the apologies?

By Tony Collins

“The current [recruitment] system is outrageous” – army officer

“A catalogue of failure, lost files and incorrect decisions” – MrReasonable.

A British Army officer told the BBC last week that it took him 16 months from applying to join the army to swearing his oath to the Queen.

Asking to remain anonymous, he said: “The current [recruitment] system is outrageous.”

He was referring to Capita’s £495m contract to supply software and manage the recruitment process for the British Army. The National Audit Office criticised the contract in a report published on Friday.

The army officer said, “Fortunately I’m now in my first term of training but it’s not just the wait times – they make critical errors.”

He described how some close friends had been told they could not do the job they wanted for medical reasons, despite being told a month before they had the all-clear.

“Recently one friend got told they couldn’t become an engineer because their colour perception wasn’t up to the desired standard. They later found out this was an mistake in Capita’s own system. Her eyesight was at the correct grade all along.”

A former employee of Capita got in touch with the BBC and was “ashamed” at having worked on the team responsible for the Army recruitment website.

“I didn’t last long because I could see pretty quickly it was doomed to fail,” he said.

Problems from “day one”

James Tyson applied to join the British Army in 2017.

“The website looked clean and modern, so I felt reassured when it first began but there was delay after delay, starting with my education certificates.

“I have a background in sales and I am quite pushy, so I would chase and chase to get problems sorted, but it would take around a month for a response from anyone and it was a different person dealing with your inquiry each time.

“I didn’t realise it was Capita and just thought the Ministry of Defence was an utter shambles.”

Then Capita and the British Army lost James’ data and said he would have to set up a new online account to update his details.

“I had done everything they asked,” he said, “I couldn’t believe it.”

After 18 months of frustration, he turned his back on the process and got another job.

“It felt as if I had given up on a dream,” he said. “I had always had an idea of what my life would be like and had never stopped imagining it.

“I had told all of my family and friends of my plans as I was proud to talk about it, but that meant I felt not only had I failed, I had let them down.”

Still waiting to join

Chloe Burdett wanted to join the British Army as an intelligence officer to make use of  her photography degree. But six months on from starting her application, using Capita’s recruitment system, she is still waiting to join.

“I started my application in June and that first bit seemed quite easy, but almost every day I am being asked to fill out a different form,” she said.

“There was one for how many piercings you have, one for how many tattoos you have… then you get phone calls from so many different people, with some just asking if I am still interested. It’s tiring.”

It took her almost four months to get her GP to send over her medical records, and when they did, the Army lost them, so she started the process again.

She has found another job in the meantime to pay the bills.  She said she can see why people give up applying to join the army.

Comment:

Problems with the British Army’s recruitment system are by no means all Capita’s fault.

But when the directors of a major outsourcing company know that their employees’ work could have a direct impact on people’s lives, they have a special responsibility to understand during the bidding process the scale and complexity of the work they are planning to undertake.

Suppliers can withdraw from the bidding if they believe the customer is not ready or has not fully understood the size and complexity of the work that will be undertaken as part of the contract.

It’s too easy for suppliers to accept the contract and, when it all goes wrong say, in essence, “It wasn’t our fault”.

Indeed, the usual resp0nse of IT suppliers to a critical report of the National Audit Office is to say, “Things have improved now”, as if this justifies the damage to lives caused in the past.

A corporate apology that shows some humility would make no difference to the people whose lives have been affected but it could send a message
that says, “This is a contract in which we have done what we were asked to do although we have a deep concern that things still went wrong”.

Where is there any sign of Capita’s deep concern? Where is an apology?

Cervical screening

Capita was also defensive on its £330m contract with NHS England to provide GP support services.

Last week the Guardian reported that Capita’s failure over cervical screening letters was more extensive than thought. It said that “doctors call for firm to lose [GP support] contract as number of women affected exceeds 50,000”.

Another 3,591 women were not sent information on cervical screening as a result of errors by Capita, NHS England said.

Last month, it emerged that 47,708 women did not receive a smear test invitation, reminder or results between January and June because of Capita’s failure to send out letters.

Last Wednesday, NHS England said the number had risen to more than 50,000 after a review uncovered more correspondence from last year that was not sent.

In response, Capita said about half of the newly identified cases related to test results, but only a small proportion were abnormal result letters. It said those women had received a referral and there was no evidence of any harm resulting from its mistake.

Capita said a senior executive responsible for the contract had left the company. But the Royal College of GPs told The Guardian that Capita had lost the trust of NHS workers.

There was no apology.

Last week it also emerged that Capita “wholeheartedly refutes” the conclusions of a report by Grant Thornton into financial controls in a contract between Capita and Barnet Council.

Again, no apology for an internal fraud that was spotted almost by accident and which led to the council and local taxpayers spending tens of thousands of pounds on an investigation into how it happened.

It is clear in all of these Capita-related contracts that the fault has been partly, and perhaps mainly, with the British Army, NHS England and Barnet Council for not fully understanding what they were doing when they signed the contracts with Capita.

Where are their apologies?

 

British Army and Capita – BBC News

Mr Reasonable

Cervical screening and Capita – The Guardian

Capita “wholeheartedly refutes” findings of Grant Thornton report 

Thank you to FOI campaigner David  Orr for his help on this article.

 

 

Two separate Capita contracts in the news this week

By Tony Collins

  • Capita “wholeheartedly refutes” findings of independent report on aspects of its contracts with Barnet Council
  • National Audit Office criticises Capita’s contract with the British Army. Lessons from many past IT-related project failures not learned

Barnet Council

It’s rare for strongly-worded criticisms by a major IT outsourcing supplier on any subject to come into the public domain. This week Barnet Council published the full version of a report by Grant Thornton on financial controls in Capita’s contracts with Barnet Council.

Full disclosure of the report, which includes Capita’s criticism of the report,  follows freedom of information requests. The council had already published the report in limited form.

In its written response to the Grant Thornton report, Capita says it “wholeheartedly refutes the conclusions of this highly caveated and limited report”.

It says the report’s conclusions regarding financial controls across the council and Capita’s CSG and DRS contracts with Barnet have

“not been independently verified, are not underpinned by clear evidence, and in many instances seem to be based on opinion and hearsay”.

Grant Thornton had criticised:

  • a lack of effective review controls that resulted in a Capita employee being able to request 62 inappropriate payments to personal bank accounts. 
  • a lack of effective review of journal amendments that enabled fraudulent costs to be concealed on the ledger.
  • the “overall financial control environment” which was “not sufficiently robust to ensure that financial control weaknesses were actively identified and mitigated as part of business as usual.”

Grant Thornton also criticised the council’s lack of effective oversight of Capita’s outsourcing contracts.

Barnet’s local bloggers drew the Capita statement to public attention, particularly Barnet Eye.  Another authoritative local blogger Mr Reasonable tweeted on Capita’s statement.

The full Grant Thornton report and Capita statement is here.

Comment:

In its statement, Capita said it accepted that “this case” highlighted failings which “we have worked in partnership with the council to overcome”. It adds that “all the actions raised as a result have already been delivered by Capita and are in the process of being audited”.

But can we be sure Capita will learn from all the failings that Grant Thornton identifies given that it is scathing about Grant Thornton’s report?

We don’t often see a major IT company criticising an independent report commissioned by one of its clients.  Perhaps Capita has grounds for criticising Grant Thornton’s report. Or is Capita being extraordinarily defensive and acting like a company that cannot take criticism?

It is in Capita’s financial interests to have a reputation in the marketplace for accepting – and acting on – constructive criticisms. Throwing words at someone who criticises you is best left to the playground.

British Army

In a report published today (14 December 2018) the National Audit Office has criticised the British Army and its contractor Capita.

The British Army Recruiting Partnering Project was intended to cut the costs of recruiting soldiers and officers. The Army committed £1.36bn to the project over 10 years and agreed to pay Capita £495m for the company’s expertise in recruitment and marketing.

The National Audit Office said,

“Capita has missed the Army’s targets for recruiting new soldiers and officers every year since 2013. The total shortfall each year has ranged from 21% to 45% of the Army’s requirement.”

A core part of the Project was online recruitment but the MoD “failed in its contractual obligation to provide Capita with the necessary IT infrastructure to enable this”.

In January 2014, the MoD passed responsibility for developing the online system to Capita but the complexity of the Army’s requirements delayed system development. The online system was launched four years (52 months) later than originally planned, at a cost of £113m – triple its original budget.

Technical problems continued after the launch. Applicants had difficulties using the system and staff found it hard to process applications. The Army estimates it had 13,000 fewer applications because of the problems.

Capita, and not the Army, owns the online recruitment system. The Army has the right to modify and use it but it has not yet established whether it will be suitable in the future. After 2022, if the contract with Capita is not renewed, the Army will have to create a new system or negotiate a new support contract with Capita.

In April 2017, the Army agreed to lower Capita’s performance targets by 20%  but Capita continues to miss these lower targets for new recruits, said the National Audit Office.

Basic lessons not learned from countless major IT-based projects

The National Audit Office found that:

  •  the Army failed to simplify processes before the project started. This contributed to the long time it takes to complete applications. In 2017-18, 11% of applicants went on to join the Army, but 47% voluntarily dropped out of the process. [Simplifying working process before implementing new IT is a basic lesson from countless past IT-related project disasters.]
  • there was inadequate testing before the recruitment system and some changed processes were implemented
  • the Army cut costs before the project started. [Lessons from past projects have shown that spending on staff and centres need to be increased at the start of major new systems. NHS England cut costs and centres before and during Capita’s introduction of new systems to support GPs. The implementation was a failure.] The Army cut the number of local recruitment centres, from 131 to 68, at the start of the army recruitment project, preferring a more centralised and online approach. However, the Army and Capita realised that this approach did not provide applicants with sufficient support, and that face-to-face contact was crucial in encouraging applicants to join.”

The NAO said the Army has penalised Capita for missing its recruitment targets, applying financial service credit deductions of £26m, 6 per cent of Capita’s total contract payments.

In September 2016, the Army and Capita renegotiated the recruitment targets as the Army considered that there was little prospect of performance improving without agreeing to concessions.

In the last two years applications from potential soldiers and officers have increased but not the number of recruits. This is because of the time it takes to complete the recruitment process, said the National Audit Office. In the first six months of this year,

“Capita recruited only 2,400 regulars, compared to the Army’s target of 5,300…”

The recruitment project will not achieve its planned savings of £267m. The NAO found that the Army has not yet adjusted its forecast savings to take into account the additional people that continue to be involved in the recruitment process.

Comment

Why do senior civil servants, taxpayers  and the general public continue to  suffer the consequences of high-profile failures of IT-related projects and programmes?

The main reason is a simple one. It’s a reason no official report has ever highlighted. Not even the National Audit Office has mentioned it.

That reason is a Whitehall convention that internal and external progress reports on major IT-related projects and programmes are kept secret; therefore nobody knows a project is failing until it fails.

If internal and external reports on a project’s progress and problems were published, the media and armchair auditors would be able to draw attention to the difficulties long before they became manifest in wasted millions and/or a poor service to the public.

Mandarins are terrified of journalists. They give a host of plausible reasons for wanting to keep progress reports secret – such as wanting advisers to have a “safe space” to air candid views – but in reality the mandarins are frightened of having journalists scrutinise their actions and sometimes poor decisions.

But mandarins operate within protective walls that shield them from effective accountability. They know that if they ignore, shrug off or don’t acquaint themselves with the lessons from past project disasters they will not be held responsible. In the civil service, responsibility is shared and non-identifiable. Mandarins like it that way.

In the Brexit debate, a Whitehall convention prevented the government from publishing its legal advice. But Parliament overruled that convention. MPs voted to force the government to publish its legal advice, not just a summary. As a result the full legal advice was published; and journalism reacted by saying, “What was all the fuss about? Why the secrecy?”

If every department and agency published regularly their IT-related project progress reports, journalists whom mandarins are so terrified of would quickly lose interest. After a short time, the published progress reports would go unnoticed and unreported.

But the change in Whitehall would be dramatic. If mandarins were aware their projects were being scrutinised at regular intervals by journalists and armchair auditors, the mandarins would want to be seen to be learning lessons from past projects.

They would not want to be seen ignoring or shrugging off lessons by cutting costs before the new IT is implemented or by failing to simplify working practices before designing the IT.

And Whitehall’s report writers and advisers, far from withholding candid views in fear of a tabloid reaction from journalists, would want to reflect the true problems rather than have their competence questioned by ignoring or not noticing problems that would later become only too obvious.

Indeed we have seen from the National Audit Office’s disclosure from time to time of internal and external progress reports that the current convention of secrecy over progress reports is  worse than useless. It encourages advisers to be soft and chummy with their fellow civil servants. Often projects are given green or amber lights when a red light would be more appropriate.

Will Whitehall ever drop its convention of keeping reports on IT-based projects and programmes secret in the name of preventing more disasters?

Not unless it were forced to do so by a Parliamentary vote.

 

Are sub-postmasters generally happy with the Horizon system?

By Tony Collins

Since complaints of sub-postmasters about the Horizon branch accounting system were first published in 2009, the Post Office has said it is a reliable system used daily by thousands of people and complainants are few.

But, apart from the branch sub-postmasters who have made their concerns about Horizon known to the corporate Post Office, how many others are contented or dissatisfied with Horizon?

The BBC reported yesterday on a former sub-postmistress in Northern Ireland who said she sold her post office after problems with Horizon.

Fiona Elliott ran a  branch from 2004 to 2009. It was attached to a convenience store. She told the BBC,

“At the end of the night, it was telling me that I had maybe minus £80, minus £100 or maybe £120 down.”

She put £8,500 of her own money into the post office to balance the books.  “If the computer system had been balancing properly, I would not have had to put my own money into it.

“This left the shop side of the business struggling so we ended up selling the whole business.”

The Post Office told the BBC, “We have confidence in our network of 11,500 post office branches and the systems underpinning it.

“The Horizon computer system is operated successfully by thousands of employees, postmasters and their staff to process 47 million transactions every week.”

Another sub-postmaster’s Horizon response

Recently I asked a sub-postmaster about the Horizon system a few days before he and his wife sold their village post office.

The sub-postmaster knew me by sight as a regular customer. His post office had been on the market for several months. I spoke to him a few days before he passed it over to the new owners and asked why he was leaving. He did not look of retiring age. He said he did not like the hours and the opportunities to take short breaks were few and far between. He and his wife were going into a different line of work.

In a tone of voice that invited a positive response,  I asked what he thought of the Horizon system.  He was passionate in his criticism. He did not stop giving me his views about Horizon and its frequent updates (while shaking his head now and then) until another customer began queuing behind me.

Not a failure

Given that Horizon has been operating in thousands of post office branches for nearly 20 years and has coped with many major changes, the Post Office could say with authority that the Horizon system has not been a failure.

But is it generally reliable? And are sub-postmasters happy with it? In the absence of any published, authoritative and independent survey of sub-postmaster views, it is impossible to answer either question with any authority.

Ex sub-postmistress “wrongly had to repay 16k” – BBC

Postofficetrial

A pregnant sub-postmistress blacks out, is taken to hospital and wakes in handcuffs – due to an IT-related glitch?

By Tony Collins

Daily Mail headline – 1 December 2018

In a two-page spread at the weekend, the Daily Mail reported on what some MPs have called a national scandal – how the lives of individuals have been ruined by numbers shown on an imperfect computer system.

Pregnant sub-postmistress Seema Misra was one of those individuals. She went to jail.

She had paid £200,000 for her post office in West Byfleet, Surrey.  She experienced problems with Horizon from the day she opened in June 2005, said the Daily Mail.

Small amounts of money, under £100, appeared missing at first. Under a contract with the Post Office, sub-postmasters are responsible for any losses. To balance the books, Seema put in thousands of pounds of her own money but the deficits shown on Horizon continued.  She could no longer afford to balance the books using her own money.

In January 2008, two auditors turned up unannounced and found a £74,609 shortfall. They suspended Seema on the spot and sent someone else to run the post office. Naively, she felt relief, said the Daily Mail.  She thought her problems were over. She thought the Post Office would sort it out. “They were supposed to look after me,” she told the Mail.

In fact the Post Office took her to court. It charged her with theft and false accounting.

Standing in the dock at Guildford Crown Court in 2010, she was sentenced to 15 months in prison. She felt an agonising pain in her stomach and blacked out, said the Mail.  She was taken to hospital and, when she came round, found herself in handcuffs.  She’d never had as much as a speeding fine before.

Overcome with shame, she asked a prison officer to borrow his coat to put over her wrists.

She told the Mail, “Changing into my prison uniform that day was the worst experience of my life. If I hadn’t been pregnant, I would definitely have killed myself.”

Seema’s case is one of dozens being considered by the Criminal Cases Review Commission. The Commission could ask the Court of Appeal to review the convictions.

More than 500 former sub-postmasters and sub-postmistresses, including Seema, are suing the Post Office for financial loss, personal injury, deceit, duress, unconscionable dealing, harassment and unjust enrichment. The Post Office says it is robustly defending the case.

Conservative peer Lord Arbuthnot, a former MP who has led a parliamentary inquiry into the Post Office’s handling of the sub-postmaster cases, told the Mail,

“The behaviour of the Post Office throughout has been disgraceful. This is an organisation which is owned by the public, which needs to behave in a way the public should feel proud of.”

There’s excellent coverage of the High Court case by TV journalist Nick Wallis and by Karl Flinders of Computer Weekly.  Dogged campaigner Tim McCormack has written on the Seema Misra case.

Comment

At one level it is difficult to understand how a national institution with the Post Office’s reputation could take actions and decisions that led to a pregnant sub-postmistress finding herself recovering in hospital from a black-out – in handcuffs.

At another level, the Post Office’s decisions are understandable. Public institutions have access to an endless supply of public money with which to justify their decisions and actions.

Some at the MoD and RAF spent 17 years defending their decisions against two dead pilots whom they accused of causing a Chinook crash on the Mull of Kintyre that killed four crew and 25 senior intelligence specialists. Eventually, the miscarriage of justice was corrected and the pilots’ names were cleared but only because a minister intervened.

The Post Office has spent £5m on the High Court case so far, to justify its allegations against about 550 sub-postmasters. The case will eventually cost much more than £5m.

What of the personal accountabilities of those who are spending that money?

More importantly, what are the real costs of the Post Office’s decisions and actions in terms of human misery and the ruination of lives? Hundreds of lives.

Post offices are regarded as vital assets within local communities. It’s generally believed that the Post Office runs village post offices. It doesn’t.  In the main, they are run by self-employed businessmen and women. These sub-postmasters and sub-postmistresses buy local post offices and run them under contract to the Post Office.

In acquiring post offices, the purchasers become the public face of the Post Office. They are in effect the Post Office’s local representatives.

How is it then that Post Office corporate HQ can trust the numbers shown an imperfect computer system more than they trust the words – the heartfelt, bewildered explanations – of their local representatives -those 557 sub-postmasters and sub-postmistresses?

Optimists will say that sense will prevail eventually. Indeed Mr Justice Fraser, the judge in the case of Bates v the Post Office, has shown a deeply impressive grasp of the labyrinthine technological and legal issues involved in the case.

But the question nobody can answer is at what cost sense will eventually prevail. For the human cost can never be measured.

An appalling cover-up? – Daily Mail two-page spread 1 December 2018

Postofficetrial – Nick Wallis’s coverage of the High Court case

Post Office held back information on Horizon IT system errors – part of Karl Flinders’ coverage of the High Court case in Computer Weekly

FT reports death after Horizon system shortfall

Shedding new light on Post Office Horizon controversy? – how institutions will defend their technology whatever new facts emerge

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

Will DWP board welcome today’s criticisms of Universal Credit programme?

By Tony Collins

A report of the Public Accounts Committee published today says that the Universal Department for Work and Pensions continues to have a culture of denial over problems with implementing Universal Credit.

Labour MP Meg Hillier who chairs the Public Accounts Committee, said in an interview on LBC this morning (26 October 2018) that the Department for Work and Pensions regards any comment or feedback on the Universal Credit programme as criticism and a political attack.

Her committee’s report said that local DWP offices are helpful and listen to criticism of the Universal Credit implementation programme but not DWP corporately.

DWP officials have criticised even the National Audit Office. The report says,

“Following the Comptroller and Auditor General’s report, which raised concerns over the implementation of Universal Credit, the Department repeatedly denied the substance of his findings both in the media and in Parliament and maintained that Universal Credit was working well.

” The Comptroller & Auditor General wrote an open letter to the Secretary of State to ‘clarify the facts’ and to confirm that the report had been fully agreed with senior officials in the Department.15 On 4 July 2018 the Secretary of State had to apologise for misleading Parliament regarding the content of the report. Such defensiveness was also evident throughout the evidence session.”

As a credit to the IT professionals and civil servants who have been involved in developing the Universal Credit systems, the Public Accounts Committee report is largely about the programme’s effects on claimants rather than the technology.

Comment:

DWP’s mandarins are likely to be comforted by criticisms of the Universal Credit implementation programme in today’s report of the Public Accounts Committee.

They  remain convinced that Universal Credit is working well and that criticisms are policy-related. To some extent they are right. In the past year, criticism of the programme has gradually moved away from the performance of the IT.

Today’s report of the Public Accounts Committee is about the intricacies of the Universal Credit implementation programme but hardly mentions the IT. This is much to the credit of those developing the systems. Universal Credit replaces six systems that are each of labyrinthine complexity: housing benefit, employment and support allowance, jobseeker’s allowance, child tax credit, working tax credit and income support.

Many Universal Credit payments are wrong and late but these criticisms are not in the mainstream, eclipsed perhaps by legitimate criticisms of how Universal Credit works rather than whether it works.

Of concern, though, is the fact that the Universal Credit programme is years from being fully rolled out. The DWP claims that just over on million people are claiming it, which is a seventh of the total numbers expected to claim.

Whether the IT will work well at scale is not known. The DWP routinely keeps secret independent evaluations of the Universal Credit systems.

It is this culture of secrecy that makes the Department of Work and Pensions an organisation ill-suited to spending large sums of public money on IT-enabled programmes.  Universal Credit IT is, to some extent, working well in spite of the corporate culture. But we don’t know how well it will work when put under much more pressure.

Could the DWP’s defensive, dismissive and secretive culture end up sinking the Universal Credit programme when the number of claimants rise substantially?

What is worrying is that the DWP will probably not recognise that the boat is sinking until it is too late for rescue.

In its report published today, the Public Accounts Committee describes the  Department of Work and Pensions as a “department disturbingly adrift from the real-world problems of the people it is there to support”.

The PAC report adds that the DWP is in denial and cannot learn from its mistakes (which is a criticism of a departmental culture that goes back decades).

The DWP hierarchy may be pleased at this criticism because the more outsiders and particularly MPs criticise Universal Credit,  the more some senior Whitehall officials seem to have a settled belief that they are on the right track.

The only thing that deeply upsets DWP officialdom is a leak of authoritative information to outsiders in the media or to MPs.

Leaks have led in the past to internal inquiries led by the security services. Even a leak to the media of the results of an internal survey of staff morale on the Universal Credit programme prompted a top-level investigation.

This is what the PAC said,

Denial

“The Department’s systemic culture of denial and defensiveness in the face of any adverse evidence presented by others is a significant risk to the programme.”

Blinkered

“The Committee has regularly commented on the Department’s blinkered approach to risks and problems with Universal Credit’s implementation.”

Unresponsive

“We are disappointed that this culture of denial remains firmly in place. Local organisations have found the Department unresponsive to issues they have raised, and told us that the Department is not learning lessons and applying them to the programme. In addition, when the Comptroller and Auditor General raised concerns over the implementation of the programme in his report, the Department repeatedly questioned the substance of the report both in the media and in Parliament.”

“The Department’s defensive approach was further evident in the way it responded to criticism during our evidence session, refusing to accept that Universal Credit causes hardship for many claimants, and believing that issues raised were reflecting the policy not the implementation.

“But unless the Department learns to listen, it will not be able to adapt the programme to make it a success.”

Perhaps the only solution is a secretary of state who would be willing to criticise the DWP. It has not happened yet except briefly when Stephen Crabb took over the role from Iain Duncan Smith for  few months in 2016.

Esther McVey the current secretary of state is what DWP mandarins would call a “safe pair of hands”.

For the DWP, the culture of denial, defensiveness and unresponsiveness will remain unconfronted. All of which bodes ill for the Universal Credit implementation programme when it is put under the pressure of having millions of claimants.

Thank you to campaigner David Orr for the Universal Credit links

Public Accounts Committee report – Universal Credit

Universal Credit DWP statistics

Horizon IT High Court case could have a “material” effect on Post Office accounts.

By Tony Collins

Directors of the publicly-owned Post Office have said that an adverse outcome of a High Court dispute with former subpostmasters over the Horizon IT system could have a material impact on the consolidated accounts.

The directors also say that £3m was spent on legal costs in 2017/18 and “we expect costs to be more significant in 2018/19 and 2019/20”.

Hundreds of owners of local post offices are taking part in a Group Litigation case against the Post Office. They say their lives and finances have been ruined by problems related to the performance of the Post Office’s Horizon accounting system.

The High Court case is to determine whether the Post Office was legally justified in taking the actions it did against the subpostmasters and whether the shortfalls shown on the Horizon system, for which subpostmasters were held personally liable, were genuine deficits or merely numbers generated by an unreliable system.

Three years ago the directors of the Post Office said in their annual report that the outcome of a High Court dispute with the former subpostmasters would not have a material adverse impact on the consolidated position of the Group.

This is from the Post Office’s 2015/16 annual report,

“A High Court claim has been issued on behalf of a number of postmasters against Post Office in relation to various legal, technical and operational matters. Full particulars of the claim (including as to quantum) have not yet been received by Post Office. The Directors do not consider the outcome of any current claim or action will have a material adverse impact on the consolidated position of the Group.”

The following year, the directors reported thatthey will “keep under review” whether the outcome of the case will have a material impact on the consolidated position of the Group.

 The Directors do not currently consider, but continue to keep under review whether, the outcome of any current claim or action will have a material adverse impact on the consolidated position of the Group,” – Post Office 2016/17 annual report.

Last month, in their 2017/18 annual report, the directors of the Post Office said that an adverse outcome of the case “could be material” to the consolidated position of the Group.

While the Directors recognise that an adverse outcome could be material, they are currently unable to determine whether the outcome of these proceedings would have a material adverse impact on the consolidated position of the Group, and are unlikely to be able to do so until the Court has made further determinations and the Claimants have provided the necessary information about the value of their claims. The Directors continue to keep this under close review. In 2017/18 the costs of £3 million included in operating exceptional items relate to Post Office defending the Post Office Group Litigation. These have been disclosed as operating exceptional items because we expect costs to be more significant in 2018/19 and 2019/20.”

Comment:

Whether concerns about the dependability of Horizon were being raised by MPs, by BBC’s Panorama or by Second Sight, the forensic accountants the Post Office commissioned to look into subpostmaster complaints, the Post Office’s board has always stood by its decisions and actions.

Do Post Office directors believe that the legal issues matter more in the case than the lives of hundreds of people who used to work for them?

Some subpostmasters have been jailed or declared bankrupt. Some have sold their homes to cover the shortfalls shown on the Horizon system. Most have lost their livelihoods. Do their lives matter more than proving the legal grounds of decisions and actions taken?

It is not as if the decisions and actions of the directors are infallible. Judge Fraser, in a pre-trial ruling earlier this month, rejected some of the Post Office’s legal arguments.

The Post Office could lose the case.  The judge could then order the Post Office (in other words taxpayers) to pay large sums in costs and compensation. As the directors recognise, an adverse outcome could have a material effect on the Post Office’s consolidated accounts.

It was the decision of the Post Office’s directors to, in effect, mount a High Court defence of their actions and the Horizon system.  It was their decision to spend millions of pounds of public money on lawyers rather than on settling the dispute and paying compensation to the subpostmasters. It’s clear that the directors remain convinced that there is no merit in the subpostmasters’ case.

If the Post Office loses the case (and any subsequent appeals) will its directors be held accountable for their decisions?

If they decide now to settle the dispute, will they be held accountable for the millions of pounds of public money already spent on legal fees?

Whatever the outcome of the case, lawyers will have to be paid.   With every week that goes by without a settlement, the legal costs are mounting. The amounts of public money at risk are increasing.

It is almost certain nobody in government will interfere with the Post Office’s decision to continue its defence of the subpostmasters’ actions. It is therefore the directors’ decision to continue to fight.

No doubt they are convinced their actions and decisions will be vindicated. But what if they are wrong? What will happen then? Who will be responsible for the millions of pounds of public money spent on a case that did not have to be fought?

If the current directors have left their jobs by the time of any appeals in 2020, will they still be held accountable if the Post Office loses?

Thank you to Tim McCormack, a former IT consultant and owner of local post offices in Scotland who has been a critic of the Horizon system and the Post Office’s actions aganst subpostmasters. He spotted what the Post Office was saying in its various annual reports about the High Court case and has written about it on his blog “Problems with POL [Post Office Limited)”.

Tim McCormack’s blog

Tim McCormack on Twitter:  @Jusmasel2015

Nick Wallis’s blog on the High Court case

High Court Horizon IT case has cost £10m – and the trial has yet to start