Category Archives: Atos

More public sector IT-related failures for which nobody will be accountable – a solution?

The Times front page – 23 January 2019

By Tony Collins

Criminal trials were delayed, jurors unable to enrol and witness statements inaccessible.

Quoting a tweet by the authoritative @BarristerSecret, the BBC said the “entire digital infrastructure” of courts was “broken for days”.

@BarristerSecret added,

“No accountability, no lessons learned.”

In the Spectator, Matthew Scott, a criminal barrister at Pump Court Chambers, said,

“Nobody seems to know exactly what has gone wrong or, if they do, they do not like to say.”

His Spectator blog was headlined,

The Spectator – 24 Jan 2019

 

 

“The most irritating fault has been for a few days the near total seizure (or ‘major service degradation’ to use the official non-explanation) of the secure email system (‘CJSM’) which for several years now has been the only authorised means of written communication between the Crown Prosecution Service and defence lawyers, probation, prisons, police and others.”

The Law Society Gazette said,

Law Society Gazette – 22 Jan 2019

 

 

 

The Law Society Gazette gave examples of how the problems had caused disruption and angst in the criminal justice system. It said,

“Major disruption that affected multiple Ministry of Justice IT systems last week continues to cause chaos.

“Lawyers on the front line have told the Gazette that trials have been delayed, jurors have been unable to enrol and practitioners have been prevented from confirming attendance that will enable them to get paid.

“Last week the ministry’s digital and technology team said most systems were improving. However, the Gazette has spoken to practitioners whose experiences suggest otherwise.”

A criminal barrister who spent the day in Leicester Crown Court said  none of the court’s computer systems was operational, jurors could not be enrolled, and no advocates could sign into the Ministry of Justice’s XHIBIT system, an online service that logs lawyers’ attendance so they can get paid.

A lawyer at Lincoln Crown Court said the XHIBIT system was down again. The Crown Court Digital Case System, on which all cases are accessed, was also down.

A criminal defence solicitor arrived at Highbury Magistrates’ Court in London at 9.15am, where there were several clients in the cells. But jailers did not know which courts the cases would be heard in and  because there was no wi-fi in the building magistrates had no access to any papers on their ipads before the hearings.

“The Gazette was told that several people attended Scarborough Magistrates’ Court last week to make statutory declarations in respect of driving matters. ‘Most of these people had come suited and booted, with all the anxiety that marks ordinary members of the public out as different from the frequent flyers who regularly come before the courts.

“These poor souls were left hanging around all morning, until 1pm, when they were advised that the systems were still not back up. Two of them agreed to come back on an adjourned date, 14 days later, but one of them explained that he couldn’t take further time off work. He was asked to come back in the afternoon, in the vain hope that the case management system might be back online.”

Former government chief technology officer Andy Beale quoted The Times in a tweet,

 

 

 

In another tweet, Beale said,

 

 

 

The Guardian reported yesterday (28 January 2019) that the Ministry of Justice knew its court computer systems were “obsolete” and “out of support” long before the network went into meltdown, internal documents have revealed.

The MoJ document, entitled Digital & Technology, said, “Historical under-investment in ageing IT systems has built our technical debt to unacceptable levels and we are carrying significant risk that will result in a large-scale data breach if the vulnerabilities are exploited.”

It added, “We have a Technology 2022 strategy, but it is not funded to help us address the long-term issues with current systems and allow us to make best use of new technologies to improve service delivery.”

It referred to a database used by 16 employment tribunal administrative offices in which the “scale of outage” accounted for 33% of incidents over the previous six months. Users were unable to access systems for a “significant number of hours”.

The report cited problems such as “risk of database corrupted leading to data loss; unable to restore service in a timely manner”, and added: “Judges say they will put tribunal activity on hold because of the poor running of the application.”

Government response

In the Commons, the government’s justice minister Lucy Frazer, responding to an urgent Labour request for a statement on the IT problems, was relaxed in her comments. She said the disruption was “intermittent” and the problems were merely “frustrating”. She added,

“The issue that has arisen relates mainly to email systems. There has been minimal disruption, I am told, to the courts system as a whole.”

She said there had been an “infrastructure failure in our supplier’s data centre”.

“The Prison Service has not been affected and—to correct inaccurate reporting—criminals have not gone free as a result of the problem. We have been working closely with our suppliers, Atos and Microsoft, to get our systems working again, and yesterday we had restored services to 180 court sites, including the largest ones.

“Today (23 January 2019), 90% of staff have working computer systems. Work continues to restore services and we expect the remainder of the court sites to be fully operational by the time they open tomorrow morning. We are very disappointed that our suppliers have not yet been able to resolve the network problems in full.

“This afternoon, the permanent secretary, Sir Richard Heaton, will meet the chief executive of Atos and write personally to all members of the judiciary. I am very grateful to all our staff who have been working tirelessly and around the clock, alongside our suppliers, to resolve the issues.”

Labour’s Yasmin Qureshi asked if Microsoft and Atos have paid any penalties to which Frazer gave a vague, non-committal reply,

“… the permanent secretary is meeting the supplier’s chief executive this afternoon and of course we will look carefully at the contracts, which include penalty clauses.”

Frazer later said the problem related to a “server” which raised questions about how the failure of a single server, or servers, could cause widespread chaos in the courts.

Labour’s Steve McCabe said the server problem was not a  single or unusual event.

“… her Department has been receiving reports of failures in the criminal justice secure email service for at least six months now”.

Police systems

The BBC reported last week that problems with a police IT system were causing some criminals to escape justice.

Nine forces in England and Wales use Athena from Northgate Public Services. They are Bedfordshire, Cambridgeshire, Essex, Hertfordshire, Kent, Norfolk, Suffolk, Warwickshire and West Mercia. The system is designed to help speed up the detection of crimes.

But officers told the BBC’s Victoria Derbyshire programme that it crashes regularly and is overly complicated, meaning some cases are not built in time or dropped.

Developers Northgate Public Services apologised for problems “in small areas”, which it said it was fixing.

A joint response from nine police forces said Athena – which has cost £35m over the past 10 years – had been “resilient and stable, although no system is perfect”.

The system was introduced following a government directive for forces to share intelligence after the Soham murders of Holly Wells and Jessica Chapman, in 2002.

Officers said the intelligence-sharing function works well but problems arise when they use the system to build cases for the Crown Prosecution Service.

The delays it causes means officers can struggle to get the information together in time to charge suspects or the cases are not up to a high-enough standard and are dropped.

Serving officers at Bedfordshire, Hertfordshire and Essex told the programme the process could now take up to twice as long.

The BBC did not name any officers who revealed details of the problems because they could face disciplinary action for speaking out. Their comments included:

  • “The first two weeks it (the system) was brought in were the worst two weeks of my entire career. It’s overly bureaucratic. It doesn’t understand the police investigative process at all. From day one, it malfunctioned. Four years on, it is still malfunctioning”
  • “It often requires information that is totally irrelevant and if you miss just one data entry point (like whether a solicitor is male or female), I have to reject the whole case and send it back to the officer”
  • “Even for a simple shoplift, I probably have to press about 50 buttons, with a 30-second minimum loading time between each task”
  • “There have been incidents where charges have been dropped because of the inadequacies of the system. There have been cases of assaults, albeit fairly minor assaults, but these are still people who should be facing criminal charges”
  • “It slows the whole criminal justice system down. At the moment, it is not fit for purpose. This is the most challenging time I have come across. We’re at breaking point already. This has pushed some officers over the edge”
  • “When you’ve got detainees in a custody block who’ve got various illnesses and ailments, medical conditions that are all recorded on there and they need medication at certain times – it became very dangerous because we were unable to access the records”

The nine forces – which also include those in Cambridgeshire, Kent, Norfolk, Suffolk, Warwickshire and West Mercia – said in a joint statement that they had been working with the supplier to identify and correct issues as they arose.

“Over the 12 months up to November 2018, there have only been 72 hours of total downtime and there are detailed plans in place of how to manage business when this occurs.”

Northgate Public Services, which created Athena, said 40,000 officers accessed the system and benefited from improved criminal intelligence.

It said it was working to make improvements to the “complex system”.

“We recognise there are a small number of areas of the solution where improvements can be made and we apologise for any difficulties this has caused.

“We are working hard with the customer and other parties to make these improvements as a priority.”

Comment:

As @BarristerSecret said,

“No accountability, no lessons learned.”

In central and local government, accountability means suppliers sometimes have to pay small penalties. Outsourcing supplier Capita last year paid Barnet Council about £4.2m in compensation for poor performance.

It was a fraction of the hundreds of millions Capita has received from Barnet Council.

Sometimes the opposite happens and it is the supplier that wins money from the government after a failure.

The Home Office sacked Raytheon over problems on an e-borders IT systems and ended up paying Raytheon £224m in compensation.

The Department of Heath ended up paying Fujitsu hundreds of millions of pounds after the supplier’s contract to deliver systems under the National Programme for IT [NPfIT] was ended.

A major failure in one area of the public sector will not  stop or deter officials from awarding the same supplier a major contract in the same or another part of the public sector.

Were a major failure or legal dispute to preclude a supplier from bidding for further UK public sector work, most if not all major suppliers would today have little UK government business.

A solution?

There is an effective way to encourage IT suppliers and the public sector to avoid public service failures. But the senior civil service isn’t interested.

That solution would be to publish – after every major public services failure – a full, independent third-party report into what went wrong and why.

Some senior officials seem unruffled by public criticism or even contempt after a services failure. But particularly in some of the major departments, there is a high-level fear of the full truth emerging after an administrative disaster.  Departments would do almost anything to avoid IT-related failures if reports on the causes were routinely published.

But unless there is a Parliamentary or public clamour for such internal analyses to be published, they will remain hidden or uncommissioned.

When the National Audit Office publishes a report on a departmental failure, the report has usually been agreed and signed off by the department; and it is usually a one-off report.

When public services descend into chaos, as happened in the court service last week, immense pressure falls on the IT teams to restore normal services urgently. But without the routine publication of reports on major IT-related public service failures, where is the motivation for senior officials to avoid chaos in the first place?

House of Commons debate on the courts’ IT failures

Thank you to Celina Bledowska for her tweet alerting me to the criminal justice IT problems.

Advertisements

Atos pleased after it’s cleared of “sharp practice”

By Tony Collins

atos

A Cabinet Office review of the Whitehall contracts of IT services company Atos following a Public Accounts Committee allegation of “sharp practice” has more than  exonerated the supplier.

After looking at 12 Atos government contracts, the Cabinet Office has written to the Public Accounts Committee praising Atos for going beyond its contractual obligations. Where the company has fallen short, it has taken remedial steps.

Rarely are any government statements on an IT supplier replete with praise.

It’s likely the vindication will take some MPs by surprise after failings in a project to gather and collect in one place data from all the various GP practice systems – the so-called General Practice Extraction Service.

Now Atos may in future be a position to use the statement as evidence, when bidding, of its success in delivering government IT services and projects.

Millions written off

In December 2015 the Public Accounts Committee was highly critical of Atos in its report on the extraction service project.

The NHS Information Centre accepted the system from Atos although it didn’t work properly. The Centre also made public announcements at the time on the system’s success.  In fact the system had “fundamental design flaws” and millions of pounds was written off.

The Committee said,

“Very common mistakes from past projects were repeated, such as failing to adopt the right contracting approach, failing to ensure continuity of key staff on the project, and failing to undertake proper testing before accepting the system.

“GPES [General Practice Extraction Service] started some five years later than planned; it is over-budget; and it still does not provide the full service required.

“Atos, supplier for a key part of the system, may have met the letter of its contractual obligations but took advantage of a weak client by taking the client’s money while knowing full well that the whole system had not been properly tested.”

The Committee said that the NHS official who was chief executive of the Information Centre when it accepted the flawed system was “awarded total emoluments of £470,000 for the financial year 2012–2013 including a redundancy payment of £330,000”.

Tests

The Committee found that in its approach to the project, “Atos did not show an appropriate duty of care to the taxpayer”.

“We are not satisfied Atos provided proper professional support to an inexpert client and are very concerned that it appears to have acted solely with its own short term best interests in mind.

“Atos admitted that end-to-end testing should always be undertaken and that it was supposed to have happened in this case. However, NHS IC and Atos agreed a more limited test of the Atos component due to delays in completing other parts of the system.

“The Atos software passed this test, but after NHS IC accepted the system—and to Atos’s professed surprise—the system as a whole was found not to work. Atos claims it fixed the issues relating to its software at its own expense and that the additional £1.9 million it received while doing so was for additional work related to 15 new features.

“We found that Atos’s chief executive, Mr Adrian Gregory—the company’s witness in our enquiry—appeared rather indifferent to the plight of the client; we expect more from those contracting with government and receiving funds from the taxpayer.”

“Sharp practice”

The Committee recommended that the Cabinet Office undertake a “full review of Atos’s relationships as a supplier to the Crown”.

“We expect the Cabinet Office to note carefully this example of sharp practice when determining what obligations a duty of care on contractors should entail and what sanctions would apply when performance falls short.”

The government agreed to have a review.

Findings of Cabinet Office review of Atos contracts

The Cabinet Office found no “examples of behaviour that might be described as sharp commercial practice in the course of this review”.

The review team looked at 12 Atos contracts worth a total of more than £500m a year – 80% of Atos’s work with central government.

 

No: Department Contract Name
1 Department for Work and Pensions (DWP) Personal Independence Payments (PIP)
2 Department for Work and Pensions (DWP) Government Gateway Agreement
3 Department for Work and Pensions (DWP) ICT in support of medical assessments
4 HM Treasury (HMT) National Savings and Investments (NS&I)
5 Ministry of Justice (MOJ) Development, Innovation and Support Contracts (DISC) Infrastructure Services Agreement
6 Ministry of Justice (MOJ) End User Computing Services (EUCS)
7 Nuclear Decommissioning Authority (NDA) Shared Service Alliance
8 Home Office (HO) IND Procurement of Infrastructure Development and Support (IPIDS) Agreement
9 Home Office (HO) Contain Agreement
10 Department of Health (DH) Information Management Services (IMS 3)
11 Ministry of Defence (MOD) Strategic Partner Framework Defence Core Network Services (DCNS01)
12 Driver and Vehicle Standards Agency (DVSA) ICT Managed Services Agreement (IS2003)

Far from finding examples of sharp practice, the review team found “examples to the contrary”. In some of the contracts, Atos was “working at risk” and going “beyond their contractual obligations to act in the client’s interests”.

“Specific examples include expediting change control notices at the client’s request in advance of formal approval, taking financial risk ahead of contract extensions and proactively supporting the redeployment of resource to assist in the avoidance of client cost. On one contract, a notice period for a number of major decommissioning events lapsed and Atos continued to deliver the services flexibly to the client’s requirements until the service could be safely decommissioned.”

Where Atos did not meet monthly performance targets, service penalties were incurred and charged to Atos. “It was evident that when operational performance fell short appropriate sanctions were applied.”

Commitment

The Cabinet Office went on to say that Atos proactively and constructively engaged in the review and provided information as requested, “sometimes over and above their contractual commitments”.

The review team added,

“It is clear that Atos values its relationship as a supplier to the Crown; it has a comprehensive approach to the governance of all the contracts reviewed and the Atos leadership team shows commitment to its customers.

“In response to the PAC [Public Accounts Committee] hearing Atos has undertaken a number of initiatives to address PAC’s concerns.

“The Atos corporate programme ‘Client at the Heart’ aims to deepen the client-focussed culture within the organisation by embedding a set of values and action plans to deliver improved service for each contract they run, including all government contracts.

“In addition, whilst employees have always been recognised for achievement in quantitative and qualitative objectives, financial targets vary but typically account for only a small proportion of total reward packages.

“We see this as evidence that Atos client executives are incentivised to provide the appropriate professional support.”

An Atos spokesman told civilserviceworld that the company was “proud to be a trusted supplier” and had welcomed the review as an opportunity to demonstrate the quality of its services.

“We are pleased that the Cabinet Office has concluded that we deliver the appropriate level of professional support to our government clients,” he said.

Comment

It’s clear that Atos deserves credit for going beyond the call of duty on some contracts. It is also clear that those departmental officials the Cabinet Office spoke to as part of the review were happy with Atos.

What’s not so clear is the extent to which civil servants in general are in a position to know how well their major IT suppliers are performing.

Evidence from National Audit Office reports is that departments may not always have comprehensive, accurate and up-to-date information – and enough staff time – to give sound judgements on how well a major IT supplier is performing on a complex contract.

Indeed the National Audit Office can be scathing about the quality of contract management within departments.

In 2013 the Audit Office, in its report “Universal Credit: early progress” identified a series of astonishing failings that, taken together,  suggested that the DWP had little understanding of what its major IT suppliers were charging for, or why, let alone what their performance was like.

The DWP is the largest central government department – which leaves one to wonder whether some other departments, which have smaller budgets and fewer staff, are better or worse off in terms of understanding their IT contracts.

These were some of the contract management weaknesses at the DWP as identified by the National Audit Office in 2013:

  • Over-reliance on performance information that was provided by suppliers without Department validation.
  • Inadequate controls over what would be supplied, when and at what cost because deliverables were not always defined before contracts were signed.
  • Weak contractual relationships with supplier
  • The Department did not enforce all the key terms and conditions of its standard contract management framework, inhibiting its ability to hold suppliers to account.
  • Limited line of sight on cost of delivery, in particular between expenditure incurred and progress made in delivering outputs.
  • Poorly managed and documented financial governance, including for delegated financial authorities and approvals; for example 94 per cent of spending was approved by just four people but there is limited evidence that this was reviewed and challenged.
  • Limited IT capability and ‘intelligent client’ function leading to a risk of supplier self-review.
  • Insufficient review of contractor performance before making payments – on average six project leads were given three days to check 1,500 individual timesheets, with payments only stopped if a challenge was raised.
  • Ministers had insufficient information to assess the value for money of contracts before approving them.
  • Insufficient challenge of supplier-driven changes in costs and forecasts because the programme team did not fully understand the assumptions driving changes.

The Cabinet Office, in its review of Atos, found “inconsistencies” in departmental compliance with guidelines on contract management. It said,

“Where the evidence suggests that contract management is inconsistent [with National Audit Office guidelines on contract management] the Cabinet Office is discussing improvements with the contract owners in the Departments concerned.”

Praise where praise is due and Atos may well be a good – and perhaps outstanding – IT supplier to central government.

But if departments don’t have enough solid information on how well their major IT suppliers are performing, to what extent is any Cabinet Office statement praising an IT supplier likely to be a hopeful panegyric, based on what officials in departments believe they are expected to say?

Cabinet Office statement on Atos to the Public Accounts Committee – 8 September 2016

Public Accounts Committee report on Atos and the General Practice Extraction Service – December 2015

 

Another fine NHS IT mess

By Tony Collins

Today the National Audit Office reports on the General Practice Extraction Service, an IT system that allows patient data to be extracted from all GP practices in England.

The report says that Department of Health officials – who were then working for the NHS Information Centre – signed off and paid for a contract even though the system was unfit for use. The original business case for the system grossly underestimated costs.

And the system was developed using the highest-risk approach for new IT – a combination of agile principles and traditional fixed-price contract.

Some of the officials involved appear to be those who worked for NHS Connecting for Health – the organisation responsible for what has become the UK’s biggest IT-related failure, the £10bn National Programme for IT (NPfIT).

As with the NPfIT it is unlikely anyone responsible for the latest failure will be held accountable or suffer any damage to their career.

The NAO says officials made mistakes in the original procurement. “Contract management contributed to losses of public funds, through asset write-offs and settlements with suppliers.” More public money is needed to improve or replace the system.

Labour MP Meg Hillier MP, the new chairman of the Public Accounts Committee, sums up today’s NAO’s report:

“Failed government IT projects have long been an expensive cliché and, sadly for the taxpayer and service user, this is no exception.

“The expected cost of the General Practice Extraction Service ballooned from £14m to £40m, with at least £5.5m wasted on write-offs and delay costs.

“GPES has managed to provide data for just one customer – NHS England – and the data was received 4 years later than originally planned.

“While taxpayers are left picking up the tab for this failure, customers who could benefit, such as research and clinical audit organisations, are waiting around for the system to deliver what they need to improve our health service.”

Some GPs who do not want patient data to be extracted from their systems – they believe it could compromise their bond of confidentiality with patients – may be pleased the extraction system has failed to work properly.

But their concern about patient confidentiality being compromised will not make the failure of the extraction service any more palatable.

The NAO says it only learned of the failure of the extraction system through its financial audit of the Health and Social Care Information Centre. It learned that the system was not working as expected and that HSCIC had agreed to pay additional charges through a settlement with one of the main suppliers, Atos IT Services UK Ltd.

An NHS Connecting for Health legacy?

Work on the GP Extraction Service project began in 2007, first by the NHS Information Centre, and then by the HSCIC.

The NHS Information Centre closed in 2013 and responsibility transferred to the HSCIC which combines the Department of Health’s informatics functions – previously known as NHS Connecting for Health or CFH – and the former NHS Information Centre.

What went wrong 

The original business case said the extraction service would start in 2009-10, but it took until April 2014 for HSCIC to provide the first data extract to a customer.

Meanwhile other potential users of the system have found alternative sources of patient data in the absence of the HSCIC system.

The NAO says that officials changed the procurement strategy and technical design for the GPES extraction systems during the project. “This contributed to GPES being unable to provide the planned number and range of data extracts.”

The NHS Information Centre contracted with Atos to develop a tool to manage data extraction. In March 2013, the Centre accepted delivery of this system from Atos.

But officials at the HSCIC who took over the system on 1 April 2013 found that it had fundamental design flaws and did not work. “The system test did not reflect the complexity of a ‘real life’ data extract and was not comprehensive enough to identify these problems”.

To work in a ‘real life’ situation, the GPES query system needed to communicate accurately with the four separate extraction systems and other systems relying on its data.  The test officials and Atos agreed was less complex. It did not examine extractions from multiple extraction systems at once.

Nor did the test assess the complete process of extracting and then passing GPES data to third-party systems.

Fixed price and agile – a bad combination

Officials began procuring the GPES query tool in April 2009, using a fixed-price contractual model with ‘agile’ parts. The supplier and officials would agree some of the detailed needs in workshops, after they signed the contract.

But the NAO says there was already evidence in central government at this time that the contractual approach – combining agile with a fixed price – was high risk.

The NAO’s report “Shared Services in the Research Councils”reviewed how research councils had created a shared service centre, where a similarly structured IT contract failed.

In the report, Fujitsu and the shared service centre told the NAO that: “the fixed-rate contract awarded by the project proved to be unsuitable when the customers’ requirements were still unclear.”

The court case of De Beers vs. Atos Origin highlighted a similar failure.

To make matters worse officials relied too heavily on contractors for development and procurement expertise.  And 10 project managers were responsible for GPES between 2008 and 2013.

Once health officials and Atos had signed the query tool contract, they found it difficult to agree the detailed requirements. This delayed development, with Atos needing to start development work while some requirements had yet to be agreed. Officials and Atos agreed to remove some minor components. Others were built but never used by HSCIC.

A Department of Health Gateway 4 review in December 2012 found that difficulties with deciding requirements were possibly exacerbated by development being offshore.

They raised concerns about the project management approach:

“The GPET-Q [query tool] delivery is being project managed using a traditional ‘waterfall’ methodology. Given the degree of bespoke development required and the difficulties with translation of requirements during the elaboration parts of R1, the Review Team considers that, with hindsight, it might have been beneficial to have adopted an Agile Project Management approach instead.”

General Practice Extraction Service – an investigation. NAO report. 

Latest healthcare IT disaster is a reminder of how vital government digital transformation is.

 

Universal Credit and its IT – an inside track?

By Tony Collins

An excellent BBC Radio 4 “Inside Welfare Reform” Analysis broadcast yesterday evening gave an insider’s view of the IT-based Universal Credit programme from its beginnings to today.

It depicted Iain Duncan Smith as a courageous reformer who’s kept faith with important welfare changes that all parties support. If they work, the reforms will benefit taxpayers and claimants. The broadcast concludes with an apparent endorsement of IDS’s very slow introduction of UC.

“When real lives and real money are at stake, being cautious is not the worst mistake you can make.”

So says the BBC R4 “Analysis” guest presenter Jonathan Portes who worked on welfare spending at the Treasury in the 1980s and became Chief Economist at the Department for Work and Pensions in 2002. He left the DWP in 2011 and is now director at the National Institute of Economic and Social Research.

The BBC broadcast left me with the impression that UC would today be perceived as meeting expectations if DWP officials and ministers had, in the early days:

– been open and honest about the complexities of IT-related and business change

– outlined the potential problems of implementing UC as set out in internal reports and the minutes of programme team meetings

– explained the likelihood of the UC programme taking more time and money than initially envisaged

– urged the need for extreme caution

– made a decision at the outset to protect – at all costs – those most in genuine need of disability benefits

– not sold UC to a sceptical Treasury on the basis it would save billions in disability claims  – for today thousands of disability claimants are in genuine need of state help, some of whom are desperately sick, and are not receiving money because of delays.

Instead UC is perceived as a disaster, as set out in Channel 4’s Dispatches documentary last night.

A £500m write-off on IT?

Other noteworthy parts of the BBC R4 Analysis broadcast:

– The Department for Work and Pensions gave selective responses to the BBC’s questions. Portes: “We did ask the Department for Work and Pensions for an interview for this programme but neither Iain Duncan  Smith nor any minister was available. We sent a detailed list of questions and have had answers to some.”

– Margaret Hodge, chairman of the Public Accounts Committee, gave her view that the next government will have to write off £500m on IT investment on Universal Credit – about £360m more than the Department for Work and Pensions has stated publicly.

Hodge told the BBC: “We are now on our fourth or official in charge of the project and the project has only been going four or five years. Anyone who knows about project management will tell you that consistency of leadership is vital. I don’t think there has been ownership of the project by a senior official within DWP.  I think they and ministers have only wanted to hear the good news. Management of the IT companies has been abysmal.

“I still believe, though I haven’t t got officials to admit to this, that after the general election we will probably be writing off in excess of half a billion  pounds on investment in IT that had failed to deliver… The investment in IT that they are presently saying they can re-use in other ways is not fit for purpose. The system simply cannot cope.”

The BBC asked the DWP for its comment on the scale of the write-offs. “No answer,” said Portes.

Parliament told the truth?

Stephen Brien, who has been dubbed the architect of Universal Credit, gave his first broadcast interview to Analysis. He worked with IDS at the Centre for Social Justice, a think tank set up by IDS in 2004. Brien saw IDS on a nearly daily basis.

Portes asked Brien when IDS first realised things were going off track. “The challenge became very stark in the summer of 2012,” said Brien.

Portes: What was your relationship with IDS?

“My office was across the corridor from his.  I would join him for all the senior meetings about the programme. I would keep him updated as a result of the other meetings I was addressing within the programme team. When it became materially obvious we had to change plans it was over that summer [2012].

Portes: But that was not the public line. In September 2012 this is what IDS said (in the House of Commons):

“We will deliver Universal Credit on time, as it is, on budget, right now.”

IDS appears to have given that assurance while being aware of the change to UC plans.

UC oversold to Treasury?

Portes: “The really big savings were supposed to come from disability benefit. And here trouble was brewing. The problem was the deal IDS had done with the Treasury. The Treasury never liked UC. It thought it was both risky and expensive. And the Treasury, faced with a huge budget deficit, wanted to save not spend.

“With pensions protected disability benefits were really the only place savings could be made.  The previous government had contracted ATOS to administer a new medical test – the Work Capability Assessment – to all 2.5 million people on Incapacity Benefit but only a few pilots had started.

“IDS and the Treasury agreed to press ahead.  Some claimants would be moved to new Employment and Support Allowance but the plan was that several hundred thousand would lose the benefit entirely – saving about £3bn a year.

“Disability living allowance which helps with the extra cost of disability would also be replaced with the new, saving another £2bn…

But …

“By now the new work capability assessment was supposed to have got more than 500,000 people off incapacity benefits. Instead they are stuck in limbo waiting for an assessment.

“By now the new Personal Independence Payment should have replaced disability living allowance saving billions of pounds more. Instead it too has been dogged by delay.

“Just a few days ago the Office for Budget Responsibility said delays in these benefits are costing taxpayers close to £5bn a year. This dwarfs any savings made elsewhere and leaves a potential black hole in the next government budget.”

How many people left stuck in the system?

The BBC asked the Department of Work and Pensions’ press office how many claimants, and for how long, they have been waiting for claims to be resolved. Portes: “They didn’t answer. But their own published statistics suggest it is at least half a million.

“One aim of the reforms was to cut incapacity benefit and the numbers had been on a long slow decline between 2003 and 2012 but now it is rising again. So much for the Treasury saving.”

Who is at fault?

Publicly IDS talks about a lack of professionalism among civil servants and that he has lost faith with their ability to manage the UC-related problems. Rumours in the corridors of Westminster are that behind the scenes IDS has attempted to blame his permanent secretary Robert Devereux.  On this point, again, the DWP refused the BBC’s request for a comment.

Gus O’Donnell, former head of the civil service, who appointed Devereux, told the BBC that tensions between IDS and Francis Maude at the Cabinet Office did not help. “Robert [Devereux] was in a very difficult position. He was in a world where Francis Maude was trying to deliver, efficiently, programmes for government and on the other hand IDS was seeing the centre as interfering and criticising whereas he knew best: it was his project; he was living it every day. There was a lot of tension there. Really what we need to do is get everyone sitting round a table trying to work out how we can deliver outcomes that matter.”

Was Devereux set up to fail?

O’Donnell: “With hindsight one can say this is a project that could not be delivered to time and cost.”

Were DWP officials to blame?

Stephen Brien said: “There was a real desire from the very beginning to get this done. I think there was a desire within DWP to demonstrate that it could again do big programmes. The DWP had not been involved in very large transformation programmes over the previous decade. There was a great enthusiasm to get back in the saddle,  a sense that it [UC] had to get underway and it had to be well entrenched through Parliament.

“These forces – each of them – contributed to a sense of ‘we have got to get this done and therefore we will get this done.’”

Too ambitious?

Richard Bacon, a member of the Public Accounts Committee, told the BBC: “If you know what it is you want to do and you understand what is required to get there, then what’s wrong with being ambitious?

“The trouble is that when you get into the detail you find you are bruising people, damaging people, people who genuinely will always need our help. Taxpayers, our constituents, expect us to implement things so that they work, rather than see project after project go wrong and money squandered.

“There may come a point where we say: ‘we have spent so much money on this and achieved so little, is the game worth the candle?’”

Thank you to Dave Orr for drawing my attention to the Dispatches documentary. 

When “life and death” NHS IT goes down

By Tony Collins

Almost unnoticed outside the NHS an email was circulated by health officials last weekend about a national “severity 1” incident involving the Electronic Prescription Service, running on BT’s data Spine .

“The EPS [electronic prescriptions service] database is currently experiencing severe degradation of performance. … BT engineers [are] currently investigating with the database application support team,” said the email.

A severity 1 or 2 incident, which involves a temporary loss of, or disruption to, the Spine or other national NHS system,  is not unusual, according to a succession of emails forwarded to Campaign4Change.

The Department of Health defines a severity 1 incident as a  failure that has the potential to:

— have a significant adverse impact on the provision of the service to a large number of users; or

— have a significant adverse impact on the delivery of patient care to a large number of patients; or

— cause significant financial loss and/or disruption to NHS Connecting for Health [now the Health and Social Care Information Centre], or the NHS; or

— result in any material loss or corruption of health data, or in the provision of incorrect data to an end user.

The Health and Social Care Information Centre, which manages BT’s Spine and other former NPfIT contracts, reports that the spine availability is 99.9% or 100%. But the HSCIC’s emails tell a story of service outage or disruption that is almost routine.

If the spine and other national services  are really available 99.9% of the time, is that good enough for the NHS, especially when ministers and officials are increasingly expecting clinicians and nurses to depend on electronic patient records and electronic prescriptions?  In short, are national NHS IT systems up to the job?

NHS staff access the spine tens of millions of times every month, often to trace patients before accessing their electronic records.  The spine is pivotal to the use of patient records held on Rio and Cerner Millennium systems in London. It is critical to the operation of Choose and Book, the Summary Care Record, Electronic Prescription Service pharmacy systems, GP2GP, iPM/Lorenzo, and the Personal Demographics Service.

According to a Department of Health letter sent to the Public Accounts Committee, payments to BT for the Spine totalled £1.08bn by March 2013.

BT says on its website that its 10-year NHS Spine contract involves developing systems and software to support more than 899,000 registered NHS users. The HSCIC says the Spine is used and supported 24 hours a day, 365 days a day.

“There is a huge amount of industrial-strength robustness, availability, disaster recovery, that you cannot get someplace else,” said a BT executive when he appeared before MPs in May 2011.

Life and death  

Sir David Nicholson spoke of the importance of the spine and other national NHS systems at a hearing of the Public Accounts Committee in 2011. He said they were

“providing services that literally mean life and death to patients today … So the Spine, and all those things, provides really, really important services for our patients…”

When Croydon Health Services NHS Trust went live with a Cerner Millennium patient records system at the end of September a “significant network downtime” – of BT’s N3 network – had an effect on patients.

A trust board paper, dated 25 November 2013 says:

“CRS Millennium (Cerner) Deployment -Network downtime – Week 1.  In particular, the significant network downtime in week 1 (BT N3 problem) led to no electronic access to Pathology and Radiology which resulted in longer waits for patients in the Emergency Department (ED) leading to a large number of breaches. This was a BT N3 problem which has been rectified with BT …”

Below are some of the emails passed to Campaign4Change in the past four months. Written by the Health and Social Care Information, the emails alert NHS users to outages or disruption to GP or national NHS IT systems.

Some HSCIC messages of disruption to service

October 2013

Severity 2
HSCIC
National
CQRS has not received a number of participation status messages.
Also affecting: GPES
USER IMPACT:
CQRS Users are not able to manually submit specific information, this will impact the users’ business process for entry of achievement data.
ACTION BEING TAKEN:
Following a configuration change by the GPES Business Unit a specific code has now been added to the GPET-Q Database. We are currently awaiting confirmation that the addition of the relevant code has been successful. Discussions are taking place regarding the re-submission of status messages. HSCIC conference calls are on-going.

[A severity 2 service failure is a failure [that] has the potential to:

– have a significant adverse impact on the provision of the service to a small or moderate number of service users; or

– have a moderate adverse impact on the delivery of patient care to a significant number of service users; or

– have a significant adverse impact on the delivery of patient care to a small or moderate number of patients; or

– have a moderate adverse impact on the delivery of patient care to a high number of patients; or

– cause a financial loss and/or disruption … which is more than trivial but less severe than the significant financial loss described in the definition of a Severity 1 service failure.]

**

Severity 2
HSCIC
BT Spine
National
Intermittent performance issues on TSPINE.
T-Spine
RESOLUTION:
BT Spine have confirmed that the incident has been resolved and users are able to perform routine business processes without delays.

November 2013

Severity 1
BT Spine
HSCIC
National
Users are unable to log into PDS.
USER IMPACT:
All sites are currently unable to access PDS, this is causing a delay to normal services.
ACTION BEING TAKEN:
BT Spine are working to restore service.

**

Severity 2
BT Spine
HSCIC
National EPS users.
Slow performance on reliable and unreliable messages for EPS.
USER IMPACT:
This is causing delays to routine business processes as some users may be experiencing slow performance with the EPS service.
BT investigating.

**

Severity 2
BT Spine
HSCIC
National
Slow performance on EPS Messaging.
USER IMPACT:
This is causing delays to routine business processes as some users may be experiencing slow performance with the EPS service.
ACTION BEING TAKEN:
BT moved the database to an alternate node following application server restarts. This temporarily restored normal message response times however performance has started to degrade again. BT Investigation continues.

**
Severity 1
Atos
HSCIC
National
Multiple users were unable to log in to the Choose & Book application.
ATOS made some network configuration changes overnight 19th/20th November which restored service. After a period of monitoring throughout the day yesterday the service has remained stable and at expected levels. Further activities and investigation will be carried out by several resolver teams which will be scheduled through change management.

**
Severity 2
BT Spine
HSCIC
National
Slow performance on EPS Messaging.
No further issues of slow response times with EPS messaging have occurred today. BT Spine to continue root cause investigation.

**

Severity 2
Cegedim RX
HSCIC
National
Cegedim RX – Users are experiencing slow performance in EPS 1 and EPS 2.
USER IMPACT:
Users are experiencing slow performance and delays to routine business processes when using EPS 1 and EPS 2.
ACTION BEING TAKEN:
Following a restart of application services, traffic has improved for all new EPS messages. However there is a backlog of EPS messages which may cause delays to routine business processes. Cegedim RX to continue to investigate.

**

December 2012

Severity 1
BT Spine
HSCIC
National
Performance issues have been detected with the transaction messaging system (TMS).
Also affecting: Choose and Book, GP2GP
USER IMPACT:
This may cause delays to routine business processes. This may have an effect on all Spine related systems. This includes PDS, Choose and Book, PSIS, SCR, ACF Services.
ACTION BEING TAKEN:
This has been resolved but BT are currently monitoring performance. Further investigation is required by BT into the root cause.

**

Severity 2
GDIT – CQRS
HSCIC
National
DTS has not processed a CQRS payment file.
CQRS
Also affecting: GPES
USER IMPACT:
This is causing delays to routine business processes.
ACTION BEING TAKEN:
GDIT are currently developing a fix which will be rolled out tomorrow evening, pending successful testing.

January 2014

Severity 1
BT Spine
HSCIC
National
TMS reliable messaging unavailable.
USER IMPACT:
TMS reliable messaging unavailable and users having to implement manual workarounds.
ACTION BEING TAKEN:
Issues experienced due to a planned change overrunning, BT Spine continue to implement the transition activity in order to restore service.

**

Severity 2
BT Spine
HSCIC
National
Users have experienced intermittent issues with the creation and cancellation of smartcards in CMS [Card Management Service for managing smartcards].
CMS
USER IMPACT:
This is intermittently causing delays to routine business processes as some users have been unable to create, cancel, cut or print cards in CMS.
ACTION BEING TAKEN
Users may experience issues with the creation and cancellation of cards in CMS. BT have identified a fix for the issue which is currently undergoing testing prior to deployment into the live environment.

**

Severity 2
BT Spine
HSCIC
National
The maternity browser was unavailable within NN4B.
RESOLUTION:
BT identified a problematic server which was recycled to restore system functionality.

**

Spine scheduled outage for essential maintenance activity.

During critical work to migrate to a new storage solution on Spine an issue was experienced on the Transaction Messaging Service (TMS) in September of this year. The issue resulted in BT failing over the TMS database from its usual site on Live B to Live A to restore service. The failover was completed well within the Service Level Agreement and no detrimental long term impacts to the service were incurred.

On the 15th January 2014 between approximately 22:00-23:30, HSCIC, in conjunction with BT, are planning to relocate the TMS database back to Live B, this is for several critical reasons:

  1. The issues experienced, which prompted the failover, are fully resolved and will not be experienced again as the storage migration work is now complete.
  2. The Spine service is designed to operate with all databases running on Live B so this work supports the optimum configuration for the service.
  3. Most critically the transition for all data on Spine to Spine2 has been designed to operate from a standby site with no live databases on it. Therefore to support the Spine2 transition this work is absolutely essential.

In order to facilitate a safe relocation of the database a 1.5 hour outage is required to TMS. The impact of this to Spine is significant and results in effectively an outage for Spine and its interfaces to connecting systems for that period. The time and date is aimed at the lowest times of utilisation for Spine, to minimise impact to end users, as well as not impacting critical batch processing and Choose & Book slot polls.

 

Date & Time

Change Start Change Finish Services Affected Outage Duration
15/01/2013 22:00 15/01/2013 23:30 Transaction Messaging Service (TMS) 1.5 hours
Service  Impact Description
Choose and Book The Choose and Book service will be available but functionality will be limited until the TMS database has switched over.Users of the web application will experience limited retrievals during the outage window.The system will not be able to create shared-secret for patients who have not been referred via Choose and Book before.Service Providers will be unable to:

  • Perform clinic re-structures and re-arrange appointments for patients for directly bookable services
  • Send DNA messages to Choose and Book.

For directly bookable services the following functionality will be unavailable:

  • Booking appointments
  • Rearranging appointments
  • Creating new patient accounts

Choose & Book systems will need to queue the messages and resend to Spine once the TMS service is enabled.

Due to the timing of the outage slot polls will not be affected.

Summary Care Record application (SCRa) The SCRa application will be available but functionality will be limited until the TMS database has switched over. Simple traces can be completed on PDS data but users will be unable to perform any PSIS updates (e.g. GP summary updates)
DSA The DSA application will be available but functionality will be limited until the TMS database has switched over.Simple traces can be completed on PDS data but users will be unable to perform any PSIS updates (e.g. GP summary updates).
Electronic Prescription Service (EPS)Pharmacy Systems Reliable messaging will be unavailable for the duration of the switchover work as the TMS service will be suspended dual site. All messages received from EPS systems will be rejected and not go into retry.EPS systems will need to queue the messages and resend to Spine once the TMS service is enabled.
EPS Batch The PPA response for any “claim” messages will not be sent to PPA/PPD. However, EPS will send those response(s) again when the retry jobs are re-activated after the switchover exercise is over. Response for any “claim” messages will not be received until after the switchover. Retry jobs will resend the responses once the TMS service is enabled.
Existing Service Providers (ESPs) There will be varying impacts depending on the product, release version and Spine compliant modules of the solution.ESP systems will need to queue the messages and resend to Spine once the TMS service is enabled.
GP2GP GP2GP will be unavailable until the TMS database has switched over.GP2GP systems will need to queue the messages and resend to Spine once the TMS service is enabled.
GP Extraction Service (GPES) GPES functionality will be unavailable until the TMS database has switched over.Messages will be queued on Spine and processed once the TMS service is restored.
GP Systems Functionality for Choose & Book, EPS and GP2GP, SCR will be limited until the TMS database has switched over.For Choose & Book directly bookable services the following functionality will be unavailable:

  • Booking appointments
  • Rearranging appointments
  • Creating new patient accounts

Systems will need to queue the messages and resend to Spine once the TMS service is enabled.

iPM/Lorenzo The real-time connection to Spine will be unavailable during the TMS outage. However both systems can be disconnected from Spine and operate without synchronised PDS data.iPM/Lorenzo will need to queue the messages and resend to Spine once the TMS service is enabled.
Millennium An outage of PDS reliable messaging will impact Millennium users.Users will be unable to:

  • trace patients
  • register new patients on PDS
  • book or reschedule appointments

Millennium will need to queue the messages and resend to Spine once the TMS service is enabled.

NN4B Trusts will need to be aware that during the outage NHS numbers cannot be generated, new-births cannot be registered and blood-spot labels cannot be generated and should plan accordingly.All birth notifications will be queued and processed once the TMS service is enabled.
Personal Demographics Service (PDS) Simple traces can be completed on PDS data.PDS reliable messaging will be unavailable until the TMS database has switched over.
RiO Users will be unable to:

  • trace patients
  • register new patients
  • book or reschedule appointments

The RiO system will need to queue the messages and resend to Spine once the TMS service is enabled.

TMS Event Service (TES) The majority of TES functionality will be unavailable during the outage.Trusts will need to be aware EPS, Death notifications, and Patient Care Provision Notifications (change of pharmacy) will be queued and sent to the receiving systems once the TMS service is restored.Any impacted notifications will be queued and sent to the receiving systems once TMS is restored.
TMS Batch (DBS, CHRIS, ONS) DBS will be unavailable until the TMS database has switched over (DBS processing will be suspended for the duration of the exercise).As the TMS switchover will be scheduled to start at 22:00, CHRIS batch should complete before the outage starts (CHRIS batch runs at 20:00 nightly).ONS processing will start at 18:00 nightly. If it doesn’t complete before 22:00, the messages will be queued and processed once the TMS service is restored.

**

Severity 2
BT Spine
HSCIC
National
Users are unable to grant worklist items within UIM.
USER IMPACT:
This is causing delays to routine business processes as users are unable to complete their worklist items within the UIM application.
ACTION BEING TAKEN:
BT investigating.

**

Severity 1
BT Spine
HSCIC
National
The EPS database is currently experiencing severe degradation of performance.
USER IMPACT:
Delays to routine business processes.
ACTION BEING TAKEN:
BT engineers currently investigating with the database application support team.

Comment

David Nicholson is right. The NHS has become dependent on systems such as the Spine. But can doctors ever trust any aspect of the safety of patients to systems that are not available 24×7 as they need to be in a national health service?

It appears that BT and other suppliers have not been in breach of service level agreements, and the HSCIC has a good relationship with the companies.  But does the HSCIC have too great an interest in not finding fault with its suppliers or the contracts, for finding fault  could draw attention to any defects in a service for which the HSCIC is responsible?

Have national NHS IT suppliers a strong enough commercial or reputational interest  in avoiding  a disruption or loss of service, so long as they keep within their service level agreements? 

If nobody sees anything wrong with the reliability of existing national NHS IT services improvements are unlikely. Diane Vaughan’s book on the culture and organisation of NASA shows that experts in a big organisation can do everything right according to the rules  and procedures – and still have a disastrous outcome.

Capita – an NAO insight.

By Tony Collins

Capita is a remarkable success story. Formed in 1984 with two people, as a division of the Chartered Institute of Public Finance and Accountancy, it grew rapidly to become a FTSE 100 member in 2006. In 2012 its turnover was £3.35bn, its pre-tax profits were £425.6m and it employed 52,500 people. It now has 62,000 staff across the UK, Europe, South Africa and India. It  acquired about 36,000 staff through TUPE.

In a survey, 71% of Capita staff agreed with the statement that “Overall I feel Capita is a good place to work” and 85% have an overall satisfaction with management.

The company’s  public sector turnover in the UK is about £1bn, divided roughly equally between local and central government. Two of its most recent UK contracts are at Barnet Council.

Yesterday the National Audit Office published an insight into four companies, Capita being one, after a request by the chair of the Public Accounts Committee, Margarget Hodge. She is not so impressed by Capita’s success.

“I asked the NAO to carry out this work after looking at case after case of contract failure- G4S and the Olympic security, Capita and court translation services, Atos and work capability assessments, Serco and out-of-hours GP services, to name a few.

“In each case we found poor service; poor value for money; and government departments completely out of their depth,” said Hodge.

Capita, however, comes out of the NAO investigation fairly well, better than the other three companies (G4S, Serco and Atos) but the NAO made some general points, unspecific to any of the four contractors, that indicate contracting arrangements between government and some of its major suppliers are far from ideal.

One of the NAO’s findings is that some suppliers may be “too big to fail” – and “difficult to live with, or without”.

The NAO memo provides information on Capita that would not otherwise be in the public domain. The audit office based its information on interviews with suppliers and civil servants, surveys, company reports, data from “open book” accounting and Cabinet Office files.

The four suppliers co-operated with the NAO but not completely. Where the contract did not have “open book” clauses Capita did not provide information on its costs or profit margins.

Below are some of the NAO’s findings in its “Memorandum on the role of major contractors in the delivery of public services”.

Capita has contracts with most major central government departments. In 2012/13 these contracts by value included:

Department for Work and Pensions: £146m.

Home Office: £99m

NHS: £71m

MoD: £40m

Department for Transport: £28m

Ministry of Justice: £23m

Cabinet Office: £19m

Department for Education: £17m

Department for Business Innovation and Skills: £11m

Department for Culture Media and Sports: £5m

DEFRA: £5m

Department for Energy and Climate Change: £3m

Department for International Development: £2m

HM Treasury: £2m

HMRC: £1m

Department for Health: £1m

Capita’s profits

The NAO says:

“Capita has been profitable for many years. Its accounts allocate its activities to 11 operating segments according to the nature of the services provided. All of these operate globally and contain at least one public sector contract as well as UK private sector and overseas work.

“The information that we saw at Capita indicates the following

• Public sector work generally has a margin, before both divisional and global overheads, of 6 to 18 per cent, falling to between 1 to 10 per cent once overheads are included. Capita told us that its other public sector contracts would be similar, but that they were ‘doing better’ in the private sector.

• Two contracts reported a loss. Capita said this was because costs such as investment were being incurred at the start of the contract. Capita told us they expected these contracts to achieve a whole-life gross margin of at least 15 per cent.

• Some contracts had higher margins. Capita told us these were older contracts, some of which had made losses early on.

“Capita only showed us information on contracts that had open-book clauses. They believed that most of their clients regularly use open-book access rights. It  [Capita] said: ‘We do not distinguish between public and private sector contracts in our internal management information systems and it would be additional work for us to make available the information in a comparable format.’”

Capita’s UK taxes

The NAO estimate Capita’s UK tax paid in 2012 was £50m-£56m.

Below are some of the NAO’s general points that are not specific to any one of the four companies.

Making money through contract changes

NAO: “Changing a contract and adding requirements allows a contract to evolve, but can be less competitive than fully tendering the new requirement.

“Because of such changes, the total revenue through contract tends to grow, as reflected in the four contractors’ portfolios. In our experience the contractors tend to make higher profit margins on these changes. Good practice aims to build flexibility to the contract and relies on transparent costs and profits…

“Generally contractors manage their profit across a portfolio, targeting an overall level of profit. Low margins are often established during the bidding process, but can increase during the contract lifetime.”

Easier to stick with existing suppliers?

“Incumbents can be seen by procurement and policy officials as the easier and safer option. Across the 15 applicable services we looked at as case studies for this memorandum, seven had been re-tendered at least once, with four of the most recent competitions for each service being won by existing providers and three by new providers.”

Open book accounting not always open

“The government only has access to information on the profits contractors make where ‘open-book arrangements’ are written into contracts. Open-book arrangements either require the contractor to update the client department regularly on their costs and profit, or allow the client to audit those costs and profit on an ad hoc basis.

“We found that use of open-book access rights varies. Some public bodies do not try to see data on contract profits. Comparing profit levels from the open-book arrangements we reviewed also posed challenges as contractors vary in how and when they allocate central overhead costs against profits from contracts…

“We do not have direct audit rights over government contractors. It is normal, however, for government contracts to require the contractor to give us information and help when we audit that public service and government entity. Where there are open‑book accounting arrangements with the government then this includes making those available to us.”

Suppliers pass risk back once contract start?

The original allocation of risk in the contract often changes once the contract starts. For instance:

• Contractors will often pass risk back to clients who do not fully enforce or carry out their part of the contract. The government department therefore needs the appropriate skills to manage the type of contract it is using.

• The original understanding of the risks in the contract may prove to be wrong. This can lead to the contract being terminated (Figure 18) and risks that the government thought the contractor would manage returning to the public sector.

• The government sometimes ignores the commercial terms and risk allocation in the contract when trying to settle a dispute or vary the requirement. Instead, it can put political pressure on the contractor and threaten their reputation

You can’t rely on contracts

The standards expected of all public services are honesty, impartiality, openness, accountability, accuracy, fairness, integrity, transparency, objectivity, and reliability, says the NAO. They should be carried out:

• in the spirit of, as well as to the letter of, the law;

• in the public interest;

• to high ethical standards; and

• achieving value for money.

In these respects public contracts are limited in what they can achieve. Says the NAO:

“Many of the standards expected of all public services do not easily translate into a contract specification. It is not possible, for instance, to contract for ‘integrity’ or the ‘spirit of the law’.

“Achieving the standards expected for public service depends largely on the corporate culture, control environment and ethics of the contractor. It is not easy, however, to use contract negotiations to meaningfully assess and set standards for the contractor overall.

“Government therefore needs to supplement traditional contractual mechanisms with other means of ensuring the expected standards are met. In particular, they need to ensure that the companies’ own corporate governance, management and control environment are aligned with taxpayers’ interests.

“This requires both transparency over performance and incentives to implement the rigorous control environment required including credible threat to profits and future business if problems are found.”

The NAO says officials need to better understand the general control environment that contractors use to manage government contracts, and how far senior executives in those companies should understand what is happening within their companies.

US is more open than UK

The NAO says that companies’ own public reporting and transparency to the public is important to facilitate public scrutiny and trust. Although the government publishes new public contracts on its website www.contractfinder this contains only recently awarded contracts and “very few of the four contractors’ contracts are on it”, says the NAO which adds:

“By contrast, the US government website www.USAspending.gov sets out the full contracts and spending on all government suppliers.”

On Freedom of information, contractors compile information to answer freedom of information requests when asked by their government clients, where they hold the information for the government, but the department answers the actual request.

Says the NAO: “Freedom of information does not apply to the contractor’s business and commercially sensitive information can be exempt.”

On the openness of suppliers in reporting profits the NAO says:

“Even where transparency exists, it is inevitably difficult to interpret profit information. It can be unclear what a reasonable margin looks like. In theory, the margin is meant to reflect risk, innovation and investment. But these are difficult to measure. Furthermore, profit is rarely presented consistently. It can be unclear how overheads are allocated. The profit margin changes, depending on the stage of the project. And different companies may target different rates depending on their business model.”

KPIs of limited value

The NAO says KPIs give a limited overview of performance and are normally focused on things that are easily measurable.

“The main way the government can gain quality assurance is through the contractual reporting. This normally includes a set of KPIs that track performance and that are often linked to financial incentives. Together these make up the service level agreement (SLA). These can be used effectively to manage performance. However, there are three major risks that mean that contractual reporting is not sufficient on its own to monitor performance.”

The NAO says there are risks of misreporting. “There have been instances of contractors misreporting performance, including the case of Serco’s Cornwall out-of-hours healthcare contract …”

Poorly calibrated KPIs.  

“All the contractors told us about instances where poor calibration has resulted in green SLA traffic lights where the client is unhappy or red traffic lights where the client is content with the service. This reduces the SLA’s relevance and can indicate that incentives are not working.”

Are some suppliers too big to fail?

“The current government, like the one before it, sees contracting out as a way to reform public services and improve value for money. Contracting out can significantly reduce costs and help to improve public services. However, there are several indications that better public scrutiny is needed across government contracting:

• There have been several high-profile allegations of poor performance, irregularities and misreporting over the past few months. These raise concerns about whether all contractors know what is going on in their business and are behaving appropriately; and how well the government manages contracts.

• The government believes that contractors generally have often not provided sufficient value, and can contribute more to the overall austerity programme.But the general level of transparency over contractors’ costs and profits is limited. The government needs a better understanding of what is a fair return for good performance for it to maintain the appropriate balance between risk and reward.

• Third, underlying both these issues is the concern that government is, to a certain degree, dependent upon its major providers. There is a sense that some may be ‘too big to fail’ – and difficult to live with or without.

Can we see whether contractors’ profits reflect a fair return?

The NAO’s answer to its own question appears to be “no”.

It says there is a need to explore further:

• Whether there is sufficient transparency over costs, profit and tax.

• Whether the balance of risk and reward is providing the right incentives

for contractors.

• Whether profits represent a fair return.

Shareholder v taxpayers’ interests

The NAO suggests that suppliers are likely to put their own interests before taxpayers’.

“Companies’ own control environments will likely concentrate on maintaining shareholder value. Government needs to ensure that it is in the contractors’ financial interests to focus their control environment more widely on meeting the standards expected of public service.

“This involves using contractual entitlements to information, audit and inspection to ensure standards are being met. And it is likely to involve financial penalties, banning from competitions and political fallout when problems are found.”

The NAO says that, to be a well-informed customer, the government needs to satisfy itself that contractors’ corporate governance structures work in taxpayers’ interests, and that the companies are not paying ‘lip service’ at the centre with little group-wide control to back it up.

“Companies that are large and have sprawling structures, involving a vast number of subsidiaries, may have to make particularly strenuous effort to demonstrate this.”

The NAO suggests further areas to explore:

• Whether contractors are meeting the standards of performance the public expects.

• What contractors consider themselves accountable for.

• Whether transparency is sufficient to ensure contractors work in the taxpayers’ interests.

• Whether contractors’ control environments focus on ensuring standards of public services are met.

Supplier information unverified

The NAO says: “We are grateful for the help and cooperation provided by Atos, Capita, G4S and Serco in the preparation of this memorandum. Most of the information in this report is based on information the companies provided.

“Much of this would not otherwise be in the public domain. The contractors also helped us to understand their business and talked frankly about the risks, challenges and incentives they face.

“However, we do not directly audit these companies and have not been able to verify all the information provided against underlying evidence. We have therefore presented the information in good faith, and attempted to compare different evidence sources wherever possible.”

NAO memorandum on the role of major contractors in the delivery of public services

Comment

Capita is not a bad government contractor.  Perhaps it is one of the best. But is that a ringing endorsement?

The NAO has carried out a thorough investigation but its inquiry suggests that much about public sector contracting remains hidden. On suppliers in general, it is not difficult, if both sides tacitly agree, to hide problems from Parliament, the media and even the Cabinet Office which asks the right questions of departmental officials but does not always get answers, let alone accurate answers.

The NAO did not always get answers to its questions. Indeed Amyas Morse, head of the NAO, said there is an impression that some officials are not in control of their suppliers.

“Contracting with private sector providers is a fast-growing and important part of delivering public services.  But there is a crisis of confidence at present, caused by some worrying examples of contractors not appearing to treat the public sector fairly, and of departments themselves not being on top of things.

“While some government departments have been admirably quick off the mark and transparent in investigating problems, there is a clear need to reset the ground rules for both contractors and their departmental customers,” said Morse.

My thanks to campaigner Dave Orr for drawing my attention to Morse’s comment.

How to cost-justify the NPfIT disaster – forecast benefits a decade away

By Tony Collins

To Jeremy Hunt, the Health Secretary, the NPfIT was a failure. In an interview with the FT, reported on 2 June 2013, Hunt said of the NPfIT

“It was a huge disaster . . . It was a project that was so huge in its conception but it got more and more specified and over-specified and in the end became impossible to deliver … But we musn’t let that blind us to the opportunities of technology and I think one of my jobs as health secretary is to say, look, we must learn from that and move on but we must not be scared of technology as a result.”

Now Hunt has a different approach.  “I’m not signing any big contracts from behind [my] desk; I am encouraging hospitals and clinical commissioning groups and GP practices to make their own investments in technology at the grassroots level.”

Hunt’s indictment of the NPfIT has never been accepted by some senior officials at the DH, particularly the outgoing chief executive of the NHS Sir David Nicholson. Indeed the DH is now making strenuous attempts to cost justify the NPfIT, in part by forecasting benefits for aspects of the programme to 2024.

The DH has not published its statement which attempts to cost justify the NPfIT. But the National Audit Office yesterday published its analysis of the unpublished DH statement. The NAO’s analysis “Review of the final benefits statement for programmes previously managed under the National Programme for IT in the NHS” is written for the Public Accounts Committee which meets next week to question officials on the NPfIT. 

A 22 year programme?

When Tony Blair gave the NPfIT a provisional go-ahead at a meeting in Downing Street in 2002, the programme was due to last less than three years. It was due to finish by the time of the general election of 2005. Now the NPfIT  turns out to be a programme lasting up to 22 years.

Yesterday’s NAO report says the end-of-life of the North, Midlands and East of England part of the NPfIT is 2024. Says the NAO

“There is, however, very considerable uncertainty around whether the forecast benefits will be realised, not least because the end-of-life dates for the various systems extend many years into the future, to 2024 in the case of the North, Midlands and East Programme for IT.”

The DH puts the benefits of the NPfIT at £3.7bn to March 2012 – against costs of £7.3bn to March 2012.

Never mind: the DH has estimated the forecast benefits to the end-of-life of the systems at £10.7bn. This is against forecast costs of £9.8bn to the end-of-life of the systems.

The forecast end-of-life dates are between 2016 and 2024. The estimated costs of the NPfIT do not include any settlement with Fujitsu over its £700m claim against NHS Connecting for Health. The forecast costs (and potential benefits) also exclude the patient administration system Lorenzo because of uncertainties over the CSC contract.

The NAO’s auditors raise their eyebrows at forecasting of benefits so far into the future. Says the NAO report

“It is clear there is very considerable uncertainty around the benefits figures reported in the benefits statement. This arises largely because most of the benefits relate to future periods and have not yet been realised. Overall £7bn (65 per cent) of the total estimated benefits are forecast to arise after March 2012, and the proportion varies considerably across the individual programmes depending on their maturity.

“For three programmes, nearly all (98 per cent) of the total estimated benefits were still to be realised at March 2012, and for a fourth programme 86 per cent of benefits remained to be realised.

There are considerable potential risks to the realisation of future benefits, for example systems may not be deployed as planned, meaning that benefits may be realised later than expected or may not be realised at all…”

NPfIT is not dead

The report also reveals that the DH considers the NPfIT to be far from dead. Says the NAO

“From April 2013, the Department [of Health] appointed a full-time senior responsible owner accountable for the delivery of the [the NPfIT] local service provider contracts for care records systems in London, the South and the North, Midlands and East, and for planning and managing the major change programme that will result from these contracts ending.

“The senior responsible owner is supported by a local service provider programme director in the Health and Social Care Information Centre.

“In addition, from April 2013, chief executives of NHS trusts and NHS foundation trusts became responsible for the realisation and reporting of benefits on the ground. They will also be responsible for developing local business cases for the procurement of replacement systems ready for when the local service provider contracts end.”

The NAO has allowed the DH to include as a benefit of the NPfIT parts of the programme that were not included in the original programme such as PACS x-ray systems.

Officials have also assumed as a benefit quicker diagnosis from the Summary Care Record and text reminders using NHSmail which the DH says reduces the number of people who did not attend their appointment by between 30 and 50 per cent.

Comment

One of the most remarkable things about the NPfIT is the way benefits have always been – and still are – referred to in the future tense. Since the NPfIT was announced in 2002, numerous ministerial statements, DH press releases and conference announcements have all referred to what will happen with the NPfIT.

Back in June 2002, the document that launched the NPfIT, Delivering 21st Century IT for the NHS, said:

“We will quickly develop the infrastructure …”

“In 2002/03 we will seek to accelerate the pace of development …

“Phase 1 – April 2003 to December 2005 …Full National Health Record Service implemented, and accessible nationally for out of hours reference.”

In terms of the language used little has changed. Yesterday’s NAO report is evidence that the DH is still saying that the bulk of the benefits will come in future.

Next week (12 June) NHS chief Sir David Nicholson is due to appear before the Public Accounts Committee to answer questions on the NPfIT. One thing is not in doubt: he will not concede that the programme has been a failure.

Neither will he concede that a fraction of the £7.3bn spent on the programme up to March 2012 would have been needed to join up existing health records for the untold benefit of patients, especially those with complex and long-term conditions.

Isn’t it time MPs called the DH to account for living in cloud cuckoo land? Perhaps those at the DH who are still predicting the benefits of the NPfIT into the distant future should be named.

They might just as well have predicted, with no less credibility, that in 2022 the bulk of the NPfIT’s benefits would be delivered by the Flower Fairies.

It is a nonsense that the DH is permitted to waste time on this latest cost justification of the NPfIT. Indeed it is a continued waste of money for chief executives of NHS trusts and NHS foundation trusts to have been made responsible, as of April 2013, for reporting the benefits of the NPfIT.

Jeremy Hunt sums up the NPfIT when he says it has been a huge disaster. It is the UK’s biggest-ever IT disaster. Why does officialdom not accept this?

Instead of wasting more money on delving into the haystack for benefits of the NPfIT, it would be more sensible to allocate money and people to spreading the word within Whitehall and to the wider public sector on the losses of the NPfIT and the lessons that must be learnt to discourage any future administrations from embarking on a multi-billion pound folly.

Another Universal Credit leader stands down

By Tony Collins

Universal Credit’s Programme Director, Hilary Reynolds, has stood down after only four months in post. The Department for Work and Pensions says she has been replaced by the interim head of Universal Credit David Pitchford.

Last month the DWP said Pitchford was temporarily leading Universal Credit following the death of Philip Langsdale at Christmas. In November 2012 the DWP confirmed that the then Programme Director for UC, Malcolm Whitehouse, was stepping down – to be replaced by Hilary Reynolds. Steve Dover,  the DWP’s Corporate Director, Universal Credit Programme Business, has also been replaced.

A DWP spokesman said today (11 March 2013),

“David Pitchford’s role as Chief Executive for Universal Credit effectively combines the Senior Responsible Officer and Programme Director roles.  As a result, Hilary Reynolds will now move onto other work.” She will no longer work on UC but will stay at the DWP, said the spokesman.

Raised in New Zealand, Reynolds is straight-talking. When she wrote to local authority chief executives in December 2012, introducing herself as the new Director for the Universal Credit Programme, her letter was free of the sort of jargon and vague management-speak that often characterises civil service communications.  It is a pity she is standing down.

Some believe that Universal Credit will be launched in such a small way it could be managed manually. The bulk of the roll-out will be after the next general election, which means the plan would be subject to change. Each limited phase will have to prove itself before the next roll-out starts.

Reynolds’ letter to local authorities suggests that the roll-out of UC will, initially, be limited.  She said in her letter,

“For the majority of local authorities, the impact of UC during the financial year 2013/14 will be limited. .. Initially, UC will replace new claims from single jobseekers of working age in certain defined postcode areas.

“From October 2013 we plan to extend the service to include jobseekers with children, couples and owner-occupiers, gradually expanding the service to locations across Great Britain and making it available to the full range of eligible working age claimants …by the end of 2017.”

Some IT work halted? 

Accenture, Atos Origin, Oracle, Red Hat, CACI and IBM UK have all been asked to stop work on UC, according to shadow minister Liam Byrne MP, as reported on consultant Brian Wernham’s blog.

Wernham says that Minister Mark Hoban did not rebut Byrne’s statement but said that HP was committed to carrying on with the project. HP is responsible for deployment of a solution, not development, says Wernham’s agile government blog.

Comment

The DWP says that Pitchford has taken over from Reynolds – but separately the DWP had confirmed that Pitchford was leading UC temporarily and that Reynolds had a permanent job on the programme. Pitchford’s usual job is running the Major Projects Authority in the Cabinet Office.

All the changes at the DWP, and the reported halting of work by IT contractors, imply that the UC project is proving more involved, and moving more slowly,  than initially thought. It’s also a reason for the DWP to continue to refuse FOI requests for internal reports that assess the project’s progress.

Perhaps the DWP doesn’t want people to know that the project is on track for such a limited roll-out in October that it could be managed, in the main, by hand. With the bulk of the roll-out planned for after the next general election Labour may be denied the use of UC as an effective electoral weapon against the Conservatives. In other words, the riskiest stage of UC is being put off until 2016/17.

 Francis Maude, who is worried that UC will prove an IT and electoral disaster, has his own man, David Pitchford, leading the project, if only temporarily. Meanwhile UC project leaders from the DWP continue to last an extraordinarily short time. Reynolds had been UC programme director for only four months when she stood down. Pitchford is in a temporary role as the programme’s head, and Andy Nelson has recently become the DWP’s Chief Information Officer.

So much for UC’s continuity of leadership.

The truth about the project hasn’t been told. Isn’t it time someone told Iain Duncan Smith what’s really happening – Francis Maude perhaps?