Category Archives: change management

Is HMRC’s RTI project really a success?

By Tony Collins

On  Eddie Mair’s “PM” programme on R4, I suggested that HMRC’s real-time information project was not the failure many had expected it to be.

“Even some hawk-eyed critics of government IT projects like journalist Tony Collins think that HMRC may have something of a success on its hands,” said BBC reporter Chris Vallance who produced the RTI item.

I was quoted as saying that many had expected RTI to become another government IT disaster. “But given that there are millions of PAYE employees who are on the system at the moment, if there were any major difficulties we’d expect to have seen them by now.”

Now an HMRC expert has questioned whether my comments were justified. He says parts of RTI are in chaos. He doesn’t want to be named. He writes:

“The RTI system was intended to report on a weekly or monthly basis the same information as had previously been reported by employers on an annual basis. Although details of pay and tax would be forwarded to HMRC far more frequently the same core logic applied. Details of the statutory deductions by the employer would have to be reconciled with payments made, and details of the income and tax paid recorded against the employee’s PAYE record.

“What appears to have happened is that HMRC has designed a system that takes details of employees’ earned or pension income, and statutory PAYE deductions, and then makes various illogical assumptions.

“For instance it would appear that where an employee receives no earnings in a particular pay period, the RTI system assumes that no information is “transmitted” for this employee, indicating that the employee has “left the employment”.

“Similarly where an employer undertakes a re-order of the pay identities (codes on the payroll system called Works Numbers that identify employees), the fact that payroll information is transmitted to HMRC with a Works Number different to that used previously triggers an assumption that the employee has two employments, with the same employer.

“This has the consequence of allowing the NPS (New PAYE Computer System – costing in excess of £400 million) to assume that the employee’s estimated income for the tax year has doubled. The NPS then looks to see if the employee has any part-time or other employment, and in many cases it changes the PAYE code number of these part-time employments from Basic Rate, which deducts tax at 20%, to Code D0, which deducts tax at 40%. All because of an incorrect and invalid assumption.

“Similarly, this failure to understand how PAYE and payroll interact has lead to the situation where an employee who leaves an employment that has attracted a PAYE coding deduction for Car Benefit in Kind and starts another Employment, has the PAYE Coding Deduction removed. The fact that the new employment may well involve a company car is completely ignored, with the result that the employee is more than likely to have a large underpayment of income tax at the year end, despite being on PAYE.

“This failure to understand the basic operation and logic of PAYE would appear to be due to that fact that HMRC has been influenced by those who have an understanding of data flows and cash transfers. The rush to modernise PAYE and move away from “a 1940’s system” has completely omitted the fact that basic operations for employments, tax and NI deductions and the accountability of these remains exactly the same, even if the calculations are undertaken electronically rather than with a quill pen and large ledger book.

“The old PAYE system had as part of its reporting system two components: the forms P14 detailing each individual’s pay, tax etc. and a summary of all employees information, the form P35. The P14 passed information to the NPS system and the P35 information was passed to the accounts computer systems. This allowed HMRC to determine the income of the employee and calculate if sufficient income tax etc had been paid. It also allowed HMRC to match the figure of tax / NIC due and payable on the P35 with the amount actually received from the employer. RTI has failed to comply with this basic logic and chaos is ensuing, to the extent that the National Audit Office recently commented

 ‘The financial and accounting systems supporting RTI are not yet fully accredited. Financial accreditation is a formal requirement of HMRC’s Change Programme and provides assurance that any new systems are acceptable for accounting and financial control purposes. The RTI systems went live on the basis that action would be taken to resolve identified financial design issues by 31 October 2013.

‘These issues do not affect an employer’s ability to submit data to HMRC but do weaken HMRC’s ability to produce and report financial information on PAYE. HMRC is currently undertaking work to understand the impact of these issues and how best to address them.’

“Why the RTI system was not designed in the same logical manner is of great concern.

“The system failures that are occurring are not due to computer components or programs not being fit for purpose. Indeed the processing of the PAYE data streamed to HMRC as a result of the RTI system could reasonably be compared to any other large commercial organisation, albeit that the NAO has concerns over the fall-back planning HMRC has in place should there be any hardware failures and commented

‘The resilience needed to maintain the RTI service if there is a major technical failure is not in place. Online and time-sensitive system implementations are usually developed with formal technical resilience and disaster recovery capability.

‘HMRC chose not to pay for full resilience because of the cost implications and because PAYE could be operated in an emergency without RTI. However, although RTI has the potential to be used by other government departments, the lack of full resilience may inhibit its use in areas of activity where a temporary disruption to service cannot be tolerated.

‘Data submissions can be held temporarily in a queue but this would not provide continuity of service in the event of a catastrophic failure. The RTI service failing at a critical processing time could increase the volume of customer communications and lead to more effort for employers.’

“The RTI system is a very clear example of basic failures to properly prepare a Business Analysis Requirement for a system which in essence does no more that increase the number of times payroll information is passed to HMRC. Claims for the reinvention of PAYE for the 21st Century are as invalid as the claim that the ability to write has been done away with due to email and electronic communication. There has been a flawed reliance on the thoughts and views of those who have little or no experience in PAYE or payroll.”

On the PM programme, Ruth Owen, Director General of PersonalTax at HMRC, accepted that all was not perfect. She said

“We have had over 1.4 million PAYE schemes come into Real-Time Information [each PAYE scheme may have many employees on it] and that exceeds our expectations at this point in the year. But there’s still more to do. We have got to get everybody on and there are still people who need our help to get on.”

She added: “We have had a small number of difficult issues… We have had issues where people have got the wrong tax codes.”

Owen said the links between RTI and Universal Credit were “going well” but conceded that there have been only a tiny number of UC claimants so far.

“We have had around 100 claimants who we have helped DWP identify income stream data for. So it’s going to plan at the moment.”

Chris Vallance concluded the item by saying that some of the largest employers have yet to be added to RTI. “It’s only when it works at scale that we will really know how good real-time information really is,” he said.

Update: Chartered accountant Baker Tilly says on its website  that thousands of people have been issued wrong tax codes as a result of RTI-related problems. 

Audio of PM programme item on RTI – 4 July 2013 (approx 5 mins)

Whitehall to lose its best troubleshooter

By Tony Collins

David Pitchford, who is arguably the civil service’s most able troubleshooter, is to quit the civil service in September and return to his native Australia for undisclosed family reasons. The FT broke the story yesterday.

Pitchford is Executive Director at the understaffed Major Projects Authority. It aims to work in partnership with permanent secretaries and senior civil servants to improve the success rate of major departmental IT and other large projects. 

In practice some senior civil servants in central departments resent the intrusion of the Cabinet Office. They do not like having to present their big schemes to the Major Projects Authority, particularly as it has David Cameron’s mandate to stop or re-scope failing projects.

Fighting intransigence? 

One unanswered question about Pitchford’s quitting is: has his morale been beaten down by departmental intransigence and even ill-will? Has the system defeated Pitchford and the taxpayer – the same system that confronted other Cabinet Office reformers John Suffolk, Chris Chant and Andy Tait?

It is possible that Pitchford feels his work is done now that the Major Projects Authority has finally, and after some departmental resistance, produced its first annual report.

The report’s key feature is its “traffic light” status on the projects it is keeping an eye on. In a foreword to the report, Pitchford wrote:

“April 2013 marks two years of the Major Projects Authority… For the first time, the country’s biggest and most high-risk projects are scrutinised so problems are exposed before they spiral out of control. Over two-thirds of major projects are predicted to deliver their promises on time and on budget, more than double the historic success rate. However, the MPA has studied carefully what goes on in every department, and we have uncovered some weaknesses which we are continuing to address.

“The MPA was established following a landmark report by the National Audit Office in 2010, which recommended a wholesale shift in the administration of major projects. It works closely with individual departments’ project teams and Permanent Secretaries to monitor and improve the management of major projects…the MPA’s Government Major Projects Portfolio has improved the rate of successful project delivery from under 30% to over 70%.

“Our success has been achieved by focusing intensively on the three core elements of successful project management: improving leadership; improving the operating environment; and looking closely at the past lessons.”

Pitchford is a much-valued executive in part because he can see why projects are failing and is straight-talking. He joined the Cabinet Office in November 2009 and in 2010 told a conference what he had discovered so far about the reasons for the failure of UK government projects:

– Political pressure

– No business case

– No agreed budget

– 80% of projects launched before 1,2 & 3 have been resolved

– Sole solution approach (options not considered)

– Lack of Commercial capability – (contract / administration)

– No plan

– No timescale

– No defined benefits

Since then Pitchford has been a little more guarded now about what he says in public. Campaign4Change said in February 2013 that the longer he stays in the innately secretive civil service the more guarded he seems to become but he is still one the best assets the Cabinet Office has. His main advantage is his independence from government departments.

Francis Maude, Cabinet Office minister, said he would “much miss David’s sharp wit and impressive leadership”.

Is Pitchford’s departure a sign that the non-reformers in Whitehall departments are winning the battle against major change?

 

When Whitehall shuns statutory scrutiny

By Tony Collins

In some ways central departments are deeply accountable.

They provide volumes of statistics and reports to the centre of government (Cabinet Office and Treasury) – as far as their limited management information systems will let them – and senior officers will sometimes answer questions from MPs on Parliamentary committees. Their permanent secretaries will meet colleagues in other departments every week.

At the same time, on things that really matter, some central departments – and councils – can be infinitely unaccountable. 

A report by the National Audit Office – which it says was researched and written unusually quickly, partly in response to parliamentary concern – gives a glimpse of how unaccountable central departments (and councils) can be.

When they don’t want to provide information they simply don’t – and nothing it seems can be done to force disclosure.

Power to ignore

With explicit and written approval from David Cameron the Cabinet Office has the power to mandate change in central departments. But senior officials can, if they wish, when faced with central requests for information, ignore, reject, deliberately misunderstand, confuse or minimise answers, or delay until the request no longer need be answered.

This ability of central departments to evade democratic and even statutory scrutiny surfaces in the NAO report Confidentiality clauses and special severance payments.

The report is into the gagging of public servants when they receive payments for ending their employments early. Rightly, the media’s coverage of the report focuses on the NAO’s concerns over gagging clauses that stop officials becoming whistleblowers. The FT said on Friday (21 June 2013)

“More than a thousand civil servants have signed gagging clauses that could stop them speaking out about problems, a system the [NAO] condemned as “unacceptable”.

What the national media apparently did not notice was that the NAO was unable to obtain all the information it had requested of departments.

“Despite the NAO’s statutory access rights, it received only 60 per cent of the compromise agreements requested from departments,” says the NAO.

The NAO has statutory rights of access to information held by departments. Indeed its Comptroller and Auditor General Amyas Morse certifies the accounts of all government departments and many other public sector bodies. The NAO says he has “statutory authority to examine and report to Parliament on whether departments and the bodies they fund have used their resources efficiently, effectively, and with economy”.

Avoiding NAO scrutiny

But some departments have not complied with the NAO’s requests, and one, the Department of Culture, Media & Sport, formally requested not to be involved in the NAO’s investigation.

Says the NAO report

“Unfortunately, some departments did not respond promptly to our requests, and were delayed by their legal teams’ questioning of our access rights.

The NAO adds

“The Department for Culture, Media & Sport requested not to be involved in this piece of work, a position which could not be resolved until after our fieldwork window had closed.

“We found it challenging to gain a complete picture of the use of confidentiality clauses as, by their nature, they are not openly discussed. Our work was also hampered by incomplete records, and access to data as outlined above.

“It took several attempts to identify the appropriate individuals within departments responsible for compromise agreements and the associated payments. We experienced delays in receiving data, and what departments provided was frequently incomplete or in a format that was difficult to collate and analyse.”

So what can the NAO do now it has been snubbed or, to put it in Whitehall-speak, has encountered departmental non-compliance with statutory access requests?

Little or nothing. The NAO has no power to punish. Through MPs on the Public Accounts Committee it can admonish. That is all.

Says the NAO:

“Given the innovative nature of this work, some initial difficulties were anticipated. We will continue to work with departments, the Treasury and Cabinet Office to explore ways in which we can obtain the evidence on a timelier basis. It is important that departments are able to respond more quickly to these investigations in the future.”

Councils too can evade democratic accountability. The NAO has no access rights to local authorities but councils are, in theory, subject to the Freedom of Information Act. In practice they can all but ignore the FOI legislation if they wish.

In March 2010, the Audit Commission published a report on severance payments to council chief executives. The study found that:

• agreed severance packages for 37 council chief executives totalled £9.5 million, 40 per cent of which were in pension benefits;

• three in every ten outgoing council chief executives received a pay-off;

• the average cost to councils of each severance package was almost double the annual basic salary, but in four cases was more than triple; and

• 79 per cent of mutually-agreed severance payments had a confidentiality clause.

But the NAO found that, in a recent survey of councils by a member of the public under the FoI Act, 52 councils refused to disclose information on their use of compromise agreements.

The good news

The NAO says: “Some organisations have chosen to be transparent about severance packages, such as NHS National Services Scotland, who agreed to the disclosure of a director’s remuneration package, despite a confidentiality agreement being in place, following consultation with legal advisers.”

Comment:

How is Francis Maude to reform central government, particularly IT, if officials in central departments can apparently do what they wish?

The NAO found cases of payments that were higher than contractual entitlement, where there was the apparent reward for failure, and no attempt to seek Treasury’s approval.  Is all this lawful? 

On top of this there are departmental officials who avoided the NAO’s statutory requests for information.

If they can circumvent the law they can probably resist any central demands for change. Resistance seems to be regarded within departments as honourable.

One irony is that bureaucrats in Russia probably have little choice but to respond to central demands – whereas officials in Whitehall departments don’t have to.

Radical reform to change Whitehall’s outdated and costly ways is unlikely to happen while senior officers in departments run the system and have the final say.

NAO report “Confidentiality clauses and special severance payments

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.

Francis Maude boasts of £10bn savings but …

By Tony Collins 

This morning Cabinet Office minister Francis Maude held a press conference with his senior officials to announce that civil servants have radically changed the way they work to save £10bn in 2012/13.

The savings are nearly £2bn higher than originally planned and, according to the Cabinet Office, have been “reviewed and verified” by independent auditors.

With a little journalistic licence Maude says: “…we are on the way to managing our finances like the best-run FTSE100 businesses.”

The breakdown of the £10bn savings:

Procurement   £3.8bn
Centralisation of procurement for common goods and services  £1.0bn
Centrally renegotiating large government contracts  £0.8bn
Limiting expenditure on marketing and advertising, consultants and temporary agency staff   £1.9bn
Transformation savings   £1.1bn
IT spend controls and moving government services and transactions onto digital platforms  £0.5bn
Optimising the government’s property portfolio  £0.6bn
Project savings   £1.7bn
Reviewing performance of major government projects  £1.2bn
Taking waste out of the construction process  £0.4bn
Workforce savings   £3.4bn
Reducing the size of the Civil Service   £2.2bn
Increasing contributions to public sector pensions   £1.1bn

Comment

It’s good news and the figures don’t seem plucked out of thin air which sometimes happens when central government announces savings.

The big question is whether the savings are sustainable. Maude has inspired the Cabinet Office’s Efficiency and Reform Group to be motivated and hard-working. But bringing about long-term change in Whitehall – as opposed to restricting consultancy contracts and cutting annual costs of supplier contracts by reducing what’s delivered – is like peddling uphill. How long can you do it without losing motivation and energy? It’s not just parts of the civil service that are resistant to the savings agenda – it is also some IT suppliers, according to Government Computing.

It’s likely that only profound changes in central government operations and working practices will outlast the next general election. At the moment the civil service is like a rubber band that has been stretched a little. It wants to return to its standard shape, which the next government may allow it to do.

The National Audit Office said in its report in April 2012 on the Efficiency and Reform Group in 2011/12:

“Savings to date have differing degrees of sustainability.”

The NAO also said this:

“It is not fully clear how ERG intends to make the reforms necessary to secure enough savings over the rest of the spending review. ERG has yet to translate its ambition for saving £20 billion by 2014-15 into more detailed plans.

“ERG has made progress in developing strategies across its wide range of responsibilities, and is focusing on core activities likely to produce savings. However, until recently ERG’s focus has mainly been on the savings themselves, with less emphasis on delivery of the longer-term changes and improvement in efficiency necessary to make them sustainable.”

And this:

“Departments have still tended to lack a clear strategic vision of what they are to do, what they are not, and the most cost-effective way of delivering it. Much of departments’ 2014-15 savings are likely to come from further reductions in staff. Sustainability of these savings will depend on developing skills and working in new ways while maintaining staff motivation and engagement.”

But the NAO was generally positive about the ERG’s contribution to savings.

“ERG’s actions to date, particularly its spending controls, have helped departments deliver substantial spending reductions.”

We hope the Cabinet Office’s diligent efforts continue  – sustainably.

Efficiency and Reform 2012/13 savings. Summary report.

Some suppliers still resistant to change? – Government Computing.

Is Major Projects annual report truly ground-breaking?

By Tony Collins

Francis Maude, the Cabinet Office minister, describes as “nothing short of groundbreaking” a report of the Major Projects Authority which gives the RAG (Rred/Amber/Green) status of more than 100 major projects.

That the report came out late on Friday afternoon as most journalists were preparing to go home, some of them for the whole bank holiday weekend, suggests that the document was a negotiated compromise: it would be published but in such a way as to get minimal publicity.

Indeed the report is a series of compromises. It has the RAG status of projects but not the original text that puts the status into context.

Another compromise: senior civil servants in departments have persuaded Maude to publish the RAG decisions when they are at least six months old.

This enables departmental officials to argue their case in the “narrative” section of the MPA annual report that a red or amber/red decision is out-of-date and that there has been significant improvement since. This is exactly the DWP’s justification for the amber/red status on Universal Credit.

The DWP says in the MPA report: “This rating [amber/red] dates back to September 2012, more than seven months ago. Since then, significant progress has been made in the delivery of Universal Credit. The Pathfinder was successfully launched and we are on course both to expand the Pathfinder in July 2013 and start the progressive national roll-out of Universal Credit in October.”

That the Pathfinder was launched successfully might have nothing to do with Universal Credit’s amber/red status which could be because of uncertainties over how the IT will perform at scale, given the complexities and interdependencies.  The MPA report says nothing about the uncertainties and risks of Universal Credit.

More compromises in the MPA annual report: the Cabinet Office appears to have allowed departments to hide their cost increases on projects such as HMRC’s Real-time Information [RTI] in the vague phrase “Total budgeted whole life costs (including non-government costs).”

The Cabinet Office has also allowed departments to write their own story to accompany the RAG status. So when HMRC writes its story on RTI it says that “costs have increased” but not by how much or why. We know from evidence that HMRC gave to the Public Accounts Committee that RTI costs have risen by “tens of millions of pounds”. There is nothing to indicate this in the MPA annual report.

Another compromise in the MPA annual report: there are no figures to compare the original forecast costs of a project with the projected costs now. There are only the 2012/13 figures compared with whole-life projected costs (including non-government projected spend).

And the MPA report is not comprehensive. It came out on the same day the BBC announced that it was scrapping its Digital Media Initiative which cost the public £98m. The MPA report does not mention the BBC.

The report is more helpful on the G-Cloud initiative, showing how cheap it is – about £500,000. But there is little information on the NHS National Programme for IT [NPfIT] or the Summary Care Record scheme. 

Yet the MPA annual report is ground-breaking. Since Peter Gershon, the then head of the Office of Government Commerce, introduced Gateway reviews of risky IT projects about 12 years ago with RAG decisions, they have remained unpublished, with few exceptions. The Cabinet Office is now publishing the RAG status of major departmental projects for the first time. Maude says

“A tradition of Whitehall secrecy is being overturned. And while previous Governments buried problems under the carpet, we are striving to be more open. By their very nature these works are high risk and innovative.

“They often break new ground and dwarf anything the private sector does in both scale and complexity. They will not always run to plan. Public scrutiny, however uncomfortable, will bring about improvement. Ending the lamentable record of failure to deliver these projects is our priority.”

Comment

The MPA annual report is a breath of fresh air.

Nearly every sentence, nearly every figure, represents compromise. The report reveals that the Universal Credit project was last year given an amber/red status – but it doesn’t say why. Yet the report has the DWP’s defence of the amber/red decision. So the MPA report has the departmental defences of the RAG decisions, without the prosecution evidence. That’s a civil service parody of openness and accountability: Sir Humphrey is allowed to defend himself in public without the case against him being heard.

But it’s still useful to know that Universal Credit is at amber/red.  It implies well into the project’s life that the uncertainties and risks are great. A major project at amber/red at this stage, a few months before go-live, is unlikely to turn green in the short term, if ever.

Congratulations

The Cabinet Office deserves congratulations for winning the fight for publication of the RAG status of each major project. Lord Browne, the government’s lead non-executive director and a member of the Cabinet Office’s Efficiency and Reform group, has said  that billions of pounds of taxpayers’ money is being frittered away because of “worryingly poor” management of government projects.

“Nobody ever stops or intervenes in a poor project soon enough. The temptation is always to ignore or underreport warning signs,” he says.

The management of some large projects – usually not the smaller ones – is so questionable that departments ignore advice to have one senior responsible owner per major project, says the MPA.

The MPA annual report will not stop the disasters. Its information is so limited that it will not even enable the public – armchair auditors – to hold departments to account. Senior civil servants have seen to that.

But the report’s publication is an important development: and it provides evidence of the struggle within Whitehall against openness. Francis Maude and Sir Bob Kerslake, head of the civil service, have had to fight to persuade departmental officials to allow the RAG status of projects to be published. The Guardian’s political editor Patrick Wintour says of the MPA annual report

“Publication led to fierce infighting in Whitehall as government departments disputed the listings and fought to prevent publication.”

Large-scale change

If Maude and Kerslake struggled to get this limited distance, and there is still so much left to reform, will large-scale change ever happen?

Maude and his officials have as comprehensive mandate for change from David Cameron as they could hope for. Yet still the Cabinet Office still seems to have little influence on departments. When it comes to the big decisions, Sir Humphrey and his senior officials hold onto real power. That’s largely because the departments are responsible to Parliament for their financial decisions – not the Cabinet Office.

Maude and his team have won an important battle in publishing the MPA annual report. But the war to bring about major change is still in its very early stages; and there’s a general election in 2015 that could halt Maude’s reform plans altogether.

The Major Projects Authority Annual Report.

Report on status of big Gov’t projects to be published at last

By Tony Collins

The Telegraph reports that the Cabinet Office’s Major Projects Authority is about to publish its first annual report – and it will reveal the status of schemes that include Universal Credit, says the article.

The Cabinet Office said in 2011 that the MPA’s annual report would be published by the end of December that year. In 2012 Sir Bob Kerslake, head of the civil service, told the Public Accounts Committee’s Conservative MP Richard Bacon that the MPA’s annual report would be published in June 2012.

But senior departmental  civil servants have objected repeatedly to the red-amber-green “traffic light” status of projects being published, which contradicts the wishes of Kerslake and Francis Maude, the Cabinet Office minister.

One reason for the delay in publishing the MPA annual report is that Maude and Kerslake have been weighing objections to the reporting of the red-amber-green status against the need for departmental cooperation to implement civil service reforms.

From the Telegraph article it appears that Maude has persuaded (or forced) departmental heads to accept the publication of the traffic light status on big and risky projects. The Major Projects Authority reviews IT and other projects costing more than £50m.

The Telegraph says the MPA annual report will reveal Government troubleshooters’ concerns about multi-billion pound projects like the Universal Credit.

The article says the MPA annual report will show that about a third of projects it has reviewed are late or over budget. Says the Telegraph: “Government sources said that the MPA will show that management of big projects has improved significantly since 2010, when two-thirds of programmes were in trouble.

“But the report, expected later this month, will confirm that Whitehall ‘still has a long way to go’ to improve its handling of major projects, a source said.”

The article adds that publication of the annual report “follows a lengthy internal struggle between ministers and civil servants about the disclosure of problems with big Government schemes”.

Some ministers, says the article, are privately concerned that civil servants are bad at managing big, expensive projects but repeatedly cover up their failings and refuse to tell ministers about problems.  Disclosing “candid” assessments about big projects will improve management, ministers believe.

The Telegraph says that a “new publication scheme that will start later this month” will publicly rate each project at red, amber, or green. 

Each central department will be told to publish details of its major projects every six months, including the red-amber-green ratings and the data behind them, says the article.

The Telegraph quotes as a coalition source as saying: “Releasing a candid report about Whitehall’s major projects is a big and brave step for Government…”

Management of big projects better but still generally poor? 

Lord Browne, a lead non-executive in the Cabinet Office and the man appointed to recruit business leaders to Whitehall departmental boards, has criticised the management of major projects as “worryingly poor”.

He said that insufficient attention was given to identifying risks in the planning stage, and that there had been a “consistent failure” to appoint leaders with the right skills and experience.

Browne said the creation of the Major Projects Authority (MPA) in the Cabinet Office in 2011 had improved their delivery, but “nobody ever intervenes in a poor project soon enough” and that warning signs were often ignored or under-reported.

He called for an “ongoing and rigorous review process with real teeth” which would monitor measures of progress and call “time out” on failing projects, allowing them either to be fixed or stopped.

Browne said the government could learn from the private sector, where projects are scrutinised to a “very high standard” before work begins. In line with this, he suggested that the MPA should have a strengthened “stage-gate approval process” to ensure that projects achieve objectives.

He said that projects should not be allowed to begin until a team with the right skills – including a leader who had previously delivered a large, complex project – had been identified.

He also suggested that the MPA nominate leaders and veto unsuitable candidates. He said that expensive projects should “never be seen as a personal development opportunity”.

He advocated using pay, benefits and bonuses to give team members incentives to work on the project “until appropriate milestones are reached”. This, Browne said, had been key to the success of major projects delivered by the private sector.

Departments still sceptical of Maude’s reforms?

Meanwhile the FT has reported that Maude’s attempts to inject commercial acumen into Whitehall by putting leading business figures on departmental boards is failing to live up to its billing, with some departments rarely consulting their external non-executive directors.

The FT says that the Treasury department’s supervisory board met only once in the year to April 2012, according to a report by Insight Public Affairs, a consultancy. The energy department’s board met twice, compared to 15 meetings in the transport department, reflecting the inconsistent involvement of non-executive directors.

John Lehal, managing director of Insight Public Affairs, said the ad hoc manner in which departments held board meetings reflected the need for greater accountability – as underlined by the Treasury’s failure to engage its non-executives.

Comment

At long last the Major Projects Authority, under the straight-talking Australian David  Pitchford, will publish its annual report; and it may contain more detail on major projects than has been published by any government.

As departments fear public embarrassment more than any other sanction, publication of the traffic light status of projects – with the underlying detail – should genuinely discourage the starting of ill-considered projects.

Although the MPA annual report is much delayed Maude has succeeded in getting agreement for it to be published. Provided it contains enough detail to allow the status of projects to be judged by armchair auditors, it should begin to make a real difference.

Telegraph article

Why isn’t Universal Credit IT a disaster yet?

By Tony Collins

voltaireVoltaire said those who walk well-trodden paths tend to throw stones at those who show a new road. 

Iain Duncan Smith has had nothing but criticism in the media for his extreme caution over the go-live yesterday of the innovative Universal Credit scheme. But he told Radio 4’s Today presenter Justin Webb he was learning from the NHS IT scheme and the implementation of tax credits.

[With the NPfIT the Department of Health threw caution to the wind and spent billions on IT work and contracts that were unnecessary. After working tax credits went live the Office of National Statistics estimated that, of the £13.5bn paid out in tax credits in 2004, £1.9bn was in overpayments; and IT-related problems led to delays in issuing payments, which caused hardship for those on low incomes.]

Iain_Duncan_Smith,_June_2007IDS said on R4 Today yesterday:

“What I have introduced here is a deliberate and slower process introduction because I learned from the chaos of tax credits where it collapsed and the chaos of the health department’s changes to their IT systems. I want to do this carefully to make sure we get it right.”

Justin Webb: But your critics say you are not testing the things that could go wrong – children and homeless people are not involved.  When are you going to involve them in a pilot?

IDS: They are all going to be involved as we roll out.

Webb: There will be a pilot that includes those more difficult groups?

IDS: These pilots are to test two things; first of all that the base process works and secondly that all the other issues …

Webb: No homeless people involved in that. The difficult people are not involved?

IDS: What we are doing is testing the basic process. As we roll out from October onwards we then complicate the process and we roll it out in such a way as we are able to bring those people in and ensure that we also test them as we are going through. It’s a perpetual process of rolling out and checking, rolling out and checking. That is the better way to do it. I have done this in the private sector and Lord Freud [work and pensions minister] did this in the banking sector. We have insisted on it because this is the right way to do it. Get it right. Not get it early.

Can IDS be too cautious?

Universal Credit is live on GOV.UK.  To claim it now you need to live in an OL6, OL7, M43 or SK16 postcode, have just become unemployed, fit for work, have no children, not be claiming disability benefits, not have any caring responsibilities, not be homeless or living in temporary accommodation, and have a valid bank account and national insurance number.

But still it’s a test of links between UC  and HMRC’s RTI systems. If the links are working properly the systems should verify that the new UC claimant has recently left PAYE employment. The pilot in Ashton is also a test of the UC payment system and whether the new scheme will encourage claimants to find a job and stay in work longer.

On Sunday, on BBC Radio 5’s Double Take, I praised the Department of Work and Pensions for an ultra-cautious approach in going live with UC.

But IT consultant Brian Wernham, author of Agile Project Management for Government, pointed out to BBC’s World This Weekend that thousands of people will need to claim UC every day from the official start of the scheme in October 2013 to the end of 2017 if the DWP is to complete its UC roll-out within the coalition’s promised schedule.

Yet the limited pilot in Ashton has restricted claimants to about 300 a month. At this rate the roll-out to more than eight million claimants will not be anywhere near complete by the end of 2017.

Comment

The Financial Times quotes Iain Duncan Smith as saying that one million claimants would be receiving universal credit by the end of April 2014.

This is now unlikely if not impossible. Even in October when the UC roll-out begins nationally, it will start with simple cases. By April 2014 it is hard to see that there will be 100,000 people claiming UC, let alone one million. Indeed the most complex cases may be handled outside of the main UC system, possibly manually or on a spreadsheet.

Why should the coalition care if the 2017 deadline is not met? A general election on 7 May 2015 means that UC will become the responsibility of a new government. IDS is then unlikely to be the DWP’s secretary of state. He could argue at that time that he should not be held responsible for any delays in the roll-out. Indeed the Tories could be out of government by then.

So what the coalition says now about UC’s future means little or nothing.

That said, the coalition seems to be learning lessons from past IT-related failures. It deserves praise for its extreme caution over the introduction of UC.

It is not doing everything right: the DWP is refusing to publish any of its expensive consultancy reports on the progress of the UC IT systems. Partly that is because of DWP culture and because shadow ministers are waiting to jump on any putative weakness in the UC scheme. Labour’s shadow work and pensions secretary Liam Byrne said on yesterday’s Today programme that universal credit was “a fine idea that builds on Labour’s tax credits revolution”.

liam byrneHe added: “The truth is the scheme is late, over budget, the IT system appears to be falling apart and even DWP [Department of Work and Pensions] ministers admit they haven’t got a clue what is going on.”

But when Byrne was in government he was an unswerving advocate of the disastrous NPfIT. So can his criticism of the UC project be trusted now?

Despite a generally negative media there are no signs yet that UC is a disaster in the making.  Indeed RTI is working so far, which was the biggest single risk.

Cabinet Office minister Francis Maude is said to remain concerned that UC could prove an electoral disaster, and his concern is good for the UC IT project. It means the coalition will continue to roll out UC with extreme caution.

Such a play-it-safe approach might never have occurred before on a major government IT project. So does it matter that UC  takes years to roll out?

Perhaps the roll-out may continue well beyond 2017 but it’s better to complete a simplification of the benefits system over an extended time than pay claimants the wrong amounts or leave the vulnerable without payment altogether.  

Teething troubles on day one of Universal Credit scheme – Guardian

Could HMRC have a major success on its hands? – RTIis working

The vultures circle over Universal Credit IT.

DWP hides the facts on UC IT progress.

Are civil servants misleading IDS over Universal Credit IT progress?

Could HMRC have a major IT success on its hands?

By Tony Collins

It’s much too soon to say that Real-Time Information is a success – but it’s not looking  like another central government IT disaster.

A gradual implementation with months of piloting, and HMRC’s listening to comments from payroll professionals, software companies and employers, seems to have made a difference.

The Cabinet Office’s high-priority attempts to avoid IT disasters, through the Major Projects Authority, seems also to have helped, by making HMRC a little more humble, collegiate and community-minded than in past IT roll-outs. HMRC is also acutely sensitive to the ramifications of an RTI roll-out failure on the reputation of Universal Credit which starts officially in October.

On the GOV.UK website HMRC says that since RTI started on 6 April 2013 about 70,000 PAYE [pay-as-you-earn] returns have been filed by employers or their agents including software and payroll companies.

About 70,000 is a small number so far. HMRC says there are about 1.6 million PAYE schemes, every one of which will include PAYE returns for one or more employees. About 30 million people are on PAYE. Nearly all employers are expected to be on RTI by October 2013.

The good news

 Ruth Owen, HMRC’s Director General Personal Tax, says:

“RTI is the biggest change to PAYE in 70 years and it is great news that so many employers have started to report PAYE in real time. But we are under no illusions – we know that it will take time before every employer in the country is using RTI.

“We appreciate that some employers might be daunted by the change but …we are taking a pragmatic approach which includes no in-year late filing penalties for the first year.”

It hasn’t been a big-bang launch. HMRC has been piloting RTI for a year with thousands of employers. Under RTI, employers and their agents give HMRC real-time PAYE information every time the employee is paid, instead of yearly.

When bedded down the system is expected to cut administrative costs for businesses and make tax codes more accurate, though the transitional RTI costs for some businesses, including training, may be high and payroll firms have had extra costs for changes to their software.

RTI means that employers don’t have to complete annual PAYE returns or send in forms when new employees join or leave.

The bad news

The RTI systems were due to cost £108m but HMRC’s Ruth Owen told the Treasury sub-committee that costs have risen by tens of millions:

“… I can see that it [RTI] is going to cost £138m compared with £108m. I believe that is going to go up again in the scale of tens of millions.”

She said that in October 2012.

Success?

The Daily Telegraph suggested on Monday that RTI may be “ready to implode”.

But problems with RTI so far seem to be mainly procedural and rule-based – or are related to long waits getting queries answered via the helpline – rather than any major faults with the RTI systems.

In general members of the Chartered Institute of Payroll Professionals report successes with their RTI submissions, and some comment on response times being good after initial delays at around the launch date.

Payroll software supplier Sage says the filing of submissions has been successful. There was a shaky start, however, with HMRC’s RTI portal being under maintenance over the weekend.

Jonathan Cowan from the Sage Payroll Team said: “There was understandable confusion and frustration over the weekend with businesses unable to file due to HMRC site issues.”

Accountingweb’s readers have had many problems – it said RTI “stumbled into action –  but few of the difficulties are, it seems, serious. “Have I missed something, but RTI despite all the commotion doesn’t seem that bad,” says an accountant in a blog post on the site.

Payrollworld says RTI problems have been minor. “The launch of Real Time Information (RTI) has encountered a number of minor issues, though payroll suppliers broadly report initial filing success.”

Comment

It’s not everyday we report on a big government IT project that shows signs of succeeding. It’s too early to call RTI a success but it’s difficult to see how anything can go seriously wrong now unless HMRC’s helplines give way under heavy demand.

It’s worth remembering that RTI is aimed at PAYE professionals – not the general public as with Universal Credit. Payroll specialists are used to solving complex problems. That said, RTI’s success is critical to the success of Universal Credit. A barrier to that success has, for now, been overcome.

Perhaps HMRC’s RTI success so far shows what a central department can achieve when it listens and acts on concerns instead of having a mere consultation; and it has done what it could to avoid failure. They’re obvious precepts for the private sector – but have not always in the past been characteristics of central government IT schemes such as the NPfIT.

Cornwall Council rushes to sign BT outsourcing deal before elections

By Tony Collins

Cornwall council logoCornwall Council was a model of local democracy in the way it challenged and then rejected a large-scale outsourcing plan. Now it has gone to the other extreme.

Amid extraordinary secrecy the Council’s cabinet is rushing through plans to sign a smaller outsourcing contract with BT – a deal that will include IT – before the May council elections.

Councillors who have been given details are not allowed to discuss them. No figures are being given on the costs to the council, or the possible savings. The Council’s cabinet is not releasing information on the risks.

Councillors are being treated like children, says ThisisCornwall. Documents with details of the BT outsourcing plans have to be handed back by councillors, and cabinet papers are being printed individually with members’ names as a watermark, on every page, to guard against copying and to help identify any whistleblowers.

The council’s Single Issue Panel has a timetable for the IT outsourcing plan.

– Recommendation to Cabinet to approve release of ITT – 27 February 2013

– Evaluation of bid – March 2013

– If contract awarded, commencement of implementation work – April 2013

– Staff transfer date – July 2013

The SIP report emphasises that the timetable for signing a deal is tight. “Evidence received is that there is little room for slippage in the timetable, but that potential award of contract is achievable by the end of March 2013… It is expected that a contract could be ready to be issued as part of the ITT [invitation to tender] pack by early in the week commencing 4 March 2013.”

The SIP report concedes that the plan is “fast moving”.

In the past, the SIP group of councillors has been open and challenging in its reports on the council’s plans with BT (and CSC before the company withdrew from negotiations). Now the SIP’s latest report is vague and unchallenging. The risks are referred to in the report as a tick-box exercise. Entire paragraphs in the SIP report appear to have little meaning.

“Risk log and programme timelines are reviewed and updated on a regular basis… 

“The Council and health partners have been working on and have reached agreement on their positions in relation to commercial aspects in the contract and their expectations have been part of the dialogue with BT.”

“Previous concerns of the Panel relating to the area of new jobs have been addressed with BT in contract discussions and contract clauses have been revised to reflect this…”

It is also unclear from the SIP report why the council is outsourcing at all, only perhaps a hint that the deal will be value for money.

“The contract will be fully evaluated by the Head of Finance and her team to ensure value for money once the final bid is received. No savings have been assumed for 2013/14 budgetary purposes, although there are assumptions of savings for the indicative figures for future years,” says the SIP report.

Comment

It is a pity that Cornwall Council’s cabinet is rushing to sign a deal for which it won’t be accountable if things go wrong. In a few weeks a new council will be voted in and, if the outsourcing deal with BT ends up in a dispute or litigation, the new council will simply blame the old, as happened when Somerset County Council’s joint venture deal with IBM, Southwest One, went into dispute.

In essence, with the local elections only two months away, Cornwall Council’s cabinet has a freedom to make whatever decision it likes with impunity; and it appears to be taking that freedom to an extreme, almost to the point of sounding, in the latest SIP report, as if the council is an arms-length marketing agent of BT.

Cornwall Council’s cabinet has a mandate from the full council to move to a contract with BT. The full council has voted to “support” a deal. But that vote was a mandate to negotiate, not to sign anything BT wants to sign.

Openness has gone out of the window and BT, it seems, is no longer being rigorously  challenged – by Cornwall’s cabinet, the full council, the public or the media.

How exactly can BT guarantee jobs and make savings? We don’t know. The Cabinet isn’t saying, and its members are doing all they can to stop councillors saying.

Are BT’s promises reliant on the fact that IT is subject to constant and sometimes costly change – often unforeseen change – and that is bound to continue, at least in the form of supporting changing legislation and reorganisations?

Unforeseen changes could add unforeseen costs which the council may have to pay because IT is at the heart of business continuity.  In any dispute with the council  – and BT knows its way around the world of contested contracts – the company would have the upper hand because of its experience with litigation and the fact that the council would need undisrupted IT at a time of change and could not afford, without risk, to take the service back in-house.

We have seen how normality broke down at Mid Staffs NHS Foundation Trust amid a lack of openness and excessive defensiveness;  and we have seen, in Somerset County Council’s joint venture with IBM, Southwest One, what can happen when a contract signing is rushed.

Cornwall Council’s cabinet is doing both. It is rushing to sign a contract; and it is rushing to sign it amid excessive secrecy.

Surely Cornwall Council can do better than slip into the shadows to sign a deal with BT before the council elections in May?  If it is such a good deal, the new council will want to sign it. A new council should have the chance to do so.

For Cornwall Council to outsource now what is arguably its single most important internal resource – IT – is bad for local democracy: it is snub to anyone who holds true the idea that local councillors are accountable to local people.

Thank you to campaigner Dave Orr who drew my attention to information that made this post possible.

* Cornwall Council, by the way, has one of the best local authority websites I have seen.  If the website is a reflection of the imagination and efficiency of its IT department, Cornwall Council should be selling its IT skills to BT for a small fortune – not giving staff away.