Category Archives: Energy and Industrial Strategy – BEIS

50 more lawyers are hired over the Post Office IT scandal: not a great way to say sorry?

Posted on 22/09/2020 | 6 comments

 

Photo: Andrew Buchanan,- Unsplash

By Tony Collins

In a settlement statement last December, the Post Office seemed to mark an end to a long dispute with sub-postmasters over its  Horizon branch accounting system.

More than 550 sub-postmasters had sued the Post Office in the High Court to establish that Horizon was flawed and that they were not to blame for unexplained shortfalls shown on the system.  The Post Office defended Horizon, arguing it was robust, but settled when it became clear it was losing the case.

The litigation cost the Post Office £46m in legal expenses and £57.75m to settle. It had hired four QCs and two firms of solicitors to handle the case and had spent £500,000 alone on determining its litigation strategy. The judge in the case, Mr Justice Fraser, remarked on the Post Office’s apparent legal approach when he said,

“… The Post Office has appeared determined to make this litigation, and therefore resolution of this intractable dispute, as difficult and expensive as it can.”

But in settling the dispute and apologising, the Post Office’s new CEO said he was “very pleased we have been able to find a resolution to this longstanding dispute”.

He added, “Our business needs to take on board some important lessons about the way we work with postmasters, and I am determined that it will do so.  We are committed to a reset in our relationship with postmasters, placing them alongside our customers at the centre of our business. As we agree to close this difficult chapter, we look forward to continuing the hard work ahead of us in shaping a modern and dynamic Post Office, serving customers in a genuine commercial partnership with postmasters, for the benefit of communities across the UK.”

At the heart of the dispute was whether Horizon, which was built and run by Fujitsu, had material faults that could alter post office branch balances and show phantom losses of tens, or sometimes hundreds, of thousands of pounds.

Whether or not Horizon was at fault, the Post Office demanded that sub-postmasters made good the shortfalls from their own pockets. It cited Horizon in the courts as robust evidence that the shortfalls represented actual money and  prosecuted sub-postmasters for theft, false accounting and fraud. It also used Horizon evidence to obtain confiscation orders on countless homes, businesses and cars. Lives were ruined. At least 2,000 sub-postmasters were affected. One sub-postmaster,  Martin Griffiths, stepped in front of a bus. His inquest heard the Post Office was pursuing him over shortfalls of tens of thousands of pounds. There have been other early deaths of Horizon victims including Fiona Cowan and Julian Wilson.

Remorse – or 50 more lawyers?

The litigation established that Horizon had numerous flaws. The Post Office and Fujitsu had hidden defects, bugs and errors for years – and the Post Office had not properly investigated Horizon before it blamed sub-postmasters for shortfalls shown on the system. As a result of the High Court Horizon judgment, the Criminal Cases Review Commission, which looks at possible miscarriages of justice, referred 47 sub-postmaster cases to the Court of Appeal. The Commission has never referred such a large number of convictions on one issue to the Court of Appeal. It criticised the Post Office for an “abuse of process”.

Exceptional

The Commission categorised the Horizon-related cases as “exceptional”.  Usually the Commission considers applications only when a convicted person has first had their case heard and rejected by the Court of Appeal.  But in exceptional circumstances the Commission can consider “no appeal” cases.

All but one of the 47 sub-postmaster applications are “no appeal” cases, which suggests that the Commission, in referring all of them to the Court of Appeal, regards the grounds for quashing their convictions as exceptionally strong.

The Court of Appeal is expected to hear the cases over the next few months and  first rulings are likely early next year. They may reveal whether Horizon’s flaws were deliberately hidden from judges and juries and whether the prosecution’s choice of criminal charges was in any way influenced by strengthening the Post Office’s position when seeking confiscation orders for homes, businesses and cars.

A Directions Hearing for the Court of Appeal cases is scheduled for November. A key date for those hoping to have their convictions quashed is 2 October 2020 when the Post Office must indicate whether it will oppose any, some or all of the Court of Appeal cases. It is possible the Post Office will contest some of them, despite its apology and conciliatory remarks in the settlement statement, at which time it referred to a “genuine desire to move on from these legacy issues and learn lessons from the past”.

Horizon dispute very much alive

If the Post Office has no intention of contesting any of the Court of Appeal cases, it is unclear why it would need a large force of lawyers. The Post Office has retained more than 50 barristers and two QCs to  consider the disclosure of documents relevant to the appeals to the Court of Appeal and a Historical Shortfall Scheme in which at least 1,300 sub-postmasters are seeking the return of money the Post Office demanded from them.

The Post Office’s large ongoing legal spend suggests the Horizon dispute is very much alive. It further raises the question of why ministers and civil servants still have an apparently “hands-off” approach to the Post Office’s legal spending.

Difficulties proving whether Horizon was or wasn’t to blame

That a complex computer system is at the heart of the dispute presents difficulties for both sides in producing evidence. For sub-postmasters, they can prove Horizon had numerous flaws that could alter branch accounts and that Fujitsu personnel had a “back door” to branch accounts which they could use to edit, add or delete transactions without the knowledge of sub-postmasters. Also, sub-postmasters can show from the litigation rulings that Fujitsu did not keep a proper record of what its IT personnel did when accessing branch accounts. The High Court judgments further showed that it was not unknown for Fujitsu personnel, when accessing branch post office accounts, to use the same counter number actually in use by the sub-postmaster or an assistant. This meant that the sub-postmaster, looking at the records, could end up believing the transaction inserted by Fujitsu had been performed within the branch itself. This information was only disclosed by Fujitsu (and therefore the Post Office) late in the litigation in January and February 2019.

All these things sub-postmasters could prove but it is almost impossible for them to obtain the information that proves Horizon was at fault in their particular case. This difficulty was summed up by Mr Justice Fraser,

“For a SPM [sub-postmaster] to demonstrate they were not at fault, if there was a loss, could be verging on nigh on impossible. Firstly, they would have to concentrate upon and analyse all of the branch records for every single transaction within the particular trading period. That would be an onerous burden for a single SPM. Secondly, those records would only be between the branch and the Post Office; SPMs have no access to data between the Post Office and its clients, and are not able to obtain it…a SPM simply does not have access to the type of information that would make such an onerous exercise possible even in theory.”

For the Post Office, establishing evidence that Horizon was working well at the time and date and branch post office in question may also be difficult. The Post Office relies for information about Horizon from Fujitsu which had thousands of Horizon known error logs that, for years, the Post Office might not always have seen. Also,  Fujitsu sometimes wrongly categorised system problems as “user error” – in other words the fault of the sub-postmaster or an assistant.  A further problem is that the Post Office may not be able to find the relevant records or might not have kept them.  A big spend on a scientific approach to disclosing documents may therefore be unjustified.

Mr Justice Fraser made several comments in his judgements on the Post Office’s apparent lack of an open approach to disclosure of evidence. He referred to the difficulties for sub-postmasters of obtaining the Horizon known error log. At first, the Post Office said the log was not relevant and then suggested it may not exist. The judge referred to this approach as “disturbing” and “misleading”. These are some of the judge’s other comments about the Post Office’s lack of openness:

an “… overly intricate attempt to sow confusion and obscure the true issues in the case.”
“expenditure of time, resources and money by the defendant [Post Office] on restricting the claimants’ [sub-postmasters’] evidence.”
“It is difficult to see how they [sub-postmasters]  can have such an opportunity if they are denied access even to copies of information or records.”
“It took a trial, tens of millions of pounds and several years to ascertain the truth about remote access [to branch accounts by Fujitsu].”

Post Office response

Asked last week why the Post Office is still spending large sums on lawyers despite its apology last year and criticisms by the judge, the Post Office said in a statement,

“The Post Office has been working closely with the Criminal Cases Review Commission since a number of former postmasters applied to overturn their convictions for offences based on evidence from the Horizon computer system, used in Post Offices since 1999.

“We are also conducting an extensive review of historical convictions which relied upon Horizon, to identify and disclose material that might cast doubt on the safety of those convictions in accordance with Post Office’s duties as former prosecutor.

“The Criminal Cases Review Commission has so far decided to refer for appeal the convictions of 47 applicants. The majority of these referrals are to the Court of Appeal (which relate to convictions in the Crown Court) with six separate referrals to Crown Courts (which relate to convictions in the Magistrates’ Court).

“The cases span the period between 2001-2013 and are technically and factually complex.  The Court of Appeal has granted Post Office until 2 October 2020 to file its Respondent’s Notices.”

Comment:

The new battalion of lawyers is being funded by an institution that only last December announced that it was learning lessons from the Horizon-related judgments in the High Court – judgments that included criticisms of its excessive legal costs.

But some who have read the hundreds of pages of judgments in the litigation may wonder if two parallel worlds are in operation.

The judge referred at different stages to the Post Office’s evidence in terms of a Lewis Carroll nursery rhyme, the earth as flat and a parallel world. It further emerged that sub-postmasters were expected to sign an agreement that referred to a non-existent Book of Rules and the Post Office argued in the litigation that, contractually, it was entitled to act in a vindictive, capricious or arbitrary way.

Where the judge found the Post Office’s conduct anomalous and surprising, he commented  on it which, perhaps, was one reason the Post Office tried to remove him. That is the Post Office’s world.

The other world is the one in which people who know about the scandal do not understand why the Post Office is not in the least embarrassed at having the luxury, as a publicly-funded institution, of engaging four QCs and two firms of solicitors to contest a High Court litigation that ought not to have been necessary in the first place.  Moreover, the Post Office seems not in the least uneasy about having made a public apology over the Horizon IT scandal but not paid back even half the money it demanded from sub-postmasters for Horizon shortfalls.

Those observing the scandal may also wonder, given the hundreds of lives ruined, why the Post Office seems to show few real signs of compassion, humility, empathy and remorse.

Lee Castleton is among the former sub-postmasters who continues to suffer the consequences of the scandal 13 years after the Post Office took him to court over Horizon shortfalls of about £26,000 and subsequently landed him with legal costs of 13 times that amount – £321,000.  The problem for Castleton is that his case was in the civil court. He might have been better off if he had received a criminal conviction which today he could seek to overturn and then, if successful, take action against the Post Office.  As things stand,  there is little Castleton can do to right the financial wrongs he has suffered. He has received £51,000 from last year’s Horizon settlement – but £36,000 of this has gone into paying off what is left of the £321,000 Post Office legal bill that bankrupted him. The Horizon settlement has, for him, covered less than 20% of the Post Office’s court fees that he was made to pay and offered him no recompense for a ruined life.

The Post Office has been criticised by MPs, peers, forensic accountants it hired – Second Sight – the High Court, the Appeal Court, sub-postmasters and the Criminal Cases Review Commission.

But then there is the Post Office’s world. This is one in which postal affairs ministers are completely supportive. Not a word or hint of criticism of the current Post Office board from any business minister or the business secretary. In the Post Office’s world, every sub-postmaster is a potential fraudster. The challenge is minimising the potential for hundreds of millions of pounds worth of fraud. In this world, there is little place for humility and compassion. Any weakness in the system could be exploited by the unscrupulous. In this world, the Post Office is strong, seen to be strong, always in control and willing to take the action that needs to be taken to keep the vital network of post office branches in place, commercially sound and on a solid procedural, administrative and IT footing. And therein lies the two irreconcilable worlds.

Nobody in government is willing to bridge the two worlds. Ministers in successive governments seem to say to the Post Office, in essence, “We know you’re running a vital public service and a complex one in which we in our short time as ministers cannot hope to understand even superficially. We must therefore trust that, whatever you say,  you know what you are talking about.”

Someone dynamic, senior and independently-minded in government is needed to intervene. But it will not happen with government business ministers who seem little more than Post Office flatterers.

Where is the public spending watchdog the National Audit Office?

There are some big questions that will remain unanswered until somebody in government gets a grip on the scandal. One question is: where is the public spending watchdog the National Audit Office?  For years the Post Office has been seemingly awash with money to spend on lawyers.  The NAO seems  nowhere in sight.

And why is nobody in government challenging business ministers in their quest for a Horizon review that campaigning peer Lord Arbuthnot calls a “pathetic response to a national outrage”.

To do the right thing, ministers, civil servants and the Post Office could start by accepting the principle that it is not emasculating to make proper amends for a vast number of miscarriages of justices.  To carry on spending huge sums on lawyers shows that, despite the good words and apology in the settlement statement, the Post Office’s culture and attitude is the same as it was when Horizon went live in 1999.

Worse, the Post Office could decide to contest Horizon cases that are due to go to the Court of Appeal. The Criminal Cases Review Commission has already categorised these Horizon cases as “exceptional”.  For the Post Office to contest a single one of them, therefore, would be an extraordinary perpetuation of the Horizon scandal.

It would also reinforce the case for a full judge-led inquiry into how it is that ministers and civil servants continue to flatter and uncritically support an arm of the state that has held, in its hands, the future of more than 2,000 people but seems, to some, to continue to act as if in a Lewis Carroll nursery rhyme. One Lewis Carroll rhyme is, incidentally, called The Crocodile…

How cheerfully he seems to grin,
How neatly spreads his claws,
And welcomes little fishes in,
With gently smiling jaws!

**

Chirag Sidhpura’s crowdfunding appeal to support a Judicial Review of the Post Office’s Historical Shortfall Scheme which he regards as fundamentally flawed and unfair.

Hundreds of victims of Post Office IT scandal will be excluded from new compensation scheme – Daily Mail

The Post Office Trial – BBC Radio 4 series presented by Nick Wallis

Post Office Horizon IT scandal victims face further battles as government digs heels in – Computer Weekly

 

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Posted in BEIS, Campaign for justce, Campaign4Change, Department for Business, Energy and Industrial Strategy - BEIS, Fujitsu, Horizon system, IT-related disputes, Legacy ICT, Ministry of Justice, oversight, Post Office IT, presumption

The civil service may face an investigation into maladministration over Post Office IT scandal

Posted on 03/06/2020 | 2 comments

By Tony Collins

Campaigners for justice over the Horizon IT scandal have launched a bid to raise £98.000 to try and hold the civil service to account over its failed oversight of the Post Office that allowed the scandal to continue unchecked for years.

It comes as the Post Office continues to defend its actions over the Horizon controversy, raising questions about whether its culture has changed in the sixteen years since sub-postmaster Alan Bates  began his campaign to elicit the truth about the Horizon system.

The Post Office’s latest bout of defensiveness has come to the fore thanks to journalist Nick Wallis’ 10-part BBC R4 series on the Horizon scandal, The Great Post Office Trial, which continues every day this week at 13.45.

A theme running through several of the episodes in the series is that the Post Office is still defending itself over the Horizon controversy. Last year, following a group legal action brought by Justice for Subpostmasters Alliance [JFSA], the High Court strongly criticised the Post Office’s conduct, actions and truthfulness in its dealings with sub-postmasters and during the litigation itself.

The institution’s apparent lack of remorse – it has given an apology for “past” events but not its conduct during the litigation – may add force to the JFSA’s appeal for crowd-funding to launch a complaint to the Parliamentary Ombudsman.

The Alliance wants funding for a QC to prepare a complaint about the Department for Business, Energy and Industrial Strategy and its predecessor organisation BIS.  The department was supposed to oversee the Post Office but repeatedly defended it while sub-postmasters went to prison, lost their livelihoods, made bankrupt and handed over their life savings to the Post Office, because of discrepancies shown on a flawed Horizon system.

The Alliance also wants the role of government as a stakeholder on the Post Office board to be investigated.

Maladministration is defined as a public body’s not having acted properly or fairly, or having given a poor service and not put things right. At the time the Ombudsman office was established, Richard Crossman, the then Leader of the House of Commons, defined maladministration as including “bias, neglect, inattention, delay, incompetence, inaptitude, perversity, turpitude, arbitrariness and so on”.

If crowd-funding succeeds in raising £98,000 and the JFSA’s QC puts forward a strong argument for redress, the Ombudsman has no executive powers to award compensation but can recommend a financial remedy.

The principles underlying the Ombudsman’s work is that, where it is established that maladministration or poor service has resulted in an injustice or hardship, the public body restores to complainants the position they would have been in had the maladministration or poor service not occurred. If that is not possible, the Ombudsman can suggest the public body provides appropriate compensation.

A typical Ombudsman investigation takes six months but could be delayed by the pandemic.

Those who want to contribute to the campaign can pledge money via this crowd-funding site. Money is collected only if the £98,000 target is met.

The Great Post Office Trial

Subpostmasters to force scrutiny of governments’ role in Post Office IT scandal – Computer Weekly’s Karl Flinders

The case for a statutory public inquiry into Post Office Horizon scandal – Eleanor Shaikh

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Posted in BEIS, campaign, Campaign for justce, Campaign4Change, culture, Department for Business, Energy and Industrial Strategy - BEIS, Government IT, Horizon system, National Audit Office, Post Office IT

Is the Post Office to blame for Horizon IT dispute – or is it really ministers and civil servants?

Posted on 21/11/2019 | 4 comments

By Tony Collins

How does a public institution behave when it has little effective oversight?

Mr Justice Peter Fraser is expected to rule shortly on a critical question that is at the heart of a long-running IT dispute between the Post Office and hundreds of former sub-postmasters.

His ruling may answer the question of whether the Post Office’s “Horizon” IT or sub-postmasters were likely to have been to blame for unexplained shortfalls of sometimes tens of thousands of pounds shown on local branch systems.

If the Post Office loses the High Court case, it could end up paying damages of hundreds of millions of pounds – which could fall to the taxpayer. The state owns 100% of the Post Office. Public funding of the Post Office amounted to £2bn between 2010 and 2017 and a further funding package of £370m is agreed until 2021. Any damages could be on top of this.

If the case ends up with the Post Office’s needing a taxpayer bail-out, this would raise some obvious questions:

  1. Who in government and the civil service provided oversight when the Post Office decided controversially to trust what was shown on a proprietary computer system rather than the word of hundreds of local branch sub-postmasters?
  2. Who in government and the civil service endorsed the Post Office’s decision to defend litigation that could end up costing taxpayers hundreds of millions of pounds?
  3. Who in government and civil service endorsed the decision to continue defending the litigation – and indeed deepening it – despite excoriating criticisms of the Post Office by two High Court judges?

It is still possible for the Post Office to win the case in which event its actions and decisions may be vindicated. But it has lost every interim ruling so far, in a case which has lasted two years to date.

When asked about their oversight of the Post Office, ministers have distanced themselves.

In August 2019, the then Minister for Postal Services, Kelly Tolhurst, said in a letter that Post Office Limited “operates as an independent, commercial business and the matters encompassed by this litigation fall under its operational responsibility”.

But thanks to extensive research by Eleanor Shaikh, a reader of the blog of journalist Nick Wallis, who is crowd-funded to cover the High Court hearings, we know that civil servants reporting to ministers have extensive responsibilities for oversight of the Post Office.

The state categorises the Post Office as an “Arm’s Length Body”]. Shaikh learned that the Department for Business Energy and Industrial Strategy is required to “exercise meaningful and commensurate oversight of ALB [Arm’s Length Body] strategy, financial management, performance and risk management”.

A 2014 Civil Service document, Introduction to Sponsorship, adds that,

“the Secretary of State is ultimately accountable to Parliament for the overall effectiveness and efficiency of each ALB of which their department is responsible.”

It’s not only about oversight. Civil servants are,

“… expected to play an active role in the governance, financial management, risk management and performance monitoring of ALBs and are responsible for managing the relationship with an ALB on behalf of the Minister and the AO [accounting officer].”

Wallis reports in full on Shaikh’s findings.

How effective has civil service oversight been so far?

The judge’s comments in his ruling of March 2019, which the Post Office is seeking leave to appeal, suggest that there has been little effective civil service challenge to Post Office’s decisions. Indeed, one of the judge’s findings was that,

“The Post Office appears, at least at times, to conduct itself as though it is answerable only to itself.”

The judge also criticised,

  • untrue statements by the Post Office
  • threatening and oppressive behaviour by the Post Office.
  • the Post Office’s appearing “determined to make this litigation, and therefore resolution of this intractable dispute, as difficult and expensive as it can”.
  • the Post Office house style for some senior management personnel giving evidence which was to “glide away from pertinent questions, or questions to which the witness realised a frank answer would not be helpful to the Post Office’s cause”.
  • a culture of secrecy and excessive confidentiality generally within the Post Office but particularly focused on Horizon
  • Post Office witnesses in general who have become “so entrenched over the years, that they appear absolutely convinced that there is simply nothing wrong with the Horizon system at all …”
  • attempts by the Post Office to prevent some evidence from emerging into the public domain by applying to have it struck out as irrelevant
  • attacks by the Post Office on the credibility of sub-postmasters whom the judge found credible as witnesses in the case.
  • some Post Office procedures that went from the sublime to the ridiculous,
  • some Post Office submissions that were “bold, pay no attention to the actual evidence, and seem to have their origin in a parallel world”.
  • the Post Office’s asking a sub-postmistress to extend the local branch’s opening hours a day after her husband, who ran the branch, had died.

Of the Post Office’s most senior witness, a director, the judge described her as highly intelligent. She on occasions gave clear and cogent evidence. She helped to improve the Horizon system and had provided some useful evidence.

But in describing parts of her evidence he also referred to a “degree of obstinacy”, extraordinarily partisan”, “sought to obfuscate matters…”, “disingenuous” and a “disregard for factual accuracy”. He said at one point in his ruling, “I find that she was simply trying to mislead me.”

He concluded, “I find that it is necessary to scrutinise everything she said as a witness, both in her witness statement and in cross-examination, and treat it with the very greatest of caution in all respects.”

Comment

If the judge is right in his criticisms – and it is too early in the appeals process to say conclusively that he is right – is he simply describing the behaviour of a state institution that is, in essence, without higher control?

Civil servants from, among others, the Department for Work and Pensions, HM Revenue and Customs, the Ministry of Defence, Home Office and DEFRA appear regularly before the Public Accounts Committee and are the subject of value-for-money investigations by the National Audit Office. The Post Office has little of this scrutiny.

A large private company has many shareholders and the threat of going bust to keep it in check. But the Post Office is too big and important to the community to be allowed to fail.

When Boeing’s aircraft technology is the subject of independent, detailed and widespread criticism, its planes are grounded indefinitely while regulators investigate.

The Post Office has no fear of any regulators shutting down its Horizon system.

In an accountability vacuum, how can a state institution be expected to behave?

Individuals within a large organisation will have a sense of right and wrong. But collectively, can people within state institutions be expected to do much more than meet the requirements of the culture and law as they perceive it?

That is why effective and rigorous oversight of state institutions is critical, if only to protect the interests of taxpayers.

When the widow of a sub-postmaster who’d died the previous day took over his branch, the Post Office asked her to extend the opening hours, which seems to have surprised the judge. Wouldn’t that behaviour surprise anyone?

When shortfalls were shown on the computer system, how easy was it for the Post Office to demand that sub-postmasters made good the losses sometimes without full investigations? It was easier, perhaps, without effective oversight.

Can the Post Office be held entirely responsible for the Horizon IT debacle? It is a state institution. Responsibility for the debacle lies, therefore, with ministers and civil servants, whatever the outcome of the Horizon dispute.

Nick Wallis’ trial coverage including Eleanor Shaikh’s research on the oversight that ought to be provided by ministers and the civil service.

Computer Weekly’s useful summary of the latest position

 

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Posted in Campaign4Change, Department for Business, DWP, Energy and Industrial Strategy - BEIS, excessive secrecy, Freedom of Information, HMRC, Home Office, Horizon system, National Audit Office, Post Office IT

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Civil servant in charge of £9.3bn IT project is not shown internal review report on scheme’s failings.

Posted on 31/07/2019 | 9 comments

By Tony Collins

“If people don’t know what you’re doing, they don’t know what you’re doing wrong” – Sir Arnold Robinson, Cabinet Secretary, Yes Minister, episode 1, Open Government.

Home Office officials kept secret from the man in charge of a £9.3bn project a report that showed the scheme in serious trouble.

The Emergency Services Network is being designed to give police, ambulance crew and firemen voice and data communications to replace existing “Airwave” radios.  The Home Office’s permanent secretary Philip Rutnam describes the network under development as a “mission-critical, safety-critical, safety-of-life service”.

But Home Office officials working on the programme did not show an internal review report on the scheme’s problems to either Rutnam or Stephen Webb, the senior responsible owner. They are the two civil servants accountable to Parliament for the project.

Their unawareness of the report made an early rescue of the Emergency Services Network IT programme less likely. The scheme is now several years behind its original schedule, at least £3.1bn over budget and may never work satisfactorily.

The report’s non circulation raises the question of whether Whitehall’s preoccupation with good news and its suppression of the other side of the story is killing off major government IT-based schemes.

With the Emergency Services Network delayed – it was due to start working in 2017 – police, ambulance and fire services are having to make do with the ageing Airwave system which is poor at handling data.

Meanwhile Motorola – which is Airwave’s monopoly supplier and also a main supplier of the Emergency Services Network – is picking up billions of pounds in extra payments to keep Airwave going.

Motorola may continue to receive large extra payments indefinitely if the Emergency Services Network is never implemented to the satisfaction of he emergency services.

EE is due to deliver the network component of the Emergency Services Network. Motorola is due to supply software and systems and Kellogg Brown & Root is the Home Office’s delivery partner in implementing the scheme.

Has Whitehall secrecy over IT reports become a self-parody?

The hidden report in the case of the Emergency Services Network was written in 2016, a year after the scheme started. It said that dialogue between suppliers, notably EE and Motorola, did not start until after the effective delivery dates. Integration is still the main programme risk.

MP SIr Geoffrey Clifton Brown has told the Public Accounts Committee that the report highlighted an absence of clarity regarding dependency on the interface providers, which caused something of an impasse.

He said the report “alluded to the fact that that [a lack of clarity around integration] remains one of the most serious issues and is not showing any signs of resolution”.

Stephen Webb has been in charge of the project since its start but he is the business owner, the so-called “senior responsible owner” rather than the programme’s IT head.

In the private sector, the IT team would be expected to report routinely to a scheme’s business owner.

But in central government, secrecy over internal assurance reports on the progress or otherwise of major IT-related projects is a Whitehall convention that dates back decades.

Such reports are not published or shared internally except on a “need-to-know” basis. It emerged during legal proceedings over the Universal Credit IT programme that IT project teams kept reports secret because they were “paranoid” and “suspicious” of colleagues who might leak documents that indicated the programme was in trouble.

As a result, IT programme papers were no longer sent electronically and were delivered by hand. Those that were sent were “double-enveloped” and any that needed to be retained were “signed back in”; and Universal Credit programme papers were watermarked.

The secrecy had no positive effect on the Universal Credit programme which is currently running 11 years behind its original schedule.

Webb has told MPs he was “surprised” not to have seen review report on the Emergency Services Network. He discovered the report’s existence almost by accident when he read about it in a different report written a year later by Simon Ricketts, former Rolls Royce CIO.

This month the Public Accounts Committee criticised the “unhealthy good news” culture at the Home Office. The Committee blamed this culture for the report’s not being shown to Webb.

The Home Office says it doesn’t know why Webb was not shown the “Peter Edwards” report. The following was an exchange at the Public Accounts Committee between MP Sir Geoffrey Clifton-Brown, Webb and Rutnam.

Clifton-Brown: When you did that due diligence, were you aware of the Peter Edwards report prepared in the fourth quarter of 2016?

Rutnam: No, I’m afraid I was not. The Peter Edwards report on what exactly, sorry?

Clifton-Brown: Into the problems with ESN [Emergency Services Network], in particular in relation to suppliers.

Rutnam: I do not recall it. It may have been drawn to my attention, but I’m afraid I do not recall it.

Webb: It was an internal report done on the programme. I have not seen it either.

Clifton-Brown: You have not seen it either, Mr Webb—the documents tell us that. Why have you not seen such an important report? As somebody who was in charge of the team—a senior responsible officer—why had you not seen that report?

Webb: I don’t know. I was surprised to read it in Simon’s report. [Simon Ricketts.]

Chair: Who commissioned it?

Webb: The programme leadership at the time.

Chair: That is the board?

Webb: The programme director. It was a report to him about how he should best improve the governance. I think he probably saw it as a bit of an external assurance. It probably would have been better to share it with me, but that was not done at the time.

Clifton-Brown: “Probably would have been better to share it”? That report said that dialogue between suppliers, notably EE and Motorola, only started after the effective delivery dates. The report highlighted that there was not clarity regarding dependency on the interface providers, and that caused something of an impasse. It also alluded to the fact that that remains one of the most serious issues and is not showing any signs of resolution. That was in 2016, in that report. Had that report been disseminated, would we still be in the position that we are today?

Webb: I think that we would have wanted to bring forward the sort of [independent] review that the Home Secretary commissioned, and we would have done it at an earlier date.

Clifton-Brown: Why did you need to? You would not have needed to commission another review. You could have started getting to the root of the problem there and then if you had seen that report.

Webb: Yes.

Comment:

Webb and Rutman seem highly competent civil servants to judge from the open way they answered the questions of MPs on the Public Accounts Committee.

But they did not design the Emergency Services Network scheme which, clearly, had flawed integration plans even before contracts were awarded.

With no effective challenge internally and everything decided in secret, officials involved in the design did what they thought best and nobody knew then whether they were right or wrong. With hindsight it’s easy to see they were wrong.

But doing everything in secret and with no effective challenge is Whitehall’s  systemically flawed way of working on nearly all major government IT contracts and it explains why they fail routinely.

Extraordinary?

It’s extraordinary – and not extraordinary at all – that the two people accountable to Parliament for the £9.3bn Emergency Services Network were not shown a review report that would have provided an early warning the project was in serious trouble.

Now it’s possible, perhaps even likely, the Emergency Services Network will end up being added to the long list of failures of government IT-based programmes over the last 30 years.

Every project on that list has two things in common: Whitehall’s obsession with good news and the simultaneous suppression of all review reports that could sully the good news picture.

But you cannot run a big IT-based project successfully unless you discuss problems openly. IT projects are about solving problems. If you cannot admit that problems exist you cannot solve them.

When officials keep the problems to themselves, they ensure that ministers can be told all is well. Hence, ministers kept telling Parliament all was well with the £10bn National Programme for IT in the NHS  – until the scheme was eventually dismantled in 2011.

Parliament, the media and the public usually discover the truth only when a project is cancelled, ends up in the High Court or is the subject of a National Audit Office report.

With creative flair, senior civil servants will give Parliament, the National Audit Office and information tribunals a host of reasons why review reports on major projects must be kept confidential.

But they know it’s nonsense. The truth is that civil servants want their good news stories to remain uncontradicted by the disclosure of any internal review reports.

Take the smart meters roll-out. Internal review reports are being kept secret while officials give ministers and the Department for Business, Energy and Industrial Strategy the good news only. Thus, the latest Whitehall report on smart meters says,

“Millions of households and small businesses have made the smart choice to get a smart meter with over 12.8 million1 operating in smart mode across Great Britain. This world leading roll out puts consumers firmly in control of their energy use and will bring an end to estimated bills.”

Nothing is said about millions of homes having had “smart” meters installed that are neither smart nor compatible for the second generation of smart meters which have a set of problems of their own.

The answer?

For more than 30 years the National Audit Office and the Public Accounts Committee have published seemingly unique reports that each highlight a different set of problems. But nobody joins the dots.

Sir Arnold, the Cabinet Secretary said in “Yes Minister“, that open government is a contradiction in terms. “You can be open, or you can have government.

This is more than a line in a TV satire.  It is applied thinking in every layer of the top echelons of civil service.

Collective responsibility means civil servants have little to fear from programme failures. But they care about departmental embarrassment. If reviews into the progress or otherwise of IT-enabled programmes are published, civil servants are likely to be motivated to avoid repeating obvious mistakes of the past. They may be motivated to join the dots.

But continue to keep the review reports secret and new sets of civil servants will, unknowingly each time, treat every project as unique. They will repeat the same mistakes of old and be surprised every time the project collapses.

That the civil service will never allow review reports of IT programmes to be published routinely is a given. If the reports were released, their disclosure of problems and risks could undermine the good news stories ministers, supported by the civil service, want to feel free to publish.

For it’s a Whitehall convention that the civil service will support ministerial statements whether they are accurate or not, balanced or not.

Therefore, with review reports being kept secret and the obsession with good news being wholly supported by the civil service, government’s reputation for delivering successful IT-based programmes is likely to remain tarnished.

And taxpayers, no doubt, will continue to lose billions of pounds on failed schemes.  All because governments and the civil service cannot bring themselves to give Parliament and the media – or even those in charge of multi-billion pound programmes –  the other side of the story.

Home Office’s “unhealthy good news culture” blamed for Emergency Services Network Delays – Civil Service World

Emergency Services Network is an emergency now – The Register

Home Office not on top of emergency services programme – Public Accounts Committee report, July 2019

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Posted in Campaign4Change, change management, cost reduction, culture, Department for Business, Department of Health, efficiency savings, Energy and Industrial Strategy - BEIS, excessive secrecy, FOI, Freedom of Information, Gateway reviews, governance, Government IT, Home Office, Infrastructure and Projects Authority, Institute for Government, IT projects, IT-enabled projects and waste, National Audit Office, npfit, openness and transparency, Police IT, procurement, project management, public sector, public services, public-private partnerships, software development, supplier relationships, Universal Credit

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Will Post Office need state bail-out if it loses Horizon IT trial?

Posted on 26/06/2019 | 2 comments

By Tony Collins

The Government is now aware, if it wasn’t before, that Horizon IT trials could end up costing the publicly-owned Post Office hundreds of millions of pounds.

Is continuing the case a gamble with public money?

Tom Cooper, the Government’s shareholder on Post Office board

Journalist Nick Wallis has questioned a minister and a senior official on the possible cost implications if the Post Office loses a High Court case over the Horizon IT system.

His questions to the Post Office minister Kelly Tolhurst and civil servant Tom Cooper, who is the government’s representative on the Post Office board, could help to ensure that the Government is aware that the Horizon IT trial may end up costing the Post Office hundreds of millions of pounds if it loses.

This awareness could raise questions among ministers and civil servants about whether the Post Office will face financial problems or even insolvency if it loses the Horizon trials.

The litigation began in 2017 and the Post Office has lost all of the several rulings so far. Judgements have been strongly critical of the Post Office, its approach to the litigation and its behaviour.

Hundreds of millions of pounds?

Tom Cooper joined the Post Office’s board as non-executive director last year. On the board he represents, on behalf of the Department for Business, Energy and Industrial Strategy,  the Government’s 100% shareholding in the Post Office.

He is a director of UK Government Investments, which is wholly-owned by HM Treasury and represents government interests on the boards of arm’s length bodies including the Post Office.

Wallis asked Cooper about the government’s strategy if the claimants win the case. Claimants are about 550 former sub-postmasters who are suing the Post Office – potentially for hundreds of millions of pounds – because they say they were unjustly forced to make good non-genuine losses shown on the Horizon system.

The Post Office is strongly defending the case, arguing that Horizon is robust and that the sub-postmasters were to blame for actual losses.

In his reply to Wallis, Cooper explained that claimants have not declared the size of the damages they seek. Wallis cited Freeths solicitors, which represents the former sub-postmasters, as saying the litigation could cost the Post Office hundreds of millions of pounds.

Cooper replied that no sums of that nature had been mentioned in court. At this point, one of Cooper’s colleagues politely terminated the interview.

Bail-out?

Wallis also questioned Post Office minister Kelly Tolhurst on the possible cost implications if the Post Office loses the case. She politely declined to answer directly saying, “I can’t really go into the litigation stuff… I’m not being evasive. I can’t speak to you about it.”

Wallis asked whether, if the Post Office loses, the government could end up bailing out the Post Office. Tolhurst said she wouldn’t “get into theoretical-based outcomes of the litigation.”

But Tolhurst disclosed that there were conversations going on between the Post Office, civil servants and the ministry [Department for Business, Energy and Industrial Strategy which is the Post Office’s parent ministry].

HM Treasury’s UK Government Investments is responsible for ensuring the Post Office has enough investment and subsidy funding to ensue it is commercially sustainable in the longer term, whilst meeting its social obligations, particularly around minimum network coverages requirements.

UK Government Investments also advises ministers on Post Office commercial and policy issues.

Comment

Wallis’s interviews with Cooper and Tolhurst are important developments: they mean that officials and ministers cannot credibly deny in future that, if they end up bailing out the Post Office, it has come as a shock.

In Wallis’ questions, he made it clear that solicitors Freeths had said the litigation could end up costing the Post Office hundreds of millions of pounds.

Cooper tacitly acknowledged in his reply that he had heard what Wallis said. Indeed, Cooper’s impressive financial background indicates that he will have a good understanding of the possible cost implications for the Post Office if it loses the case.

Cooper was global co-chairman of mergers and acquisitions at Deutsche Bank. He was at UBS Investment Bank for 21 years where his various roles included head of European merger and acquisitions.

Of course, ministers and officials could argue internally – at the moment – that taxpayers are not funding the litigation.

Indeed, Whitehall officials have obtained a written assurance from the Post Office that it will fund the Horizon litigation from its own money, not public money that is allocated to modernisation and new investment in the Post Office’s network.

But it’s a different story if the Post Office runs into financial trouble.

The Government would have no choice but to use public money for a bail out. It could not allow the Post Office to go bust.

And thanks to Wallis’ questions yesterday,  ministers could not argue they were unaware of the full possible cost implications of losing the case.

Indeed, it is incumbent on civil servants now to make sure ministers are aware of what could happen if the Post Office loses the case and cannot afford to pay damages and costs from its own money.

When fully aware of the risks – the gamble with public money – will ministers and officials allow the Post Office to continue spending large sums on the High Court case – or will they urge it to settle now before many more millions of pounds are spent on legal costs?

The judge in the trials, Mr Justice Fraser, has said the case will continue for “years”. Ministers and officials could therefore take the attitude that they may be long gone by the end of the trials and therefore costs are a matter for their successors.

Or they could do the right thing and urge the Post Office to limit its potential liabilities by settling now.

Wallis has a full account of his conversations with Cooper and Tolhurst on his postofficetrial blog.

Post Office Ltd and the money tree – Tim McCormack’s blog

Post Office ordered to pay £5m towards claimants’ costs – part of Computer Weekly’s coverage of Horizon trials

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Posted in Campaign4Change, Department for Business, Energy and Industrial Strategy - BEIS, Fujitsu, Horizon system, National Audit Office, Post Office IT

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Whitehall renews facade of openness on major IT projects

Posted on 20/07/2017 | 2 comments

By Tony Collins

Headlines yesterday on the state of major government IT projects were mixed.

Government Computing said,

“IPA: Whitehall major projects show ‘slow and steady’ delivery improvement”

Computer Weekly said,

“Government IT projects improving – but several still in doubt”

The Register said,

“One-quarter of UK.gov IT projects at high risk of failure – Digital borders, digital tax and raft of MoJ projects singled out”

The headlines were prompted by the Infrastructure and Projects Authority’s annual report which was published yesterday.

The report listed the RAG – red/amber/green – status of each of 143 major projects in the government’s  £455bn major projects portfolio. Thirty-nine of these are ICT projects, worth a total of £18.6bn.

Publication of the projects’ red/amber/green status – called the “Delivery Confidence Assessment” – seemed a sign that the government was being open over the state of its major IT and other projects.

A reversal of decades of secrecy over the progress or otherwise of major IT projects and programmes?

In a foreword to the Infrastructure and Project Authority’s report, two ministers referred twice to the government’s commitment to openness and accountability.

MP Caroline Nokes, Cabinet Office minister, and MP Andrew Jones, a Treasury minister, said in their joint foreword,

“The government is also committed to transparency, and to being responsive and accountable to the public we serve.

“Accordingly, we have collected and published this data consistently over the past five years, enabling us to track the progress of projects on the GMPP [Government Major Projects Portfolio] over time.

“We will continue to be responsive and accountable to the public.”

But the report says nothing about the current state of major IT projects. The delivery confidence assessments are dated September 2016. They are 10 months out of date.

This is because senior civil servants – some of whom may be the “dinosaurs” that former minister Francis Maude referred to last month – have refused to allow politicians to publish the red/amber/gtreen status of major projects (including the Universal Credit programme and the smart meters rollout) unless the information, when published, is at least six months old.

[Perhaps one reason is to give departmental and agency press officers an opportunity to respond to journalists’ questions by saying that the red, red/amber of amber status of a particular major project is out of date.]

Amber – but why?

An amber rating means that “successful delivery appears feasible but significant issues already exist” though any problems “appear resolvable”.

In September 2016 the Universal Credit programme was at amber but we don’t know why. Neither the IPA or the Department for Work and Pensions mention any of the “issues”.

The £11bn smart meters rollout is also at amber and again we don’t know why. Neither the IPA nor the Department for Business, Energy and Industrial Strategy mention any of the “issues”. Permanent secretaries are allowed to keep under wraps the IPA’s reasons for the red/amber/green assessments.

Even FOI requests for basic project information have been refused.  Computer Weekly said,

“Costs for the Verify programme were also withheld from the IPA report, again citing exemptions under FOI.”

Comment

The senior civil servants who, in practice, set the rules for what the Infrastructure and Projects Authority can and cannot publish on major government projects and programmes are likely to be the “dinosaurs” that former Cabinet Office minister Francis Maude referred to last month.

Maude said that Whtehall reforms require that new ministers “face down the obstruction and prevarication from the self-interested dinosaur tendency in the mandarinate.”

Clearly that hasn’t happened yet.

The real information about Universal Credit’s progress and problems will come not from the Infrastructure and Projects Authority – or the Department for Work and Pensions – but from local authoritities, housing associations, landlord organistions, charities and consumer groups such the Citizen’s Advice Bureau (which has called for Universal Credit to be halted), the local press, the National Audit Office and Parliamentary committees such as the Public Accounts Committee and Work and Pensions Committee.

On the smart meter rollout, the real information will come not from the Infrastructure and Projects Authority – or the Department for Business, Energy and Industrial Strategy – but from business journalist Paul Lewis, consumer advocate Martin Lewis, business organistions such as the Institute of Directors,  experts such as Nick Hunn, the Energy and Climate Change Committee and even energy companies such as EDF.

Much of this “real” information will almost certainly be denied by Whitehall press officers. They’ll be briefed by senior officials to give business journalists only selected “good news” facts on a project’s progress and costs.

All of this means that the Infrastructure and Projects Authority may have good advice for departments and agencies on how to avoid project failures – and its tact and deference will be welcomed by permanent secretaries – but it’s likely the IPA will be all but useless in providing early warnings to Parliament and the public of incipient project disasters.

Ministers and some senior civil servants talk regularly about the government’s commitment to openness and accountability. When it will start applying to major government IT projects?

 

UK.gov watchdog didn’t red flag any IT projects. And that alone should be a red flag to everyone

 

 

 

 

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Posted in Campaign4Change, DWP, Energy and Industrial Strategy - BEIS, excessive secrecy, Freedom of Information, Government IT, Infrastructure and Projects Authority, IT-enabled projects and waste, Major Projects Authority, Ministry of Justice, National Audit Office, openness and transparency, Universal Credit

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