Category Archives: excessive secrecy

Patient records go-live “success” – or a new NPfIT failure?

Posted on 09/12/2013 | 5 comments

By Tony Collins

John Goulston says the go-live of a new patient records system at his trust is a “success”.

He should know. He’s Chief Executive of Croydon Health Services NHS Trust. He’s also chair of the trust’s Informatics Programme Board which has taken charge of bringing Cerner Millennium to Croydon’s community health services and the local University Hospital, formerly the Mayday.

He was formerly Programme Director of the London Programme for IT at NHS London – a branch of the NPfIT.

In a report two weeks ago Goulston said the trust deployed the “largest number of clinical applications in a single implementation in the NHS”. Croydon went live with Cerner Millennium on 30 September and 1 October 2013.

Said Goulston in his report:

“Administrative functions do not engage clinicians; providing them with a suite of clinical functionality has been justified as each weekday approx. 1,000 staff are logged on and using the system. CHS [Croydon Health Services] has in Phase 1 deployed, in addition to patient administration, the largest number of clinical applications in a single implementation in the NHS England.”

BT helped install Millennium at Croydon under the National Programme for IT. The trust’s spokesman says the Department of Health provided central funding, and the trust paid for implementation “overheads”. The Health and Social Care Information Centre was the trust’s partner for the go-live.

The Centre is the successor for Connecting for Health. It has taken on CfH’s officials who continue to help run the NPfIT contracts with BT and CSC.

Goulston said that Cerner and BT have paid tribute to the trust which installed Millennium in A&E, outpatients, secretarial support and cancer services, and elsewhere.

“Our partners Cerner, BT and Ideal have commented that the Trust has undertaken one of the most efficient roll-outs of the system they have worked on, with more users adopting the system more quickly and efficiently than other trusts … the success we have achieved to date is the result of the efforts of every single system user and all staff members,” said Goulston.

Best Cerner implementation yet?

Optimistic remarks about their launch of Cerner Millennium were also made in 2012 by executives at the Royal Berkshire NHS Foundation Trust. Their optimism proved ill-judged.

Of the Millennium go-live at Royal Berkshire, trust executives said that it “had been considered to be the best implementation of Cerner Millennium yet and that despite staff misgivings, the project was progressing well”. This positive message should be disseminated, they said.

Months later they told the Reading Chronicle of patient safety issues and a financial crisis arising from the Millennium implementation.

A Royal Berkshire governors Rebecca Corre was quoted as saying: “There is a patient safety issue when staff write down observations and then there is an hour before they can get it onto the computer. If it is an experienced nurse, they may pick up a problem, but others may not.”

Ed Donald, Chief Executive of Royal Berkshire was quoted as saying:

“Unfortunately, implementing the EPR [electronic patient record] system has at times been a difficult process and we acknowledge that we did not fully appreciate the challenges and resources required in a number of areas.”

Are executives and managers at Croydon Health Services NHS Trust now similarly afflicted with an unjustified optimism about the success of their Cerner go-live?

Past consequences of NPfIT go-lives hidden?

The Department of Health has claimed benefits for the NPfIT of £3.7bn to March 2012 but there have been trust-wide failures: thousands of patients have had their appointments, care or treatment delayed by difficulties arising from past implementations of patient record systems under the NPfIT. For thousands of patients waiting time standards have been exceeded or “breached” because of disruption arising from troubled go-lives.

In nearly every case trusts made it difficult for the facts to come out publicly. Vague or unexplained fragments of information about the consequences of the NPfIT implementation appeared in different board papers over several months. The facts only emerged after a journalistic investigation that required scrutiny of many board papers and follow-up questions to the trust’s press office.

So Campaign4Change investigated Croydon Health’s implementation of Cerner Millennium to see if the Francis report’s call for a “duty of candour” over mistakes and problems in the NHS have made any difference to the traditional fragmentation of facts after NPfIT go-lives of patient record systems.

The Francis report called for “openness, transparency and candour“. Trusts were told not to hide sub-standard practices under the carpet. The health secretary Jeremy Hunt said it can be “disastrous” when bad news does not emerge quickly and the public are kept in the dark about poor care.

To my questions about the Cerner Millennium implementation Croydon trust’s spokesman always responded promptly and tried to be helpful. But it appears that trust executives have given him limited information about consequences of the go-live, and have preferred to indulge the “good news” NHS culture that Jeremy Hunt warned about.

On being asked what problems the trust has faced since the go-live the spokesman gave various answers that made no mention of the problems.

“All of our staff received training on the system, and we are continuing to offer our teams support as it is embedded.”

What of the problems arising from the implementation, and has the board been fully informed?

“Millennium has featured regularly on the Corporate Risk Register presented to each Part 1 Board meeting. In addition, implementation has received detailed confidential consideration at Part 2 of Board meetings, (which is why you won’t find it in our public board papers).”

Given Francis’s call for duty of candour, should the trust be more open about its problems?

“The initial roll out for CRS Millennium was introduced over three days at the Trust, with a phased approach. We did this to ensure the system was working in each department, before introducing it in another area.

“We are monitoring waiting time performance and records management so we can identify any issues if they emerge. The system is still being introduced in some services and when this is completed we will be able to assess the overall programme,” said the spokesman.

Does Croydon’s unwillingness to give in its statements to me any details of problems indicate that the culture of a lack of transparency in the NHS will be hard to change, no matter how many times Jeremy Hunt talks about the need for candour when things go wrong?

The spokesman:

“I’d like to be clear about the Trust’s approach:

The Trust board has been cited on the roll out of CRS Millennium and any potential risks throughout the process. As I previously noted, the board received an update in September. The board meeting, which will take place on Monday of next week, will receive a further update from the Chief Executive. The papers from this meeting will be published on our website and the meeting takes place in public;
A meeting chaired by the Chief Operating Officer has reviewed any operational matters arising on a daily basis. This is an internal meeting for clinicians and managers which has informed the implementation process;
Patients and visitors to the hospital have been kept fully appraised of the introduction of the system and were made aware that they may experience some delays to the check-in process while staff became familiar with the new computer system;

“These actions would suggest that the Trust has been transparent in its approach. You are welcome to review the board papers when they are published.”

Serious problems now emerge

Croydon did indeed publish its board papers on 25 November 2013 – which is to its credit because not all NHS trusts publish timely board papers.

But it’s mostly in the small print of various board papers that details emerge of Millennium-related problems. The shortcomings are mentioned as individual items rather than in a single, detailed Cerner Millennium deployment report. This leaves one to question whether trust directors have an overview of the seriousness of the difficulties arising from its implementation of a new patient records system.

These are some excerpts from deep inside Croydon’s latest board papers:

Breaches in waiting time standards

– “CRS Millennium (Cerner) Deployment -Network downtime – Week 1. In particular, the significant network downtime in week 1 (BT N3 problem) led to no electronic access to Pathology and Radiology which resulted in longer waits for patients in the Emergency Department (ED) leading to a large number of breaches. This was a BT N3 problem which has been rectified with BT providing CHS with the required scale of N3 access (>600 concurrent users and >1,600 users on any day – which is the largest network usage of any trust in England).”

– • “Hospital Based Pathways: The deployment of CRS Millennium was a particular challenge in the month across the multiple service areas within the Directorate of A&E, Surgery and Maternity.

• “Cancer & Core Functions: With the implementation of CRS Millennium, the open pathways part of RTT [referral to treatment – patient waiting times) may fail the standard – validation will be completed after the narrative for this report… “

Excessive waits in A&E

– “The main drivers adversely affecting the performance in the month [October 2013) for A&E were the deployment of CRS Millennium and the commencement of winter pressures due to the seasonality change. A&E 4-Hour Total Time in Department Target: 95.00%. Actual: 91.57%.”

Over budget

“The Trust position as at October is an adverse variance of £4.1m. This is a significant deterioration on the Month 6 position. The movement is mainly due to a significant reduction in income mainly as a result of operating issues caused by the Cerner deployment (£0.9m)… Actual £14.8 (£14.8)m; Budget £10.7m; Variance £4.1m.”

“Cerner Millennium: Plan YTD [year-to-date] £245,000; Actual YTD £621,000;

Significant loss in income

“… A new patient administration system was deployed in the Trust on the 30th September and 1st October (Cerner Millennium). The deployment has resulted in significant loss in income in September and October £ 1.1m. Trust performance on Activity Planning Assumptions and Key Performance Indicators is substantially worse than plan …”

Extra costs

“Medical £412k and admin £148k agency levels continue to be high due to cover for vacancies, annual leave, sickness and release of staff for Cerner training. The Trust has also incurred additional costs associated with the Cerner deployment (£600k) including overtime payments to administration staff and training costs.”

Bid to recover Cerner costs?

“… The Trust is currently forecasting a deficit position of £17.8m, which is £3.3m off the plan submitted to the NHS Trust Development Authority. This is a £3m movement from the month 6 forecast and is as a result of operational issues caused by the Cerner deployment. The current projected impact is an additional costs £1.7m and a loss in activity £1.1m . An application is to be made to recover the additional cost/losses relating to the Cerner deployment [of £2.9m] …”

HSCIC support for delays

“Cerner Millennium – Revised implementation date to Sept 2013 (achieved) ,with resultant additional costs including additional PC requirements of £146k, specialist support services £300k, procurement costs £91k, data cleansing costs £200k.

“Health& Social Care Information Centre (HSCIC) has confirmed support for the delayed implementation will be provided, accounting treatment of support to be confirmed with Department of Health.”

More money to stabilise operational position?

“As a result of operational issues caused by the Cerner deployment , Income is significantly reduced in October. The forecast assumes that the Trust will resume normal operating levels from November and that an element of the income lost will be will be recovered in the latter part of the year. A business case is being submitted to the Trust Board for additional investment in Cerner to stabilise the operational position.

“If there are further operational issues due to the Cerner deployment then this will significantly impact on the year end forecast…”

Over-optimism?

Principal risk -reporting output from Cerner is not accurate or timely. Officer in charge: CEO. Before go-live risk scores: June 2013 – 16; July – 16; Aug – 10; Sept – 10. After go-live risk score (for Oct): 20 [high risk of likelihood and consequences]

Principal risk – operational readiness following the implementation of Cerner. Officer in charge: COO. Before go-live risk score 15. Post go-live: 20. Risk rating before go-live – Green. After go-live – Red.

Red risks

Corporate Risk Assurance Framework

Nine risks are reported as Red [two of which relate directly to Millennium]:

“… Reporting output from Cerner is not accurate or timely. Data migration was successful. However reliance on external provider as internal knowledge has not yet been fully gained. A data quality dashboard with exception reporting is in place.

“… Operational readiness following the implementation of Cerner CRS Millennium impact conveyed to Trust Development Authority e.g. ED [Emergency Department] reporting and cost overruns

Risk scores

– Failure of CRS millennium to deliver anticipated benefits – 12. Officer in charge: CEO

– Reporting output from Cerner is not accurate or timely – 20. Officer in charge: CEO

– Operational readiness following the implementation of Cerner – 20. Officer in charge: COO

Croydon’s trust’s response to problems

Said John Goulston, Croydon’s CEO, in his latest [November 2013] report to the board of directors:

“The issues being encountered now with CRS Millennium are not due to any lack of integration testing with legacy applications or testing of workflow. They can be attributed to changing from a 25 year old Patient Administration System (Patient Centre) which did not require working in real time, was simple and intuitive to use, easily configurable and flexible to our needs.

“CRS Millennium’s patient administration functions are almost the complete opposite and the language used is new for our staff i.e. conversations, encounters etc. For our staff it has been a big ask for them to step into and up to such a complex application.”

He added: “The benefits of the new system are that each patient will have a single accurate electronic record that can be viewed and kept up-to-date by hospital and community clinical staff. This will eventually mean less time searching for patient notes, missing documentation and duplicating patient information…

“As with any massive change, there are still some challenges to tackle in making the system work effectively for every single user, in a diverse and complex organisation.

“However the success we have achieved to date is the result of the efforts of every single system user and all staff members. I would like to thank all our staff for their hard work in getting the Trust to this important stage.”

The trust spokesman gave me this statement on the problems:

“The Trust board has been given regular reports on the roll out of CRS Millennium and any potential risks throughout the process, not least through its regular reviews of the Corporate Risk and Board Assurance Frameworks. As I previously noted, the board received a specific update in September.

“As you already know, November’s board meeting received a further update from the Chief Executive. The papers from this meeting were published and the meeting takes place in public; Those attending are invited to put forward questions.

“A meeting chaired by the Chief Operating Officer continues to review operational matters. This is an internal meeting for clinicians and managers which has informed the implementation process;

“Patients and visitors to the hospital have been kept fully appraised of the introduction of the system and were made aware that they may experience some delays to the check-in process while staff became familiar with the new computer system;

“As you highlight from the board report, Cerner & BT noted that ‘the Trust has undertaken one of the most efficient roll-outs of the system they have worked on’ The papers also note some operational challenges as the system was rolled out. These have been addressed as part of the daily meetings I reference above – these are mainly concerned with users familiarising themselves with the system and have been addressed through the support and training staff received.

“In terms of the costs, the introduction of CRS Millennium has been supported by central funding from the Department of Health with the Trust paying the implementation overheads. These costs are a matter of public record and the Trust publishes annual Accounts as part of its Annual Report.”

Comment

When you go into hospital it’s reassuring to know the directors will be well informed and open about problems that could affect you.

The approach of Croydon Health Services NHS Trust to openness about its problems is not reassuring. It is no better or worse than other trusts that have implemented Cerner’s Millennium. In fact the timely publication of its board papers means it is more open than some.

But it should not require a time-consuming journalistic investigation to establish the consequences for patients of an NPfIT go-live. It has required just such an investigation after the go-live of Millennium at Croydon.

Board directors will not have the time to dig for, and piece together, information about internal problems that could delay patient appointments, treatment and care. They need the unpalatable facts in one place. Croydon Health Services has failed to make it easy for patients or board directors to see what has gone wrong.

NPfIT deployments at other trusts have led, cumulatively, to thousands of patients having appointments that were disrupted, or who had to wait longer to be seen than necessary, or whose records were not available, or who were seen with another patient’s records.

In shying away from telling the whole truth trusts take their cue from the top: the Department of Health has always made it hard to establish facts about anything to do with the NPfIT. Said the Public Accounts Committee in its report The National Programme for IT in the NHS: an update on the delivery of detailed care records systems in July 2011:

“It is unacceptable that the Department [of Health] has neglected its duty to provide timely and reliable information to make possible Parliament’s scrutiny of this project.

“Basic information provided by the Department to the National Audit Office was late, inconsistent and contradictory.”

Unanswered questions

Croydon has questions to answer, such as how many breaches of waiting time standards it has had, and may still be having, due to problems arising from the go-live. Other unanswered questions:

– What does a “a large number of breaches” in the Emergency Department mean? Have each the patients affected been told?

– Why are the risks related to the implementation much higher after go-live than before, given that the trust has had years to prepare for the go-live, and the many lessons it could have learned from other trusts?

– Exactly what problems are still affecting patients?

In a post-Francis NHS, Jeremy Hunt has demanded openness about mistakes and problems. There is an agreed need for change – but how can Hunt change an NHS culture – indeed a public sector culture – in which senior executives, in troubled IT implementations, will always emphasise the good news over the bad, perhaps hoping the bad will always remain hidden?

5 Comments

Posted in BT, Campaign4Change, change management, CSC, e-health, excessive secrecy, Government IT, health, health records, IT-related failures, LPfIT, managing outsourced services, NHS, npfit, openness and transparency, operational issues, public sector, public services, supplier relationships

Tagged CSC, npfit

Will truth ever be told when things go wrong?

Posted on 28/11/2013 | 5 comments

By Tony Collins

Cabinet Office minister Francis Maude has criticised civil servants who don’t always tell ministers what is going on in their departments. He used the Universal Credit project as an example.

He told the Financial Times: “There were a lot of failures in DWP and it isn’t good that it took a review commissioned . . . by the secretary of state to disclose what was going on.”

He added:

“You’ll find a lot of ministers don’t know a lot of things going on in the department because there’s no way you’ll find out.”

Maude’s comments touch on a common factor in IT-related project disasters in government – that ministers get mostly “good news” from their officials, and learn little or nothing about the seriousness of problems until a debacle is only too apparent to be denied.

But can ministers or the boards of large private companies ever expect their senior staff to be the bearers of bad news?

The Performing Right Society did not find out the truth about its failing IT-based project until it appointed a new head of IT who had no emotional equity in what had gone on before. [Crash – chapter 1)

The National Audit Office report “Universal Credit: early progress” referred to a “good news” culture at the Department for Work and Pensions that “limited open discussion of risks and stifled challenge”.

Ministers in charge of the Rural Payments Agency’s Single Payment Scheme said they were kept in the dark about the seriousness of IT-related problems. “When delays occurred, many stakeholders only found out at the last minute,” said a report of the Public Accounts Committee.

“Conspiracy of optimism”

The PAC report of March 2007 is worth a further mention:

“Lord Bach [minister in charge of the Single Payment Scheme] told us that he felt very let down by the advice he had received from the RPA [Rural Payments Agency], upon whom he said the Department relied very heavily in these circumstances, and the “conspiracy of optimism” on the part of the Agency.”

Lord Bach told MPs that he kept being told by officials that all was well.

“I frankly have to say that I do not think that that was satisfactory from senior civil servants whose job is to tell ministers the truth.”

Let down by civil servants – Universal Credit

Now the FT reports that Francis Maude has “entered the controversy over the implementation of the government’s universal credit scheme”. Maude told the FT he believed that Iain Duncan Smith, the work and pensions secretary, had been let down by his civil servants.

Maude said senior civil servants in charge of projects should tell ministers bluntly if they felt they were being misdirected and insist on a formal “letter of direction” to show that they had raised their objections. If they did not, they should be accountable for failings on their watch.

Maude did not comment directly on whether Robert Devereux, the top official in Mr Duncan Smith’s department, should take the rap for the much-criticised implementation of universal credit, but said: “I think everybody has to take responsibility for what they were part of”.

SROs accountable to MPs?

He suggested that civil servants who are in charge of big projects, known as senior responsible owners (SROs), should account directly to parliament, which would “toughen the relationship with ministers” and give officials a greater incentive to challenge developments they believed were wrong.

He said: “If you have an SRO who knows that he or she is going to be hauled up in front of select committees and interrogated . . . then I think you’re much more likely to have what is a very healthy thing in our system which is push-back. . . There’s a great phrase ‘speaking truth unto power’ and it’s very important – it doesn’t happen enough.

He added: “I’ve never had a civil servant come to me and say ‘Would you like us to stop doing this?’ The answer might easily be, ‘yes’.”

Comment:

Do ministers and boards of large private companies always have to commission their own independent reports to find out if their organisation’s biggest IT-based projects are failing? Probably.

The problem is not one of lying. Civil servants tend not to lie. Neither do senior executives when reporting to their boards. But the sin of omission – the art of not telling the truth while not lying – is well practiced in public life.

A succession of IT-based project disasters in the US, Australia and the UK show that truth is the first casualty of any large failing IT-based project.

Barnet Council and Capita

It’s isn’t just IT-based projects that bring out the sin of omission. Outsourcing deals do too. Barnet Council’s outsourcing deal to Capita is mired in controversy over truth.

Why did Barnet’s officials give Capita £16m after saying that the council had no spare cash, and that Capita would make the necessary upfront IT investments?

Officials have given a long-winded explanation which is a little like the drawn-out, incomprehensible explanation a six year-old may give in the playground when teacher asks why he took his friend’s bar of chocolate.

Liverpool LDL, BT and excessive mark-ups?

Liverpool Direct Ltd, a joint venture between Liverpool council and BT, is also mired in a controversy over truth. According to the Liverpool Daily Post, Local Government Minister Brandon Lewis has questioned whether LDL is proving value for money. There are allegations of excessive mark-ups on IT and services supplied by BT to the council.

It seems that BT makes a mark-up on what it supplies to LDL and LDL makes a further mark-up on what it supplies to the council.

But a council spokesperson said: ““The mark up incorporates a calculation of the cost of setting up a particular piece of hardware or software by LDL. The important figure is the profit after tax per item which is much lower, and on some items, LDL actually makes a loss.”

The minister said Liverpool Council needed to open up its books if it wants to insist it gets value for money from the BT deal. Will Liverpool Council open up?

Hardly.

Politicise parts of the civil service?

There is a strong argument for politicising the top echelons of the civil service so that ministers are not so reliant on officials who are thought to be neutral but evidence shows can be biased towards good news and suppressing the bad.

Ministers and boards of large companies do not need various versions of the truth when things go wrong. They need their own version.

As Richard Nixon said when accepting the presidential nomination in 1968 [pre-Watergate]:

“Let us begin by committing ourselves to the truth—to see it like it is, and tell it like it is—to find the truth, to speak the truth, and to live the truth.”

Doubtless Nixon believed it when he said it. Just as countless officials and executives in public and private life believe they are speaking the truth when they ministers and boards on their big IT-based projects. It may be the truth. But how much of it are they telling?

Update:

In a tweet BrianSJ3 makes a great suggestion: Genchi Genbutsu – “go and see for yourself” he says.

5 Comments

Posted in BT, Campaign4Change, Capita, DWP, excessive secrecy, Government IT, IT projects, IT-related failures, local democracy, local government, public-private partnerships, Universal Credit

Tagged Cabinet Office, Efficiency and Reform Group, Francis Maude

Does outsourcing make corruption more likely?

Posted on 17/10/2013 | 7 comments

By Tony Collins

Few journalists want to write about corruption in local government unless they have specific evidence from a court case. Which helps to explain why a well-researched report on the subject last week attracted little mainstream publicity, although there was a piece in the Professional section of The Guardian .

Journalists assume, perhaps like many people, that local government doesn’t have a problem with corruption. But by its nature a subtle exploitation of the opportunities provided by a lack of oversight and accountability – at worst indifference – will remain hidden.

Who would say anything to the police – and if the police were informed would they act? – if officers or councillors shaped policy or a decision in favour of a certain company, with a view to opening up a path to future employment? Could such subtle deviance be proven?

“The temptation might be exacerbated by the risk of redundancy, providing a greater incentive for officers to use their position to build a network with a view to future employment,” says last week’s report Corruption in UK local government – the mounting risks.

The report was not written by a marginal organisation. It was researched and drafted for Transparency International by Elizabeth David-Barrett, Research Fellow at Said Business School and Director, Corruption and Transparency Research Centre, Kellogg College, Oxford University. Funding was from the Joseph Rowntree Charitable Trust.

Transparency International defines corruption as the abuse of entrusted power for private gain. David-Barrett says a disturbing picture emerges of conditions in which corruption is likely to thrive, what she calls:

“low levels of transparency, poor external scrutiny, networks of cronyism, reluctance or lack of resource to investigate, outsourcing of public services, significant sums of money at play and perhaps a denial that corruption is an issue at all”.

High standards in public life are the norm but David-Barrett notes that a “feature of researching this report has been the lack of agreement among the many experts we consulted about the scale and prevalence of corruption in UK local government”.

Some argued that the cases that have come to light represent the tip of the iceberg. Others said the small number of obvious corruption cases, and their disclosure by existing oversight structures, indicated there was no iceberg.

The report makes no comment on current levels of corruption but points out that, by its nature, it will usually remain hidden. Corruption in local government does exist, says the report, and it gives a few examples that have been publicised.

Outsourcing

“If local authority employees abuse their access to insider information or their ability to shape policy or contracts whilst in office in order to create opportunities for themselves, their friends, or for private-sector companies for which they will later work, this is corrupt,” says the report.

Such corruption could manifest itself in poor services and value for money. It may shut out companies of unquestionable integrity that could offer better deals.

That said, some suppliers may be concerned about the risks to their reputation of hiring through the revolving door. One unnamed interviewee quoted in the report says:

“We’ve been approached by individuals who are retiring from local government but don’t want to stop working. They come to us and say they can help us, they have a lot of experience. We look at it very carefully and err on the side of caution if we are going to be working with that council.”

But another interviewee is quoted in the report as saying

“There are situations where local authority staff end up working for contractors and implicit agreements to scratch backs in return for contracts will arise.”

The report claims that a council officer who had written the specification for a tender for a particular contract resigned from the council and successfully bid for the contract as a private-sector supplier.

Undue influence

“Research conducted for this report suggested that revolving-door type corruption is difficult to prove, but may not be uncommon and is certainly creating suspicions which, in themselves, undermine public confidence.”

Change requests

An interviewee is quoted in the report as saying

“…the number of variations – that’s where people make money. The profit is often determined by the award of work under the framework contracts, particularly where the pricing basis is not clearly defined, so that you can end up with charging for extra work by hourly rates.”

Another interviewee said

“The sharp operator in terms of the outsourcing contractor company will have agreed a contract based on a lump sum, invariably based on a local authority which, at the time that the contract was let, was much larger.

“If you have a company which provides HR, IT and admin, where can it make its savings? If they are prepared to make the investment, they can usually make significant savings for themselves, that’s where they are legitimately making some of their profit, but if the local authority has downsized over the years, then there is less to provide.

“So if it’s a 20-year contract, every 5 years there is a review and renegotiation based around head count. But normally councils are not very good at negotiating soft-side deliverables.”

The report says that corruption can arise if favoured sub-contractors are not held accountable, or the use of sub-standard goods is overlooked, or if a corrupt company and corrupt supervising official collude to agree on price increases or changes in specifications.

“There is a key weakness in the governance of this area because the contract implementation phase is often managed by the local authority department which uses the procured goods or services, rather than by the central procurement function. This department may be unaware of the precise terms of the contract and may not notice if corners are cut.”

A procurement expert is quoted in the report as saying

“There might be a disconnect between a procurement department that does this first part [pre-tender and tender] and the ‘client’, for example, the council’s IT dept. It is the IT department that is supposed to monitor the contract, and see how it is performing, but the disconnect reduces accountability. The supplier might be able to provide sweeteners to the IT department to re-negotiate the contract without going back through the procurement department.”

Another procurement specialist said that relatively few resources are devoted to contract management.

“The central functions in local authorities often focus on contract letting and not contract management. Many of the same skills are involved, but less [sic] resources are devoted to contract management. And departments are often left to manage contracts – raising risks not just of corruption but also of inefficiency.”

Does outsourcing reduce accountability?

“When services are outsourced, local authorities retain a statutory obligation to ensure that all of the rules that would have applied to them are equally followed by the external providers. However, the extent to which that obligation is fulfilled varies… there are concerns that local government officers do not adequately monitor contract performance or respond to complaints. Councils sometimes seek to claim that decisions made by contractors on long-term contracts are beyond their control.

“Without the Audit Commission to exert pressure and with the decline of local investigative journalism, there is a risk that corruption in this area will become more common.

“The Institute for Government’s 2012 report, Commissioning for Success, argues that decisions about when to outsource need to be made on a more robust basis, that monitoring and stewardship of outsourced services needs to be strengthened, and that accountability arrangements need to be clarified.”

Auditors enfeebled?

The report says

“The system of checks and balances that previously existed to limit corruption has been eroded or deliberately removed.

“These changes include the removal of independent public audit of local authorities, the withdrawal of a universal national code of conduct, the reduced capacity of the local press and a reduced potential scope to apply for freedom of information requests. We have identified 16 areas in which we find a marked decline in the robustness of local government to resist corruption…”

The lack of independent audits is a particular concern. Audits are carried out by companies that can be sacked if they’re too critical.

“We believe that the new system – in which local authorities themselves are solely responsible for awarding their audit contracts and where there is no back-stop support for auditors who are challenging the local authority – will narrow the scope and effectiveness of local audits, while increasing potential conflicts of interest…”

External auditors risk being sued if they try to highlight suspected corruption in a report, even if they have the appetite to do it “which is less likely given their commercial priorities and the expected relative reduction in the scope of audits”.

The report goes further and says that external auditors “may face incentives to avoid undertaking investigations or raising concerns about suspicions of fraud or corruption”.

Audit professionals interviewed for this report saw these as serious concerns. One commented, “If you come down tough on a client, and it creates ruffles, you’ve got an eye to what will happen when it goes to open competition.”

Another said “external auditors now have nominal independence but they will probably feel pressure to keep their clients happy so as to avoid losing this contract, future contracts, or non-audit contracts with the local authority.”

Risks

Particular risks of corruption include:

1. public procurement at needs assessment stage;

2. public procurement at bid design stage;

3. public procurement at award stage;

4. public procurement at contract implementation stage;

5. control and accountability over outsourced services;

6. the revolving door of personnel between local authorities and private companies bidding to provide services;

7. planning discretion and influence regarding ‘permissions to build’ decisions;

8. planning discretion and influence regarding ‘changes of use’ decisions;

The report says:

“We feel it is important to emphasise, as has been noted in a number of public consultations and inquiries, that the majority of local councillors and council officers observe high standards of conduct and very few misuse their positions to further their own ends.

“There is no substitute for a commitment to ethics and integrity in public service. However, when accountability is absent, public officials may exercise their power for private ends unchecked by scrutiny, complaint, or the threat of punishment.

“Clear opportunities exist for unethical officers and members to exploit public trust for private gain. In any sector, corruption tends to increase as oversight and enforcement are weakened…

“Irrespective of how much corruption currently occurs, we believe that under the new and proposed arrangements for local government, corruption is likely to increase and there will be less reporting of that corruption.”

Media enfeebled?

The report says there is little scrutiny of local authority work by a “largely emasculated local media”; and the ballot box “provides only feeble discipline given that turnout is low and in many areas one party dominates or seats go uncontested”.

Corruption scandals over the years have revealed that individuals are sometimes able to capture local politics, exercising informal power over the local party and their political group as well as council officers, “so that they can shape policy to serve their own interests unchallenged by their peers”.

Countering corruption

The report highlights a need for:

– Effective assessment of corruption risks;

– Independence of the units or authorities whose duty is to prevent or investigate corruption;

– Visible and effective whistleblowing mechanisms. “Whistleblowing has been more effective than audit, internal monitoring, or police investigations in revealing corruption in local government … Suitable mechanisms should be established to provide an easy-to-use and confidential channel for reporting corruption suspicions or incidents.”

– The institutional will to mount effective investigation and prosecution of corruption;

– A nominated individual in every local authority who is responsible for counter-corruption and who conducts a regular corruption risk assessment and liaises closely with law enforcement authorities.

– Strong sanctions implemented against those who are caught – both legal and other;

– A commitment to transparency.

– Firms providing an audit function for local authorities not being allowed to provide other commercial and consultancy services to the same local authority.

– Internal investigations being adequately resourced and sufficiently independent. “Internal audit teams are vulnerable to manipulation by the corrupt, and this vulnerability increases if they are under-resourced, unsupported by the leadership or have their terms of reference and freedom to investigate curtailed.”

– Strict procedures requiring officers always to report (i) major price discrepancies among procurement bids and (ii) details of contract variations to the council’s Audit Committee and senior management.

– Greater monitoring of elected officials’ interests

– Private companies, when operating services in the public interest, to be required to comply with the Freedom of Information Act with regards to those services. Specifically audit reports from local authorities should be covered under the Freedom of Information Act or published directly as public documents.

Thank you to openness campaigner Dave Orr for drawing my attention to the Transparency International report.

Comment

Lack of firm oversight, and a tolerance of bad practice contributed to the financial crisis of 2007/8. It was normal to give mortgages to people who had no means of paying them back. Only when the crisis became manifest did people realise that what had been regarded as normal behaviour was in fact deviant.

Is there a danger of tolerance in local government to aberrant behaviour such as the shaping of policy to favour outsourcing which could later benefit some individuals?

Those who claim corruption hardly exists can point to the strong ethos of public service in many councils – and indeed countless councillors do important public work for very little money – but that doesn’t remove concerns about what may remain hidden.

Transparency International’s report rings alarm bells. It points out that auditors, the media and whistleblowers are unlikely to expose deviant practices, and are even less likely to in the future. The report suggests that local government provides unprecedented opportunities for corruption.

“The accomplice to the crime of corruption is frequently our own indifference.” – Bess Myerson, columnist. 1974.

Corruption in UK local government – the mounting risks.

7 Comments

Posted in Campaign4Change, excessive secrecy, Freedom of Information, local government, managing outsourced services, oversight, public services, public-private partnerships

Croydon trust plans “high-risk” Cerner go-live in secret

Posted on 26/09/2013 | 2 comments

By Tony Collins

NHS trusts have gone live with Cerner Millennium with mixed success. Eight trust implementations went seriously awry. A list is at the end of this post.

The flawed go-lives have meant that hospital managers have lost track, cumulatively, of thousands of patients and found that treatments, including those for cancer, were delayed or care pathways interrupted. At times medical notes have not been available, or clinicians have been given the wrong notes.

In July 2008 E-Health Insider reported that the deployment of a national programme care records system at Milton Keynes Hospital NHS Foundation Trust “developed into an untenable situation which resulted in near melt down of the organisation”.

One of the lessons from the problematic go-lives is that trusts, when they have reported on the difficulties later, have said they underestimated the risks.

In particular they regarded the patient records system as mainly administrative with no risks to the health and care of patients. Yet it is possible for incidents arising from flawed patient record implementations to be judged “clinical”.

Is Croydon Health Services NHS Trust, which includes the former Mayday hospital, about to repeat this same mistake – of regarding the risks as non-clinical?

The Trust is due to go live this weekend with the start of one of the largest patient record go-lives in the UK. The deployment is being run under the NPfIT, which, in the capital, is now called the London Programme for IT. The plans are to install Millennium at Croydon University Hospital (formerly Mayday) and at some community sites.

The Trust says its preparations are designed to ensure a safe and effective deployment that will replace systems that are more than 20 years old and lack “many of the functions one expects in the modern healthcare digital age”.

But the signs are, from the trust’s board papers, that the risks of a flawed implementation are being seen largely as financial and administrative. For patients it appears that the worst that is envisaged is a “poor experience”.

Have the risks to patients been properly flagged to the board’s directors?

I looked through Croydon’s most recently published board papers to see how well the trust’s directors have been kept informed of the risks of the go-live and could see almost no mention of Cerner – except a risk that income to the Trust could be affected if it is unable to produce timely reports. There is no specific mention of risks to patients.

Given the history of failed implementations of Cerner Millennium under the NPfIT, I asked Croydon Health NHS Trust what directors have been told about the risks.

This was the trust’s reply:

“CRS Millennium has featured regularly on the Corporate Risk Register presented to each Part 1 Board meeting.

“In addition, implementation has received detailed confidential consideration at Part 2 of Board meetings, (which is why you won’t find it in our public board papers).”

I then put it to the trust that I was not sure why, in a new era of openness and transparency in the NHS, that board discussions should be in private on a matter that could affect large numbers of patients to judge from past implementations at other trusts. The spokesperson – the interim stakeholder relations manager – made no further comment.

Richard Granger, when head of the NPfIT, was quoted as saying he was ashamed of some of the Cerner deployments . Granger quit the programme in January 2008 – and since then several more Cerner deployments at trusts have gone badly wrong, at North Bristol NHS Trust, for example.

After the NPfIT go-live of Cerner at the Nuffield Orthopaedic Centre, the National Audit Office, at the request of a member of the Public Accounts Committee Conservative MP Richard Bacon, investigated and produced a public report on the lessons learned.

The Nuffield go-live was in December 2005. Since then managers at all trusts that have gone live with Cerner have claimed they have learned those lessons.

Comment:

It’s true that Croydon Trust’s risk register has shown “red” for the Cerner implementation. It is indeed deemed “high risk”. But how many of its board directors will understand the nature and substance of the risks to patients from a graphic?

It’s easy for the trust to say that board directors have been informed through confidential discussions but how would anyone outside the trust be able to judge whether that’s true?

Trust boards can never be held fully accountable after a patient record go-live goes wrong. They hold their own investigations or sometimes commission inquiries by consultants known to them, and the final reports usually indicate that no patients have been harmed. Even after a trust has lost track of thousands of patient appointments for more than a year, it has later reported that in the end all was well.

As trust boards are not voted in and out by the public they have a special duty to ensure they are fully informed on things that can go wrong. Is Croydon Health’s board fully informed on the risks of the Cerner go-live? I doubt it.

Some flawed NHS patient record go-lives:

Barts and The London

Royal Free Hampstead

Weston Area Health Trust

Milton Keynes Hospital NHS Trust

Worthing and Southlands

Barnet and Chase Farm Hospitals NHS Trust

Nuffield Orthopaedic

North Bristol.

St George’s Healthcare NHS Trust

Lorenzo:

University Hospitals of Morecambe Bay NHS Foundation Trust

Birmingham Women’s Foundation Trust

NHS Bury

2 Comments

Posted in Campaign4Change, Cerner, change management, excessive secrecy, health, health records, LPfIT, npfit, openness and transparency

Is this a reason some council and NHS scandals stay hidden for years?

Posted on 19/09/2013 | 5 comments

By Tony Collins

Six years into Southwest One’s joint venture between IBM and three public authorities, the outsourced service is not a big success.

Somerset County Council, one of the joint venture’s partners, has been in dispute with IBM, the major shareholder in Southwest One. It cost the county council £5.9m to settle, including £800,000 in costs when bringing back staff who had been outsourced.

The joint venture’s SAP-based “transformation” led to complaints of poor quality of service by some of Somerset’s finance users; the venture has consistently made losses and on the matter of savings, Somerset Cabinet member for resources, David Huxtable, said there have been some but added:

“It was a very complex contract and lots of the savings were predicated on an ever-increasing amount of money being put into public services and we know in the last four years that has gone into reverse.”

Now IBM has sold its low-margin customer care outsourcing unit which could affect the future of Southwest One.

Yet a smaller partner in Southwest One, Taunton Deane Borough Council, describes the relationship as a “success”. Reports to Taunton Deane’s councillors on Southwest One are remarkably positive.

Dave Orr an IT specialist who used to be work for Somerset County Council and has kept a close eye on Southwest One since it was formed in 2007 has drawn my attention to Taunton’s latest reports on the joint venture. When read quickly Taunton’s reports are upbeat, almost breathless with praise for the joint venture.

Below are excerpts from two reports that have been written for today’s meeting of Taunton Deane’s Corporate Scrutiny Committee. The first is a “Procurement Transformation Update”, report to the council by Southwest One’s Chief Procurement Officer.

There are no hints of any difficulties on the contract except a comment that cutting spending will make it harder to achieve procurement savings. From Southwest One’s report to Taunton:

“Executive Summary

“As at 31/07/13, in excess of £1.8m [report’s emphasis] savings have been delivered to the Council through signed-off procurement-related initiatives brought about by Southwest One’s Strategic Procurement Service. This is up from £1.59m when last reported in January 2013.

“A further £1.364m of savings are scheduled to be delivered from these signed-off initiatives during the life of the current Southwest One contract, which expires in 2017.

“Multiple projects continue to be progressed by Southwest One Strategic Procurement Service which are expected to significantly add to the pipeline of savings. These Include initiatives for a new pool & spa at Blackbrook; Waste; Insurance; various small scale initiatives within the DLO/HPS areas .”

A second report for Taunton’s Corporate Scrutiny Committee “SouthwestOne Partnership Update report” is written jointly by a team at Taunton council and the CEO of Southwest One. Again it’s upbeat and summarises Southwest One’s performance over the last six months.

“Service delivery for TDBC, viewed in the round, is broadly on track. The majority of services perform well or extremely well (eg Customer Services). We do have concerns in some areas and we are working closely with the services in question to remedy the issues. “

The report says that the shared service model in conjunction with larger authorities provides Taunton with “much needed resilience” (report’s underlining) in service delivery, although “this has been impacted to a certain extent by changes made recently to the contract by the other partners”.

Additionally, “our secondee staff to SWO benefit from ‘assured employment’, which was offered by IBM”.

A survey of staff in June 2013 “saw marked improvements in staff morale and communication”.

Sickness absence for the financial year to the end of March 2013 was slightly down to about 9 days per full-time employee though up a little more recently.

Appendices – now for the problems

It’s only when councillors come to the report’s appendices that they will see some detail of the problems. But how many councillors will scrutinise a report’s appendices? From the Taunton report’s appendices:

“There are service and capacity issues. The helpdesk move caused significant problems, leading to an increased number of issues being raised with the Client Team from TDBC [Taunton Deane Borough Council] staff. We are closely monitoring the plan SWO [Southwest One] have put in place to fix these issues.

“Project delivery capacity and project scheduling continues to cause concern, with improved governance within TDBC highlighting this problem more acutely. Our issue tracker is currently tracking 11 escalated issues with SWOne, 6 of them with a Red RAG status.

“ SRM (Supplier Relationship Management) performance in SAP continues to be well below the required level despite the amount of focus it is receiving from SWOne. Work on a revised governance process for the SAP system is underway and looks likely to deliver a more controlled SAP Change process.”

The most serious problem – and it is not mentioned until the penultimate page of the report’s appendices – is that savings will be nowhere near the original target of £10m.

“This is red, tracked against the original [savings] £10m target. To date £2.8m has been signed-off and it is not yet clear how the lower target of £5.7m will be achieved as there are fewer savings opportunities and initiatives emanating from SWO…”

From the small print of Taunton Deane’s report it is possible to work out that the cost of the council’s SAP implementation was supposed to have been paid off by savings but hasn’t. Indeed a debt of nearly £1m is still incurring interest.

Comment

Perhaps it’s unfair to pick on Taunton Deane’s reports to councillors. The positive tone is little different to dozens, perhaps hundreds, of NHS, council and central government board reports I have read over two decades.

If you’re a director of a public authority your job is probably made harder if you’re getting self-vindicating internal reports on the organisation’s progress. It would be more helpful if management reports were neutral and objective, framed by unvarnished facts.

When you hire a roofing company and it reports back on the finished job, you want to know about the tiles that leave a gap or are loose, not the ones that fit nicely.

NHS trust reports can often be particularly one-sided, often of the type that say:

“We had 3 fatalities on the main staircase last month because of a ruptured floor lining but the overall accident rate in that part of the building is down over the last 3 years and our falls rate overall is 3% below the average for the NHS as a whole.

“Our contractor confirms that the floor lining is within KPI requirements and a repair will be effected shortly.”

It appears that those who write board reports for public authorities feel an obligation to motivate and inspire, to leave the reader feeling good, to clothe bad news in layers of good news, omit it altogether or put it in the appendix hardly anyone reads.

Is this one reason so many outsourcing and NHS scandals stay hidden for years?

5 Comments

Posted in Campaign4Change, cost reduction, decision-making, excessive secrecy, IBM, legal disputes, local democracy, local government, NHS, openness and transparency, outsourcing, public sector, public services, public-private partnerships

NPfIT central costs rise by tens of millions – even after “dismantling”

Posted on 18/09/2013 | 1 comment

By Tony Collins

On 22 September 2011 the Department of Health announced the dismantling of the NPfIT. As the press release was being issued some officials at the department were aware that they were continuing to spend tens of millions on central administrative costs of the programme.

Today’s report of the Public Accounts Committee has a figure for the central costs of the NPfIT until the end of March 2012 of about £890m. Before the DH announced the dismantling of the programme, in March 2011, the DH put the central costs at £817m.

So there has been a rise in central admin costs of about £70m since the NPfIT was supposedly dismantled.

The administrative costs are separate from spending on the contracts with BT or CSC. The admin costs don’t include the delivery of a single laptop to the NHS under the NPfIT. They are simply the central costs of administering the programme – including day rates for consultants – such as day rates of £1,700 to help senior officials prepare for appearances before MPs on the Public Accounts Committee.

The central costs have never been explained, not even by the National Audit Office which has published several reports on the NPfIT. It is known that some central costs are explained by items of questionable benefit such as the commissioning of DVD films that marketed the NPfIT.

Some of the cost categories have emerged as a result of an FOI request (below). Officials made regular visits to various parts of the globe to promote the success of the NPfIT. It’s thought that the DH has spent more than £100m on consultants for the programme.

Millions of pounds have been spent with public relations companies. The DH spent about £30,000 on press cuttings in two years alone. Released central costs for just two years of the NPfIT between 2005 and 2007 include:

£1.23m with Expotel Hotel Reservations
£1.87 Harry Weeks Business Travel
BT conferencing – £1.15m
Intercall video conferencing – £274,973
MWB (Serviced Offices) – £15.8m
Regus – offices and meeting rooms – £3.17m
Spring International Express (courier and other services) – £192, 662
Cision UK (press cuttings) – £30,000
Fishburn Hedges (includes public relations) – £559,310
Good Relations (public relations] – £1.55m
Porter Novelli (public relations and information) – £943,000
ASE Consulting – £31.7m
Capgemini – £15m
Deloitte MCS – £42.8m
Atos Consulting – £32.3m
Gartner – £3.8m
QI Consulting – £14.5m
Tribal Consulting – £6.9m

Comment

Central administrative costs of nearly £900m on a single IT programme are breathtaking. That makes the National Programme for IT in the NHS one of the world’s largest public sector IT projects – before a penny has been spent on deliveries of hardware or software to the NHS.

It’s almost as surprising that not even the National Audit Office has been able to obtain a breakdown. Has central spending been properly controlled? Perhaps not, given that the DH, even this year, spent up to £1,700 a day on consultants to brief a senior official for a hearing of the Public Accounts Committee in June 2013.

Maybe the taxpayer should be grateful that the consultants were hired for only 52 days between February and June 2013 to prepare for the Committee’s hearing, and that the DH managed to renegotiate the day rate down from £1,714 to £1,000 a day between April and June.

Maybe the taxpayer should be grateful that the total cost of the consultancy for preparing for the PAC hearing was only £73,563.

But the £73,563 was spent after the DH estimated its central administrative costs on the NPfIT at nearly £900m – which are costs up to 31 March 2012.

It’s also remarkable that some at the DH still consider the NPfIT a success. This was the NAO’s conclusions on the NPfIT in its May 2011 report on the NPfIT Care Records Service:

“Central to achieving the Programme’s aim of improving services and the quality of patient care, was the successful delivery of an electronic patient record for each NHS patient. Although some care records systems are in place, progress against plans has fallen far below expectations and the Department has not delivered care records systems across the NHS, or with anywhere near the completeness of functionality that will enable it to achieve the original aspirations of the Programme.

“The Department has also significantly reduced the scope of the Programme without a proportionate reduction in costs, and is in negotiations to reduce it further still. So we are seeing a steady reduction in value delivered not matched by a reduction in costs.

“On this basis we conclude that the £2.7 billion spent on care records systems so far does not represent value for money, and we do not find grounds for confidence that the remaining planned spend of £4.3 billion will be different.”

But this was the Department of Health’s view on NPfIT Care Records Service value for money:

“The Department considers, however, that the money spent to date has not been wasted and will potentially deliver value for money… The Department believes that the flexibility provided by the future delivery model for the programme will deliver functionality that best fits the needs of the clinical and managerial community. The future architecture of the programme allows many sources of information to be connected together as opposed to assuming that all relevant information will be stored in a single system. This approach has been proven in other sectors and is fully consistent with the Government’s recently published ICT strategy.”

This contradiction between the DH’s view of the NPfIT, and the NAO’s, indicates, perhaps, that the DH continues to live in a world not entirely attached to reality.

From April 2013, the DH’s central team and some local programme teams responsible for the NPfIT moved to the Health and Social Care Information Centre which has taken over the local service provider contracts with BT and CSC. Will it be able to control central spending on the very-much-alive NPfIT?

Update:

The central costs could rise much further – possibly by more than £100m – if the eventual settlement of the legal case between the DH and Fujitsu works out badly for the taxpayer. Legal costs on the case so far are about £31m.

1 Comment

Posted in BT, Campaign4Change, CRC, excessive secrecy, Freedom of Information, Fujitsu, health records, India, IT projects, IT-related failures, managing outsourced services, NHS, npfit

Will Universal Credit ever work? – NAO report

Posted on 05/09/2013 | 8 comments

By Tony Collins

Today’s National Audit Office report Universal Credit: early progress is one of most excoriating the NAO has published on a government IT-enabled project or programme.

Iain Duncan Smith, secretary of state for work and pensions, has already responded to the NAO report by implying it is out of date and that the problems are in the past. This is a standard government response to well researched and highly critical NAO reports.

But the authors of the NAO report have pointed to some UC problems that are so fundamental that it may be difficult for any independent observer to credibly regard the project’s problems as historic. Says the NAO:

“The Department [DWP] is unable to continue with its ambitious plans for national roll-out until it has agreed the future service design and IT architecture for Universal Credit.”

So can the UC project ever be a success if, years after its start, there is no agreed design or IT architecture? Says the NAO

“The Department may also decide to scale back the complexity and ambition of its plans.”

Although the DWP has spent more than £300m on UC IT, mostly with the usual large IT suppliers, complex claims cannot yet be handled without manual work and calculations.

In February 2013, the Cabinet Office’s Major Projects Authority reviewed Universal Credit and raised “serious concerns about the programme’s progress”, says the NAO report. “The review team was concerned that the pathfinder [pilot project] could not handle changes in circumstances and complex cases which had to be dealt with manually, and that this meant the pathfinder could not be rolled out to large volumes.”

The Independent says the DWP gave false assurances on the project’s progress. The Daily Mail says the scheme has got off to a “disastrous start”.

The NAO’s main findings:

Is £303m spent on IT value for money?

“At this early stage of the Universal Credit programme the Department has not achieved value for money. The Department has delayed rolling out Universal Credit to claimants, has had weak control of the programme, and has been unable to assess the value of the systems it spent over £300m to develop [up to the end of March 2013].

“These problems represent a significant setback to Universal Credit and raise wider concerns about the Department’s ability to deal with weak programme management, over-optimistic timescales, and a lack of openness about progress.”

A projected IT overspend of £233m?

The NAO puts the expected cost of implementing Universal Credit to 2023 at £2.4bn. The spend to April 2013 is £425m, including £303m on the IT. The planned IT investment in the current spending review period from the May 2011 business case was £396m, but the December 2012 business case puts the planned IT investment in the current review period at £637m – and increase of £233m, or 60%. The DWP wants to make changes elsewhere in its budgets to accommodate the extra IT spend.

Ministers and DWP spokespeople have said repeatedly that the project is within budget.

Some of the IT spend breakdown

– Core software applications including a payment management component – £188m

– Interface with HMRC real time information – £10m

– Case management module – £6m

– Licences – £31m

– Supplier support – £26m

– Hardware, telephony and changes to old systems – £50m

– Departmental staff costs on the Business and IT Solution team – £29m.

– Staff contractors provided by suppliers to support departmental staff – £26m.

Main IT suppliers – spend to end of 2012/13

– Accenture. Software design, development and testing including: interview system; evidence capture, assessment and verification; and staff contractors – £125m

– IBM. Software design, development and testing including: real time earnings; process orchestration and payment management; and staff contractors – £75m

– HP. Hardware and legacy system software, and staff contractors – £49m

– BT. Telephony. It also supplied specialist advice on agile development methods – £16m

A further £9m was spent on live system support costs provided by HP; bringing total spending with suppliers to £312m, says the NAO.

Is the IT high quality or not?

The NAO report suggests there may be conflicting views between those in DWP who believe the IT is high quality and others who are not so sure.

“The Department believes that the majority of the built IT is high quality, but has not been fully developed and cannot support scaling up the programme as it stands. Some assessments have commented that systems are inflexible or over-elaborate.”

Will the IT support a national roll-out?

The NAO says it’s uncertain that the IT can support full national roll-out of Universal Credit without further work and investment.

“The Department does not yet know to what extent its new IT systems will support national roll-out. Universal Credit pathfinder systems have limited function and do not allow claimants to change details of their circumstances online as originally intended. The Department does not yet have an agreed plan for national roll-out and has been unclear about how far it will build on pathfinder systems or replace them.”

Will timetable and scope have to change further?

“The Department will have to scale back its original delivery ambition and is re-assessing what it must do to roll-out Universal Credit to claimants. The current programme team is developing new plans for Universal Credit. Our experience of major programmes supported by IT suggests that the Department will need to revise the programme’s timing and scope, particularly around online transactions and automation.”

Over-optimism?

“It is unlikely that Universal Credit will be as simple or cheap to administer as originally intended. Delays to roll-out will reduce the expected benefits of reform…”

Rushed?

“ The ambitious timetable created pressure on the Department to act quickly…”

Open to fraud?

“The Department’s current IT system lacks the ability to identify potentially fraudulent claims. Within the controlled pathfinder environment, the Department relies on multiple manual checks on claims and payments. Such checks will not be feasible or adequate once the system is running nationally.

“Without a system in place, the Department will be unable to make the savings it had planned, by reducing overpayments from fraud and error. In December 2012, it estimated these savings to be worth £1.2 billion per year in steady state.”

Separately the NAO states that there have been “unanticipated security problems from putting transactions online”. The DWP may now scale back all that was planned to be online.

In January 2013 the technical director of CESG and other reviewers said that the UC security solution was “over-complex” and could have conflicted with DWP plans to encourage people to claim online.

Delay in national roll-out

“The Department has delayed rolling out Universal Credit nationally. The Department will not introduce Universal Credit for all new out-of-work claims nationally from October 2013 as planned. Instead it will add a further six pathfinder sites from October 2013

“Pause UC immediately”

In early 2013 the Cabinet Office’s Major Projects Review Group noted that the Department had not addressed issues with governance, management and programme design despite their having been raised in previous reports. The Authority “recommended that the Universal Credit programme be paused immediately”.

All post-2015 plans under review

The original plans were for UC roll-out to finish by late 2017. All statements by officials and Iain Duncan Smith have confirmed this 2017 deadline. In fact, says the NAO, all milestones beyond the start of 2015 are “currently under review” including:

• National roll-out of all new claims

• Closedown of tax credits new claims

• Roll-out of Pension Credit Plus on Universal Credit platform

• Completion of claimant migration

The NAO says the DWP has considered completing the roll-out beyond 2017.

Complete rethink needed

The Cabinet Office’s Major Projects Authority reviewed and reported on Universal Credit in February 2013. The Authority’s found that:

“Universal Credit Programme needs a complete rethink of the delivery approach together with streamlining potentially over-elaborate solutions.”

A separate review of the project by Capgemini in January 2013 and a “Reset IT stocktake” in April 2013 concluded that the UC “architecture is of limited extensibility”.

Pathfinders of limited value

“The pathfinder lacks a complete security solution. Claimants cannot make changes in circumstances online. This increases the need for manual work as changes must be made by telephone. The pathfinders also require more staff intervention than planned, because of reduced automation and links between systems.”

100 day planning period

“In May 2013, the Department appointed the current senior responsible owner [Howard Shiplee] to lead the Universal Credit programme. The team is now conducting a ‘100-day planning period’, which will end at the end of September 2013. The Department will then submit a new business case to HM Treasury, and ask for ministerial sign-off for delivery plans in late 2013.”

Secrecy – even internally?

“The reset took place between February and May 2013. The reset team included departmental, Cabinet Office and Government Digital Services staff. The reset team developed an extensive set of materials as part of a ‘blueprint’ covering design and implementation, and 99 detailed recommendations. The reset team shared the blueprint with the Department’s Executive Team who approved it at each stage of its development. The Department shared the blueprint with a small number of people but did not initially share it widely.”

A £34m write-off – so far

“The Department has acknowledged that it needs to write off some of the value of its Universal Credit IT assets. By the end of 2012-13, the Department had spent £303m on its IT systems and created assets which it valued at £196m – a difference of £107m. But the DWP has decided to write-off £34m – 17% – though it may increase the size of the write-off later.

“The Department is conducting further impairment reviews of the value of its Universal Credit IT assets before finalising its 2012-13 accounts.” The £34m write-off was based on a “self-assessment which it asked its suppliers to conduct”.

Number of claimants well below planned level

“In its October 2011 business case, the Department expected the Universal Credit caseload to reach 1.1 million by April 2014, but reduced this to 184,000 in the December 2012 business case.”

Planned savings down by nearly £500m

“The cost to government of implementing Universal Credit will be partly offset by administrative savings. In December 2012, the Department estimated that a three-month delay in transferring cases from existing benefits to Universal Credit would reduce savings by £240m in the current spending review period and by £247m after April 2015.”

Anyone know who decided on October 2013 for planned UC roll-out?

“The Department was unable to explain to us why it originally decided to aim for national roll-out from October 2013. It is not clear whether the Department gave decision-makers an evaluation of the relative feasibility, risks and costs of this target date.”

Agile … with a 1,000-strong team?

“In 2010, the Department was unfamiliar with the agile methodology and no government programme of this size had used it. The Department recognised that the agile approach would raise risks for an organisation that was unfamiliar with this approach. In particular, the Department

• was managing a programme which grew to over 1,000 people using an approach that is often used in small collaborative teams;

• had not defined how it would monitor progress or document decisions;

• needed to integrate Universal Credit with existing systems, which use a waterfall approach to managing changes; and

• was working within existing contract, governance and approval structures.

“To tackle concerns about programme management, the Department has repeatedly redefined its approach. The Department changed its approach to ‘Agile 2.0’ in January 2012. Agile 2.0 was an evolution of the former agile approach, designed to try to work better with existing waterfall approaches that the Department uses to make changes to old systems.

“After a review by suppliers raised concerns about the achievability of the October 2013 roll-out the Department then adopted a ‘phased approach’ and created separate lead director roles for the pathfinder (phase 1), October roll-out (phase 2) and subsequent migration (phase 3).

“The Cabinet Office does not consider that the Department has at any point prior to the reset appropriately adopted an agile approach to managing the Universal Credit programme.”

Anyone know how UC is meant to work?

“The source of many problems has been the absence of a detailed view of how Universal Credit is meant to work. The Department has struggled to set out how the detailed design of systems and processes fit together and relate to the objectives of Universal Credit.

“This is despite this issue having been raised repeatedly in 2012 by internal audit, the Major Projects Authority and a supplier-led review. This lack of clarity creates problems tracking progress, and increases the risk that systems will not be fit for purpose or that proposed solutions are more elaborate or expensive than they need to be…

“The Department was warned repeatedly about the lack of a detailed ‘blueprint’, ‘architecture’ or ‘target operating model’ for Universal Credit. Over the course of 2011 and the first half of 2012, the Department made some progress but did not address these concerns as expected.

“By mid-2012, this meant that the Department could not agree what security it needed to protect claimant transactions and was unclear about how Universal Credit would integrate with other programmes. These concerns culminated, in October 2012, in the Cabinet Office rejecting the Department’s proposed IT hardware and networks.

“ Given the tight timetable, unfamiliar programme management approach and lack of a detailed operating model, it was critical that the Department should have good progress information and effective controls. In practice the Department did not have any adequate measures of progress.”

High turnover among IT leaders?

“Including the reset and the current director general for Universal Credit, the programme has had five different senior responsible owners since mid-2012.

“The Department has also had high turnover in important roles other than the senior responsible owner. The Department has had five Universal Credit programme directors since 2010.”

The NAO said that the director of Universal Credit IT was “removed from the programme in late 2012 and the Department has replaced the role with several roles with IT responsibilities”. During and since the ‘reset’ the Government Digital Service has helped to redesign the systems and processes supporting transformation.

Good news culture and a fortress mentality

“The culture within the programme has also been a problem…Both the Major Projects Authority and a supplier-led review in mid-2012 identified problems with staff culture; including a ‘fortress mentality’ within the programme. The latter also reported there was a culture of ‘good news’ reporting that limited open discussion of risks and stifled challenge.”

“Inadequate control of suppliers”

The Department had to manage multiple suppliers. Three main suppliers – Accenture, IBM and HP – developed components for Universal Credit. The Department commissioned IBM to act as an Applications Development Integrator from January 2012, providing some oversight and overall management of IT development, but creating risks of supplier self-management.

The NAO found that there were inappropriate contractual mechanisms; charges were on the basis of time and materials, leaving the majority of risks with the Department. The NAO said there were “inadequate controls over what would be supplied, when and at what cost because deliverables were not always defined before contracts were signed.”

There was “over-reliance on performance information that was provided by suppliers without Department validation”. And weak contractual relationships with suppliers meant that the DWP “did not enforce all the key terms and conditions of its standard contract management framework, inhibiting its ability to hold suppliers to account”

Said the NAO:

“Various reviews have criticised how the Department has managed suppliers. In June 2012, CESG reported the lack of an agreed, clearly defined and documented scope with each supplier setting out what they should provide. This hampered the Department’s ability to hold suppliers to account and caused confusion about the interactions between systems developed by different ones. In February 2013, the Major Projects Authority reported there was no evidence of the Department actively managing its supplier contracts and recommended that the Department needed to urgently get a grip of its supplier management.”

Suppliers paid without proper checks

“The Department has exercised poor financial control over the Universal Credit programme. The Department commissioned an external review in early 2013 of financial management in Universal Credit. The review found several weaknesses including poor information about the basis for supplier invoices, payments being made without adequate checks and inadequate governance and oversight over who approved spending. The review team checked a sample of invoices against the timesheets of suppliers and found no evidence of inappropriate charging, although timesheet information is not complete and cannot be linked to specific activity…”

The NAO went on to emphasise that there was “insufficient review of contractor performance before making payments. “On average six project leads were given three days to check 1,500 individual timesheets, with payments only stopped if a challenge was raised.”

The NAO added that inadequate internal challenge of purchase decisions meant that ministers had “insufficient information to assess the value for money of contracts before approving them”.

50 people on the UC programme board

“The programme board acts as the programme’s main oversight and decision-making body… The programme board has been too large and inconsistent to act as an effective, accountable group. Over the course of 2012, the programme board had 50 different people attending as core members…

“The board did not have adequate performance information to challenge the programme’s progress. In particular, while the board had access to activity measures for IT system development, it could not track the actual value of this activity against spending.

“In the absence of such measures of progress, the board relied on external reviews to assess progress. Such external reviews were not sufficiently frequent for the board to use them as a substitute for timely, adequate management information.”

Programme board disbanded

“… during the reset [Feb-May 2013], [the DWP] suspended the programme board entirely.

Failure to act on recommendations

“From mid-2012, it became increasingly clear that the Department was failing to address recommendations from assurance reviews… the key areas of concern raised by the Major Projects Authority in February 2013 had appeared in previous reports.

“From mid-2012, the underlying concerns about how Universal Credit would work meant that the Department could not address recommendations from assurance reviews; it failed to fully implement two-thirds of the recommendations made by internal audit and the Major Projects Authority in 2012. Without adequate, timely management information, the Department relied on periodic external assurance reports to assess progress.”

Ceasing work for national roll-out

“By late 2012, the Department had largely stopped developing systems for national roll-out and concentrated its efforts on preparing short-term solutions for the pathfinder…”

Slippery Parliamentary answers

The NAO lists almost imperceptible changes in the language of Parliamentary answers on Universal Credit.

In 2011 the DWP said in a Parliamentary answer that “all new applications” for out-of-work financial help would be treated as a UC claim; and in November 2012 the DWP said in a Parliamentary reply that in October 2013 it would start to migrate claimants from the old system to the new. But by June 2013 the DWP’s line had changed. By then it was saying in a Parliamentary reply that Universal Credit will “progressively roll-out” from October 2013 with all those who are entitled to UC claiming the new benefit by 2017. In fact all new applications for out-of-work help are not being treated as a UC claim. The NAO says that new claimants in the pathfinder must be “single, without children, newly claiming a benefit, fit for work, not claiming disability benefits, not have caring responsibilities, not be homeless or in temporary accommodation, and have a valid bank account and National Insurance number”.

Will UC ever work?

“ …it is still entirely feasible that it [UC] goes on to achieve considerable benefits for society. But to do so the Department will need to learn from its early mistakes.

“As it revises its plans the Department must show it can: exercise effective control of the programme; develop sufficient in-house capability to commission and manage IT development; set clear and realistic expectations about the timescale and scope of Universal Credit; and, address wider issues about how it manages risks in major programmes.”

Margaret Hodge MP, Chair of the Public Accounts Committee, says of the NAO report:

“The Department for Work and Pensions has made such a mess of setting up Universal Credit that the Major Projects Authority had to step in to rescue the programme.

“DWP seems to have embarked on this crucial project, expected to cost the taxpayer some £2.4bn, with little idea as to how it was actually going to work.

“Confusion and poor management at the highest levels have already resulted in delays and at least £34m wasted on developing IT. If the Department doesn’t get its act together, we could be on course for yet another catastrophic government IT failure.

“This damning indictment from the NAO gives me no confidence that we will see the £38 billion of predicted benefits between 2010-11 and 2022-23. Vulnerable benefit claimants need a secure system they can rely on.”

NAO report – Universal Credit: early progress

8 Comments

Posted in Accenture, Agile, BT, Campaign4Change, Capgemini, change management, excessive secrecy, Government digital Service, Government IT, HP, IBM, IT-related failures, Major Projects Authority, managing outsourced services, openness and transparency, Oracle, procurement, project management, public sector, public services, Universal Credit

Tagged agile, Cabinet Office, Francis Maude, government IT

Universal Credit IT working well claims DWP

Posted on 21/08/2013 | 2 comments

By Tony Collins

Staff in job centres working on Universal Credit system are writing jobseekers’ personal information down on paper because their IT systems are so “clunky and cumbersome”, Dame Anne Begg, chair of the Commons’ Work and Pensions Committee, told Civil Service World.

“When we visited the Bolton Jobcentre Plus the IT system seemed clunky and cumbersome,” Begg said. Staff making appointments for UC applicants at the Bolton pilot scheme “had to write out some of the [jobseekers’] personal details, just to transfer them from one computer system to another. That’s something that we would have expected to be ironed out.”

The handwriting of jobseekers’ details “could lead to transposing errors”, she said. Further, the Universal Credit IT system doesn’t allow jobseekers to save their data midway through an online application, Begg said. She warned that this will penalise those who don’t own computers, who will have to remember to take all of their personal details in one batch to open access computers such as those at local libraries.

But a spokesperson for the Department for Work and Pensions said:

“The IT supporting Universal Credit is working well and the vast majority of people are claiming online. Making a claim to Universal Credit in one session… helps ensure the security of a claimant’s information.”

Last month a leaked survey of staff at the Department of Work and Pensions who are working on Universal Credit programme found dishonesty, secrecy, poor communications, inadequate leadership and low morale.

[ Computer Weekly reports that the DWP placed just 0.5% of its Universal Credit IT spending directly with SMEs, and that the department’s major suppliers – Accenture, Atos, BT, IBM, Capita, HP and SCC – subcontracted little to SMEs. “The Universal Credit supply chain flowed downstream mostly to multinational technology suppliers such as Oracle, Nuance, Genband and RedHat.” Most Universal Credit IT spending has gone to Accenture, IBM and HP: £57m, £41m and £34m respectively, between January 2011 and May 2013.]

Comment

While keeping secret internal reports on the Universal Credit IT project, and while all the signs are that Universal Credit’s IT is in trouble – it’s easier to handle claims at least in part by hand – the DWP’s senior officials, spokespeople and Iain Duncan Smith are telling the public and Parliament that all is well.

Perhaps the next logical step is that they come onto the public stage in costume to tell us nursery tales, while playing stock characters who sing, dance, and perform skits. Maybe then they’ll be more believable.

2 Comments

Posted in Accenture, Agile, Campaign4Change, Capita, DWP, excessive secrecy, IBM, managing change, openness and transparency, Oracle, procurement, public sector, public services, Universal Credit

The story of Southwest One

Posted on 16/07/2013 | 2 comments

By Tony Collins

Dave Orr worked in a variety of IT and project management roles for Somerset County Council and retired in 2010. For years he has campaigned with extraordinary tenacity to bring to the surface the truth over an unusual joint venture between IBM, Somerset County Council, a local borough council and the local police force.

Now he has written an account of the joint venture and the lessons. It is published on the website of procurement expert Peter Smith.

Orr questions whether Southwest One was ever a good idea, since it was formed in 2007.

The deal has not made the savings intended, a SAP implementation went awry, the contract has been mired in political controversy and criticism, Southwest One has repeatedly lost money, and many of the transferred staff and services have returned to the county council, and some services returned to the borough council. IBM and the county council have ended up in a legal dispute that cost the county council £5.5m to settle. Southwest One was not exactly the partnership it set out to be.

The contract may show how an outsourcing deal that doesn’t have the support of the staff being transferred is flawed fundamentally from the start (which is one reason few people will be surprised if a 10-year £320m deal for Capita to run Barnet Council’s new customer service organisation [NSCSO] ends in tears).

These are some of Orr’s points:

– Like other light-touch regulators, the Audit Commission repeatedly gave Southwest One positive reports, without ever qualifying the accounts, even as problems with SAP implementation mounted in 2009 and procurement savings were not being made in line with forecasts.

– The contract called for transformation based upon ‘world-class technologies’, yet all of the IT Service was placed into Southwest One with no IT expertise back in the Somerset County client (until after a poor SAP implementation in 2009). Was the lack of retained IT skills in the Somerset County client behind the formal acceptance of a badly configured SAP implementation?

– Large scale outsourcing over a long contract of 10 years or more requires an ability to foresee the future that is simply not possible to capture in a fixed contract. In a 10-year contract, there will be three changes of national government and three changes of local government. That is a great deal of unpredictable change to cope with via a fixed, long-term contract.

– Local Government will always be at a disadvantage in resources and skills, to a large multi-national contractor like IBM, when it comes to negotiating, letting and managing a complex multi-service contract.

– What was the culture of Southwest One (75% owned by IBM)? Was it private, public or a hybrid? The management culture remained firmly IBM, yet the councils and police workforces were seconded and remained equally firmly public sector rooted. There is such a thing as a public service ethos. In fact, Southwest One was run like a mini-IBM based upon global divisions, complete with IBM standard structures and processes. Southwest One seconded employees were not allowed anything like a full access to IBM internal systems, thus creating additional complexity, as “real” IBM employees relied entirely upon on-line systems.

– Mixed teams in a single shared service were hard to amalgamate. This meant the IBM managers of Southwest One never really gained the sort of command & control of the multi-tier workforces that their bonus-oriented model needs to function. “I doubt that IBM would ever again contemplate the seconded staff model over the TUPE transfer model,” says Orr.

– Somerset County Council ran with a “thin” client management team that, in Orr’s view, did not have sufficient expertise or enough staff resources to effectively manage this complex contract with IBM. The councils relied upon definitions of “partnership” that meant one thing to the councils’ side and quite another thing to IBM, says Orr.

– In Southwest One, Somerset County Council handed their entire IT Service over lock, stock and barrel. “Can you really consider IT as wholly a ‘back office’ service? Many successful private Companies see IT as a strategic service to be kept under their own control.”

– The real savings might have been found in optimising processes in big departments (like Social Care, Education, Highways) that lay outside of Southwest One’s reach. “The focus on IT rather than service processes was another flaw in the model.”

Orr concludes that nobody who played a major part in the Southwest deal has in any way been held to account for what has gone wrong.

Southwest One – the complete story from Dave Orr

2 Comments

Posted in Campaign4Change, change management, excessive secrecy, FOI, Freedom of Information, governance, IBM, IT-related failures, legal disputes, local government, managing change, managing outsourced services, openness and transparency, Politics, private sector lessons for the public sector, procurement, project management, public-private partnerships, SAP, shared services, supplier relationships

Universal Credit – good for its IT suppliers?

Posted on 11/07/2013 | 1 comment

By Tony Collins

The DWP is conceding in its own tangential way that the IT for Universal Credit is not up to scratch; and an article in the Daily Telegraph suggests that Universal Credit this year (and perhaps well beyond) will handle so few claimants that the calculations for the time being could be done by hand, or on a spreadsheet, and not automatically by IT systems. The Register, through anonymous sources, has confirmation of this.

The FT says there will be a progressive national rollout of the coalition’s welfare reform in just six additional jobcentres which it said was the “latest sign the project is falling behind schedule”. It added that a significant shake-up of the IT underpinning universal credit is under way.

The DWP said David Pitchford, the Whitehall troubleshooter who took over the running of Universal Credit for three months, had been asked to “review” the IT and ministers had “accepted his recommendation that they should explore enhancing the IT for universal credit working with the government digital service”.

“Advancements in technology since the current system was developed have meant that a more responsive system that is more flexible and secure could potentially be built,” said the DWP.

The FT quoted Howard Shiplee, who has led the Universal Credit project since May, as denying claims from MPs that the original IT had been dumped because it had not delivered. “The existing systems that we have are working, and working effectively,” he said.

He added that he had set aside 100 days not to stop the programme, but to reflect on where it has got to and start to look at the entire total plan.

Iain Duncan Smith, the work and pensions secretary, doesn’t concede that the timetable for the implementation of Universal Credit has changed. He told the work and pensions committee on Wednesday that numbers of claimants would ramp up during 2014 and he insisted that all claimants would be on the system by 2017, as originally planned.

“We get fixated on things like IT; the reality is it’s about a cultural shift,” Duncan Smith told MPs.

Comment

Iain Duncan Smith makes it clear that his DWP staff and suppliers, with the help of HMRC, are implementing Universal Credit with extreme care. Labour’s work and pensions spokesman Liam Byrne says the Universal Credit project is a shambles. The truth is hard to fathom.

For years the DWP has rejected press reports that the IT for Universal Credit was in trouble. It is able to do without fear of authoritative contradiction because it keeps secret all its consultancy reports on the state of the Universal Credit project, despite FOI requests.

The Cabinet Office minister Francis Maude and his officials talk much about the need for openness and transparency. Isn’t it time they persuaded DWP officials to release their internal and external reports on the detailed challenges faced by suppliers and civil servants on Universal Credit and other major government IT projects?

All big government IT projects are characterised by secrecy and defensiveness, although a little information about them is in the vague and subjectively-worded Major Projects Authority annual report.

One by-product of departmental defensiveness and secrecy is that the IT suppliers – in Universal Credit’s case HP, IBM and Accenture – are likely to continue to be paid even if the project is halted and redesigned. It’s probable the suppliers would argue that they have successfully done what they were asked to do in the contract. Who knows what the truth is?

The DWP is in effect protecting its suppliers from public and parliamentary scrutiny. It has been this way for decades and nothing has changed.

1 Comment

Posted in Accenture, Agile, Campaign4Change, excessive secrecy, FOI, Freedom of Information, Government IT, IBM, IT-related failures, Major Projects Authority, managing change, managing outsourced services, openness and transparency, operational issues, outsourcing, oversight, project management, public sector, public services, software quality, supplier relationships

Tagged agile, Cabinet Office, Efficiency and Reform Group, Francis Maude, public sector

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