Category Archives: Fujitsu

HMRC appoints Microsoft executive as head of IT

By Tony Collins

Government Computing reports that HMRC has appointed a new chief digital and information officer, Jacky Wright, who is currently Microsoft’s corporate vice-president, Core Platform Engineering.

Theresa May ratified Wright’s appointment. Candidates were considered from across the civil service and the public and private sectors, and internationally.

The chief executive of HMRC Jon Thompson said,

“Jacky is a seasoned commercial leader with ‘best in class’ credentials, globally. Balancing strong operating experience with a record of driving innovation… Her influence as a technology leader and as a champion for the role of women and BAME [black, Asian, minority ethnic) in industry, is a major win for this organisation.”

Wright will take up her appointment from 16 October. She said,

“I am passionate about the impact innovation can have in truly transforming services for people and businesses in a positive way and want to continue the great work being done within HMRC and across the Civil Service at this time. I am proud to represent women and BAME in technology and will continue to promote the vital role of diversity within our industry and more broadly.”

One of HMRC’s biggest IT challenges in the coming months and years will be to detach itself from the £10bn “Aspire” outsourcing deal in which Capgemini and Fujitsu are the main suppliers.

Aspire is being broken up. HMRC says the contract is already “dead” but the department will rely on Capgemini as a strategic supplier until June 2020 and most probably beyond. HMRC has spent at least £720m a year on Aspire since 2008, including 2015/16.

Comment:

After spending years trying to distance itself from major IT suppliers, HMRC has appointed a top Microsoft executive as its new head of IT.

That said, Wright is an excellent appointment. She’s widely recognized for her contributions to the technology industry and for championing diversity. She has been in Britain’s Powerlist 100 of Most Influential People, the Top 100 BAME Leaders in Business, and Savoy Magazine’s Top Women list.

The challenge for Wright will be to use her influence and skills in a civil service that, at the top level, may not fully appreciate her. Will she feel sufficiently valued and stay?

Francis Maude – the former IT reformer and Cabinet Office minister – said in a Speaker’s Lecture this week that the civil service values policy experts more than operational and technical leaders.

“Policy nearly always trumps operational and technical skills for the leadership roles,” said Lord Maude.

“It feels like a class divide: there are the white-collar policy mandarins, and the blue-collar technicians who do operations, finance, procurement, IT and digital, project management, HR, and so on.

“All the attempts to create genuine parity of esteem have failed. This has to change in the future. Many government failures could have been prevented if operational and technical teams had the same access to Ministers as do policy officials.”

In working for HMRC,  Wright may need to acclimatise to a civil service culture that could, at times, strike her as frustrating, closed and irrational.  HMRC’s former IT chiefs include Steve Lamey, Phil Pavitt and Mark Dearnley.

Will an innovations specialist of Wright’s calibre last at HMRC? If she does, it could imply that HMRC is defying the civil service culture and is valuing a top international IT professional.

If she doesn’t last, it could imply that she has been hired as a Formula One driver and then given a Prius to race.

The Prius is an impressive piece of machinery. But it’ll never go particularly fast, however expertly it’s driven.

Microsoft’s Jacky Wright named as HMRC’s new CDIO

 

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Whitehall to auto-extend outsourcing deals using Brexit as excuse?

By Tony Collins

Type of government procurement spend 2014-2015. ICT is the top item.
Source: National Audit Office

Under a headline “UK outsourcing deals extended because of Brexit workload”, the Financial Times has reported that “hundreds of government contracts with the private sector that were due to expire are to be automatically extended because civil servants are too busy with Brexit to focus on new and better-value tenders”.

The FT says the decision to roll over the contracts could prove expensive for taxpayers because it limits competition and undermines government efforts to improve procurement.

A “procurement adviser to the government” whom the FT doesn’t name, said more than 250 contracts were either close to expiring or had already expired in 2016-17. The adviser told the FT,

“Brexit has pushed them down the list of priorities so there are lots of extensions and re-extensions of existing deals.”

The adviser added that this was the only way civil servants could prioritise the huge increase in Brexit-related work since the referendum.

Extensions

The FT provides no evidence of automatic contract extensions or the claim that deals will be extended because of the civil service’s Brexit workload.

There is evidence, however, that Whitehall officials tend to extend contracts beyond their original expiry date.

In a report published this year on the Cabinet Office’s Crown Commercial Service, the National Audit Office identified 22 framework contracts that were due to expire in 2016-17. Half of them (eleven) were extended beyond their original expiry date.

[The Crown Commercial Service was set up in 2014 to improve state procurement.]

The NAO also found that Whitehall departments – and the Crown Commercial Service – have been awarding contracts using expired framework deals, even though this contravenes public contracting regulations.

In 2015-16, 21 of the 39 frameworks that were due to expire were extended without competition or market testing, according to the NAO.

One example of an extended contract is a deal between Capita and the Department for Work and Pensions which started in 2010. Capita provides eligibility assessments for the personal independent payment allowance, which supports for people with long-term ill health or disability.

The five-year deal was extended by two years until July 2019.

Capita has also won a three-year extension to a contract with the Pensions Regulator and the BBC has extended a deal with Capita that was signed originally in 2002 to June 2022 – a total of at least 20 years.

Open competition?

The NAO has found that extending ICT contracts may not always be good for taxpayers. In the later years of their government contracts, suppliers tend to make higher margins (though not always).

There are also suggestions that civil servants will sometimes sign contract extensions when the performance of the supplier does not meet expected standards.

On ICT, the Cabinet Office asks central departments to complete a return every six months for each business process outsourcing and facilities management contract above £20m with strategic suppliers.

The survey asks whether the contract is being delivered on time, to scope, to budget, to the appropriate standards, and whether there have been any disputes.

In one study of government contracts with ICT suppliers, the NAO found that, of 259 returns from departments, 42 highlighted problems that included,

  • failure to achieve milestones
  • dissatisfaction with quality of outputs
  • errors and other issues with delivery
  • poor customer engagement and end user dissatisfaction and
  • failure to meet key performance indicators.

Comment

For taxpayers there is some good news.

A break-up of “Aspire”, the biggest IT outsourcing long-term deal of all, between HMRC and Capgemini (and to a lesser extent Fujitsu) – worth about £9bn – is going ahead this June. An HMRC spokesman says,

“HMRC is on track to complete the phased exit from Aspire, as planned, by June 2017.”

And according to Government Computing, Defra’s IT outsourcing contracts with IBM and Capgemini under a £1.6bn contract called “Unity” are due to expire in 2018 and there are no signs the deals will be extended.

But the Department for Work and Pensions’ huge IT outsourcing contracts with the same major suppliers are renewed routinely and not always with open competition. The DWP says on its website,

“DWP contracts are awarded by competition between potential suppliers, unless there are compelling reasons why competition cannot be used.”

The DWP doesn’t define “compelling”. Nor is it clear whether its auditors look at whether the DWP has put up a compelling case for not putting a large IT contract out to open competition.

In 2014 the Public Accounts Committee, after investigating major suppliers to government, concluded,

“Government is clearly failing to manage performance across the board, and to achieve the best for citizens out of the contracts into which they have entered.

“Government needs a far more professional and skilled approach to managing contracts and contractors, and contractors need to demonstrate the high standards of ethics expected in the conduct of public business, and be more transparent about their performance and costs”.

Breaking up is hard to do

The break up of the huge Aspire IT outsourcing contract at HMRC is an exception, not the rule. The NAO has found that civil servants regard their major incumbent suppliers as safe and less risky than hiring a smaller company (that’s not steeped in Whitehall’s culture).

The NAO has also found that in some cases officials don’t know whether their suppliers are performing well or not. On many ICT contracts there is “open book” accounting, but not all departments have the staff or expertise to check regularly on whether their suppliers’ profits are excessive.

If Whitehall, with exceptions, is continuing to roll over contracts whether it’s legal to do so or not, what incentive exists to stick to the rules?

Brexit?

The FT story suggests Brexit is the reason hundreds of contracts are to be extended automatically. There’s probably truth in the automatic extension of some contracts – but it’s unlikely to be because of Brexit.

It’s unlikely that the civil servants involved in Brexit will be the same ones who are handling ICT contract extensions. That said, Brexit will inevitably put a higher workload on lawyers working for government.

If contracts are being extended automatically, it’s probably because that’s the way it has always been, at least within living memory.

While Sir Humphrey and his senior officials remain only nominally accountable to Parliament for how they spend taxpayers’ money, the easiest option of renewing or extending existing contracts will usually be seen as the best option.

It can be justified with “compelling” arguments such as a need to make an urgent decision in difficult circumstances, or the absence of alternative suppliers who have the necessary skills or the financial strength to accept the risks of failure.

Will anything change?

Until departments have to publish contemporaneously their intentions to award contracts without open competition or there is effective accountability within the civil service for major decisions, little is likely to change.

It hasn’t happened yet and there’s no reason to believe it will.  Many politicians including prime ministers have tried to reform the civil service and they haven’t ruffled a single carpet in the corridors of Whitehall.

As Antony Jay, co-writer of Yes Minister,  said in January 2013,

“The central anomaly is that civil servants have years of experience, jobs for life, and a budget of hundreds of billions of pounds, while ministers have, usually, little or no experience of the job and could be kicked out tomorrow.

” After researching and writing 44 episodes and a play, I find government much easier to understand by looking at ministers as public relations consultants to the real government – which is, of course, the Civil Service.”

In short, Brexit is likely to be officialdom’s up-to-date excuse for carrying on much as before.

Thank you to @TimMorton2 for alerting me to the FT article.

Southwest One – a positive postscript

By Tony Collins

somerset county council2IBM-led Southwest One has had a mostly bad press since it was set up in 2007. But the story has a positive postscript.

Officials at Somerset County Council now understand what has long been obvious to ICT professionals: that the bulk of an organisation’s savings come from changing the way people work – and less from the ICT itself.

Now that Somerset County Council has the job of running its own IT again – its IT-based relationship with Southwest One ended prematurely in December 2016 – the council’s officials have realised that technology is not an end in itself but an “enabler” of headcount reductions and improvements in productivity.

A 2017 paper by the county council’s “Programme Management Office”  says the council has begun a “technology and people programme” to “contribute to savings via headcount reduction by improving organisational productivity and process efficiency using technology as the key enabler”.

Outsourcing IT a “bad mistake” 

It was in 2007 that Somerset County Council and IBM launched a joint venture, Southwest One. The new company took over the IT staff and some services from the council.

In the nine years since then the council has concluded that outsourcing ICT – thereby separating it from the council’s general operations – was not a good idea.

The same message – that IT is too integral and important to an organisation  to be outsourced – has also reached Whitehall’s biggest department, the Department for Work and Pensions.

Yesterday (8 February 2017) Lord Freud,  who was the Conservative minister in charge of Universal Credit at the Department for Work and Pensions, told MPs that outsourcing IT across government had proved to be a “bad idea”.  He said,

“What I didn’t know, and I don’t think anyone knew, was how bad a mistake it had been for all of government to have sent out their IT…

“You went to these big firms to build your IT. I think that was a most fundamental mistake, right across government  and probably across government in the western world …

” We talk about IT as something separate but it isn’t. It is part of your operating system. It’s a tool within a much better system. If you get rid of it, and lose control of it, you don’t know how to build these systems.

” So we had an IT department but it was actually an IT commissioning department. It didn’t know how to do the IT.

“What we actually discovered through the (Universal Credit) process was that you had to bring the IT back on board. The department has been rebuilding itself in order to do that. That is a massive job.”

Task facing Somerset officials

Somerset County Council says in its paper that the council now suffers from what it describes as:

  • Duplicated effort
  • Inefficient business processes
  • A reliance on traditional ways of working (paper-based and meeting-focused).
  • Technology that is not sufficient to meet business needs
  • Inadequate data extraction that does not support evidence based decision making.
  • “Significant under-investment in IT”.

To help tackle these problems the council says it needs a shift in culture. This would enable the workforce to change the way it works.  

From January 2017 to 2021, the council plans “organisation and people-led transformational change focused on opportunities arising from targeted systems review outcomes”.

The council’s officers hope this will lead to

  • Less unproductive time in travelling and  attending some statutory duties such as court proceedings.
  • Fewer meetings.
  • Reduced management time because of fewer people to manage e.g. supervision, appraisal, performance and sickness.
  • Reduced infrastructure spend because fewer people will mean cuts in building and office costs, and IT equipment. Also less training would be required.
  • Reduction in business support process and roles.
  • Reduction in hard copy file storage and retention.

 The council has discovered that it could, for instance, with changes in working practices supported by the right technology,  conduct the same number of social services assessments with fewer front- line social workers or increase the level of assessments with the same number of staff.

Southwest One continues to provide outsourced services to Avon and Somerset Police. The contract expires next year.

Comment

Somerset County Council is taking a bold, almost private sector approach to IT.

Its paper on “technology and people” says in essence that the council cannot  save much money by IT change alone.

Genuine savings are to be found in changing ways of working and thus reducing headcount. This will require very close working – and agreement – between IT and the business end-users within the council.

It is an innovative approach for a council.

The downside is that there are major financial risks, such as a big upfront spend with Microsoft that may or may not more than pay for itself.

Does outsourcing IT ever make sense?

Somerset County Council is not an international organisation like BP where outsourcing and standardising IT across many countries can make sense.

The wider implication of Somerset’s experience – and the experience of the Department for Work and Pensions – is that outsourcing IT in the public sector is rarely a good idea.

Thank you to Dave Orr, who worked for Somerset County Council as an IT analyst and who has, since the Southwest One contract was signed in 2007, campaigned for more openness over the implications of the deal.

He has been more effective than any Somerset councillor in holding to account the county council, Taunton Deane Borough Council and Avon and Somerset Police, over the Southwest One deal.  He alerted Campaign4Change to Somerset’s “Technology and People Programme” Somerset paper.

One of Orr’s recent discoveries is that the council’s IT assets at the start of the Southwest One contract were worth about £8m and at hand-back in December 2016 were worth just £0.32m, despite various technology refreshes.

Somerset County Council’s “Technology and People Programme” paper

Whitehall’s outsourcing IT a “bad mistake” – and other Universal Credit lessons, by a former DWP minister

Post Office Horizon IT – for Julian Wilson time ran out on justice

By Tony Collins

Julian Wilson was a subpostmaster, one of the founding members of Justice for Subpostmasters Alliance.

He and his wife Karen had their lives turned upside down after the Post Office’s centrally-run Horizon system, which was installed at the local branch they ran, showed unexplained losses.

He was one of more than 150 subpostmasters across the country whom the Post Office has blamed for losses shown on Horizon.

Subpostmasters run smaller post offices under a contract issued by the Post Office. Under their contracts, subpostmasters are personally responsible for deficits at their branches.

MPs and TV documentaries have raised concerns about whether the Post Office has accused subpostmasters of criminal actions when technical faults might have caused the losses.

The concerns of MPs were reinforced by the findings of forensic accountants Second Sight. At the request of MPs, the Post Office brought in Second Sight to investigate each of the subpostmaster complaints.

The Post Office criticised Second Sight’s findings and said there was no evidence that faults with the computer system caused money to go missing. “There is evidence that user actions, including dishonest conduct, were responsible for missing money,” said the Post Office.

Julian Wilson

TV investigative reporter Nick Wallis, who has reported on the Post Office Horizon IT system for the BBC’s The One Show, and has followed the story for many years, has written a moving post on the death of Julian Wilson who fought for justice for as long as he was able.

On his blog, Wallis says of Julian, “He was, I suppose, what we journalists call a contact.

“But his gentle manner, generous spirit and calm good humour made me think of him as more than that.”

Julian was prosecuted by the Post Office for false accounting. He pleaded guilty and went to his grave a near-bankrupt convicted criminal, says Wallis.

When Julian died, his conviction was one of 20 subpostmaster cases being considered by the Criminal Cases Review Commission.

Technical fault or crime?

More than 11,000 post offices have used Fujitsu’s £1bn Horizon system for branch accounting and rarely have had problems. At the close of each day, the system has balanced money coming in from customers and money going out.

If the system showed a shortfall, subpostmasters had few options: make up the deficit out of their own money, sign off the accounts as correct, or refuse to sign off – which might have meant closing the post office (and upsetting customers) while a financial audit took place.

The Post Office prosecuted subpostmasters who signed off the accounts as correct knowing there were unexplained losses; and it prosecuted in some cases for theft.

Dozens of subpostmasters have been jailed, made bankrupt or had their lives ruined after the Post Office took action against them in the light of discrepancies shown on Horizon.

Tears

Julian Wilson was determined to clear his name.

Wallis interviewed him in December 2014 alongside his wife Karen in a village hall in Fenny Compton, where the Justice for Subpostmasters Alliance met for the first time in 2009.

“Karen stood there with tears streaming down her face as Julian explained in his measured, Hampshire burr how problems with the computer system at their Post Office in Astwood Bank had caused their lives to fall apart.”

Wallis says there was never a trace of bitterness about Julian. “He accepted things with great patience even though he was still in danger of losing his house because of the Post Office’s pursuit of him.”

Julian found out he had terminal cancer towards the end of last year. “This summer he deteriorated rapidly,” says Wallis.

One of the comments on Wallis’s blog says of Julian,

“He carried on campaigning against the Post Office until he had no strength left to fight and I made him a promise – in the last few days of his life – that I would keep going along with the JFSA [Justice for Subpostmasters Alliance] until we got our long-overdue justice.

“What an absolute tragedy that such a good man should be taken from his beloved wife Karen and wonderful daughter Emma before his name had been cleared.”

Another said,

“RIP Julian – I am so sorry that we could not let you leave this world with the vindication you will certainly, but now posthumously, receive.”

Comment

Subpostmasters represented by Justice for Subpostmasters Alliance have issued a writ against the Post Office and the legal action is well and truly underway – but Julian Wilson’s untimely death shows that not all the individuals involved in complaints against the Post Office can afford the time to wait for justice.

In some cases, complaints go back at least eight years – so far.

The Post Office’s argument all along has been, in essence, that there is, and never has been, any evidence that Horizon caused the losses.

But neither is there evidence that more than 150 subpostmasters stole the money in question.

Institutional blindness?

In a BBC Panorama documentary on complaints about Horizon, Ian Henderson, a Second Sight investigator, told reporter John Sweeney,

“Horizon works reasonably well if not very well most of the time. In any large IT system it is inevitable that problems will occur.

“What seems to have gone wrong within the Post Office is a failure to investigate properly and in detail cases where those problems occurred. It’s almost like institutional blindness.”

The Post Office denies this and maintains that it has investigated each case thoroughly.

What strikes me, though, is the insularity of the Post Office’s case.

Crashes

Imagine if airlines and aircraft manufacturers were allowed to be the judge of whether pilots were to blame after major incidents.

The RAF’s hierarchy wrongly blamed two pilots for the crash of a Chinook helicopter on the Mull of Kintyre in June 1994. It took 17 years for the families of the dead pilots to win justice for their dead sons.

It was only after numerous independent inquiries, Parliamentary hearings and leaks of a mass of material about problems with the helicopter’s computer systems that the RAF’s finding of gross negligence against the two pilots was quashed.

The case showed that, despite the sincerely-held beliefs of two air marshals that the pilots were, without any doubt, at fault, the RAF was eventually found to have failed to take sufficient account of the possibility of a technical malfunction, or a chain of events involving a technical malfunction.

The restoration of the pilots’ reputation came about not because the RAF’s hierarchy changed its mind about the pilots’ gross negligence, but because there was a change of government in 2010 and setting aside the finding against the pilots was the will of Parliament.

The then Coalition government decided that a technical cause of the crash could not be ruled out.

Of course there was no air crash in the case of the subpostmasters. But there was a similarity: the RAF and Post Office are State institutions that dismissed complaints about their equipment and blamed the system “users”, with devastating consequences for the reputations and lives of the families involved.

There is also a fundamental difference: a regulatory authority always undertakes investigations into air crashes.

Airlines and aircraft manufacturers are not the legal investigating authority. In the UK it is the Air Accidents Investigation Branch. In its investigations into possible equipment failings, the AAIB has powers set out in law [including the Civil Aviation (Investigation of Air Accidents and Incidents) Regulations 1996] to require information from airlines and manufacturers.

In the case of the subpostmasters, the Post Office was the owner of the computer equipment that showed the losses; it was responsible for investigations into that equipment; and it was the prosecuting authority.

Contradictory evidence

There have been numerous commercial air crashes where regulatory investigating authorities have uncovered evidence that contradicted evidence from the airlines or manufacturers.

Sometimes it took regulatory authorities several years to discover the truth. Eventually they found technical faults where manufacturers had said initially there were none.

In the case of the Post Office Horizon controversy, there are no regulatory investigating authorities.

When accused subpostmasters have blamed the system for the losses, they have been unable to rely on an Air Accident Investigation Branch to produce a final report that could not be contested by the airline or manufacturers.

The Post Office could argue (rightly) that it operates under completely different laws, rules and regulations to the legal and regulatory framework that governs investigations of air crashes. In the Post Office cases, no public safety is involved.

But the Post Office has had a succession of serious incidents: the lives of 150 or more subpostmasters and in many cases their spouses have been thrown into turmoil.

Is this not a succession of serious incidents in which none has been the subject of an inquiry backed by a regulatory authority?

It’s a credit to the tenacity of Justice for Subpostmasters Alliance that legal proceedings have been issued. But the wheels of justice turn slowly. With appeals, the case could drag on for years.

More uncertainty and suffering for the families involved?

It’s also obvious that the Post Office has deeper pockets than those of individual subpostmasters.

That’s one reason why, after serious air incidents, the independent investigating authorities have complete control over their inquiries. Air accident investigators recognise that lawyers for airlines and manufacturers may seek to defend their organisations after a serious incident.

Sometimes air accident investigators will conduct parts of their investigations without relying on evidence from the manufacturers.

In the case of the accusations against subpostmasters, what powerful independent organisation exists to challenge the evidence of the Post Office?

The Post Office was able to commission Second Sight and later to discontinue its contract. The Post Office was also able to issue a point-by-point denial of Second Sight’s findings.

Imagine an airline or aircraft manufacturers being able to order independent investigators to discontinue their inquiries after a succession of serious incidents?

The Post Office said in response to Second Sight’s reports that it was “unable to endorse” the findings. After serious air incidents it would not matter if the airline or manufacturers disputed the report of regulatory authorities. The regulator’s report would stand.

Fairness?

The Post Office has a duty to prosecute subpostmasters who steal. But could it also do more to recognise that the imbalance of power and resources puts subpostmasters who have gained nothing – and lost much as a result of losses shown the system – at a severe disadvantage?

As the prosecuting authority, and the investigating authority, the Post Office is not open to serious challenge except through the courts where it has the money and resources to sustain costly and protracted battles.

Is this fair? Is this just?

The Post Office has every legal right to carry on exactly as it is, but could it not instead consider the cases on the basis of “benefit of doubt?”

In other words concede that there is doubt over whether subpostmasters had criminal intent?

Taking into account ordinary fairness and magnanimity in the face of its extraordinary power, the Post Office could settle the cases now, and not put the families of so many subpostmasters through any more suffering.

Nick Wallis’ post on Julian Wilson

Post Office faces group litigation over Horizon IT as subpostmasters fund class action

Justice for Subpostmasters Alliance

Jailed and bankrupt because of “unfit” Post Office IT? What now?

Communication Workers Union warns subpostmasters of flaw in Post Office Horizon accounting system

Horizon not fit for purpose at some branches?

Labelled as criminals – Telegraph

DWP “evasive” and “selective” with information on Universal Credit programme

By Tony Collins

Has the Department for Work and Pensions put itself, to some extent, beyond the scrutiny  of Parliament on the Universal Credit IT programme?

Today’s report of the Public Accounts Committee Universal Credit progress update was drafted by the National Audit Office. All of the committee’s reports are effectively more strongly-worded NAO reports.

If the Department for Work and Pensions cannot be open with its own auditors – the National Audit Office audits the department’s annual accounts – are the DWP’s most senior officials in the happy position of being accountable to nobody on the Universal Credit IT programme?

The National Audit Office and the committee found the Department for Work and Pensions “selective or even inaccurate” when giving some information to the committee.

In answering some questions, the committee found officials “evasive”.

Today’s PAC report says:

“We remain disappointed by the persistent lack of clarity and evasive responses by the Department to our inquiries, particularly about the extent and impact of delays. The Department’s response to the previous Committee’s recommendations in the February 2015 report Universal Credit: progress update do not convince us that it is committed to improving transparency about the programme’s progress.”

On the basis of the limited information supplied by the DWP to Parliament the committee’s MPs believe that the Universal Credit has stabilised and made progress since the committee first reported on the programme in 2013, but there “remains a long way to go”.

So far the roll-out has largely involved the simplest of cases, and the ineligibility list for potential UC claimants is long.  By 10 December 2015, fewer than 200,000 people were on the DWP’s UC “caseload” list.

The actual number could be far fewer because the exact number recorded by the DWP by 10 December 2015 (175, 505)  does not include people whose claims have terminated because they have become ineligible by for example having capital more than £16,000 or earning more so that their benefits are reduced to zero.

The plan is to have more than seven million on the benefit, and the timetable for completion of the roll-out has stretched from 2017 originally to 2021,  although some independent experts believe the roll-out will not complete before 2023.

Meanwhile the DWP appears to be controlling carefully the information it gives to Parliament on progress. The committee accuses the DWP in today’s report of making it difficult for Parliament and taxpayers to hold the department to account. Says the report,

“The programme’s lack of clear and specific milestones creates uncertainty for claimants, advisers, and local authorities, and makes it difficult for Parliament and taxpayers to hold the Department to account.”

These are more excerpts from the report:

“In February 2015 the previous Committee of Public Accounts published Universal Credit: progress update … The Department accepted the Committee’s recommendations.

“However, we felt that the Department’s responses were rather weak and lacked specifics, and we were not convinced that it is committed to ensuring there is real clarity on this important programme’s progress.

“As a result, we recalled both the Department and HM Treasury to discuss a number of issues that concerned us, particularly around the business case, the continuing risks of delay, and the lack of transparency and clear milestones.

“Recommendation: The Department should set out clearly how it is tracking the costs of continuing delays, and who is responsible for ensuring benefits are maximised.

“The Department does not publish accessible information about plans and milestones and we are concerned by the lack of detail in the public domain about its expected progress.

“For proper accountability, this information should be published so that the Committee, the National Audit Office and the general public can be clear about progress…

“… the Department did not acknowledge that the slower roll-out affects two other milestones, because it delays the date when existing claimants start to be moved onto Universal Credit and reduces the number of Universal Credit claimants at the end of 2019.

“The flexible adaptation of milestones to circumstances is sensible, but the Department should be open about when this occurs and what the effects are. Instead, the Department’s continued lack of transparency makes it very difficult for us and the public to understand precisely how its plans are shifting.

“Claimants need to know more than just their benefits will change ‘soon’; local authorities need time to prepare additional support; and advisers need to be able to help people that come to them with concerns…

“Recommendation: By May 2016, the Department should set out and report publicly against a wider set of clearly stated milestones, based on ones it currently uses as internal measures, including plans for different claimant groups, local authority areas and for the development and use of new systems. We have set out the areas we expect these milestones to cover in an appendix to this report…

“The Department was selective or even inaccurate when highlighting the findings of its evaluation to us.”

The DWP has two IT projects to deliver UC, one based on its existing major suppliers delivering systems that integrate the simplest of new claims with legacy IT.

The other and more promising solution is a far cheaper “digital service” that is based on agile principles and is, in effect, entirely new IT that could eventually replace legacy systems. It is on trial in a small number of jobcentres.

The DWP’s slowly slowly approach to roll-out means it is reluctant to publish milestones, and it has reached only an early stage of the business case. The final business case is not expected before 2017 and could be later.

The committee has asked the DWP to be more transparent over the business case. It wants detail on:

  • Projected spending, including both investment and running costs for:
  • Live service (split between ‘staff and non staff costs’ and ‘external supplier costs’)
  • Digital service (split between ‘staff and non staff costs’ and ‘external supplier costs’)
  • Rest of programme (split between ‘staff and non staff costs’ and ‘External supplier costs’)
  • Net benefits realised versus forecasts.

Meanwhile the DWP’s response to those who criticise the slow roll-out is to give impressive statistics on the number of jobcentres now processing UC claims, without acknowledging that nearly all of them are processing only the simplest of claims.

Comment

To whom is the DWP accountable on the Universal Credit IT programme? To judge from today’s report it is not the all-party Public Accounts Committee or its own auditors the National Audit Office.

No government has been willing to force Whitehall departments to be properly accountable for their major IT-enabled projects or programmes. Sir Humphrey remains in control.

The last government with Francis Maude at the helm at the Cabinet Office came close to introducing real reforms (his campaign began too forcefully but settled into a good strategy of pragmatic compromise) but his departure has meant that open government and greater accountability for central departments have drifted into the shadows.

The DWP is not only beyond the ability of Parliament to hold it accountable it is spending undisclosed of public money sums on an FOI case to stop three ageing reports on the Universal Credit IT programme being published. The reports are nearly four years old.

Would that senior officials at the DWP could begin to understand a connection between openness and Lincoln’s famous phrase “government of the people, by the people, for the people”.

Public Accounts Committee report Universal Credit, progress update

DWP gives out “selective” information on welfare reform even to its auditors (a similar story in 2015)

Department for Work and Pensions “evasive” – Civil Service World (This article is aimed at its readers who are mostly civil servants. It is likely it will find favour with senior DWP IT staff who will probably mostly agree with the Public Accounts Committee’s view that the DWP hierarchy is, perhaps because of culture, evasive and selective with the information it gives to Parliament and the public.)

 

Post Office closes amid Horizon broadband problems

By Tony Collins

A Post Office has closed – temporarily perhaps – because the postmistress is refusing to spend more of her own money balancing the books on the Horizon IT system.

The York Press has published an article on the concerns of Wendy Martin who runs a Post Office branch in Clifton, York.

A broadband connection from her branch to the Horizon system goes down regularly, which she says stops payments being processed centrally. This has left her business hundreds of pounds down at the end of the month and her covering the shortfall.

Under her contract with the Post Office – and all such contracts – subpostmasters are responsible for any losses shown on Horizon.

About 150 sub-postmasters have complained to the Post Office about shortfalls which they say were accounting discrepancies related to Horizon problems rather than theft or fraud.

The Post Office’s legal action following cash shortfalls has led to the ruin of  dozens of subpostmasters who have lost their livelihoods, been made bankrupt or gone to jail. There were criminal convictions in 43 cases.

Subpostmasters claim the Post Office failed to investigate irregularities properly before launching criminal proceedings.

Wendy Martin has closed her Post Office until the connectivity problem is corrected.

The self-employed postmistress, who has worked in various shops during an 18-year career, says she is concerned that the problem will increase and could leave her paying in more money each month until the shop goes bust.

She told The Press: “The public feel I’m doing them a dis-service because the shop is shut but I could be in a situation where I may end up in prison.

“It costs me £400 just to keep the shop closed and if I keep putting in the money I will go bust. I hope the Post Office takes this seriously and come out to sort this, but until they do I’ll have to stay shut.”

Since the York Press article was published on 29 August Wendy Martin says the Post Office told her it would be “out asap and will sort this out”. She says she “cannot afford to keep putting money in for lost transactions due to this”.

Some subpostmasters have set up a Facebook page to air some of their grievances.

The Post Office says it does not prosecute people for making innocent mistakes and never has. In response to a BBC Panorama documentary last month on Horizon and the complaints of subpostmasters, the Post Office said:

“There is no evidence that faults with the computer system caused money to go missing at these Post Office branches. There is evidence that user actions, including dishonest conduct, were responsible for missing money.

“We are sorry if a small number of people feel they have not been treated fairly in the past but we have gone to enormous lengths to re-investigate their cases, doing everything and more than we committed to do…

“The Horizon computer system is robust and effective in dealing with the six million transactions put through the system every day by our postmasters and employees at 11,500 Post Office branches. It is independently audited and meets or exceeds industry accreditations.”

Mediation latest

John Munton, a director of the Centre for Effective Dispute Resolution, which is mediating in the disputes between the Post Office and subpostmasters, has written to the Post Office on the results of his review of the mediation so far.

Of the 20 cases that have gone through mediation, 8 have been resolved which is 40%.  Munton says this settlement rate is “somewhat lower than the average settlement rate that we see across all the mediations that CEDR conducts”.

In an average year its settlement rate “tends to range between 65% and 75% with a further 10% to 15% of cases resulting in some progression towards final resolution”.

Munton suggests there is a fundamental mismatch between the expectations of the subpostmasters and the object of mediation which is not to award compensation but to achieve an agreement between the parties.

Subpostmasters expect to enter into talks on compensation for their lost livelihoods and money they have paid to the Post Office to cover accounting shortfalls. The Post Office’s representatives make it clear they need credible evidence to justify the claims for compensation.

The mediation process has been more effective, says Munton, “where a continuing contractual relationship is still in place between subpostmasters and the Post Office, and where both parties would like it to continue.”

Comment

The Post Office, in mediation and its entire approach to the complaints of subpostmasters, is taking an empathetic but legalistic approach. To subpostmasters who say Horizon was responsible for losses, the Post Office’s lawyers say in essence: “Prove it.”

The subpostmasters can prove little or nothing, perhaps because Horizon is not owned or run by them. All the information subpostmasters possess is supplied and owned by the Post Office or its main supplier Fujitsu. The Post Office says there is no evidence that Horizon has caused the discrepancies complained of by the subpostmasters.

This is not like a train crash where there would be an independent statutory investigation, the findings of which would have a statutory authority. In these cases, the Post Office has chosen to commission an independent investigation from forensic accountants Second Sight. The findings have no statutory authority. The Post Office is entitled to reject Second Sight’s findings. And it has.

It is unclear whether all the facts in these cases have surfaced, whether the Post Office still possesses all the potentially relevant data from disputes that date back many years, or whether it has made any mistakes in its interpretations of the facts.

The Post Office will continue to benefit from a purely legalistic approach because subpostmasters may be able to prove that Horizon can go wrong but they will never prove that it did go wrong in their particular case.

Even when statutory investigations take place into public safety incidents, it may take years to find possible or likely causes. And that’s the point. There are only possible or likely causes. In fatal air crashes involving large passenger jets, for example, the outcome is a “probable” cause or “probable” causes.

By requiring evidence of a definite cause or causes of shortfalls, the Post Office is demanding the impossible.  On the other hand, why would it pay compensation when subpostmasters cannot prove that Horizon and the Post Office’s training or procedures were at fault?

Perhaps the only sensible way for these disputes to be settled is for lawyers to stand aside and allow managers to resolve cases on the balance of probabilities.

It’s clear to outsiders that 150 subpostmasters have not had criminal intent when, as happened in some cases, they signed off unreconciled accounts as correct. Many are victims of miscarriages of justice and deserve to have adequate compensation and their names cleared. The sooner this happens the sooner the Post Office can reclaim its reputation for fairplay.

If the cases are not settled the campaign for justice could go on indefinitely.

Mediation – letter from Centre for Effective Dispute Resolution to the Post Office. CEDR – mediation review

York Post Office closes amid cash row

Post Office Horizon and last night’s Panorama

 

Universal Credit at “amber/red” says latest DWP report

By Tony Collins

The Major Projects Authority, which is part of the Cabinet Office’s Efficiency and Reform Group, has today published its annual report on 188 projects including Universal Credit, about which it makes only positive comments.

But the authority’s annual report is, it appears, economical with the actualité. At the same time as the MPA published the report, the Department for Work and Pensions published a spreadsheet with statistics and its own narrative on the state of its major projects including the Universal Credit programme.

The spreadsheet said that the UC programme had an “amber/red” rating – but neither the MPA nor the Department for Work and Pensions has given the MPA’s reasons for the rating.

At the request of permanent secretaries the MPA has agreed not to publish its comments on the traffic light status of certain projects, including Universal Credit. The MPA and the Cabinet Office have agreed to allow officials in each departmental to give their own narrative to explain the traffic light status of their projects.

So the DWP, on its website, gives a summary of the state of its major projects, but its narrative on Universal Credit says nothing about the programme’s problems. Neither is there any of the MPA’s recommendations which related to the “amber/red” rating.

In a further shrinking from openness, the MPA and Cabinet Office have agreed with permanent secretaries that the traffic light status of major projects will be published only when they are out of date. So the “amber/red” rating on Universal Credit, although published today, is dated September 2014.

Comment

It is odd in a modern democracy that a large central government department – the DWP – can spend £330m on the IT for a major project and get away with publishing such obviously contradictory information on the scheme.

On the one hand the MPA, the Cabinet Office and the DWP publish only positive comments about progress on the Universal Credit programme.

These are some of the MPA’s comments on Universal Credit:

“Delivery remains on track against plans announced in September 2014. Additionally the Programme has brought forward testing of initiatives from which the programme can learn including the:

• Continued trialling of Universal Support in partnership areas to ensure the right integrated local foundations are in place to support UC expansion.

• Extending In work progression trials to help households increase their earnings once they have found work. • Extending the role of UC Work Coaches to engage with households at their work search interview to assess financial capability.”

Similarly the DWP’s comments in its spreadsheet on the status of its major projects reads like a government press release. Why was one of the government’s major projects – the whole life project costs of UC are estimated at £15.8bn – given an amber/red status?

We don’t know. Except we know that the MPA gives an amber/red rating when it regards a programme as not on track – a programme that needs an assurance and action plan to improve confidence in delivery. Why is the programme not on track? What does the assurance and action plan say? What is the rating today?

So much for open government. Indeed the DWP’s external lawyers are going to an FOI tribunal in London next month as part of a long legal battle to stop four old reports on Universal Credit being published.

Any ministerial announcements about open government in future should, perhaps, take this unedifying FOI episode into account.

Major Projects Authority annual report 2014/2015

What do Ben Bradshaw, Caroline Flint and Andy Burnham have in common?

By Tony Collins

Ben Bradshaw, Caroline Flint and Andy Burnham have in common in their political past something they probably wouldn’t care to draw attention to as they battle for roles in the Labour leadership.

Few people will remember that Bradshaw, Flint and Burnham were advocates – indeed staunch defenders – of what’s arguably the biggest IT-related failure of all time – the £10bn National Programme for IT [NPfIT.

Perhaps it’s unfair to mention their support for such a massive failure at the time of the leadership election.

A counter argument is that politicians should be held to account at some point for public statements they have made in Parliament in defence of a major project – in this case the largest non-military IT-related programme in the world – that many inside and outside the NHS recognised was fundamentally flawed from its outset in 2003.

Bradshaw, Flint and Burnham did concede in their NPfIT-related statements to the House of Commons that the national programme for IT had its flaws, but still they gave it their strong support and continued to attack the programme’s critics.

The following are examples of statements made by Bradshaw, Flint and Burnham in the House of Commons in support of the NPfIT, which was later abandoned.

Bradshaw, then health minister in charge of the NPfIT,  told the House of Commons in February 2008:

“We accept that there have been delays, not only in the roll-out of summary care records, but in the whole NHS IT programme.

“It is important to put on record that those delays were not because of problems with supply, delivery or systems, but pretty much entirely because we took extra time to consult on and try to address record safety and patient confidentiality, and we were absolutely right to do so…

“The health service is moving from being an organisation with fragmented or incomplete information systems to a position where national systems are integrated, record keeping is digital, patients have unprecedented access to their personal health records and health professionals will have the right information at the right time about the right patient.

“As the Health Committee has recognised in its report, the roll-out of new IT systems will save time and money for the NHS and staff, save lives and improve patient care.”

[Even today, 12 years after the launch of the National Programme for IT, the NHS does not have integrated digital records.]

Caroline Flint, then health minister in charge of the NPfIT,  told the House of Commons on 6 June 2007:

“… it is lamentable that a programme that is focused on the delivery of safer and more efficient health care in the NHS in England has been politicised and attacked for short-term partisan gain when, in fact, it is to the benefit of everyone using the NHS in England that the programme is provided with the necessary resources and support to achieve the aims that Conservative Members have acknowledged that they agree with…

“Owing to delays in some areas of the programme, far from it being overspent, there is an underspend, which is perhaps unique for a large IT programme.

“The contracts that were ably put in place in 2003 mean that committed payments are not made to suppliers until delivery has been accepted 45 days after “go live” by end-users.

“We have made advance payments to a number of suppliers to provide efficient financing mechanisms for their work in progress. However, it should be noted that the financing risk has remained with the suppliers and that guarantees for any advance payments have been made by the suppliers to the Government…

“The national programme for IT in the NHS has successfully transferred the financing and completion risk to its suppliers…”

Andy Burnham, then Health Secretary, told the House of Commons on 7 December 2009:

“He [Andrew Lansley] seems to reject the benefits of a national system across the NHS, but we do not. We believe that there are significant benefits from a national health service having a programme of IT that can link up clinicians across the system. We further believe that it is safer for patients if their records can be accessed across the system…” [which hasn’t happened].

Abandoned NHS IT plan has cost £10bn so far

Is HMRC spending enough for help to replace £10.4bn Aspire contract?

By Tony Collins

Government Computing reports that HM Revenue and Customs is seeking a partner for a two-year contract, worth £5m to £20m, to help the department replace the Aspire deal which expires in 2017.

HMRC is leading the way for central government by seeking to move away from a 13-year monopolistic IT supply contract, Aspire, which is expected to cost £10.4bn up to 2017.

Aspire’s main supplier is Capgemini.  Fujitsu and Accenture are the main subcontractors.

HMRC says it wants its IT services to be designed around taxpayers rather than its own operations. Its plan is to give every UK taxpayer a personalised digital tax account – built on agile principles – that allows interactions in real-time.

This will require major changes in its IT,  new organisational skills and changes to existing jobs.

HMRC’s officials want to comply with the government’s policy of ending large technology contracts in favour of smaller and shorter ones.

Now the department is advertising for a partner to help prepare for the end of the Aspire contract. The partner will need to help bring about a “culture and people transformation”.

The contract will be worth £5m to £20m, the closing date for bids is 6 July, and the contract start date is 1 September.  A “supplier event” will be held next week.

But is £5m to £20m enough for HMRC to spend on help to replace a £10.4bn contract?

This is the HMRC advert:

“HMRC/CDIO [Chief Digital Information Officer, Mark Dearnley] needs an injection of strategic-level experience and capacity to support people and culture transformation.
“The successful Partner must have experience of managing large post-merger work force integrations, and the significant people and cultural issues that arise. HMRC will require the supplier to provide strategic input to the planning of this activity and for support for senior line managers in delivering it.
“HMRC/CDIO needs an injection of strategic level experience and capacity to help manage the exit from a large scale outsourced arrangement that has been in place for 20+ years.
“HMRC is dependent on its IT services to collect £505bn in tax and to administer £43bn in benefits each year. The successful supplier must have proven experience of working in a multi-supplier environment, working with internal and external legal teams and suppliers and must have a proven track record of understanding large IT business operations.
“HMRC/CDIO needs an injection of strategic level experience and capacity to help HMRC Process Re-engineer and ‘Lean’ its IT operation. HMRC/CDIO requires a Programme Management Office (PMO) to undertake the management aspects of the programme.
“It is envisaged that the Lead Transformation Partner will provide leadership of the PMO and work alongside HMRC employees. The leadership must have significant experience of working in large, dynamic, multi-faceted programmes working in organisations that are of national/international scale and importance including major transformation…”

Replacing Aspire with smaller short-term contracts will require a transfer of more than 2,000 Capgemini staff to possibly a variety of SMEs or other companies, as well as big changes in HMRC’s ageing technologies.

It would be much easier for HMRC’s executives to replace Aspire with another long-term costly contract with a major supplier but officials are committed to fundamental change.

The need for change was set out by the National Audit Office in a report “Managing and replacing the Aspire contract”  in 2014. The NAO found that Capgemini has, in general,  kept the tax systems running fairly well and successfully delivered a plethora of projects. But at a cost.

The NAO report said Aspire was “holding back innovation” in HMRC’s business operations”.

Aspire had made it difficult for HMRC to “get direction or control of its ICT; there was little flexibility to get things done with the right supplier quickly or make greater use of cross-government shared infrastructure and services”. And exclusivity clauses “prevented competition and stifled new ideas”.

Capgemini and Fujitsu made a combined profit of £1.2bn, more than double the £500m envisaged in the original business plan. Profit margins averaged 16 per cent to March 2014, also higher than the original 2004 plan.

HMRC was “overly dependent on the technical capability of the Aspire suppliers”. The NAO also found that HMRC competed only 14 contracts outside Aspire, worth £22m, or 3 per cent of Aspire’s cost.

Although generally pleased with Capgemini,  HMRC raised with Capgemini, during a contract renegotiation, several claimed contract breaches for the supplier’s performance and overall responsiveness.

When benchmarking the price of Aspire services and projects on several occasions, HMRC has found that it has often “paid above-market rates”.

HMRC did not consider that its Fujitsu-run data centres were value for money.

Comment

HMRC deserves credit for seeking to replace Aspire with smaller, short-term contracts. But is it possible that HMRC is spending far too little on help with making the switch?

HMRC doesn’t have a reputation for caution when it comes to IT-related spending.  The total cost of Aspire is expected to rise to £10.4bn by 2017 from an original expected spend of £4.1bn. [The £10.4bn includes an extra £2.3bn for a 3-year contract extension.]

Therefore a spend of £5m to £20m for help to replace Aspire seems ridiculously low given the risks of getting it wrong, the complexities, the number of staff changes involved, the changes in IT architecture, and the legal, commercial and technical capabilities required.

The risks are worth taking, for HMRC to regain full control over ICT and performance of its operations.

If all goes wrong with the replacement of Aspire, costs will continue to spiral. The Aspire contract lets both parties extend it by agreement for up to eight years. HMRC says it does not intend to extend Aspire further. But an overrun could force HMRC to negotiate an extension.

As the NAO has said, an extension would not be value for money, since there would continue to be no competitive pressure.

Campaign4Change has never before accused a government department of allocating too little for IT-related change. There’s always a first time.

Government Computing article

 

Raytheon/Home Office IT dispute rolls on

By Tony Collins

Another big, old government IT contract goes wrong. It’s part of civil service tradition that officials blame the supplier for missing milestones and not delivering what the end-users needed or wanted; and the supplier blames the customer for causing or contributing to the alleged defaults.

The Raytheon Systems/Home Office eBorders legal dispute is going along these lines – as did the Department of Health’s dispute with CSC over parts of the failed National Programme for IT [NPfIT].

It’s tradition for the civil service not to take big IT suppliers to court: a hearing could mean that civil servants have to talk about government business in an open courtroom.

Senior Whitehall officials do not want the public knowing how departments are really managed, or not managed.

In 2002 a 44-day court case between National Air Traffic Services and EDS [now HP] ended suddenly – minutes before a senior civil servant was due to give evidence.

Arbitration is different. It’s in secret so a long dispute can be tolerated.

And so a Home Office mega-contract awarded to US company Raytheon in 2007 has ended up in arbitration and is set for a sequence of hearings and appeals that could last years.

It took 10 years for an IT dispute between HP and BSkyB to be settled, and it could take this long for Raytheon and the Home Office to settle their dispute.

Chronology 

In 2003 Tony Blair launches the eBorders programme. He wants a database of foreign travellers entering and leaving Britain to help fight the war on terror.

A year later the Home Office launches Project Semaphore with IBM to pilot an electronic borders system.

In 2007 Jacqui Smith, Labour’s home secretary, signs an eBorders contract with Raytheon Systems as lead supplier and Serco, Detica, QinetiQ and Accenture as subcontractors. It’s worth £750m. Within two years Home Office officials are expressing concern that milestones are being missed.

In 2010 a new coalition government that’s determined not to put up with big, underperforming IT deals, terminates the Raytheon contract after a recommendation by the Major Projects Authority and a coalition review group.

In 2011 it emerges that Raytheon is threatening to sue the Home Office for £500m for repudiating the contract. Raytheon blames project delays on UK Border Agency mismanagement. It’s far from clear that officials knew what they wanted from the systems.  Arbitration proceedings begin.

In 2013 it emerges that IBM, Fujitsu and Serco are carrying out some of the original eBorders work.

Home Office loses arbitration

Last year an arbitration tribunal ruled that the Home Office must pay £224m to Raytheon. It found that the decision to terminate Raytheon’s contract was unlawful on a number of grounds. The Home Office had not fully considered the extent to which the Home Office and the UK Border Agency had caused or contributed to the alleged defaults.

Home Office wins appeal

Now the Home Office has won an appeal against the arbitration tribunal’s ruling. A good account of the appeal judgment is on the Pinsent Masons website. Pinsent Masons was acting for the Home Office.  The appeal judge found that the arbitration award had been tainted by legal irregularities that could have caused a substantial injustice. The judge took the unprecedented step of setting aside the arbitration award and ordered that the dispute be resolved by a new tribunal.

Raytheon appeal

Raytheon has announced that it is appealing. It points out that the arbitration had 42 days of oral hearings with testimony from multiple witnesses, and had issued a 276 page award decision. Raytheon says it is determined to recover the sums it is due because of the “wrongful” termination of the contract.

Comment:

It’s five years since Raytheon’s contract was cancelled. It could easily be another five years before all the rulings and appeals are finally over.

It’s easy in hindsight to say, but would it have been better if the Home Office and coalition ministers had spent longer negotiating with Raytheon rather than doing the macho thing of cancelling the contract?

Pinsent Masons – latest ruling

Raytheon contests Home Office’s High Court verdict over e-Borders