Category Archives: Fujitsu

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

Posted on 18/09/2014 | 2 comments

By Tony Collins

post office logoThe BBC’s “PM” programme returned to the topic last week of subpostmasters who were stripped of their post office contracts and bankrupted because of theft, fraud and false accounting. Some went to jail.

“Is it possible they were innocent and that a computer system was to blame instead?” asked Eddie Mair, the programme’s presenter.

The BBC has seen a leaked copy of an independent report the Post Office commissioned into its “Horizon” branch office accounting system. An interim version of the report by consultancy Second Sight was released last year.

The leaked report says the system was unfit for purpose in some branches, says the BBC. When Post Office investigators checked out shortfalls they did not look for the root cause of the errors – and instead accused the sub-postmasters of theft or false accounting, says the BBC, quoting from the report.

£1bn Horizon system

More than 11,000 post offices use Fujitsu’s £1bn Horizon system for branch accounting and rarely have problems. At the close of each day, the system balances money coming in from customers and money going out, to banks, energy companies, for tax disc sales and for lottery tickets.

If the system showed there was a shortfall, subpostmasters had few options: make up the deficit themselves, 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 BBC PM programme last week re-broadcast its interview in June 2012 with a gently-spoken Welshman, Noel Thomas, who worked for the Post Office for 42 years before he had problems with the Horizon branch accounting system at Gaerwen. When he went to balance the accounts the system kept telling him there was a deficit – a shortfall in the daily takings.

Prison

After speaking to the Post Office helpline several times he believed the matter would be sorted out in time. He signed off the accounts – and the Post Office took him to court for false accounting. He pleaded guilty and went to prison; and he went bankrupt.

In his interview with Eddie Mair, Thomas came across as a man of guileless integrity.

“I had a very busy post office,” said Thomas. “I am not ashamed to tell you I had a very good income of between £20,000 and £30,000 a year. I worked very hard for it: I looked after my customers.”

Mair: What was the first sign of trouble?

“I did have trouble over about 12 months actually. The last six months it went worse. You just couldn’t balance. It was going in the end (into deficit) at the rate of £2,000-£3,000 a week.”

Mair: This wasn’t your own personal books – you weren’t filling in a ledger – this was the computer system?

“This was the computer system. In the end I was convicted on the basis that I false accounted for over £50,000.”

Mair: They thought you’d stolen it?

“Yes. But when it came to the court case they dropped the theft [charge] very very quickly and just went for false accounting.”

Mair: You went to jail?

“Yes… I was lucky. I only had eight days. Time went very very quickly.”

Mair: But I am guessing for you that was not really the problem, the passing of time. You’d been branded a criminal?

“Yes. That’s what got me you see.”

Mair: The Post Office still says it is confident about this computer system. It is still happy with it.

“It would say [that], wouldn’t it?”

Mair: As for you, are you confident you didn’t make a lot of mistakes?

“Yes. I can say I didn’t make mistakes. I can say with my hand on my heart I didn’t take the money.”

Mair: What effect has this had on you?

“A big effect, because I was declared bankrupt. The Post Office are paying my pension but they took my private pensions away.”

Mair: What would you like to happen?

“Not for me myself but for (other subpostmasters and mistresses). It has ruined their lives hasn’t it? If you pilfer off the Royal Mail you need to be punished –”

Mair: But Noel if you are correct – and obviously the Post Office has a different view of this – if you are right then you have been made bankrupt, you have lost almost everything –

“Yes.”

You have been to jail –

“Yes.”

Over a computer mistake –

“Yes.”

Mair: What do you want from them?

“That we can get justice for everybody.”

Criminals or faulty systems?

Thomas had given up trying to prove his innocence when he received a phone call from retired senior probation officer Roch Garrard who said the same thing had happened to his local postmistress in Hampshire.

In time Thomas found that dozens of middle-aged, middle-class subpostmasters and mistresses who had never put a foot wrong were being branded criminals.

“It didn’t make sense to me so I started to contact some of them and said to them ‘this is what happened to our postmistress, what happened to you’ and the stories were all so similar that I thought there must be something wrong,” he said.

Now, more than 150 sub-postmasters say they were wrongly prosecuted, or made to repay money, because of the system. The Post Office remains defensive. Its public statements express little sympathy. It is, though, in secret talks with the subpostmasters over possible compensation. But can money ever put right injustices that have ruined lives?

New Second Sight report

BBC reporter Dan Johnson said the latest report explains exactly was going on with the Post Office computer system. “The thrust of this report is that it was faults in that computer system as well as communication problems, and issues around training that led to these mistakes. It wasn’t dishonesty,” said Johnson.

The report said training was not good enough for those without IT skills and power failures and communication issues made things worse. Helpline staff gave conflicting advice or said problems would sort themselves out.

Second Sight found in its research on Horizon that bugs were  not unknown. It said in its interim report that “some combinations of events can trigger situations where problems occur”.

A tearful Sarah Burgess Boyd, from Newcastle-upon-Tyne told the BBC she lost her life savings in repaying an incorrect shortfall. She said of the Post Office, “I just don’t know of another business that would conduct themselves in such a callous and inhumane manner.”

The Post Office said the leaking of the report was “unhelpful”. In a statement, the Post Office told the BBC:

“Although we will not comment on the contents of any confidential documents, after two years of investigation it remains the case that there is absolutely no evidence of any systemic issues with the computer system which is used by over 78,000 people across our 11,500 branches and which successfully processes over six million transactions every day.”

The Post Office is in mediation with some of the affected subpostmasters, in part because of campaigning for justice by MPs, particularly North East Hampshire MP James Arbuthnot.

Also leading the campaign is the Justice for Subpostmasters Alliance, which was set up to “raise awareness of the problems around the Post Office Horizon system which for many years Post Office Limited has denied exist”.

Despite the mediation, the relationship between the accused subpostmasters and the Post Office remains strained. Alan Bates, a former subpostmaster in Wales who founded the Justice for Subpostmasters Alliance, continues to submit FOI requests to the Post Office, the latest being August 2014. The Post Office tends to refuse his requests or gives him unsympathetic replies.

In one of his FOI appeals, Bates tells the Post Office that the concern is not about the millions of successful weekly and monthly financial reconciliations that take place but the “numerous unsuccessful reconciliations that take place that Post Office refuses to even consider may occur”. Post Office management “seems blind to such possibilities”.

He told BBC Wales in 2012:

“One of the big problems with Horizon is the inability to fully examine all the data you have put in the system. You were not allowed to interrogate it. They restricted the access. I refused to be held liable for a system that I and my staff were unable to access to check.”

Under the FOI Act, Bates asked the Post Office last month for the total amount in value and number of all “transaction correction” invoices and credit notes issued to post offices in the latest accounts period; and he asked in April 2014

“Has Post Office ever been made aware of faults within the software of their Horizon System that would have impacted in any way on the accuracy of the accounts of any post office?”

The Post Office did not say. Its reply was that the question was not specific enough.

Ministers have been unsympathetic to the accused subpostmasters –  although the campaign to clear the names of the accused has come mostly from Conservative MPs. Minister Jo Swinson told the House of Commons last year that the number of subpostmasters who’d complained about the Horizon system was “tiny, tiny”.

The National Federation of SubPostmasters has also been unsympathetic and has backed the Post Office. The Federation said: “We continue to have complete confidence in the Horizon system, which carries out hundreds of millions of transactions every week at 11,500 Post Office outlets across the country.

“The NFSP has seen no evidence to suggest that Horizon has been at fault and we believe it to be robust.”

Contract Law

Bhavisha Parekh, a case handler at Contact Law, was approached in 2009 by a sub-postmaster whose accounts had been audited that morning – and they’d found a loss of £7,000.

Parekh writes on the Contract Law website:

“The client had found this loss when doing her daily accounts a week earlier and asked the Post Office auditors to assist her and investigate the matter to locate the loss and rectify the accounts.

“Post Office accounts consist of cash, stamps, and postal orders as well as anything else they trade in; everything is given a financial value. The client’s loss was not of cash and all her transactions were showing to be completed correctly.

“However, upon the auditor’s confirmation of the loss she was charged with theft from the Post Office and given notice of being given a statutory demand for the £7,000.

“The client was in tears over the phone as she felt she had been wrongly charged; the client had run the Post Office for many years without fault and had become a pillar of the community.

“She felt victimised, as when trying to resolve this problem with the Post Office she had asked them to audit her branch and now she was being charged with theft.

“That day I gave the client details of a firm local to her (solicitors) to assist her with this matter. A few weeks later when calling the client to get feedback on the outcome of her case, she explained that she had had been investigated by the Post Office but they had not found anything to show she had taken the money.

“When auditing her branch the final accounts showed a loss; however, the auditors were unable to trace where this loss occurred. After further investigation and having a forensic accountant look into the matter, there were still no answers as to where this loss had occurred.

“This seemed pretty strange; the client in the meantime was told she could not work in the Post Office or even enter the building so she was left without an income and fear of being criminally prosecuted.

“However, after a month or so the Post Office wrote to her to state they had dropped the charges. She would however not be able to commence work as a sub-postmaster, and no explanation of the matter was given.

“Since speaking to this client I was approached by two more former sub-postmasters with the same case. However, they have not been as ‘lucky’ as my initial client – one was dismissed as a sub-postmaster and asked to repay this ‘lost’ amount, and the other was charged with theft and imprisoned for 18 months as well as ordered to pay a sum of £75,000.

“In all three cases the Post Office and their trained auditors have been unable to locate what this loss is; further they have not been able to trace any money into the postmasters’ accounts. Apart from there actually being a loss, there has been no evidence of any theft ever taking place.

“I have only spoken to three sub-postmasters; however this is happening at an increasing scale all over England. Computer experts are now stating that the ‘Horizon’ software the Postmasters use is flawed and so showing these losses.

“Potentially, due to this computer error, many sub-postmasters have lost their jobs, been imprisoned, and left traumatised by the Post Office’s actions.”

Comment

The Post Office deserves credit for investigating some of the complaints (after years of pressure from MPs) and it is said to have settled some of the less serious cases. But five years since the accumulation of problems came to light the convictions against subpostmasters remain. Computer Weekly highlighted the plight of subpostmasters in 2009.

Second Sight’s latest report will add to concern that lives were ruined because unexplained deficits on the Post Office’s Horizon system were not thoroughly investigated – and the root cause established – before the Post Office ticked the legal box to prosecute.

There is scope for systems to go wrong when there are multiple interfaces, occasional power failures and faults in networks and communications equipment. The Post Office’s Horizon system has multiple interfaces; and in any case no IT system is perfect. That Horizon works well for tens of thousands of subpostmasters is no guarantee it will work well for all.

Telling the family of someone struck by lightning that millions of people are not struck by lightning every year is extraordinarily insensitive. What’s the point of the Post Office’s continuing to insist that most subpostmasters have no problem with Horizon? Clearly there are no system-wide issues but nobody is saying there are – and why would those sent to prison, made bankrupt or deprived of their livelihoods care if IT issues were systemic or not? They say it happened to them.

Nobody in the general population would believe that 150 or more subpostmasters were dishonest.

Who would put the integrity of a computer system above the integrity of 150 subpostmasters?

The Post Office, as the prosecuting authority, could argue it is only doing its job in protecting its money and the investments of taxpayers. But in doing their jobs Post Office managers seem to be behaving more like machines than humans. They prosecuted for false accounting because they could.

They could, because sub-postmasters, when confronted by a deficit they didn’t understand, signed off accounts after being told by the IT helpdesk that the problems would probably clear in time. Strictly speaking, signing off accounts as correct when they are  known to be incorrect is false accounting. But was it something the Post Office should have prosecuted, given the mounting complaints about the accuracy of the system’s deficit figures?

Still the Post Office is refusing to answer subpostmaster’s questions. Its managers know they have the legal and contractual upper hand; and as owners of the system they possess the facts. What they do not have is the moral upper ground: they lost any claim to neutrality when they took subpostmasters to be dishonest before properly investigating the potential for shortcomings of the system.

It will be damaging to justice and the reputations of the subpostmasters if the Post Office continues to conform to the stereotype of a large organisation that, once it has denied liability for anything, refuses repeatedly to alter its position, whatever the facts.

As individuals, Post Office managers are probably understanding. As an institution the Post Office appears hostile to those whose lives have been ruined. It seems content to allow the cry for justice to stretch out for years, while it remains defensive and unsympathetic.

Shadow business minister Ian Murray asked in the House of Commons last year:

What processes will be put in place to compensate sub-postmasters and former sub-postmasters who have been disadvantaged, fined, lost their businesses, homes or even jailed, as a result of the problems with the Horizon system?

Wronged subpostmasters deserve far more in compensation than the sums originally in dispute. Is the Post Office institutionally capable of righting egregious wrongs?

Are disaffected subpostmasters having to sign gagging orders?

Second Sight interim report

Subpostmasters tell their story

Justice for Subpostmasters Alliance

 

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Posted in Campaign4Change, FOI, Freedom of Information, Fujitsu, openness and transparency, operational issues, Post Office IT

DWP’s advert for a £180k IT head – what it doesn’t say

Posted on 06/08/2014 | 2 comments

By Tony Collins

Soon the Department for Work and Pensions will choose a Director General, Technology.  Interviewing has finished and an offer is due to go out to the chosen candidate any day now.

The appointee will not replace Howard Shiplee who runs Universal Credit but has been ill for some months. The DWP is looking for Shiplee’s successor as a separate exercise to the recruitment of the DG Technology.

In its job advert for a DG Technology the DWP seeks a “commercial CIO/CTO to become one of the most senior change agents in the UK government”.

The size of the salary – around £180k plus “attractive pension” – suggests that the DWP is looking for a powerful, inspiring and reforming figure. The DWP’s IT makes 730 million payments to a value of 166bn a year.

In practice it is not clear how much power and influence the DG will have, given that there will be a separate head of Universal Credit (Shiplee’s successor) and there is already in place a Director General for Digital Transformation Kevin Cunnington.

What’s a DG Technology to do then?

The job advert suggests the job is about bringing about “unprecedented” change.  It says:

“The department is undergoing major business change, which has at its heart a technology and digital transformation of the services it provides, which will radically improve how it interacts with citizens.”

The role, says the advert, involves:

  • “Designing, developing and delivering the technology strategy that will enable unprecedented business change.”
  • “… Reducing the time to taken to develop new services and cutting the cost of delivery.”

The chosen person needs “a clear record of success in enabling the delivery of service driven, user focused, digital business transformation,” says the advert.

What the DWP doesn’t say

If DWP officials took a truth pill when interviewing candidates they might have said:

  • “No department talks more about change than we do. We regularly commission reports on the need for transformation and how to achieve it. We issue press releases and give briefings on our plans for change.  We write  ministerial speeches on it. We employ talented people to whom innovation and productive change comes naturally. The only thing we don’t do is actually change. It remains an aspiration.
  • “We remain one of the biggest VME sites in the world (VME being a Fujitsu – formerly ICL – operating system that dates back to the 1970s). VME skills are in ever shorter supply and it’s increasingly costly to employ VME specialists but changing our core software is too risky; and there is no commercial imperative to change: it’s not private money we’re spending.  We’ve a £1bn a year IT budget – one of the biggest of any government department in the world.
  • DWP core VME systems run an old supplier-specific form of COBOL used on VME, not an industry standard form.
  • We’ve identified ways of moving away from VME: we have shown that VME-based IDMSX databases can be transitioned to commodity database systems, and that the COBOL code can be converted to Java and then run on open source application servers. Still we can’t move away from VME, not within the foreseeable future. Too risky.
  • We’d love the new DG Technology to work on change, transformation and innovation but he/she will be required for fire-fighting.
  • It’s a particularly difficult time for the DWP. We are alleged to have given what the Public Accounts Committee calls an unacceptable service to the disabled, the terminally ill and many others who have submitted claims for personal independence payments. We are also struggling to cope with Employment and Support Allowance claims. One claimant has told the BBC the DWP is “not fit for purpose”.
  •  The National Audit Office will publish an unhelpful report on Universal Credit this Autumn. We’ll regard the report as out-of-date, as we do all negative NAO reports. We will say publicly that we have already implemented its recommendations and we’ll pick out the one or two positive sentences in the report to summarise it. But nobody will believe our story, least of all us.
  • If we could, we’d appoint a representative of our major suppliers to be the head of IT.  HP, Fujitsu, Accenture, IBM and BT have a knowledge of how to run the DWP’s systems that goes back decades. The suppliers are happily entrenched, indispensable. That they know more about our IT than we do puts into context talk of SMEs taking over from the big players.
  • One reason we avoid major change is that we are not good at it: Universal Credit (known internally as Universal Challenge), the £2.6bn Operational Strategy benefit scheme that Parliament was told would cost no more than £713m, the £141m  (aborted) Benefit Processing Replacement Programme, Camelot which was the (aborted) Computerisation and Mechanisation of Local Office Tasks,  and the (aborted)) Debt Accounting and Management System. Not to mention the (aborted) £25m Analytical Services Statistical Information System.
  • They’re the failures we know about. We don’t have to account to Parliament on the progress or otherwise of our big projects, and we’re particularly secretive internally, so there may be project failures not even senior management know about.
  • We require cultural alignment of all the DWP’s most senior civil servants. This means the chosen candidate must – and without exception – defend the department against all poorly-informed critics who may include our own ministers.
  • The Cabinet Office has some well-meaning reformers we want nothing to do with. That said, our policy is to agree to change and then absorb the required actions, like the acoustic baffles on the walls of a soundproofed studio.

 

 

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Posted in Accenture, BT, Campaign4Change, DWP, excessive secrecy, Fujitsu, Government IT, HP, IT projects, IT-related failures, Major Projects Authority, managing change, National Audit Office, outsourcing, procurement, project management, public sector, public services, SME, supplier relationships, Universal Credit

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Secrecy is one reason gov’t IT-based projects fail says MP

Posted on 25/07/2014 | Leave a comment

By Tony Collins

The BBC, in an article on its website about Fujitsu’s legal dispute with the Department of Health, quotes Richard Bacon MP who, as a member of the Public Accounts Committee, has asked countless civil servants about why their department’s IT-based change projects have not met expectations.

Bacon is co-author of a book on government failures, Conundrum, which has a chapter on the National Programme for IT [NPfIT] in the NHS.

In the BBC article Bacon is quoted as saying that the culture of secrecy surrounding IT-based projects is one of the main reasons they keep going so badly – and expensively – wrong.

He says it has been obvious to experts from an early stage that the NPfIT, which was launched by Tony Blair’s government, would be a “train wreck” because the contracts were signed “in an enormous hurry” and contained confidentiality clauses preventing contractors from speaking to the press.

He says the urge to cover things up means that “we never learn from our mistakes because there is learning curve, but when things go wrong with IT the response is to keep it quiet”.

Citing the example of air accident investigations, which are normally conducted in a spirit of openness so lessons can be learned, he says “It is the complete opposite in IT projects, where everyone keeps their heads down and goes hugger-mugger.”

Fujitsu versus Department of Health

Fujitsu sued the Department of Health for £700m after the company was ejected six years early [2008] from a 10-year £896m NPfIT contract signed in January 2004.  The case went to arbitration – and is still in arbitration, largely over the amount the government may be ordered to pay Fujitsu.  Bacon says the amount of the settlement will have to be disclosed.

“I don’t know how the government can honestly keep this number quiet. It simply cannot do it. It is not possible or sensible to keep it quiet when you are spending this much money,” says Bacon.

The BBC article quotes excerpts from a Campaign4Change blog

Government ‘loses £700m NHS IT dispute with Fujitsu’ – BBC News

 

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Posted in Campaign4Change, change management, Department of Health, e-health, excessive secrecy, Fujitsu, Government IT, health, health records, IT-related failures, NHS, npfit, public sector, public services, supplier relationships

Has Fujitsu won £700m NHS legal dispute?

Posted on 24/07/2014 | 6 comments

By Tony Collins

The Telegraph reports unconfirmed rumours that Fujitsu has thrown a party at the Savoy to celebrate the successful end of its long-running dispute with the NHS over a failed £896m NPfIT contract.

Government officials are being coy about the settlement which implies that Fujitsu has indeed won its legal dispute with the Department of Health, at a potential cost to taxpayers of hundreds of millions of pounds.

Fujitsu sued the DH for £700m after it was ejected from its NPfIT contract to deliver the Cerner Millennium system to NHS trusts in the south of England.

At one point a former ambassador to Japan was said to have been involved in trying to broker an out-of-court settlement with Fujitsu at UK and global level.

But the final cost of the settlement is much higher than any figure agreed, for the Department of Health paid tens, possibly hundreds of millions of pounds, more than market prices for BT to take over from Fujitsu support for NHS trusts in the south of England. The DH paid BT £546m to take over from Fujitsu which triggered a minor Parliamentary inquiry.

A case that couldn’t go to court?

The FT reported in 2011 that Fujitsu and the Department of Health had been unable to resolve their dispute in arbitration and a court case was “almost inevitable”.

But the FT article did not take account of the fact that major government departments do not take large IT suppliers to an open courtroom. Though there have been many legal disputes between IT suppliers and Whitehall they have only once reached an open courtroom [HP versus National Air Traffic Services] – and the case collapsed hours before a senior civil servant was due to take the witness stand.

Nightmare for taxpayers

Now the Telegraph says:

“Unconfirmed reports circulating in the industry suggest that a long-running dispute over the Japan-based Fujitsu’s claim against the NHS for the cancellation of an £896 million contract has finally been settled – in favour of Fujitsu.”

It adds:

“Both Fujitsu and the Cabinet Office, which took over negotiations on the contract from the Department of Health, are refusing to comment. The case went to arbitration after the two sides failed to reach agreement on Fujitsu’s claim for £700 million compensation. Such a pay-out would be the biggest in the 60-year history of the NHS – and a nightmare for taxpayers.”

The government’s legal costs alone were £31.45m by the end of 2012 in the Fujitsu case.

Francis Maude, Cabinet Office minister, is likely to be aware that his officials will face Parliamentary criticisms for keeping quiet about the settlement. The Cabinet Office is supposed to be the home of open government.

Earlier this week the National Audit Office reported that Capgemini and Fujitsu are due to collect a combined profit of about £1.2bn from the “Aspire” outsourcing contract with HM Revenue and Customs.

Richard Bacon, a Conservative member of the Public Accounts Committee is quoted in the Telegraph as saying the settlement with Fujitsu has implications across the public sector. “It should be plain to anyone that we are witnessing systemic failure in the government’s ability to contract.”

What went wrong?

The Department of Health and Fujitsu signed a deal in January 2004 in good faith, but before either side had a clear idea of how difficult it would be to install arguably over-specified systems in hospitals where staff had little time to meet the demands of new technology.

Both sides later tried to renegotiate the contract but talks failed.

In 2008 Fujitsu Services withdrew from the talks because the terms set down by the health service were unaffordable, a director disclosed to MPs.

Fujitsu’s withdrawal prompted the Department of Health to terminate the company’s contract under the NHS’s National Programme for IT (NPfIT).

Fujitsu’s direct losses on the contract at that time – which was in part for the supply and installation of the Cerner “Millennium” system – were understood to be about £340m.

At a hearing of the Public Accounts Committee into the NPfIT,  Peter Hutchinson, Fujitsu’s then group director for UK public services, said that his company had been willing to continue with its original NPfIT contract – even when talks over the contract “re-set” had failed.

“We withdrew from the re-set negotiations. We were still perfectly willing and able to deliver to the original contract,” he said.

Asked by committee MP Richard Bacon why Fujitsu had withdrawn Hutchinson said, “We had tried for a very long period of time to re-set the contract to match what everybody agreed was what the NHS really needed in terms of the contractual format.

“In the end the terms the NHS were willing to agree to we could not have afforded. Whilst we have been very committed to this programme and have put a lot of our time, energy and money behind it we have other stakeholders we have to worry about including our shareholders, our pension funds, our pensioners and the staff who work in the company. There was a limit beyond which we could not go.”

The termination of Fujitsu’s contract left the NHS with a “gaping hole,” said the then chairman of the Public Accounts Committee Edward Leigh.

Thank you to campaigner Dave Orr for drawing my attention to the Telegraph article.

Comment 

In an era on open government it is probably not right for officials and ministers at the Cabinet Office and the Department of Heath to be allowed to secretly plunge their hands into public coffers to pay Fujitsu for a massive failure that officialdom is too embarrassed to talk about.

Why did the DH in 2008 end Fujitsu’s contract rather than renegotiate its own unrealistic gold-plated contract specifications? Should those who ended the contract be held accountable today for the settlement?

The answer is nobody is accountable in part because the terms of the dispute aren’t known. Nobody knows each side’s arguments. Nobody even knows for certain who has won and who has lost. Possibly the government has paid out hundreds of millions of pounds to Fujitsu on the quiet, for no benefit to taxpayers.

Is this in the spirit of government of the people, by the people, for the people?

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Posted in BT, BT Health, e-health, excessive secrecy, Fujitsu, Government IT, health records, IT-related failures, legal disputes, NHS, npfit, supplier relationships

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Capgemini and Fujitsu pocket “incredible” £1.2bn profits from HMRC

Posted on 22/07/2014 | 1 comment

By Tony Collins

In an outsourcing deal of then unprecedented size Inland Revenue contracted out about 2000 IT staff and services to EDS – now HP – in 1994.

The deal was worth about £1bn over 10 years. Later Inland Revenue joined with Customs & Excise and became HM Revenue and Customs. As part of the merger HP took over Customs’ IT which was largely run by Fujitsu. The £1bn outsourcing contract with HP turned into a £2bn deal.

In 2004 the merged contracts were called “Aspire” and Capgemini took over staff and IT services from HP in a 10-year deal expected to be worth between £3bn and £5bn.  The contract was later extended by 3 years to 2017.

Today a National Audit Office report Managing and replacing the Aspire contract says the deal is worth £10.4bn to Capgemini and Fujitsu.

Margaret Hodge, chairman of the Committee of Public Accounts, says of the NAO report on the Aspire contract:

“HMRC’s management of Aspire, its most important contract which provides 650 IT systems to help HMRC to collect tax, has been unacceptably poor.

“While it may have secured a good level of IT service in the end, by the time the contract ends in 2017 HMRC will have spent £10.4 billion – more than double what it initially expected to spend.

“What’s worse, it has spent £5 billion of this total without first checking whether other providers could deliver a better deal, even though it had evidence that it was paying above market prices.

“It is deeply depressing that once again a government contract has proved better value for the private companies involved than for the taxpayer, with Capgemini and Fujitsu pocketing an incredible £1.2 billion in combined profits – more than twice the profit HMRC expected.

“Its own lack of capability meant HMRC was over-reliant on providers’ technical expertise, undermining its ability to act as an intelligent customer on behalf of the taxpayer.

“HMRC is planning to replace the Aspire contract in 2017, but its new project is still half-baked, with no business case and no idea of the skills or resources needed to make it work. All of this gives me little confidence that HMRC’s senior team has the capability to manage large and complex contracts.”

“More changes than normal”

The NAO found that in more than 80% of projects, HMRC and Capgemini changed the agreed scope, time or budget. Says the NAO report:

“One feature of the cooperative approach between HMRC and Capgemini has been a willingness on both sides to make changes once the extensive planning is complete and budget, scope and timing has been agreed commercially.

“These changes are made through formal governance processes and usually help to educe risk. Some change is to be expected as part of good project management.

“However, we consider that HMRC and Capgemini made more changes than normal on projects after the point at which budgets, scope and timing had been commercially agreed. The degree of change makes it very difficult to hold the Aspire suppliers to account for their performance across the portfolio of projects.”

Managing and replacing the Aspire contract – NAO report

Good summary of NAO report at Computerworlduk

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Posted in Campaign4Change, Capgemini, Fujitsu, Government IT, HMRC, outsourcing

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.

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

Whitehall’s legacy ICT here to stay?

Posted on 11/09/2013 | 1 comment

By Tony Collins

Well done to the National Audit Office for reporting in detail on some of central government’s legacy ICT. It’s clear the NAO found the research difficult, in part because some of the system performance information it was seeking had to come from suppliers because it was not held by departments.

This gives a hint of the extent to which departments such as HMRC and the Department for Work and Pensions are in the hands of IT companies.

The NAO report Managing the risks of legacy ICT to public service delivery suggests, but doesn’t say explicitly, that legacy ICT contracts are here to stay.

Attempts by the Cabinet Office to make large cuts in the costs of central government IT will be thwarted to some extent by the reliance of departments on big suppliers and big systems. Says the NAO

“A particular risk is that departments dependent on legacy ICT will find it more challenging to achieve the business transformation envisaged by the Government in its digital strategy.”

[But there appears to be little anyone can do about it.]

The NAO report says that major change that involves underlying ICT will “create a new set of risks which will increase as the degree of system change increases”.

HMRC and the Department for Work and Pensions still rely on Fujitsu mainframes with the VME operating system, which was originally developed in the 1970s to run ICL mainframes.

These are some of the NAO’s other findings:

– “We estimate that in 2011-12 at least £480bn of the government’s operating revenues and at least £210bn of non-staff expenditure such as pensions and entitlements were reliant to some extent on legacy ICT.”

– “Managing the risk of legacy ICT has also prevented some government bodies from reducing their dependency on a few large ICT suppliers, reducing competition and increasing the risk to value for money.”

– “Departments with the largest legacy ICT estates have found it challenging to achieve value for money and improve customer service. For example:

• In 2009, HMRC described its 600 systems as “complex, ageing and costly”… By the end of 2011-12, HMRC had switched off 65 legacy applications…”

• Within DWP, we have previously found that administrative errors within the benefits system were, in part, caused by poor communication between its network of some 140 systems.  However, the Department is now rationalising its ICT estate with a view to reducing the number of ICT applications by 2017.

– “The administration cost involved in using legacy ICT can be considerable. The cost of operating HMRC’s VAT collection service is £430m per annum and the cost of the DWP pension payment service is £385m per annum.”

– Eight key legacy ICT risks are:

• Disruption to service continuity. Legacy ICT infrastructure or applications are prone to instability due to failing components, disrupting the overall service. Failure of the legacy ICT may be more difficult to rectify due to the complexity or shortage of components.

• Security vulnerabilities. Older systems may be unsupported by their suppliers, meaning the software no longer receives bug fixes or patches that address security weaknesses. The system may not therefore be able to adapt to cyber threats.

• Vendor lock-in. Legacy ICT systems are often bespoke and have developed more complexity over time to the extent that only the original supplier will have the knowledge to support them.

• Skills gaps. Specific skills in old programming languages may be required that are not widely available. Staff working with legacy ICT over a long period will have often developed a depth of understanding of the system that is difficult to replace.

• Manual workarounds. More manual processing can be required due to the lack of functionality within the system or its inability to interface with other systems. Examples of workarounds include performing detailed calculations outside the system on spreadsheets; re-entering data on to other systems or having to manually check for processing and input errors.

• Limited adaptability. New business requirements may not be supported by the legacy ICT. These may include requirements such as the provision of digital channels, the provision of real-time information and not being able to process transactions in a new way.

• Hidden costs. The true cost of operating the system may not be known. Workarounds to the system and the cost of the additional manual processes may not be recorded. By not having all the information available at the right time, legacy ICT may not be able to provide real-time performance information which could lead to poor decision-making.

• Business change. Due to the complexity or the limited availability of the skills required, change may be difficult, lengthy to implement and costly. This makes it difficult for the business to be responsive and changes may have to be prioritised.

–  “A potential ninth risk is that legacy ICT may be less energy efficient than modern systems.”

VME

-“ The legacy ICT we reviewed in DWP and HMRC both have origins that predate the internet and use technology based on Fujitsu’s Virtual Machine Environment (VME) operating system. Some of the applications using VME process the data in batches. Jobs are set serially such as checking the credibility of the amounts declared on VAT returns. Such a mode of operation would be incompatible with a fully digital service and so these applications may require replacement or modification. A fully digital service would then enable online end-to-end processes with systems that respond in real-time.

– “The current supplier of VME, Fujitsu, has announced that it will support the current version of VME until 2020. After this, organisations have the choice of moving to alternatives or extending VME applications by using Fujitsu’s planned managed service.”

Can legacy ICT be replaced?

–  “The scale and importance of both services, combined with the materiality of the public money they administer, have deterred both departments from replacing these systems. Neither department [HMRC or DWP] had considered replacing their legacy ICT with a completely new end-to-end service. Instead they built new functionality around existing processes or systems, replacing an existing paper-based system

“In both organisations we found that the ICT and business functions could have worked more closely together to develop a longer-term strategy for a complete end-to-end service. In addition, we found a lack of data that would enable management to assess the full cost of service and performance.”

Supplier lock-in?

– “HMRC has found it challenging achieving a ‘whole customer’ view, as its customer data is stored across a number of legacy ICT systems. Perpetuating the use of older systems creates challenges for sustaining the right technical skills, for improving customer service.”

–  “The scale, age and complexity of DWP and HMRC legacy ICT has meant that only a small number of large ICT suppliers are able to support them as they are far too complex for a small- or medium-sized business to maintain. This will be an important consideration when preparing for contract end points, even more than the age of the technology. The government has recognised the issue of vendor lock-in by announcing plans for the creation of common ICT infrastructure. Through greater separation of the business application from the physical hardware, the aim is to reduce reliance on individual vendors.”

Lack of data?

– The average number of major faults in the system is the number logged as severity 1 or 2 meaning that 10 per cent of users are unable to access the service or there is a failure of overnight processing or an inability to produce printed output for the public. DWP monitors the performance of its system on a four- or five-week period rather than calendar months. It was unable to provide us with detailed performance reports for the period under review but obtained the average quoted above from the supplier.

–  “Determining whether the management of legacy ICT within DWP and HMRC incurs hidden costs has proved challenging. DWP’s financial data was comprehensive but it lacked effective measures to assess overall service performance, quality of process activity and the reliability of its legacy ICT. This will make it difficult for DWP to robustly plan for the longer term.”

– “HMRC was still providing us with data in the very late stages of finalising this report and several months after it had originally been requested. For financial data, the late provision of data has prevented us from verifying that costs are on a consistent basis with other departments and forming clear conclusions. For performance information, we saw indications that HMRC has a good set of data that it uses in its day-to-day management. However, we were unable to fully confirm this finding or obtain sufficient data to allow us to conclude on the performance of the VAT service. The challenges we faced in obtaining data from HMRC suggest that it may face challenges in planning for the longer term robustly.”

NAO report: Managing the risks of ICT legacy to public service delivery

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Posted in BT, Campaign4Change, Capgemini, change management, DWP, Fujitsu, HMRC, Legacy ICT, managing change, managing outsourced services, npfit

Has 2 decades of outsourcing cut costs at HMRC?

Posted on 12/08/2013 | 2 comments

By Tony Collins

If HMRC’s experience is anything to go by, outsourcing can, in the long-term, at least triple an organisation’s IT costs.

When Inland Revenue contracted out its 2,000-strong IT department to EDS, now HP, in 1994 it was the first major outsourcing deal in central government.

Costing a projected £1.03bn over 10 years the outsourcing was a success, according to the National Audit Office in a report in March 2000. The deal  enabled Inland Revenue to bring about changes in tax policy to a tight timetable, said the NAO’s Inland Revenue/EDS Strategic Partnership – Award of New Work.

But costs soared for vague reasons. Something called “post-contract verification” added £203m to the £1.03bn projected cost over 10 years. A further increase of £533m was because of “workload increases including new work”. Another increase of £248m was put down to inflation.

By now the deal with HP had risen from £1.03bn to about £2bn.

When the contract expired in 2004, HM Revenue and Customs and HP successfully transferred the IT staff to Capgemini. The new 10-year contract from 2004 to 2014 (which was later extended 2017) had a winning bid price of £2.83bn over 10 years.

So by 2004 the costs of outsourcing had risen from £1.03bn to £2.83bn.

The new contract in 2004 was called ASPIRE – Acquiring Strategic Partners for Inland Revenue. HMRC then added £900m to the ASPIRE contract for Fujitsu’s running of Customs & Excise systems. By now there were about 3,800 staff working on the contract.

The NAO said in its report in July 2006  – ASPIRE, the re-competition of outsourced IT services – that Gateway reviews had identified the need for a range of improvements in the management of the contract and projects.

Now costing £7.7bn over 10 years

The latest outsourcing costs have been obtained by Computing. It found that annual fees paid to Capgemini under ASPIRE were:

  • 2008/09:  £777.1m
  • 2009/10:  £728.9m
  • 2010/11:  £757.8m
  • 2011/12:  £735.5m
  • 2012/13:  £773.5m

So IT outsourcing costs have soared again. The original 10-year costs of outsourcing in 1994 were put at £1.03bn. Then the figure became about £2bn, then £2.83bn, then £3.7bn when Fujitsu’s contract was added to ASPIRE. Now annual IT outsourcing costs are running at about £770m a year – £7.7bn over 10 years.

So the original IT running costs of Inland Revenue and Customs & Excise have, under outsourcing contracts, more than tripled in about two decades.

Comment:

What happened to the prevailing notion that IT costs fall over the long-term, and that outsourcing brings down costs even further?

Shouldn’t HMRC’s IT costs be falling anyway because of reduced reliance on costly Fujitsu VME mainframes, reductions in data centres, modernisation of PAYE, and the clearance of time-consuming unreconciled items on more than 10 million tax files?

HMRC knows how much profit Capgemini makes under “open book” accounting. It’s a margin of about 10-15% says the NAO. Lower margins are for value-added service lines and higher margins for riskier projects. If the overall target profit margin of 12.3% is exceeded, HMRC can obtain an equal share of the extra profits.

There were 10 failures costing £3.25m in the first 15 months. Capgemini refunded £2.67m in service credits in the first year of the contract.

It’s also worth mentioning that Capgemini doesn’t get all the ASPIRE fees. It is the lead supplier in which there are around 300 subcontractors – including Fujitsu and BT.  Capgemini pays 65% of its fees to its subcontractors.

The outsourcing has helped to enable HMRC to bring in self-assessment online and other changes in tax policy. But HMRC’s quality of service generally (and not exclusively IT) is mixed, to put it politely.

The adjudicator for HMRC who intervenes in particularly difficult complaints identifies as particular problems the giving out of inaccurate information and recording information incorrectly.

She says in her 2013 annual report:

“I am disappointed at the number of complaints HMRC customers feel they need to refer to me in order to get resolution. My role should be to consider the difficult exceptions, not handle routine matters that are well within the capability of departmental staff to resolve successfully. At a time of austerity it is also important to note that the cost of dealing with customer dissatisfaction increases exponentially with every additional level of handling.”

RTI

There are complaints among payroll companies and specialists that real-time information  is not working as well as HMRC has claimed. There seems to be growing irritation with, for example, HMRC’s saying that companies owe much more than they do actually owe. And HMRC has been sending out thousands of tax codes that are wrong or change frequently – or both.

HMRC says it has made improvements but the helpline is appalling. It’s not unusual for callers to wait 30 minutes or more for an answer – or to hang on through multifarious automated messages only to be cut off.

That said there are signs HMRC is, in general, improving slowly. Chief executive of HMRC since 2012 Lin Homer is more down-to-earth and slightly more willing to own up to HMRC’s mistakes than her predecessors, and the fact that RTI and the modernisation of PAYE has got as far as it has is creditable.

But is HMRC a shining example of outsourcing at its best, of outsourcing that cuts costs in the long term? No. A decade of HP and a decade of Capgemini has shown that with outsourcing HMRC can cope, just about, with major changes in tax policy to demanding timetables. But the costs of the outsourcing contracts in the two decades since 1994 have more than tripled.

What about G-Cloud? We look forward to a change in direction from the incoming head of IT Mark Dearnley (if he has much say).

**

A Deloitte survey “The trend of bringing IT back in-house” dated February 2013, said that 48% of respondents in its Global Outsourcing and Insourcing survey 2012 reported that they had terminated an outsourcing agreement early, or for cause, or convenience. Those that took IT services back in-house mentioned cost reduction as a factor. Deloitte said factors included:

– the need for additional internal quality control due to poor quality from the outsourcer

– an increase in the price of service delivery through scope creep and excessive change orders.

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Posted in Accenture, BT, Campaign4Change, change management, CIO, Fujitsu, G-Cloud, Gateway reviews, Government IT, HMRC, IT projects, IT-related failures, managing outsourced services, operational issues, outsourcing, oversight, procurement, project management, public sector, public services, public-private partnerships, supplier relationships

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High Court sheriffs confront Fujitsu Services

Posted on 29/07/2013 | 4 comments

By Tony Collins

BBC One’s “The Sheriffs Are Coming” shows what happens when people and companies take a civil action over money they say are owed, win their case, and don’t get payment.

Last week’s broadcast showed a car dealer, a builder, a jeweller’s shop – and Fujitsu Services – facing high court enforcement officers, who are also known as sheriffs, over unpaid debts of thousands of pounds.

After sheriffs called on a car dealer and asked him to pay a debt of about £6,000 the police were called along with tow-away trucks to carry off cars to be sold at auction to pay the debt.

After three  hours of discussions the dealer paid up.  In the same programme the sheriffs seized items worth £28,000 from a jewellery shop in Kingston. A couple had won a case over a missold engagement ring.

The appointment of the sheriffs is the final stage of a civil legal action where the debt remains unpaid.  Armed with enforcement paperwork from the High Court, the sheriffs have a legal right to seize goods there and then. Whether it’s business premises or private property they have the power to force entry.

Fujitsu staff “shaken”

Which is where Fujistu Services comes in. A unnamed company had been to court and been awarded  £149, 481.93 against Fujitsu. As Fujitsu hadn’t paid, the company asked the High Court to collect payment – and enforcement officer Lawrence Grix went with a colleague Kevin McNally to Fujitsu’s Stevenage’s offices to collect the money.

That the sheriffs were dealing with one of world’s biggest IT services companies in Europe, Middle East and Africa, which employs 14,500 people in more than 20 countries, did not faze them.

The sheriffs in a black Ford Transit van pull up at the manned security barrier at Fujitsu Stevenage where the supplier has had a presence for 43 years.

The unexpected visit  leaves Fujitsu staff “shaken” according to the broadcast.

At first Fujitsu’s security staff refuse admission to the sheriffs’ van.

Sheriff: “You can’t actually stop me.”

Fujitsu: “I can stop you.”

Sheriff: “You can’t.”

Police?

Some time later, and still without access to Fujitsu Services Stevenage, Grix warns Fujitsu that he can call the police. He tells a Fujitsu security guard:

“To be honest I don’t think we have been treated particularly professionally or courteously so far. We have done the utmost to be professional and respectful to your situation here.”

“Ok,” says a guard at the security barrier. It appears that the guard has just come on duty and is unaware that the sheriffs have been trying to gain access for some time.

The sheriff continues: “We not looking to come storming round the place and see your latest technology. That’s not what we are here for. We are here to execute a high court writ and we are asking to be treated in a courteous manner.

“We have the right to enter. If you are not going to allow me to enter I am just going to park my vehicle here (at the entrance barrier) and go in on foot and if anybody tries to stop me I will call the police because it is an arrestable offence to obstruct an enforcement officer in the execution of a writ.

“We don’t want to go down that road. We just want to be treated with some courtesy.”

Eventually the sheriffs gain access – but still don’t get payment and so they seize on paper sufficient Fujitsu goods to cover the debt.  The sheriff listed property he could remove later if the debt remained unpaid. The programme’s narrator David Reed told viewers that the sheriffs now owned just about everything at Fujitsu’s head office.

In the end Fujitsu paid the debt in full, without having any of its goods actually seized and it gave a statement to the BBC saying the delay in payment was a genuine oversight on its part and that it took immediate steps which rectified the situation.

Comment

At one level it’s a trivial incident, perhaps an amusing one.

Yet it left some Fujitsu security staff and senior managers having to deal with high court enforcement officers who felt the company had been discourteous, who had to warn that they could force entry, who said at one point that they could call police if refused entry, and who ended up listing a large quantity of Fujitsu’s goods for seizure if the debt remained unpaid.  Much of the confrontation was filmed by the BBC.

It’s surprising that a company the size of Fujitsu – a company with the legal wherewithal to sue the Department of Health for £700m and carry on negotiations and discussions over the NPfIT-related money for five years – had such an oversight.

How was it that Fujitsu’s internal controls apparently did not prevent a court-endorsed business debt of £149,000 going unpaid until high court sheriffs were called in? Not a good advert for Fujitsu Services.

Sheriffs are coming – BBC’s Fujitsu debt episode in full

 BBC:  “Sometimes writs are issued against some of the largest companies in the world. Today Lawrence and Kev are enforcing a high court writ against one of the world’s largest IT services companies – Fujitsu.

Sheriff: : “Absolutely no doubt whatsoever they [Fujitsu] have the money to pay this. At the end of the day it doesn’t matter what excuses they come up with and how big their company is. They have got a debt and we are here to collect it.”

BBC: “Fujitsu has over £30bn in revenues. Time for Lawrence to get the ball rolling.”

A black Ford Transit van with number plate smudged out pulls up to the manned entrance security barrier at Fujitsu Stevenage.

Sheriff, through an open van window: “We are here to execute a writ against Fuijitsu Services.”

Security guard says “no” – that they cannot come in until they have had the ok  from above.

Sheriff: “You can’t stop us coming in. I know what you are saying and I fully respect your position and I am quite happy for you to try and contact somebody who can deal with this but when it comes to a point of law you cannot actually stop us coming in.”

BBC: If necessary sheriffs can force entry to commercial premises but for the time being they decide to park around the corner and wait.

A sign at Fujitsu’s entrance says:

“Visitors – please report to security.

“Restrictions: Plerase declare all electrical equipment

“Please park as instructed

“All vehicles and hand baggage are liable to be searched on departure.”

BBC: “After 15 minutes at the side of the road Lawrence and Kev are finally approached by someone in authority.” A woman in dark clothing (and in the background a man in white shirt and dark trousers) talks to the sheriffs through an open passenger window.

Fujitsu: “Got any details of what this is about? Because I cannot get anybody for you unless we have more details.”

Sheriff: “They’ve have got a judgment for £149, 481.93.”

Fujitsu: “I can’t let you into the building. I am not allowed to let you into the building.”

Sheriff: “Right, unfortunately you can’t actually stop me.”

Fujitsu: “I can stop you.”

Sheriff: “You can’t.”

Fujitsu: “At the moment I can stop you coming into the building.until I get back.”

Sheriff: “You can’t. You can’t, whether you hear back – I am not trying to be awkward.”

Fujitsu: “We are not either.”

Sheriff: “We have been very cooperative at the moment. The security staff have asked us to wait here. I can understand the sensitivity of your business –”

Fujitsu: “My policy is that I don’t let you into this building. I am in control of this building and I am not allowed to let you in.”

Sheriff: “Unfortunately, as a high court officer enforcing a writ, I can force entry to a commercial premises if necessary. We do not need permission to enter your building.”

Fujitsu: “What do you need to enter the building for? Because we don’t know –”

Sheriff: “To seize goods. To seize goods. We are here to seize goods.”

Fujitsu: “Let me go and ring you back.

Fujitsu man in white shirt : “We’ll come back to you in as second …”

BBC:  “The shaken Fujitsu employees head off to talk to their superiors leaving Lawrence and Kev to continue waiting outside. After half-an-hour of sitting beside thew road, with no sign of any progress, Lawrence has had enough.”

He pulls up from a side road and stops at Fujitsu’s security barrier. A security guard comes out.

Fujitsu: “You want to come in do you?”

Sheriff: “To be honest I don’t think we have been treated particularly professionally or courteously so far. We have done the utmost to be professional and respectful to your situation here.”

Fujitsu: “Ok.”

Sheriff: “We are not looking to come storming round the place and see your latest technology. That’s not what we are here for. We are here to execute a high court writ and we are asking to be treated in a courteous manner. We have the right to enter. If you are not going to allow me to enter I am just going to park my vehicle here (at the entrance barrier) and go in on foot and if anybody tries to stop me I will call the police because it is an arrestable offence to obstruct an enforcement officer in the execution of a writ. We don’t want to go down that road. We just want to be treated with some courtesy.”

Fujitsu: “Some of us have just got here. We didn’t know you were coming.”

Sheriff: “I can appreciate that.”

Fujitsu: “Can you give me a couple of minutes?”

BBC: “Finally things seem to be happening. Lawrence is invited inside to discuss matters with someone in authority. It’s progress, but does it mean payment is on its way? … Lawrence is inside for nearly an hour before he emerges and in the chess game that is Lawrence Grix versus Fujitsu Lawrence has captured some major pieces.”

Sheriff: “He was quite insistent they were not going to pay today. So I have basically seized the entire contents of the building or as much as need be to cover the debt. If it doesn’t  get paid or resolved in a satisfactory manner we will be back and if necessary we will remove goods.”

BBC: “Lawrence has carried out a walking possession which means he has listed property he can remove at a later date if the debt isn’t paid. Thanks to Lawrence the high court now owns just about everything in Fujitsu’s head office.”

Soon after the visit Fujitsu pays the £149, 481.93.

Fujitsu gives a statement to the BBC saying that the delay in payment was a genuine oversight on its part and it took immediate steps which rectified the situation.

The sheriffs are coming.

Sheriffs set for TV stardom

The Sheriffs are coming – again.

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Posted in Fujitsu, law, legal disputes

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

Posted on 07/06/2013 | 2 comments

By Tony Collins

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

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

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

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

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

A 22 year programme?

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

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

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

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

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

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

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

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

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

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

NPfIT is not dead

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

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

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

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

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

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

Comment

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

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

“We will quickly develop the infrastructure …”

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

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

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

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

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

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

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

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

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

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

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