Category Archives: Government IT

Universal Credit project costs reach £36,222 per claimant (excluding the claim)

Posted on 17/11/2014 | 4 comments

By Tony Collins

Iain Duncan Smith has told MPs that the costs of the Universal Credit project are £652m to March 2014 – which is about £36,222 per successful claimant.

The figure includes the money paid to the DWP’s Universal Credit IT suppliers which was £303m by the end of 2012/13.  An updated figure will be published in a UC report by the National Audit Office due to be published near the end of this month.

The costs of Universal Credit per successful claimant are disproportionately high for an IT-enabled programme that has been running for more than three years because numbers on the system are small.

If the UC programme were complete, at a forecast cost of £1.8bn, and the predicted 7.7 million people were receiving the benefit, the scheme’s delivery costs per claimant would be only about £234.

As at October 2014 17,850 people were on the Universal Credit caseload.  IDS told the Work and Pensions Committee on 5 November, in a hearing that lasted more than 2 hours,  that the costs of UC were £652m by March 2014.

That works out at about £36, 222 per successful UC claimant.

Total delivery costs for the programme are expected to be £1.8bn, down from an original prediction of £2.4bn, IDS told the committee.

IDS and the DWP hope many more successful claimants will be added to the systems next year when Universal Credit is rolled out to all jobcentres and local authorities across the country. But the scheme is subject to growing uncertainties, as the DWP’s permanent secretary Robert Devereux and IDS made clear to the committee.

DWP drops firm end date for UC

When an MP put it to IDS that he no longer has a concrete end date for when  7.7 million people will be on UC, he paused. Then he said the plan was for UC to be complete “by the end of 2018”. He gave no commitment and did not deny that there is no concrete end date.

“Er yes, yeah,” replied IDS. “We do envisage UC being complete by the end of 2018. That’s our plan.”  He said that UC would handle singles, couples, then families. In the meantime the DWP is developing an “end-state digital process” that will deliver benefits for claimants and the departments.

“The roll-out gives us phenomenal understanding of what we need to do to make sure the digital service ultimately comes in and completes that process properly. There is a de-risking of the process.”

UC may never be fully automated

Another uncertainty for UC is its ability to handle an estimated 1.6 million changes per month to people’s claims.

Changes in circumstances are handled manually at present.

Robert Devereux, permanent secretary at the DWP, told the committee that the UC systems are, for some claimants,  part manual, part automated. Devereux said:

“The peculiar nooks and crannies with individual circumstances  – we have deliberately not tried to code every permutation as we go along. We are trying to make sure it can be safely delivered within costs in a sensible fashion.

“It would not be sensible to code every possible permutation back at the start while you are still learning.  There are different elements of the system, some of which will be [digital] all the way through, some which are not.”

The committee chair Dame Anne Begg questioned whether UC will ever work effectively if manual processing is applied to some of the 7.7 million claimants. She received no clear answer.

Comment

It’s a good thing that the DWP is going slowly and cautiously but a spend of £652m to March 2014 per UC recipient does not seem cautious at all. If the project is being run on agile principles of fail early and fail cheaply, can this sum be justified?

On a more positive note IDS has stopped quoting a firm end date for UC. At first the DWP was saying UC would be completed by the end of 2017, then IDS said the programme would be “essentially complete” by the end of 2017.  Now he is saying it may be complete by the end of 2018 but is giving no commitment. His caution is probably because the NAO’s update on UC later this month will suggest that the programme is unlikely to be delivered in any certain time period. Nobody can say with authority or credibility when UC’s implementation will be complete.

It’s also a good thing that the DWP is conceding that UC can never be fully automated. It doesn’t make sense spending disproportionate sums on automating calculations that can be done more cheaply by hand.  But if the exceptions prove the rule UC could prove much more expensive to implement than planned.

UC is a good idea in theory but the next government needs to do a full review of its financial and practical feasibility, which the present government is unlikely to do.

Universal Credit could be complete by 2018 – Government Computing

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Posted in Accenture, BT, Campaign4Change, change management, DWP, Government IT, HMRC, HP, IBM, IT projects, Major Projects Authority, National Audit Office, Real-Time Information, Universal Credit

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Universal Credit’s “multiple frustrations and complications”

Posted on 08/10/2014 | 8 comments

By Tony Collins

universal creditJournalists who are trying to find out the current state of the Universal Credit programme will get little help from the Department for Work and Pensions unless its press officers sense that the eventual outcome will be positive.

Sometimes journalists call me as part of their research. They want to know whether UC will end up as another government IT disaster. I had such a call yesterday.

The conversation focused on IT. But it’s a maxim in the industry that major change programmes in the public sector usually fail or are delayed for managerial rather than technical reasons.

The introduction of a new passport system failed when a better, more secure system slowed down the issuing of new passport applications.

Instead of halting the roll-out to see how to speed up the issuing of passports – by changing procedures or spending more on staff and equipment – the Home Office continued the rollout and chaos ensured. That wasn’t the fault of the IT.

It may be a similar story with Universal Credit. Even if the IT as far as it goes works well, claims handling is a laborious process,  The main systems do not handle calculations of gross income, net income or back-office integration, all of which are managed manually.

Chaos is unlikely because the rollout is going so slowly.  But the amount of manual intervention required means the slow rollout is enforced rather than merely voluntary.

[This slow rollout is despite an IT budget for UC including migration costs from 2010 to 2014/15 of £812m as at December 2012. Within this budget, £303m had been spent to March 2013, mostly with the DWP’s main IT suppliers Accenture, IBM, HP and BT.]

The programme is also running into non-IT difficulties such as delays in issuing first-time payments to claimants because of a variety of reasons around the complexity of new procedures, and tenants unable to pay rent because the money hasn’t gone directly to landlords.

If UC goes nationwide, as Iain Duncan Smith says it will next year, it will still be able to handle only limited numbers of claimants, in the tens of thousands, not hundreds of thousands and certainly not millions.

This article is a reminder that Universal Credit faces problems that go beyond the IT. A North West housing association said a survey of its tenants had exposed flaws in the universal credit system, with some claimants turning to pay day lenders to get by.

After taking part in a pilot in 2013 of the roll out of UC, First Choice Homes Oldham found that their tenants had suffered “multiple frustrations and complications with the system”. Data collected this summer from 40% of the housing association’s tenants on UC found that:

• 55% found the period between making their UC claim and receiving their first payment very difficult. 44% managed financially by borrowing and 18% had taken out a pay day loan.

• 74% had not been offered personal budgeting support by the Department for Work and Pensions. However, 57% of the tenants that were offered this service took up the offer.

• 37% did not receive their payment on the same day each month, making budgeting even more difficult.

• 59% of tenants had not found work since claiming UC.

When asked by FCHO to name the first three bills that would be paid once they were in receipt of UC, 19% of tenants did not name rent as a priority bill.

So will UC succeed?

It’s laudable that the coalition is trying to simplify the benefits system. No pain no gain. But it’s not doing it openly. IDS pretends all is well when clearly it isn’t.

This means that UC becomes an impossible project to manage well. No programme leader can take big problems to IDS because big problems are not supposed to exist. UC desperately needs a new political leader who has no emotional equity in its success.

It’s right (and largely involuntary) that the DWP is going slowly in rolling out UC. This way chaos is avoided.

But to handle millions of claims, the processing of UC transactions and payments needs to be a fully automated process. The DWP is working on that – what Iain Duncan Smith calls an “enhanced digital service”.  Nobody seems to know much about it. IDS says it is going to be tested later this year.

Uncertainty

Now into its fourth year of implementation, UC is still mired in uncertainty, despite IDS’s self-confident remarks at the Tory conference.

The facts are likely to emerge when the National Audit Office publishes its updated report which is expected before the end of this year. The DWP may already have drafted its press release saying the NAO report is outdated, which is part of the problem with UC and other big government IT-based programmes: they are more governed by politics than pragmatism.

 

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Posted in Accenture, BT, Campaign4Change, change management, DWP, excessive secrecy, Fujitsu, Government IT, HP, IBM, Major Projects Authority, Politics, project management, public sector, public services, Real-Time Information, Universal Credit

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Labour asks good questions on Universal Credit programme

Posted on 22/09/2014 | 2 comments

By Tony Collins

Labour has a “Universal Credit Rescue Committee” whose membership includes a former Rolls Royce CIO Jonathan Mitchell.

Mitchell is quoted in Government Computing as saying that it would be irresponsible for a Labour government to continue spending large amounts of money on Universal Credit without getting answers to important questions such as:

  • Is there a comprehensive business case – one that clearly outlines the expected benefits, demonstrating that the Universal Credit project is viable?
  • Is the business case agreed by all stakeholders?
  • Is there clarity about what needs to be achieved?
  • Is there a stable specification explaining exactly how the new processes will work and how they will be automated?
  • Is the project being managed and staffed by people and organisations with appropriate levels of experience, track-record and expertise, all of whom are capable of delivering the benefits of the project and ensuring safe roll-out in a timely manner?
  • Is the project fully under control?
  • Can it absorb the changes demanded by a new incoming Government? If not, can the project be brought under control at an acceptable cost with respect to the business case, through a re-planning exercise?
  • Once such a re-planning exercise is completed, are we convinced that it was successful and that the project will now proceed to a satisfactory completion in a controlled fashion?
  • Are there appropriate “control gates” in place to ensure that all aspects of each phase of the plan are fully completed (and that projected costs to completion preserve the business case) before allowing the project to move safely onto each next stage?

Mitchell said, “Universal Credit is one of those applications that might look straightforward when you first look at it, but this is most definitely not the case. I believe there are significant process and technical challenges to overcome.”

Comment

Good questions, most of which the Department for Work and Pensions is unlikely to be able to answer satisfactorily today.

The Treasury still hasn’t approved the full business case, which is odd for a project that started in earnest more than three years ago.

It’s hard to see, given the rate of progress, the amount of work being completed manually, the lack of integration with legacy systems, the complexity of changes of behaviour required, the reliance on other parties such as local authorities, the inflexibility of some supplier contracts, regularly changing project leadership, the variable performance of HMRC’s RTI systems, and the DWP’s poor history of success on big IT-related projects, how the UC programme will be completed before 2020 whoever wins the next election.

Labour committee outlines Universal Credit “rescue” strategy – Government Computing

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Posted in Accenture, BT, Campaign4Change, change management, DWP, excessive secrecy, Government IT, HP, IBM, IT-related failures, Major Projects Authority, managing change, managing outsourced services, public sector, Real-Time Information, Universal Credit

DWP appoints 180k DG Technology

Posted on 04/09/2014 | 1 comment

By Tony Collins

Mayank Prakash is the new Director General for Technology at the Department for Work and Pensions. He’ll be responsible for the DWP’s IT services and ensuring that its technology supports current and new digital services. He is the permanent replacement for DWP Chief Information Officer Andy Nelson who was in the role less than a year.

Prakash was previously Managing Director of Wealth and Asset Management Technology delivery centres at Morgan Stanley. Before that he led IT, security and digital business transformation at Sage UK.

He said: “This is a once in a lifetime opportunity to simplify welfare by transforming one of the UK’s largest IT estates to deliver easy to use digital services. It is a professional privilege to improve how the government delivers services to 22 million citizens.”

He’ll start in November.

His early career was in leading technology and eBusiness teams for Lucent and then Avaya where he was the International IT Director. He has an MBA from Manchester Business School.

He will be partly responsible for Universal Credit.

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

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Posted in Campaign4Change, CIO, DWP, Government IT, Universal Credit

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Whitehall has taken on 100 technology experts over past year

Posted on 29/08/2014 | Leave a comment

By Tony Collins

The Cabinet Office says that government departments have taken on more than  100 IT experts over the past year.

The Government Digital Service (GDS) led the recruitment as part of a plan to raise technology-related skills in the civil service.

One appointment is of former Credit Suisse CIO Magnus Falk as the Government’s new Deputy Chief Technology Officer, reporting to Government CTO Liam Maxwell. Other recent technology recruits include:

  • MOJ Chief Technology Officer Ian Sayer, who was Global Chief Information Officer at Electrolux; and
  • Government Chief Technical Architect Kevin Humphries, former Chief Technical Architect at Qatarlyst.

Chief Digital Officer appointments include:

  • HMRC Chief Digital and Information Officer Mark Dearnley, formerly CIO of Vodafone;
  • MOJ CDO Paul Shelter, who previously co-founded two start-ups and was CTO for banking at Oracle;
  • ONS’s Laura Dewis, Deputy Director Digital Publishing, who was Head of Online Commissioning at The Open University;
  • Jacqueline Steed, former Managing Director and CIO for BT Wholesale, who starts as CDO at the Student Loan Company next week; and
  • DWP CDO Kevin Cunnington, who was previously Global Head of Online at Vodafone.

Comment

It’s encouraging that the Cabinet Office, through the GDS, is overseeing the recruitment of IT leaders in government departments. It means the recruits will see their roles as cross-governmental. In the past the civil service culture has required that CIOs show an almost filial respect for their departmental seniors.

It’s a good idea that GDS tries to change age-old behaviours from within by recruiting technology experts with a wide range of experience from the private sector. But how long will they last?

Their challenge will be converting the words “transformation”, “innovation” and “fundamental change” from board papers, press releases, strategy documents, and conference speeches, into actions.

New deputy CTO role in central government – Government Computing

 

 

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Posted in BT, Campaign4Change, CIO, DWP, Government IT, HMRC, Home Office, Ministry of Justice, Oracle

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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

After two IT disasters, immigration officials launch £208m agile project

Posted on 22/07/2014 | 7 comments

By Tony Collins

In 2001 immigration officials cancelled a £77m system with Siemens for a Casework Application system.

The objective had been to create a “paperless office”, help reduce a backlog of 66,000 asylum cases and provide a “single view” of individuals. But the scope was overambitious and the supplier underestimated the complexities. It proved difficult to automate paper-based processes.

In 2010 immigration officials came up with a similar scheme that also failed to meet expectations.  They developed a business case for a flagship IT programme called Immigration Case Work (ICW).

It was designed to draw together all casework interactions between the business and a person, enabling caseworkers to gain a single accurate view of the person applying. It was expected to replace both the legacy Casework Information Database (CID) and 20 different IT and some paper-based systems by March 2014.

A National Audit Office published today says the ICW programme was closed in
August 2013, having delivered “significantly less than planned for £347m.”

So in the end, while the taxpayer has paid hundreds of millions for caseworking systems for immigration staff, many of the workers are still, says the NAO, relying on paper.  Today’s NAO report says:

“Both directorates [UK Visas and Immigration and Immigration Enforcement, which were formerly the UK Border Agency] rely heavily on paper-based working.

“The Permanent Migration team is 100 per cent paper-based and acknowledge this as a barrier to efficiency.”

Immigration officials use some technology to record personal details of people who pass through the immigration system. But:

• A lack of controls mean staff can leave data fields blank or enter incorrect
information. The NAO found many errors in the database.
• There is a history of systems freezing and being unusable.
• A lack of interfaces with other systems results in manual data transfer or
cross‑referencing.

Agile success?

Now, says the NAO, the Home Office has begun a new agile-based programme, Immigration Platform Technologies  (IPT). It is due to cost £208.7 million by 2016-17.

A tool for online applications for some types of visa has already been rolled-out and is being updated using applicant feedback,” says the NAO.

But support contracts for the existing technology [the legacy Casework Information Database] expire in January 2016, before the scheduled completion of IPT in 2017.

The Home Office is “reviewing options for support contracts to cover this gap”.

Margaret Hodge, chairman of the Public Accounts Committee, says of the agile project: “Given its poor track record, I have little confidence that the further £209 million it is spending on another IT system will be money well spent.”

Comment

Is it possible for a genuinely agile project to cost £208m? The point about agile is that it is supposed to be incremental, quick and cheap.  It looks as if the Home Office is running a hybrid conventional/agile programme, as the DWP did with Universal Credit. Either a project is agile or its not. Hybrids, it seems, are not usually successful.

There again is the Home Office congenitally capable of running an agile project?  The Agile Manifesto is based on twelve principles, most of which could be said to be alien to the Home Office’s culture:

1.Customer satisfaction by rapid delivery of useful software
2.Welcome changing requirements, even late in development
3.Working software is delivered frequently (weeks rather than months)
4.Close, daily cooperation between business people and developers
5.Projects are built around motivated individuals, who should be trusted
6.Face-to-face conversation is the best form of communication (co-location)
7.Working software is the principal measure of progress
8.Sustainable development, able to maintain a constant pace
9.Continuous attention to technical excellence and good design
10.Simplicity—the art of maximizing the amount of work not done—is essential
11.Self-organizing teams
12.Regular adaptation to changing circumstances

So what’s needed?

Big government IT-based change programmes tend to be introspective and secretive. Those working on them don’t always feel able to challenge, to criticise, to propose doing things differently.

What would be innovative would be openness and independent challenge, and tough and well-informed Parliamentary scrutiny. It rarely happens. Ask the Home Office for any of its progress reports on its IT-base change programmes and it’ll tell you exactly what the DWP says when asked a similar question: “That’s not something we generally release.”

The NAO report points to a culture problem. “… Having a transparent culture was rated as red on the UK Visas and Immigration risk trends in April 2014.”

Will the new agile project be any more successful than the other 2 major immigration IT projects? The Home Office will doubtless claim success as it usually does. Even when the patient dies it tells Parliament the operation was a success.  For you can say publicly whatever you like when you keep the facts confidential – as IDS at the DWP knows.

Reforming the UK border and immigration system – National Audit Office report

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Posted in Agile, Campaign4Change, change management, excessive secrecy, Government IT, Home Office, IT projects, IT-related failures, private sector lessons for the public sector