Category Archives: Hewlett Packard Enterprise

Does Universal Credit make a mockery of Whitehall business cases?

By Tony Collins

Does Universal Credit make a mockery of this Treasury guidance on business cases?

It’s supposed to be mandatory for Whitehall departments to produce business cases. They show that big projects are “unequivocally” affordable and will work as planned.

But Computer Weekly said yesterday that the Department for Work and Pensions has not yet submitted a full business case for Universal Credit although the programme has been running for six years.

The result is that the Universal Credit IT programme may be the first big government computer project to have reached the original completion date before a full business case has been finalised.

Its absence suggests that the Department for Work and Pensions has not yet been able to produce a convincing case to the Treasury that the IT programme will either work or be affordable when it is due to roll out to millions of claimants.

The absence also raises a question of why the Department for Work and Pensions was able to award contracts and proceed with implementation without having to be accountable to Parliament for milestones, objectives, projected costs and benefits – all things that would have been recorded in the full business case.

If the DWP can proceed for years with project implementation without a full business case, does this mean that other Whitehall department need have no final structured plan to justify spending of billions on projects?

Will Universal Credit work?

By early March 2017, fewer than 500,000 people were on Universal Credit. On completion, the system will be expected to cope with seven million claimants.

Although the rollout of the so-called “digital” system – which can handle all types of claim online – is going well (subject to long delays in payments in some areas and extreme hardship for some), there are uncertainties about whether it will cope with millions of claimants.

Universal Credit campaigner John Slater has been unable to obtain any confirmation from the DWP on whether it is planning to complete the rollout by 2022 – five years later than originally scheduled.

Business cases present arguments that justify the spending of public money. They also provide a “clear audit trail for purposes of public accountability,” says Cabinet Office guidance on business cases.

But hundreds of millions has already been spent on Universal Credit IT, according to the National Audit Office.

Business cases are mandatory … sort of

The Treasury says that production of business cases is a

“mandatory part of planning a public sector spending proposal …”

Yesterday, however, Computer Weekly reported that,

“Amazingly, given the programme has been going since 2011, the full business case for Universal Credit has still not been submitted or signed off by the Treasury – that’s due to take place in September this year.”

The Treasury says that preparation of the Full Business Case is “completed following procurement of the scheme – but prior to contract signature – in most public sector organisations.”

But by March 2013, the Department for Work and Pensions had already spent about £303m on Universal Credit IT, mostly with Accenture (£125m), IBM (£75m), HP (49m) and BT (£16m), according to the National Audit Office.

Why a business case is important

The Treasury sums up the importance of business cases in its guidance to departments,

“… it is vital that capital spending decisions are taken on the basis of highly competent professionally developed spending proposals.

The business case provides a

“structured process for appraising, developing and planning to deliver best public value.”

The full business case, in particular, sets out the

  • contractual arrangements
  • funding and affordability
  • detailed management arrangements
  • plans for successful delivery and post evaluation.

In the absence of a full business case the DWP was able to start the Universal Credit IT programme with little structured control on costs. The National Audit Office found in 2013 that there was

  • Poorly managed and documented financial governance
  • Limited evidence that supplier invoices were properly checked before payments were made.
  • Inadequate challenge of purchase decisions
  • Insufficient information on value for money of contracts before ministers approved them
  • Insufficient challenge of suppliers’ cost changes
  • Over-reliance on performance information from suppliers that the Department for Work and Pensions didn’t validate.
  • No enforcement by the DWP of key parts of the supplier contracts

Comment

Officials at the Department for Work and Pensions have gone to the bank for money for a new business venture – the building of Universal Credit IT – and said in effect,

“We’ll let you have an outline business case that may change a few times and in a few years, perhaps on completion of the programme or thereabouts, we’ll provide a full business case. But we’d like the money now please.”

In response the bank – HM Treasury – has replied in effect,

“You’re supposed to supply a full business plan before we decide on whether to give you the money but we know how important Universal Credit is.

“We’ll tell you what: we’ll let you have a few tens of millions here and there and see how you get on.

“For the time being, without a full business case, you’re restricted to an IT spend of around £300m.

“In terms of the eligibility criteria for the money, you can let us know what this should be when you’re a few years down the road.

“We accept that you’ll be in a much better position to know why you should be given the money once you’ve spent it.”

Does “mandatory” mean anything when there is no sanction against non-compliance?

And when the DWP is able to embark on a multi-billion pound programme without submitting a full business case until after the original completion date (2017), what’s the point of a business case?

The fact that the DWP is six years into implementation of Universal Credit without a full business case suggests that departments make up the rules as they go along.

What if the Treasury rejects the Universal Credit business case when it’s eventually submitted?

Will the DWP wait another few years to submit a case, when an entirely new set of officials will be in place? By then, perhaps, the Universal Credit rollout will have finished (or been aborted) and nobody at that stage could be effectively held to account if the scheme didn’t work or money had been wasted.

If Whitehall routinely waits until an IT-based programme is finished before presenting a full business case for Treasury approval, there’s nothing the Treasury can do if it wants and needs the programme.

Sir Humphrey is all-powerful.  Why should officials worry about presenting full business cases on programmes they know there’s a political imperative to deliver?

Can DWP meet its revised 2022 target for completion of Universal Credit? – Computer Weekly

Treasury guidance on business cases

 

 

Whitehall’s outsourcing of IT a “bad mistake” – and other Universal Credit lessons – by ex-DWP minister

By Tony Collins

Lord Freud, former Conservative minister at the Department for Work and Pensions – who is described as the “architect” of Universal Credit – said yesterday that outsourcing IT across government had been a “bad mistake”.

He announced in December 2016 that was retiring from government. Having been the minister for welfare reform who oversaw the Universal Credit programme, Lord Freud yesterday went before the Work and Pensions Committee to answer questions on the troubled scheme.

He said,

“The implementation was harder than I had expected. Maybe that was my own naivety. What I didn’t know, and I don’t think anyone knew, was how bad a mistake it had been for all of government to have sent out their IT.

“It happened in the 1990s and early 2000s. You went to these big firms to build your IT. I think that was a most fundamental mistake, right across government and probably across government in the western world…

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

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

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

But didn’t DWP civil servants make it clear at the outset that there wasn’t the in-house capability to build Universal Credit?

“The civil service thought it had the capacity because it could commission the big firms – the HPs and the IBMs – to do it. They did not see the problem, and government as a whole did not see the problem of doing it.

“It’s only when you get into building something big you discover what a problem that was…”

Accountability needed

But it was known at the launch of Universal Credit that government IT projects had a history of going wrong. Why hadn’t people [the DWP] learnt those lessons?

“I agree with you. People have found it very hard to work out what was the problem… you need someone doing it who is accountable. But when you commission out, you don’t have that process.

“You need a lot of continuity and that’s not something in our governance process. Ministers turn over very regularly and more importantly civil servants tend to turn over rather regularly because of the pay restrictions – they only get more pay when they are promoted – so there is a two-year promotion round for good people.

“Effectively we had a programme that had been built outside, or with a lot of companies helping us build it.”

Lord Freud explained differences between the two Universal Credit systems being rolled out.

First there is the “live” system [built at a cost of hundreds of millions of pounds that interfaces with legacy benefit systems but is not interactive beyond the initial application form].

The DWP is also rolling out in some pilot areas such as Croydon a “full system” [built at a cost of less than £10m, run on agile principles and is interactive beyond the initial application form].

Lord Freud said,

“The difference between the two is that the live system has all of the essential features of Universal Credit – you get paid an amount at a certain time – but interaction with the system after the initial application is through the telephone or through the post.

“The interactive [“full”] system has the features of Universal Credit but interaction with it is much faster because it’s on the internet. That’s the difference…

“How would I have done it in retrospect?

“The other thing I have discovered about big organisations that I hadn’t understood was it’s very difficult for them to deal with something that’s purely conceptual.

“You need something on the ground. What you should do is get something on the ground quickly – small, maybe imperfect – but the organisation can start coalescing around it, understand it, and start working it.

“Oddly, not having an all-singing, all-dancing system that is now going out, was essential for the organisation to understand what it had and how to adapt it. The IT is only a very small element. Most of the work is around your operations and organisation and how you apply it.

“The second thing we introduced in the 2013 reset was “test and learn”. It’s a phrase but what it means is that you have a system you understand and then test and test, instead of going out with a big system at once. You test all the elements because it’s impossible to envisage how something as big (as Universal Credit) unless you do it like that.

Lessons for government as a whole?

“It was a mistake putting IT out. You have to bring it back in. It’s quite hard to bring it back in because the image of government with the IT industry is not great so you have to set up an atmosphere of getting really good people in, so it’s an attractive place to work; you have to pay them appropriately.

“Our pay scales are not representative of what happens in some of these industries.

Scarce skills

“There are three areas of specialisation that government finds it very hard to buy: various bits of IT, running contracts and project management. Those are three really scarce skills in our economy. We need in government to pay for those specialisms if we are to do big projects.”

Other lessons?

“There’s an odd structure which I don’t quite believe in any more, which is the relationship between the politician – the minister – and the civil service.

“The concept is that the politicians decide what their objectives are and the civil service delivers it. I don’t believe that you can divide policy and implementation in that way. That’s a very big issue because our whole government is built up with that concept and has been for more than 100 years.”

Where does project management fit?

“In theory the civil service produces the project management but it’s an odd circumstance. It didn’t quite happen with Universal Credit. In my first five years I had no fewer than six senior responsible owners and six project managers.

“You can imagine what that was like with something as complicated as Universal Credit when the senior people hadn’t had the time to understand what it was they were dealing with; and what that implied for the minister – me – in terms of holding that together.”

Lord Freud suggested that he was acting as the permanent project manager although he had his normal ministerial duties as well – including being the government’s spokesman in the House of Lords on welfare reform matters.

“As a minister you don’t have time to do project manage a big project. I was sending teams out to make sure we were on top of particular things, which were then reincorporated into the whole process. But it was a very difficult time as we built the department into a capability to do this. There is now a very capable team doing it.”

Comment:

Two of the questions raised by Lord Freud’s comments are: If outsourcing IT is now considered such a bad idea for central government, why is it councils continue to outsource IT?

Would it be better for taxpayers in the long run if the Department for Communities and Local Government intervened to stop such deals going ahead?

Lord Freud’s evidence on Universal Credit programme in full

 

 

 

Southwest One – a positive postscript

By Tony Collins

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

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

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

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

Outsourcing IT a “bad mistake” 

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

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

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

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

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

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

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

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

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

Task facing Somerset officials

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

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

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

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

The council’s officers hope this will lead to

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

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

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

Comment

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

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

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

It is an innovative approach for a council.

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

Does outsourcing IT ever make sense?

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

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

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

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

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

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

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

Cambridge University trust to end 10-year £200m outsourcing deal early?

cuh

By Tony Collins

Two years after going live with an electronic patient record system as part of a 10-year IT outsourcing contract – one of the biggest in the NHS – Cambridge University Hospitals is going out to tender for similar services.

The Trust, which runs Addenbrook’s and the Rosie hospitals in Cambridge, describes the exercise as “market testing”, according to Government Computing.

Last year trust regulator Monitor put the trust into special measures after it over-spent an average of £1.2m a week, in part because of the huge costs of eHospital.

“The Trust underestimated the scale and challenges of implementing its new electronic patient record system, e-Hospital, and the impact this would have on its provision of healthcare for its patients. These issues led to significant cost increases and a failure to realise the benefits the system could provide,” Monitor said.

A Care Quality Commission report last year also criticised the implementation of the trust’s eHospital systems.

But in July this year the trust was shortlisted in three categories of a national award for using IT to improve patient care.

The trust went through to the finals in three categories: digital NHS trust or health board of the year; best use of IT to support integrated healthcare services, and the CCIO award for clinical informatics leadership.

ehospiital-logoEpic and HP

On 26 October 2014 that the trust went live with the “eHospital” project, which allowed clinicians to access patient information wherever they were in the hospital.

Clinicians use hand-held devices and computers on wheels to record care at the bedside. The devices enable the trust to record details of care in real-time into the new electronic patient record system.

The cost of the eHospital project over 10 years was expected to be £200m. The project involves software from US-based electronic patient records supplier Epic and hardware, services, infrastructure and support from Hewlett Packard Enterprise.

The trust’s board decided to spend the equivalent of a substantial new hospital building in an attempt to get the IT to match its reputation.

The eHospital project began in 2012, though the go-live of the patient records system was not until 2014.

cambridge-univrrsity-trust-logo

In a statement to Government Computing, Zafar Chaudry, Chief Information Officer at Cambridge University Hospitals, said of the latest tender,

“Almost four years into the eHospital programme, CUH [Cambridge University Hospitals] has exponentially increased the use of its Electronic Patient Records and seen a growing demand in the size and types of commodity IT services needed by the Trust.

“As such, we are market testing to ensure best value for public money to meet these needs, whilst recognising our partners, HP, have and continue to meet their contractual obligations.”

The trust’s tender dated 14 September 2016 says it is looking for “outsourced commodity IT services for enterprise infrastructure, service desk and end user computing including the provision of server, storage, electronic patient record application, LAN and WAN”.

The estimated contract value is £140m over seven years, with an option to renew for a further three years. From the tender document it does not appear that the trust is seeking to replace the Epic software.

In its 2015/2016 annual report, the trust was positive about the results of the Epic eHospital project.

“We are also now in our second year of operating with a comprehensive electronic patient record system in the form of Epic, as part of a ten year eHospital programme.

“The period following deployment saw a number of significant challenges, but we are now entering a phase where Epic has become very much a part of daily life and, as we consolidate our position, we are settling to the task of ensuring that we realise the many benefits of the system.”

Although there are still challenges – mainly a shortage of staff and money, with the trust anticipating a budget deficit of £74m in 2016/17  – eHospital’s benefits so far include:

  • the deployment of “business grade wifi in all clinical areas.
  • a refresh of the desktop estate of 6,750 PCs and 500 laptops.
  • the deployment of “workstations on wheels” and 420 “rover” devices (iPod touch with a barcode) for mobile working in clinical areas.
  • direct integration of physiological monitors and ventilators in all theatres and critical care areas, along with connectivity of point-of-care testing devices for integrated near-patient testing.
  • electronic patient record in full use for all aspects of care across all clinical areas in-patient and outpatient areas, typically with 3,200 concurrent users in the system at peak times, apart from paediatric chemotherapy.

Comment

On the face of it, Cambridge University Hospitals NHS Foundation Trust is seeking to replace its 10-year £200m outsourcing deal long before it’s even half way through.

But all of its literature implies it is happy – indeed proud – of the Epic system. It also seems content with Hewlett Packard Enterprise’s infrastructure and other services, though it’s not so clear whether it’s happy with its prices.

The tender could be merely an exercise to compare the prices it is paying with the prices available on the market, which could leave Hewlett Packard Enterprise, in essence, competing to keep its work at the trust.

The trust’s CIO told Government Computing that Hewlett Packard Enterprise has and continues to meet its contractual obligations.  That’s not in dispute, but it’s possible for users to be unhappy about suppliers even when contractual obligations are being met. The trust could have discovered that a new or revised contract is needed.

On the other hand, the tender could be the trust’s way of proving to the regulators that it is paying market prices for its patient record systems, outsourcing and ICT services.

The trust may have nothing to lose and everything to gain by an open tender while it’s only three years into a £200m 10-year outsourcing deal.

On the other hand, will IT companies want to spend large sums on bids none may be able to win?

Cambridge University Hospitals £140m market test – Government Computing, September 2016