Category Archives: Politics

New postal minister refuses to back judge-led inquiry into Horizon scandal

Posted on 06/03/2020 | 2 comments

By Tony Collins

Paul Scully, new business minister

Paul Scully, a new business minister in charge of the Post Office, refused yesterday to back calls by various MPs for a judge-led inquiry into the Horizon IT scandal.

Downing Street and the Department for Business, Energy and Industrial Strategy have also refused to commit to an inquiry, reports Computer Weekly.

Yesterday in a debate in the Commons on former sub-postmasters whose criminal records are being reviewed by the Criminal Cases Review Commission, Scully went off script several times but still refused to give any commitment to an inquiry over the scandal.

Asked for a commitment to an inquiry, Scully said,

“We will certainly look at how we can keep the Post Office on its toes in the future and look back and learn the lessons from that. What I don’t want to do is step on the toes of the CCRC’s [Criminal Cases Review Commission] investigation…. but clearly we do need to make sure lessons are learned and we will look at that over the coming days and see what more we can do.”

Scully’s comments appear to give strong backing to the civil service’s line on the Horizon scandal which is to be non-committal on MPs’ calls for an inquiry.

Boris Johnson indicated last week that he supported an inquiry but unless he has the support of the civil service an inquiry is unlikely.

Scully also gave no commitments on fair compensation to victims of the scandal or on whether he will hold anyone accountable. As the new business minister, he said he will dedicate his time to “making sure that we can see tis through and keep the Post Office on their toes to make sure we can come to a proper conclusion that means something to the postmasters who have suffered in the past …”

He said the convictions will not be treated as a group because the way the legal system works. “We are not able to do that,” he said. Each conviction will be dealt with individually with forensic accountants going through thousands of pages of documents.

He put aside his prepared speech on “what a great job” the Post Office is doing and instead answered points put by MPs but in a generalised way.

He said the government will proactively challenge the Post Office and its new chief executive Nick Read and “I will make sure that happens”.

MPs during the debate, in describing the Post Office’s conduct, used words such as “despicable” and “utterly deplorable”. One MP said the Post Office had “misled from the outset”.

MP Lucy Allan said yesterday she had been told by a representative of the Post Office that he doubts many cases of sub-postmasters with criminal convictions will be referred to the Court of Appeal and that those that are, may not succeed. She said the Post Office, is

“still intent on protecting the interests of the institution at all costs.”

Comment

Recent events have made the position of the government and civil service over the Horizon IT scandal clear:

  • Boris Johnson would like an inquiry but this is opposed by the civil service which has nothing to gain and much to lose: any inquiry may ask how the civil service allowed the Post Office to spend seemingly unlimited funds on its legal fight against sub-postmasters litigation (including the hiring of four QCs and two sets of solicitors). It may also ask why the civil service failed to stop a scandal that was obvious for more than a decade to anyone outside the Post Office.
  • Boris Johnson needs the full co-operation of the civil service to manage and implement his policies. He has little choice therefore but to accept the civil service’s party line that it must be non-committal when MPs ask what has happened to Johnson’s promise of an inquiry.
  • As MPs on the business committee (BEIS) look at how another Horizon-like scandal could be avoided in future, the existing Horizon scandal continues and deepens.
  • The criminal convictions of former sub-postmasters are to be reviewed individually and not collectively. Forensic accountants are going through thousands of pages of documents in individual cases. This could delay the final outcome of some cases indefinitely, although the reviews have already been delayed several years. The Post Office supports the individual rather than collective consideration of criminal cases.
  • The ruling of Mr Justice Fraser in the Horizon case made it clear that Fujitsu engineers could alter branch accounting systems from a remote location without the knowledge of sub-postmasters. Such changes could affect figures shown on the Horizon system. This fact alone – without the disclosures during litigation about bugs in Horizon – undermine every case where there is nothing other than Horizon evidence to suggest money has been stolen.
  • For each conviction to be looked at individually is as ludicrous as the Board of Inquiry in 1912 going through in forensic detail every survivor’s witness statement before making a recommendation on whether the available evidence supports claims the Titanic actually sank.
  • The Post Office continues, in practice, to exert a similar level of control and influence it had on the state during the height of the Horizon IT scandal. MPs made the point correctly yesterday that nothing has changed.
  • In the same way the Post Office tried to stop Alan Bates from launching a group litigation, the institution appears to be opposing former sub-postmasters with criminal convictions taking a group civil action – but how could individuals with criminal convictions, many of whom lost their homes and businesses and have found it difficult to get work, find the money, individually, to sue the Post Office which, in its legal fight against Alan Bates and his co-claimants, has shown it is prepared to spend tens of millions of pounds on lawyers?
  • Nothing substantive will change unless the Post Office has demonstrably independent, rigorous and fully empowered oversight, including representation of sub-postmasters on an oversight board (though not from the National Federation of Sub-postmasters which the Post Office funds and whose independence the judge questioned),  together with the detailed public reporting of progress on implementing the recommendations of a judge-led inquiry.
  • Without these two things, ministers and the civil service will do little more than try to embalm the Horizon scandal in reassuring platitudes such as lessons learnt, a new framework, ministerial meetings, working groups, better scrutiny etc
  • If the civil service has its way, there will be no fair compensation, minimal accountability and no judge-led inquiry; and the Post Office will emerge from the scandal entirely unscathed other than the damage to its reputation which will cost public servants and those who misled the High Court nothing.
  • It is up to MPs, many of whom have an excellent grasp of the facts, to test, as the judge did, everything the Post Office says for truthfulness. The judge found that some Post Office witnesses gave him partial and inaccurate evidence. The Post Office corporately gave the High Court inaccurate evidence on Horizon and a Post Office director tried to mislead the court.
  • The Post Office has a new CEO. But does he have the power to modify fundamentally an institutional culture that allowed a national scandal to take grip and, according to MPs yesterday, still opposes change?
  • Much of what the minister said yesterday implied that the government (other than Boris Johnson), the civil service and the Post Office speak as one voice – a voice that shows compassion in the words used but not at all in the deeds.
  • It’s difficult to avoid a conclusion that the only regret within officialdom over the Horizon IT scandal is that the Post Office was found out. It will now take a very clever use of language – something civil servants are famous for – to convince MPs and peers that the scandal is in the past.
  • Credit goes to MP Lucy Allan for securing yesterday’s debate and to MPs who contributed including Gill Furniss, Andrew Bridgen, Karl Turner, Sharon Hodgson, Emma Lewell-Buck, Maria Eagle, Philip Dunne, Marion Fellows, Gerald Jones, Jim Shannon,  Tonia Antoniaazzi,  Ian Paisley, and Duncan Baker.

BEIS civil servants – are they hoisting their own petard? – Tim McCormack

Those who did not play by the rules in Horizon scandal should face prosecution – Computer Weekly

Boris Johnson’s commitment to inquiry in doubt – Computer Weekly

House of Lords debate on Horizon scandal – #postofficetrial

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Posted in BEIS, Campaign4Change, Department for Business, Fujitsu, Government IT, Horizon system, Politics, Post Office IT

Are you happy paying to help with problem Capita contract?

Posted on 01/05/2018 | 4 comments

By Tony Collins

This week, as Barnet residents go to the polls, how many will be influenced by the continuing national and local media coverage of the council’s mass outsourcing deal with Capita?

Barnet’s Capita contracts are a local election issue. The council’s conservatives and Capita say the outsourcing contracts have saved money and are performing as expected “in many areas”.

But a former local Tory councillor Sury Khatri , who has been deselected after criticising the Capita contract, described the deal as “disastrous”. Barnet has paid Capita £327m since the deals were signed in 2013. Capita runs council services that range from cemeteries to IT.

Councillor Khatri said,  “My time at the council has been overshadowed by the disastrous Capita contract that is falling apart at the seams. Four years on, issues still keep rolling out of the woodwork. This contract represents poor value for money, and the residents are being fleeced.”

Another critic of the Capita contracts is John Dix who blogs as “Mr Reasonable” and is one of several highly respected local bloggers. He has been studying the council’s accounts for some years. He runs a small business and is comfortable with accounts and balance sheets.

He writes,

“I have no problem with outsourcing so long as it is being done for the right reasons. Typically this is where it involves very specialist, non core activities where technical expertise may be difficult to secure and retain in house.

“In Barnet’s case this outsourcing programme covered so many services which were core to the running of the council and which in 2010 were rated as 4 star (good). Barnet has been an experiment in mass outsourcing and almost five years in, it appears to be a failure.

“Last night’s [19 April 2018] audit committee was a litany of service problems, system failures, lack of controls, under performance, a major fraud. Internal audit saying issues were a problem, Capita saying they weren’t.”

Shadow Chancellor John McDonnell has entered the debate. He has applauded Barnet’s Unison branch for its enduring, close scrutiny of the Capita contracts. Unison this week published a report on the deal.

Capita’s share price rises

Earlier this month the national press reported extensively on concerns that Capita would follow Carillion into liquidation.

Since the bad publicity, the company’s announcement of a pre-tax loss of £535m, up from £90m the previous year, £1.2bn of debt and a rights issue to raise £662m after fees by selling new shares at a discount, Capita’s share price has risen steadily, from a low a month ago of about 130p to about 191 yesterday.

Could it be that investors sense that Capita’s long-term future is secure: the company has a wide range of complex and impenetrable public sector contracts where history shows that public sector clients – ruling politicians and officials – will defend Capita more enthusiastically than Capita itself, whatever the facts?

A list of some of Capita’s problem contracts is below the comment.

Comment

Carillion, a facilities management and construction company, collapsed in part because the effects of its failures were usually obvious: it was desperately short of money and new roads and hospitals were left unfinished.

When IT-based outsourcing deals go wrong, the effects are usually more nuanced. Losses can be hidden in balance sheets that can be interpreted in different ways; and when clients’ employees go unpaid, or the army’s Defence Recruiting System has glitches or medical records are lost, the problems will almost always be officially described as teething even if, as in Capita’s NHS contracts, they last for years.

It is spin that rules and protects IT outsourcing contracts in the public sector. Spin hides what’s really going on. It is as integral as projected savings and key performance indicators.

When Somerset County Council signed a mass outsourcing deal with IBM, its ruling councillors boasted of huge savings. When the deal went wrong and was ended early after a legal dispute with IBM the council announced that bringing the deal in-house would bring large savings: savings either way. Liverpool council said the same thing when it outsourced to BT – setting up a joint venture called Liverpool Direct – and brought services back-in house: savings each time.

Barnet Council is still claiming savings while the council’s auditors are struggling to find them.

Spinmeisters know there is rarely any such thing as a failed public sector IT contract: the worst failures are simply in transition from failure to success. Barnet’s council taxpayers will never know the full truth, whoever is in power.

Even when a council goes bust, the truth is disputed. Critics of spending at Northamptonshire County Council, which has gone bust, blame secretive and dysfunctional management. Officials, ruling councillors and even the National Audit Office blame underfunding.

In March The Times reported that Northamptonshire had paid almost £1m to a consultancy owned by its former chief executive. It also reported that the council’s former director of people, transformation and transactions for services, was re-hired on a one-year contract that made her company £185,000 within days of being made redundant in 2016.  Her firm was awarded a £650-a-day IT contract that was not advertised.

In the same month, the National Audit Office put Northamptonshire’s difficulties down to underfunding. It conceded that the “precise causes of Northamptonshire’s financial difficulties are not as yet clear”.

Perhaps it’s only investors in Capita who will really know the truth: that the full truth on complex public sector contracts in which IT is central will rarely, if ever, emerge; and although Capita has internal accountability for failures – bonuses, the share price and jobs can be affected – there is no reason for anyone in the public sector to fear failure. No jobs are ever affected. Why not sign a few more big outsourcing deals, for good or ill?

Thank you to FOI campaigners David Orr and Andrew Rowson for information that helped me write this post.

Some of Capita’s problem contracts

There is no definitive list of Capita’s problem contracts. Indeed the Institute for Government’s Associate Director Nick Davies says that poor quality of contract data means the government “doesn’t have a clear picture of who it is buying from and what it is buying”. Here, nevertheless, is a list of some of Capita’s problem contracts in the public sector:

Barnet Council

A Capita spokesperson said: “The partnership between Capita and Barnet Council is performing as expected in many areas. We continue to work closely with the council to make service enhancements as required.”

Birmingham City Council

“The new deal will deliver a mix of services currently provided under the joint venture, plus project based work aimed at providing extra savings, with forecasts of £10 million of savings in the current financial year and £43 million by 2020-21.”

West Sussex County Council

A spokesman said, “Whatever your concerns and small hiccups along the way, I believe this contract has been and will continue to be of great benefit to this county council.”

Hounslow Council

A Capita spokesperson said: “We are working closely with the London Borough of Hounslow to ensure a smooth transition of the pensions administration service to a new provider.”

Breckland Council

“They concluded that planning officers, working for outsourcing company Capita, had misinterpreted a policy, known as DC11, which dictates the amount of outdoor playing space required for a development..”

Army

Mark Francois, a Conservative former defence minister,  said Capita was known “universally in the army as Crapita”. But Capita said in a statement,

“Capita is trusted by multiple private and public clients to deliver technology-led customer and business process services, as demonstrated by recent wins and contract extensions from clients including British Gas, Royal Mail, BBC, TfL Networks, M&S and VW.”

Electronic tagging

(but it’s alright now)

A Ministry of Justice spokeswoman said: “As the National Audit Office makes clear, there were challenges in the delivery of the electronic monitoring programme between 2010 and 2015…

“As a direct result, we fundamentally changed our approach in 2015, expanding and strengthening our commercial teams and bringing responsibility for oversight of the programme in-house.

“We are now in a strong position to continue improving confidence in the new service and providing better value for money for the taxpayer.”

Disability benefits

A spokesperson for the Department for Work and Pensions said, “Assessments work for the majority of people, with 83 per cent of ESA claimants and 76 per cent of PIP claimants telling us that they’re happy with their overall experience…”

Miners

A Capita spokesperson said: “This issue has been resolved and all members affected will shortly receive letters to advise that they do not need to take any action. We sincerely apologise for any concern and inconvenience this has caused.”

NHS

Opticians

Dentists

BBC licence fee

Windrush

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Posted in Barnet Council, Birmingham City Council, Campaign4Change, Capita, DWP, excessive secrecy, Freedom of Information, Government IT, IBM, Institute for Government, local democracy, local government, managing outsourced services, National Audit Office, NHS, NHS England, operational issues, outsourcing, PCSE, Politics

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

Posted on 04/06/2015 | 7 comments

By Tony Collins

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

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

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

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

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

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

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

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

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

This is the HMRC advert:

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

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

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

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

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

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

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

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

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

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

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

Comment

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

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

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

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

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

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

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

Government Computing article

 

7 Comments

Posted in Accenture, Campaign4Change, Capgemini, consultants, Fujitsu, Government IT, HMRC, Legacy ICT, Major Projects Authority, National Audit Office, Politics, procurement, project management, public services, supplier relationships

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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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Capita has duty to promote success of Barnet contract

Posted on 03/10/2013 | 3 comments

By Tony Collins

Capita has a contractual duty to promote the success of the “One Barnet” outsourcing deal with Barnet Council – apparently without taking into account facts that may count against success.

Within the 2,400 pages that make up contracts between Capita and Barnet Council, Unison has discovered clauses that appear to put the onus on the service provider to talk up the success of Barnet’s outsourcing deal.

These are excerpts from the contracts:

“The Service Provider shall use its relationships to create advocates of the success of the One Barnet programme by informing the Department of Communities and Local Government and the Local Government Association of key milestones and achievements within the programme thereby supporting increased political awareness of the Authority and the Service Provider shall utilise its corporate and personal networks to support the communication of the success of the Partnership via appropriate case studies.”

The contract points out that the service provider has “frequent meetings across central government at official level and occasional meetings at ministerial level”. It also sits on the Public Services Strategy Board, the Whitehall & Industry Group, Reform, Policy Exchange and Localis.

“The Service Provider shall use its relationships to create opportunities for the successes of the Partnership to be promoted enhancing the profile of the Authority at strategic level across the public sector,” says one of the contractual clauses.

Thank you to Dave Orr, a campaigner for openness over local government outsourcing deals, for drawing my attention to the Barnet Council clauses.

Comment

It now seems to be official – that outsourcing deals in local government have to be perceived as successful. Perhaps these sorts of clauses in local government outsourcing contracts help to explain why the public don’t learn of failing “partnerships” and joint ventures until what has gone wrong can be hidden no longer.

This is not open government. This is a contractual expectation that the supplier’s representatives should smile, and smile broadly, whenever the subject of an outsourcing deal with Barnet is discussed, or there is an opportunity to discuss it.

Which rather undermines the credibility of the Public Services Strategy Board, the Whitehall & Industry Group, Reform, Policy Exchange and Localis if supplier’s representatives are there to pass on PR messages about their outsourcing deals, whatever the truth.

“Smile and others will smile back. Smile to show how transparent, how candid you are. Smile if you have nothing to say. Most of all, do not hide the fact you have nothing to say nor your total indifference to others. Let this emptiness, this profound indifference, shine out spontaneously in your smile.” Jean Baudrillard.

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Posted in Campaign4Change, Capita, Freedom of Information, local democracy, local government, outsourcing, Politics, public sector, public services, public-private partnerships, supplier relationships

Trust spends £16.6m on consultants for Cerner EPR

Posted on 01/08/2013 | 2 comments

By Tony Collins

Reading-based Royal Berkshire NHS Foundation Trust says in an FOI response that its spending on “computer consultants since the inception of the EPR system is £16.6m”.

The Trust’s total spend on the Cerner Millennium system was said to have been £30m by October 2012.

NHS IT suppliers have told me that the typical cost of a Trust-wide EPR [electronic patient record] system, including support for five years, is about £6m-£8m, which suggests that the Royal Berkshire has spent £22m more than necessary on new patient record IT.

Jonathan Isaby, Taxpayers’ Alliance political director, said: “This is an astonishing amount of taxpayers’ money to have squandered on a system which is evidently failing to deliver results.

“Every pound lost to this project is a pound less available for frontline medical care. Those who were responsible for the failure must be held to account for their actions as this kind of waste cannot go unchecked.”

 The £16.6m consultancy figure was uncovered this week through a Freedom of Information request made by The Reading Chronicle. It had asked for the spend on consultants working on the Cerner Millennium EPR [which went live later than expected in June 2012].

The Trust replied: “Further to your request for information the costs spent on computer consultants since the inception of the EPR system is £16.6m.”

The Chronicle says that the system is “meant to retrieve patient details in seconds, linking them to the availability of surgeons, beds or therapies, but has forced staff to spend up to 15 minutes navigating through multiple screens to book one routine appointment, leading to backlogs on wards and outpatient clinics”.

Royal Berkshire’s chief executive Edward Donald had said the Cerner Millennium go live was successful.  A trust board paper said:

 “The Chief Executive emphasised that, despite these challenges, the ‘go-live’ at the Trust had been more successful than in other Cerner Millennium sites.”

A similar, stronger message had appeared was in a separate board paper which was released under FOI.  Royal Berkshire’s EPR [electronic patient record] Executive Governance Committee minutes said:

“… the Committee noted that the Trust’s launch had been considered to be the best implementation of Cerner Millennium yet and that despite staff misgivings, the project was progressing well. This positive message should also be disseminated…”

Comment

Royal Berkshire went outside the NPfIT. But its costs are even higher than the breathtakingly high costs to the taxpayer of NPfIT Cerner and Lorenzo implementations.

As senior officials at the Department of Health have been so careless with public funds over NHS IT – and have spent millions on the same sets of consultants – they are in no position to admonish Royal Berkshire.

So who can criticise Royal Berkshire and should its chief executive be held accountable?

When it’s official policy to spend tens of millions on EPRs that may or may not make things better for hospitals and patients – and could make things much worse – how can accountability play any part in the purchase of the systems and consultants?

The enormously costly Cerner and Lorenzo EPR implementations go on – in an NHS IT world that is largely without credible supervision, control, accountability or regulation.

Cash squandered on IT help

Trust loses £18m on IT system

The best implementation of Cerner Millennium yet?

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Posted in BT Health, Cerner, consultants, CSC, culture, e-health, Freedom of Information, health records, IT-related failures, NHS, npfit, oversight, Politics, procurement, public sector, public services, software quality, supplier relationships

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The story of Southwest One

Posted on 16/07/2013 | 2 comments

By Tony Collins

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

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

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

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

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

These are some of Orr’s points:

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

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

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

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

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

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

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

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

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

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

Southwest One – the complete story from Dave Orr

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

When Whitehall shuns statutory scrutiny

Posted on 25/06/2013 | 2 comments

By Tony Collins

In some ways central departments are deeply accountable.

They provide volumes of statistics and reports to the centre of government (Cabinet Office and Treasury) – as far as their limited management information systems will let them – and senior officers will sometimes answer questions from MPs on Parliamentary committees. Their permanent secretaries will meet colleagues in other departments every week.

At the same time, on things that really matter, some central departments – and councils – can be infinitely unaccountable. 

A report by the National Audit Office – which it says was researched and written unusually quickly, partly in response to parliamentary concern – gives a glimpse of how unaccountable central departments (and councils) can be.

When they don’t want to provide information they simply don’t – and nothing it seems can be done to force disclosure.

Power to ignore

With explicit and written approval from David Cameron the Cabinet Office has the power to mandate change in central departments. But senior officials can, if they wish, when faced with central requests for information, ignore, reject, deliberately misunderstand, confuse or minimise answers, or delay until the request no longer need be answered.

This ability of central departments to evade democratic and even statutory scrutiny surfaces in the NAO report Confidentiality clauses and special severance payments.

The report is into the gagging of public servants when they receive payments for ending their employments early. Rightly, the media’s coverage of the report focuses on the NAO’s concerns over gagging clauses that stop officials becoming whistleblowers. The FT said on Friday (21 June 2013)

“More than a thousand civil servants have signed gagging clauses that could stop them speaking out about problems, a system the [NAO] condemned as “unacceptable”.

What the national media apparently did not notice was that the NAO was unable to obtain all the information it had requested of departments.

“Despite the NAO’s statutory access rights, it received only 60 per cent of the compromise agreements requested from departments,” says the NAO.

The NAO has statutory rights of access to information held by departments. Indeed its Comptroller and Auditor General Amyas Morse certifies the accounts of all government departments and many other public sector bodies. The NAO says he has “statutory authority to examine and report to Parliament on whether departments and the bodies they fund have used their resources efficiently, effectively, and with economy”.

Avoiding NAO scrutiny

But some departments have not complied with the NAO’s requests, and one, the Department of Culture, Media & Sport, formally requested not to be involved in the NAO’s investigation.

Says the NAO report

“Unfortunately, some departments did not respond promptly to our requests, and were delayed by their legal teams’ questioning of our access rights.

The NAO adds

“The Department for Culture, Media & Sport requested not to be involved in this piece of work, a position which could not be resolved until after our fieldwork window had closed.

“We found it challenging to gain a complete picture of the use of confidentiality clauses as, by their nature, they are not openly discussed. Our work was also hampered by incomplete records, and access to data as outlined above.

“It took several attempts to identify the appropriate individuals within departments responsible for compromise agreements and the associated payments. We experienced delays in receiving data, and what departments provided was frequently incomplete or in a format that was difficult to collate and analyse.”

So what can the NAO do now it has been snubbed or, to put it in Whitehall-speak, has encountered departmental non-compliance with statutory access requests?

Little or nothing. The NAO has no power to punish. Through MPs on the Public Accounts Committee it can admonish. That is all.

Says the NAO:

“Given the innovative nature of this work, some initial difficulties were anticipated. We will continue to work with departments, the Treasury and Cabinet Office to explore ways in which we can obtain the evidence on a timelier basis. It is important that departments are able to respond more quickly to these investigations in the future.”

Councils too can evade democratic accountability. The NAO has no access rights to local authorities but councils are, in theory, subject to the Freedom of Information Act. In practice they can all but ignore the FOI legislation if they wish.

In March 2010, the Audit Commission published a report on severance payments to council chief executives. The study found that:

• agreed severance packages for 37 council chief executives totalled £9.5 million, 40 per cent of which were in pension benefits;

• three in every ten outgoing council chief executives received a pay-off;

• the average cost to councils of each severance package was almost double the annual basic salary, but in four cases was more than triple; and

• 79 per cent of mutually-agreed severance payments had a confidentiality clause.

But the NAO found that, in a recent survey of councils by a member of the public under the FoI Act, 52 councils refused to disclose information on their use of compromise agreements.

The good news

The NAO says: “Some organisations have chosen to be transparent about severance packages, such as NHS National Services Scotland, who agreed to the disclosure of a director’s remuneration package, despite a confidentiality agreement being in place, following consultation with legal advisers.”

Comment:

How is Francis Maude to reform central government, particularly IT, if officials in central departments can apparently do what they wish?

The NAO found cases of payments that were higher than contractual entitlement, where there was the apparent reward for failure, and no attempt to seek Treasury’s approval.  Is all this lawful? 

On top of this there are departmental officials who avoided the NAO’s statutory requests for information.

If they can circumvent the law they can probably resist any central demands for change. Resistance seems to be regarded within departments as honourable.

One irony is that bureaucrats in Russia probably have little choice but to respond to central demands – whereas officials in Whitehall departments don’t have to.

Radical reform to change Whitehall’s outdated and costly ways is unlikely to happen while senior officers in departments run the system and have the final say.

NAO report “Confidentiality clauses and special severance payments“

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Posted in Campaign4Change, change management, cost reduction, Freedom of Information, governance, government, Government IT, local democracy, local government, managing change, oversight, Politics, private sector lessons for the public sector, public sector

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Francis Maude –“unacceptable” civil service practices

Posted on 21/03/2013 | Leave a comment

By Tony Collins

Francis Maude laments civil service inaction over a cabinet committee mandate for centralising procurement. It “corrodes trust in the system”.

Gus O’Donnell, the former head of the civil service,  confronted Francis Maude, the Cabinet Office minister in charge of civil service reform, on BBC R4’s In Defence of Bureaucracy last week.

The irreconcilable differences between O’Donnell and Maude were obvious and may be a sign of how difficult it will be for the minister to make lasting and deep cuts in IT-based spending, simplify overly complex processes, and reduce duplication.

O’Donnell spoke of the virtues of the civil service that have served the country for more than a century, particularly its impartiality.  But Maude said the “value of impartiality can sometimes turn into indifference”.

O’Donnell said: “We need to be proud and passionate about the public sector ethos…” and confronted Maude for saying things about the civil service “that are not always totally positive”.

Indeed Maude said,

“Most of the civil servants I deal with are terrific, work hard and do really good work.  It is not universal.”

O’Donnell then confronted Maude for saying that ministers in this and previous government have too often found that decisions they have made don’t get implemented. Is that the fault of ministers or civil servants, asked O’Donnell.

“I’d be astonished if it’s ministers,” said Maude who added,

“ I had a meeting the other day around this table …  where a decision was made by a cabinet committee, more than a year ago, on the centralising of procurement. It had happened to a very minimal extent.

“If there is a problem with it, that can be flagged up and tell us. Just to go away and not do it is unacceptable … it is protection of the system. This is the speaking truth unto power thing. What is unacceptable is not to challenge a ministerial position but then not to implement it. That is what corrodes trust in the system.”

About £230bn a year – nearly a third of everything government spends – is on public sector procurement.  In 2010, Nigel Smith, then CEO of the Office of Government Commerce, spoke to the “Smartgov” conference about the need for major reform in the way government buys things.

He spoke of the need for re-useable software, open source if possible, and said that suppliers regularly use fragmentation within government to maximise profits. “This has got to change,” says Smith.

He said there were 44,000 buying organisations in the public sector which buy “roughly the same things, or similar things, in basic commodity categories” such as IT and office supplies.

Massive duplication

He spoke of “massive duplication”, high tendering costs on suppliers, and a loss of value due to a lack of true aggregation. He said suppliers had little forward look of opportunities to tender and offer innovative solutions for required outcomes.

“Contract management with supplier relationship management is inconsistent, with too little attention paid to continuous improvement and benefits capture within contract.

“The opportunity to improve outcomes and efficiency gains should not be constrained by contract terms and innovations should not stop at the point of contract signature.

“If we miss this opportunity [to reform] we need shooting.”

So it is clear procurement [and much else] needs reforming. But in the R4 broadcast last week (which unfortunately is no longer available) O’Donnell portrays a civil service that is almost as good as it gets.

He speaks of its permanence in contrast to transient ministers. His broadcast attacks the US system of government in which public service leaders change every time there is a new government.  The suggestion is that the US system is like a ship that veers crazily from side to side, as one set of idealogues take the captain’s wheel from another. O’Donnell implies that in the UK civil service stability lasts for decades, even centuries.

The virtues he most admires in the UK civil service are what he calls the 4 “Ps” – Pace, Passion, Professionalism and Pride.  His broadcast speaks of the UK civil service as a responsible, effective, continual and reliable form of administration.  

Comment

O’Donnell’s most striking criticism of Maude’s intended reforms of central government goes to the heart of what Maude is trying to do: change what is happening in departments.

When, in the broadcast, Maude suggested that civil servants were not challenging ministerial decisions and were not implementing them either, O’Donnell replied that Maude was “overstating the issue”. But O’Donnell went much further and added a comment that implied Maude should leave departments alone.

O’Donnell said

“These sorts of problems mainly arise when ministers at the centre of government want to impose their will on secretaries of state who want to be left alone to run their departments as they see fit.”

Is O’Donnell giving permanent secretaries and departmental ministers his support if they continue to snub Cabinet Office reforms?

It is hardly surprising Maude is a bundle of frustrations. Central government administration cannot be reformed if departments have the autonomy to refuse to implement decisions of a cabinet committee.

It is ironic that cabinet committee decisions are binding on the entire Cabinet – but not, it seems, on departments.

Perhaps the gap between political and civil service leaders at the centre, and senior civil servants in departments, is as irreconcilable as ever. Today’s UK civil service is more than ever “Yes Minister” without the jokes.  Should this be the dysfunctional basis for coalition reforms of central government?

Perhaps this explains why Maude is trying to implement open standards, make government procurement friendly to SMEs and encourage the use of G-Cloud while the Department for Work and Pensions and the Foreign and Commonwealth Office are  agreeing new mega-contracts,  with the same handful of monolithic suppliers.

Sir Jeremy Heywood, the current Cabinet Secretary,  is perhaps a little more Maude-friendly than O’Donnell when he says in the R4 broadcast,

“There are lots of things we need to do better. Too many projects that we undertake are delayed, are over budget and don’t deliver on all the benefits that were promised. We are not as digital as the most effective private sector organisations are. We have been slow to embrace the digital revolution.”

Fine words. But if a cabinet committee’s decision on centralising procurement has little effect, how is Sir Jeremy going to convert his words into action? Or Francis Maude’s?

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Posted in Campaign4Change, Cloud, Cloud Computing, collaboration, compliance with spending review, cost reduction, EU procurement, G-Cloud, governance, government, Government digital Service, Government IT, IT-related failures, open source, open standards, Politics, procurement, project management, reducing cost strategically, SME, supplier relationships, US Government

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Another Universal Credit leader stands down

Posted on 11/03/2013 | 1 comment

By Tony Collins

Universal Credit’s Programme Director, Hilary Reynolds, has stood down after only four months in post. The Department for Work and Pensions says she has been replaced by the interim head of Universal Credit David Pitchford.

Last month the DWP said Pitchford was temporarily leading Universal Credit following the death of Philip Langsdale at Christmas. In November 2012 the DWP confirmed that the then Programme Director for UC, Malcolm Whitehouse, was stepping down – to be replaced by Hilary Reynolds. Steve Dover,  the DWP’s Corporate Director, Universal Credit Programme Business, has also been replaced.

A DWP spokesman said today (11 March 2013),

“David Pitchford’s role as Chief Executive for Universal Credit effectively combines the Senior Responsible Officer and Programme Director roles.  As a result, Hilary Reynolds will now move onto other work.” She will no longer work on UC but will stay at the DWP, said the spokesman.

Raised in New Zealand, Reynolds is straight-talking. When she wrote to local authority chief executives in December 2012, introducing herself as the new Director for the Universal Credit Programme, her letter was free of the sort of jargon and vague management-speak that often characterises civil service communications.  It is a pity she is standing down.

Some believe that Universal Credit will be launched in such a small way it could be managed manually. The bulk of the roll-out will be after the next general election, which means the plan would be subject to change. Each limited phase will have to prove itself before the next roll-out starts.

Reynolds’ letter to local authorities suggests that the roll-out of UC will, initially, be limited.  She said in her letter,

“For the majority of local authorities, the impact of UC during the financial year 2013/14 will be limited. .. Initially, UC will replace new claims from single jobseekers of working age in certain defined postcode areas.

“From October 2013 we plan to extend the service to include jobseekers with children, couples and owner-occupiers, gradually expanding the service to locations across Great Britain and making it available to the full range of eligible working age claimants …by the end of 2017.”

Some IT work halted? 

Accenture, Atos Origin, Oracle, Red Hat, CACI and IBM UK have all been asked to stop work on UC, according to shadow minister Liam Byrne MP, as reported on consultant Brian Wernham’s blog.

Wernham says that Minister Mark Hoban did not rebut Byrne’s statement but said that HP was committed to carrying on with the project. HP is responsible for deployment of a solution, not development, says Wernham’s agile government blog.

Comment

The DWP says that Pitchford has taken over from Reynolds – but separately the DWP had confirmed that Pitchford was leading UC temporarily and that Reynolds had a permanent job on the programme. Pitchford’s usual job is running the Major Projects Authority in the Cabinet Office.

All the changes at the DWP, and the reported halting of work by IT contractors, imply that the UC project is proving more involved, and moving more slowly,  than initially thought. It’s also a reason for the DWP to continue to refuse FOI requests for internal reports that assess the project’s progress.

Perhaps the DWP doesn’t want people to know that the project is on track for such a limited roll-out in October that it could be managed, in the main, by hand. With the bulk of the roll-out planned for after the next general election Labour may be denied the use of UC as an effective electoral weapon against the Conservatives. In other words, the riskiest stage of UC is being put off until 2016/17.

 Francis Maude, who is worried that UC will prove an IT and electoral disaster, has his own man, David Pitchford, leading the project, if only temporarily. Meanwhile UC project leaders from the DWP continue to last an extraordinarily short time. Reynolds had been UC programme director for only four months when she stood down. Pitchford is in a temporary role as the programme’s head, and Andy Nelson has recently become the DWP’s Chief Information Officer.

So much for UC’s continuity of leadership.

The truth about the project hasn’t been told. Isn’t it time someone told Iain Duncan Smith what’s really happening – Francis Maude perhaps?

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Posted in Accenture, Agile, Atos, DWP, FOI, Government IT, IBM, local government, openness and transparency, Oracle, outsourcing, Politics, Universal Credit

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