Category Archives: procurement

FOI hearing today on DWP’s refusal to publish Universal Credit reports

By Tony Collins

External lawyers acting for the Department for Work and Pensions are due to appear before an FOI Upper Tribunal judge in London today to argue why four reports on Universal Credit should not be published.

It’s the latest step in a costly legal battle that has lasted two years so far.

A first-tier FOI tribunal judge in 2014 ordered the four reports to be published. The DWP asked for permission to appeal that decision and lost its case.  The DWP then asked an Upper Tribunal for permission to appeal and lost that case as well.

Then it asked a different Upper Tribunal judge for permission to appeal .  As a result, a 1 day hearing is taking place today.

The case takes in evidence from the DWP, the Information Commissioner, John Slater who requested 3 of the reports in question and me. Slater requested in 2012 a Universal Credit risks register, milestone schedule and issues register (which set out problems that had materialised with the Universal Credit programme).  I requested a project assessment review carried out in 2011 on the Universal Credit programme by the Cabinet Office’s Major Projects Authority.

The DWP has refused to publish the four reports – and millions of pounds worth of other similar reports.

Today the DWP will argue that the judge in an earlier Upper FOI Tribunal did not fully consider the “chilling effect” that disclosure of the reports would have on the behaviours of civil servants or consultants who helped to write the reports in question.

In essence the DWP’s lawyers are asking the judge to accept the arguments put forward against disclosure by Sarah Cox, the DWP’s main witness in the case. Cox is a former programme assurance director for Universal Credit.

Cox submitted 49 pages of evidence – plus secret evidence during a closed hearing – on why the UC reports should not be published.  She said that civil servants must be able to think the unthinkable and record the outcome of these thoughts without hesitation or fear of disclosure.

If contributors feared the reports would be routinely disclosed the documents could become “bland records” prepared with half an eye to how they would be received in the public domain.

She said the danger of damage to the public interest cannot be overstated.

Disclosure could adversely affect management of the Universal Credit programme – and “failure of proper programme management may be catastrophic”.

Emphasising the importance of effective management of risk, she referred to the banking system prior to the credit crunch and the stability of the Bank of England in that period.

“Inappropriate or premature disclosure of the information in the risk registers or the issues registers could lead to those failures occurring in government risk management with broader parallels for other project management tools.”

She then referred to “disaster myopia” – a phenomenon she said was well established in cognitive psychology.  It referred to “an underestimation of the likelihood of low frequency but high risk damage risks”.

She added: “This can result in a lack of appropriate mitigating actions, increasing the likelihood of the risk becoming an issue. In this case fear of disclosure and misinterpretation can exacerbate this myopia, leading to the toning down of the direct and forceful language used to describe risks, or worse, risks not being identified at all”.

If civil servants or consultants writing reports on projects were to downplay the risks because of a fear of disclosure, problems may be overlooked, solutions not found, or not found promptly. “Such an outcome would be seriously detrimental to the delivery of major projects.”

Cox’s evidence could appear to some to suggest the DWP was preoccupied with its image, and the image of the Universal Credit programme, in the media, and among MPs and the public. She said routine disclosure of such reports as those in question “will distract civil servants from their tasks at a crucial point in the process of programme management.

“Instead of concentrating on implementing the changes, they will be required to address stakeholder, press or wider public concerns which have been provoked by the premature disclosure of material.”

It would be unhelpful if “attention is focused on clarifying positions with stakeholders and addressing the concerns of media, opposition and interest groups in order to correct the often misleading impression created by premature disclosure”.

This issue is “magnified in a programme with as many delivery partners as Universal Credit, covering both central and local government, with implications for all territories in the UK”.

That is because of the “implications of issues for different partners are often slightly different, so that each partner may need to be given a slightly different, and tailored, response”.

This concern should not be understated, she said.

“From my experience of high profile matters which emerge with little warning, I can say that ministers and senior officials are likely to be forced to clear their diaries, cancelling planned meetings, events and other important engagements, to attend rapidly-convened meetings to discuss the handling of the premature disclosure.

“Officials in the relevant policy areas (and lawyers as appropriate) would need to set aside other essential and pressing work to prepare briefings on the likely impact of disclosure and options for next steps. ‘Lines to take’ and a stakeholder and media-handling strategy would need to be discussed, agreed and signed off by ministers.

“Ministers could also be called to respond to urgent questions tabled in Parliament, especially where the disclosure  is made in respect of a high-profile policy area. The media might press for interviews with ministers and/or senior officials, which require careful preparation…”

But, as the Information Commissioner has pointed out, disclosure of the documents under FOI is not the same as a leak to the media.

And the reports in question are now four years old and so massive media interest is unlikely. Any media interest could be managed by DWP press officers without distracting project managers.

Cox said disclosure could harm rather than assist public debate.

“Material that requires civil servants to think the unthinkable, or to consider unusual or highly unlikely events, using intentionally vivid and forceful language, at a single point in time, potentially pre-dating attempts to mitigate the position could easily distort the public perception of the real or likely situation and encourage sensationalist rather than responsible and balanced reporting.”

She said that officials may have to release further information to counteract any misunderstandings (from a misreading of the disclosed reports). But the “world of media” may ignore this further information.

Lawyers for the Information Commissioner, in their submission to today’s hearing, will argue that an earlier tribunal had not found any existence of a “chilling effect” in this case. The tribunal had not been persuaded by what the DWP had said.

The earlier tribunal had not dismissed all of the DWP’s concerns as entirely without merit. It accepted that disclosure of the documents in question “may not be a painless process for the DWP” and that there “may be some prejudice to the conduct of government of one or more of the kinds asserted by the DWP”. The tribunal was simply unpersuaded by the extent of those prejudices.

The Commissioner’s lawyers will say the earlier tribunal gave due weight to the evidence of Ms Cox but it was not obliged to agree with her.

There was no observable chilling effect from disclosures in the past where a chilling effect had been envisaged. The DWP had not provided any evidence that a chilling effect existed.

Indeed a Starting Gate Review on the Universal Credit project had been published (by Campaign4Change) after the DWP refused to release the document under FOI. The DWP had refused to publish the Starting Gate Review because of the chilling effect it would have on the contributors to such reports.

But there was no chilling effect in consequence of publication of the Starting Gate review, say the Information Commissioner’s lawyers.

The incident “illustrates that it is perfectly within the bounds of reason to be sceptical about the DWP’s assertions about the chilling effect and the like,” says the Information Commissioner’s submission to today’s hearing.

On Ms Cox’s point that disclosure of the reports in question would change behaviours of civil servants and consultants compiling the documents, the earlier tribunal had concluded that the public was entitled to expect from senior officials – and no doubt generally gets – a large measure of courage, frankness and independence in their assessments of risk and provision of advice.

The Information  Commissioner’s lawyers will today ask the judge to dismiss the DWP’s appeal.

Comment

The DWP’s evidence suggests that the reports in question today are critical to the effective delivery of Universal Credit. The reality is that excessive secrecy can make bureaucracies complacent and, in the the DWP’s case, somewhat chaotic.

When Campaign4Change asked the DWP under FOI for two Universal Credit reports – an end to end technical review carried out by IBM at a cost of £49,240 and a “delivery model assessment phases one and two” carried by McKinsey and Partners at a cost of £350,000 – the DWP mistakenly denied that the reports existed.

When we provided evidence the reports did exist the DWP said eventually that it had found them.  The DWP said in essence that the documents had been held so securely nobody knew until searching for them that they existed.

So much for the DWP’s argument that such reports are critical to the effective management of major projects.

And when Campaign4Change asked the DWP, under FOI, to supply a project assessment review report on the Universal Credit programme, officials mistakenly supplied an incorrect version of the report (a draft) to an FOI tribunal.  Officials later apologised for their mistake.

National Audit Office reports on Universal Credit do little to portray the DWP as a professional, competent and well-managed organisation.

Which all suggests that excessive secrecy within the DWP has made officials complacent and disorganised.

Continued excessive secrecy within the department could reinforce a suspicion, justified or not, that the department may not be in a strong position to run a programme as large and complex as Universal Credit.

 

 

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

By Tony Collins

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Abandoned NHS IT plan has cost £10bn so far

Why was NHS e-Referral service launched with 9 pages of known problems?

By Tony Collins

Were GPs guinea pigs for live testing of the new national NHS e-Referral Service?

Between 2004 and 2010 the Department of Health marked as confidential its lists of problems with national NPfIT systems, in particular Choose and Book.

So the Health and Social Care Information Centre deserves praise for publishing a list of problems when it launched the national “e-Referrals” system on Monday. But that list was 9 pages long.

The launch brought unsurprised groans from GPs who are used to new national systems going live with dozens of known problems.

The e-Referral Service, built on agile “techniques” and based on open source technology, went live early on Monday to replace “Choose and Book” for referring GP patients to hospitals and to other parts of the NHS.

Some GPs found they could not log on.

“As expected – cannot refer anything electronically this morning. Surprise surprise,” said one GP in a comment to “Pulse” on its article headlined “Patient referrals being delayed as GPs unable to access e-Referrals system on launch day.”

A GP practice manager said: “Cannot access in south London. HSCIC debacle…GPs pick up the pieces. Changing something that wasn’t broken.”

Another GP said: “I was proud never to have used Choose and Book once. Looks like this is even better!”

Other GPs said they avoided using technology to refer patients.

“Why delay referral? Just send a letter. (Some of us never stopped).”

Another commented: “I still send paper referrals – no messing, you know it has gone, no time wasted.”

Dr Faisal Bhutta, a GP partner in Manchester, said his practice regularly used Choose and Book but on Monday morning he couldn’t log in. “You can’t make a referral,” he said.

The Health and Social Care Information Centre has apologised for the disruption. A statement on its website says:

“There are a number of known issues, which are currently being resolved. It is not anticipated that any of these issues will pose a clinical safety risk, cause any detriment to patient care or prevent users from carrying out essential tasks. We have published the list of known issues on our website along with details of how to provide feedback .”

But why did the Centre launch the e-Referral Service with 9 pages of known problems? Was it using GPs as guinea pigs to test the new system?

Comment

The Health and Social Care Information Centre is far more open, less defensive and a better communicator than the Department of Health ever was when its officials were implementing the NPfIT.

But is the HSCIC’s openness a good thing if it’s accompanied by a brazen and arrogant acceptance that IT can be introduced into the NHS without a care whether it works properly or not?

In parts of the NHS, IT works extraordinarily well. Those who design, test, implement and support such systems care deeply about patients. In many hospitals the IT reduces risks and helps to improve the chances of successful outcomes.

But in other parts of the NHS are some technology enthusiasts – at the most senior board level – who seem to believe that all major IT implementations will be flawed and will be improved by user feedback.

The result is that IT that’s inadequately designed, tested and implemented is foisted on doctors and nurses who are expected to get used to “teething” troubles.

This is dangerous thinking and it’s becoming more and more prevalent.

Many poorly-considered implementations of the Cerner Millennium electronic patient record system have gone live in hospitals across England with known problems.

In some cases, poor implementations – rather than any faults with the system itself – have affected the care of patients and might have contributed to unnecessary deaths when records needed urgently were not available, or hospitals lost track of urgent appointments.

A CQC report in March 2015 said IT was a possible factor in the death of a patient because NHS staff were unable to access electronically-held information.

In another incident a coroner criticised a patient administration system for being a factor in the death of three year-old Samuel Starr whose appointment for a vital scan got lost in the system.

Within NHS officialdom is a growing cultural acceptance that somehow a poor IT implementation is different to a faulty x-ray machine that delivers too high a dose of radiation.

NHS officials will always brush off IT problems as teething and irrelevant to the care and safety of patients. Just apologise and say no patient has come to any harm.

So little do IT-related problems matter in the NHS that unaccountable officials at the HSCIC have this week felt sufficiently detached from personal accountability to launch a national system knowing there are dozens of problems with the use of it.

Their attitude seems to be: “We can’t know everything wrong with the system until it’s live. So let’s launch the system and fix the problems as GPs give us their feedback.”

This is a little like the NHS having a template letter of regret to send to relatives and families of patients who die unexpectedly in the care of the NHS. Officials simply fill in the appropriate name and address. The NHS can then fix the problems as and when patients die.

It’s surely time that bad practice in NHS IT was eradicated.  Board members need to question more. When necessary directors must challenge the blind positivism of the chief executive.

Some managers can learn much about the culture of care at the hospitals that implement IT successfully.

Patients, nurses and doctors do not exist to tell hospital managers and IT suppliers when electronic records are wrong, incomplete, not available or are somebody else’s record with a similar name.

And GPs do not exist to be guinea pigs for testing and providing feedback on new national systems such as the e-Referral Service.

e-Referral Service “unavailable until further notice”

Hundreds of patients lost in NPfIT systems

Hospital has long-term NPfIT problems

An NPfIT success at Croydon? – Really?

Physicians’ views on electronic patient records

Patient record systems raise some concerns, says report

Electronic health records and safety concerns

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

By Tony Collins

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

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

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

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

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

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

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

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

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

This is the HMRC advert:

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

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

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

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

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

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

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

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

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

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

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

Comment

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

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

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

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

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

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

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

Government Computing article

 

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

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.

 

 

Judge refuses DWP leave to appeal ruling on Universal Credit reports

By Tony Collins

An information tribunal judge has unexpectedly refused consent for the Department of Work and Pensions to appeal his ruling that four reports on the Universal Credit programme be published.

The ruling undermines the DWP’s claim that there would be “chilling effect” if the reports were published.

The judge’s decision, which is dated 25 April 2014, means the DWP will have to publish the reports under the FOI Act  – or it has 28 days to appeal the judge’s refusal to grant consent for an appeal.  The DWP is certain to appeal again. It has shown that money is no object when it comes to funding appeals to keep the four reports secret.

In 2012 John Slater, who has 25 years experience working in IT and programme and project management, had requested the UC Issues Register, Milestone Schedule and Risk Register. Also in 2012 I requested a UC project assessment review by the Cabinet Office’s Major Projects Authority.

Last month the “first-tier” information tribunal ruled that all four reports should be published. It rejected the DWP’s claim that disclosure would inhibit the candour and boldness of civil servants who contributed to the reports – the so-called chilling effect.

The DWP sought the tribunal’s leave to appeal the ruling, describing it as “perverse”. It said the tribunal had wholly misunderstood what is meant by a “chilling effect”, how it is manifested and how its existence can be proved.

It claimed the misunderstanding and the perverse decision were “errors of law”.  For the first-tier tribunal’s finding to go to appeal to the “Upper Tribunal”, the DWP would have needed to prove “errors in law” in the findings of the first-tier tribunal.

Now Judge David Farrer QC says his tribunal has understood the chilling effect but found no evidence that it was relevant to the four reports in question. Indeed the judge implies that if the chilling effect existed there would be evidence of it.

“The so-called chilling effect implies Government departments and other public authorities have by now extensive experience of decisions requiring them to disclose information which they sought to withhold for the reasons advanced by DWP here,” says the judge in dismissing the DWP’s request for permission to appeal.

“If the chilling effect is a widespread and damaging result of the fear of disclosure, there is every reason for central government to investigate the matter, enabling a government department to present a case based on its research.

“Quite apart from that, those receiving reports, conducting discussions and reading advice might be expected to observe, over a period, any trend in changing style and content of their colleagues` written work, so as to be able to present examples and relate them to the perceived threat of disclosure.

“Obviously the form of document will remain the same but it is hard to believe that the experienced observer could not spot and demonstrate a general loss of trenchancy, of innovation or of boldness in the content over a period if that were indeed the effect of possible public exposure.

“Such changes would constitute ‘concrete and specific effects’, adopting DWP`s wording.”

Although the reports requested under the FOI Act are now old – they date back to 2011 – their publication could throw light on how much DWP ministers and civil servants knew about the many problems with Universal Credit IT at a time when the department was issuing unswervingly positive press releases about the UC programme.

Judge Farrer hinted that DWP ministers and civil servants could have misled the public about the real state of UC programme.

Having read the four reports in question, the judge said in his ruling that the Tribunal was “struck by the sharp contrast with the unfailing confidence and optimism of a series of press releases by the DWP or ministerial statements as to the progress of the Universal Credit Programme during the relevant period”.

At the information tribunal in January 2014 a senior civil servant Sarah Cox, on behalf of the DWP, spoke on the supposed effects of disclosure on the candour and boldness of reviewers.

But the Tribunal noted that a Starting Gate review of Universal Credit was published [in 2011] which the DWP had refused to release under FOI. The Information Tribunal noted that Ms Cox did not suggest that the revelation of this document had inhibited frank discussion within the Universal Credit programme.

The Tribunal said reports such as the risk register and project assessment review are important indicators of the state of a project. Their disclosure can give the public a chance to test whether ministers and civil servants are giving out correct information on the state of a project.

This week the judge says that the Tribunal “read and heard the evidence of Ms. Cox, considered the subject matter and the withheld material, took account of her experience, applied its own experience of these cases and its commonsense and, on this issue, found her testimony unpersuasive, as it was entitled to do.”

In conclusion the judge says the Tribunal “rejects the claim that its handling of the ‘chilling effect’ issue involved an error of law.”

Comment:

The DWP was claiming in 2012 that all was well with the UC programme when in reality they knew there wasn’t even an agreed project plan.

That is a good reason for the DWP to want to keep the reports secret – but the main reason its senior civil servants want to stop publication is tradition. The DWP does not publish any of its reports on the state of big IT-enabled projects and programmes.

It’s perhaps because the DWP has always buried itself under the covers of secrecy that it is so imperious – to the point of arrogance – in its handling of FOI requests and appeals. It acts like an institution that is not used to having outsiders, including the information tribunal and National Audit Office – peep into its affairs.

Perhaps this is why the NAO found that the UC programme was being managed so badly. When complex institutions operate in secrecy and without effective day to day scrutiny standards can continue to fall to a point when even the best leaders are powerless to intervene.

There may come a time – if that time hasn’t been reached already – when the DWP will be held together, and only remain credible in the eyes of the public and Parliament, because of the solid work of its major IT suppliers that have been there for decades, bolstered by a plethora of media announcements and ministerial assurances.

We are certainly getting the media announcements and ministerial statements, but without the publication of reports on UC’s progress, do the official pronouncements mean anything at all?

FOI ruling judge refuses DWP leave to appeal

Is IDS losing his cool over Universal Credit IT?

By Tony Collins

IDS was polite and calm, almost deferential, when he went before MPs of the Work and Pensions Committee in September 2012.  “Can I say it is always a privilege to be here?” he said.

At at Monday’s hearing of the same committee, though, he was at times tetchy, patronising and mildly bullying. “I don’t think this committee can run the department,” he replied when asked why he hadn’t told the committee in 2012 of problems with the Universal Credit IT project.

Several times he talked over the MP who was asking him questions, with the result neither could be clearly heard.

[If he’s like that at meetings with DWP officials would anyone want to tell him something he doesn’t want to hear? Perhaps his loss of cool on Monday reflected the baffling complexity, and rising costs, of the waterfall part of  Universal Credit’s  IT programme.]

IDS might also have been shaken by the absence of his most authoritative ally, Howard Shiplee, who has been off sick since shortly before Christmas.

Hidden 

Over a period of more than a year, the DWP and IDS fed the work and pensions committee good news about progress on the Universal Credit IT project. The truth didn’t surface until the National Audit Office published its report on UC in September 2013.

Unknown to the committee in 2012, the DWP was struggling at that time to set out how the detailed design of systems and processes would fit together and relate to the objectives of Universal Credit. This was raised repeatedly in 2012 by internal audit, the Major Projects Authority and a supplier-led review. The committee wasn’t told.

Hence Dame Anne Begg, the softly-spoken chairman, came to Monday’s meeting with a direct question. Why, when IDS came before the Work and Pensions committee in September 2012, did he make no mention of having commissioned a red team review into the Universal Credit project several months earlier.

“Because it was an internal review,” replied IDS. “We were looking the results of that and trying to take whatever decisions were necessary. It was about some of the issues that were going on in the UC team…”

Begg: “But why didn’t you tell us a review was going on?”

IDS: “I don’t tell the committee everything that is happening within the Department until we have reached a conclusion about what is actually happening.”

Begg: “It was an ideal opportunity when you appeared before us in September [2012] that you could have said there were concerns about what was happening with Universal Credit but at that session you were very bullish about how successful everything was.”

IDS: “I still remain very confident about how successful it will be. [Note a difference in tenses between the question and answer]. At the time we were working out how we would make the reset.”

Sir Humphrey

At IDS’s sided was Robert Devereux, Permanent Secretary at the DWP, who seemed at times a parody of Sir Humphrey. [Animated in the delivery of some of his answers Devereux looked as if he was saying something interesting until you listened to the words.]

One MP asked Devereux why the DWP had given written evidence to the committee in 2012 that Universal Credit was on track when it wasn’t. Devereux said that UC was a large and complex programme. “You are constantly evaluating and re-evaluating your forward plans … as you go along things change.” MPs were none the wiser.

Misled?

Begg [to IDS]: Did you not think it appropriate that this scrutiny committee of the House of Commons, which oversees the work the department does, [should have been kept] informed about changes?

IDS: “With respect we did keep the Committee informed as and when we had clarified what we were actually doing and what we thought the problem was and where it existed and how you isolate it and what changes you made. I don’t for one moment agree in any way at all that we hid stuff. We knew we would be accountable to the committee and all would become public… I don’t think this committee can run the department.”

Begg pointed out that IDS had failed to mention a report of the Cabinet Office’s Major Projects Authority in February 2013. That report had notified the DWP of flaws in UC governance, management and programme design – despite the same matters having been raised in previous MPA reports.

Begg:  “You gave oral evidence to us on 10 July [2012] … but you did not refer at that session to the critical Major Projects Authority report or the reset which had already taken place earlier that year.”

IDS: “I cannot remember what I said to the committee. I have no desire to look back.”

Begg said the DWP told the committee that the pathfinder projects demonstrated that the IT systems worked. “You cannot get any more definitive than that,” said Begg. IDS gave no clear answer.

Obfuscation

Mid-way through the hearing, the mood of some of the exchanges was summed up by Labour MP Debbie Abrahams who told IDS:

“I cannot say with the strongest feeling my concern about the hubris that you have demonstrated in the tone to this committee. You haven’t explained, certainly to my own satisfaction – anybody who is watching will draw their own conclusions – you have not given any satisfactory explanation about how you have informed, or kept this committee informed, about the difficulties the department was experiencing.

“There have been obfuscation and smoke and mirrors even up to a few weeks before the report from the National Audit Office [in September 2013]. The memorandum that was released in August – this was clearly saying everything was fine and dandy. It is clearly not. I give you one more opportunity to answer, so you can explain to this committee, why such poor information is provided by your department.”

IDS replied: “I just don’t agree with you, and I don’t agree that we have done anything else but be open and honest about what the issues are, as and when they have been identified and what we would do about them as and when we have made our decisions about them…

Open?

“When we found something wrong we went and sorted it out. As we sorted it out we made clear direction about that, and eventually through the NAO, the PAC [Public Accounts Committee and the [Work and Pensions] committee.

“I think we have been pretty open about it. I don’t think there’s anything more. In fact in a sense we are going round and round in circles here at this committee hearing at the moment.”

Begg:  “We are not convinced you have got it sorted out.”

Comment

Monday’s hearing shows how ministers and officials justify the hiding of reports on costly IT-enabled projects that are going wrong. IDS didn’t even tell MPs in July 2013 that the Major Projects Authority had four months earlier recommended an immediate pause in the programme.

Most worrying of all, officials and IDS seem content that the DWP gave the work and pensions committee – in September 2012 and July 2013 – a good news story on the state of the Universal Credit IT project while truth about the project’s problems stayed hidden.

IDS suggested it was not necessary to tell MPs about reports until ministers have “reached a conclusion about what is actually happening” That may be never.

It’s time for public accounts and work and pensions MPs to insist on seeing Major Projects Authority reviews, and other reports, on the progress or otherwise of big government IT-enabled programme such as UC. MPs should not have to wait for an NAO report to get the truth.

Governments, whatever their hue, will always refuse to publish these reports contemporaneously, such is the will of departmental heads. They have been refusing to publish the reports for more than 20 years.

But if MPs keep insisting with an unbreakable tenacity on their publication  – and for publication before they are out of date – it may eventually happen, and gone will be the power of ministers and officials to mislead MPs on the state of big IT-enabled programmes.

Until publication happens, is there much point in MPs questioning IDS or his officials on the UC IT programme? They will get only the public relations version of the truth.

 

BBC’s DMI project – another fine mess that was predictable

By Tony Collins

A National Audit Office memorandum published today on the BBC’s failed £125.9m Digital Media Initiative is a reminder – as in most failed big IT-enabled projects – that the causes have nothing to do with software and everything to do with management and people.

The NAO’s memorandum tells an all too familiar story with government IT (and the BBC is a public sector organisation):

– Over-optimism about the ability to implement

– Over-optimism about the ability to achieve the benefits

– Unclear requirements

– No thorough independent assessment of the technical design to see whether the DMI was technically sound

– The successful completion of the most straightforward of technology releases for the DMI, but these proved an unreliable indicator of progress.

– Technical problems and releases not meeting user expectations which contributed to repeated extensions to the timetable for completing the system, eroding user confidence and undermining the business case.

– Poor internal reporting. “The governance arrangements for the DMI were inadequate for its scale, complexity and risk. The BBC did not appoint a senior responsible owner to act as a single point of accountability and align all elements of the DMI. Reporting arrangements were not fit for purpose,” said the NAO.

– In the same way as the DWP failed with Universal Credit to take full account of recommendations in review reports, the BBC “did not adequately address issues identified by external reviewers during the course of the programme”.  The BBC had been aware that business requirements for the DMI were not adequately defined.

The BBC estimates that it spent £125.9m on the DMI. It offset £27.5m of spending on the DMI against transfers of assets, cash and service credits that formed part of its financial settlement with DMI’s previous developer Siemens. This left a net cost of £98.4m.

The BBC cancelled the DMI without examining the technical feasibility or cost of completing it, said the NAO.

The Corporation has written off the value of assets created by the programme, but is exploring how it can develop or redeploy parts of the system to support its future archiving and production needs.

Diane Coyle, Vice Chairman BBC Trust, said:

“We are grateful to the NAO for carrying out this report, which reinforces the conclusions of the PwC review commissioned by the Trust. It is essential that the BBC learns from the losses incurred in the DMI project and applies the lessons to running technology projects in future.

“The NAO’s findings, alongside PwC’s recommendations will help us make sure this happens. As we announced last December, we are working with the Executive to strengthen project management and reporting arrangements within a clearer governance system.  This will ensure that serious problems can be spotted and addressed at an earlier stage.”

Amyas Morse, head of the National Audit Office, said today:

“The BBC Executive did not have sufficient grip on its Digital Media Initiative programme. Nor did it commission a thorough independent assessment of the whole system to see whether it was technically sound.

“If the BBC had better governance and reporting for the programme, it would have recognized the difficulties much earlier than May 2012.”

Comment

The DMI project is exemplar of all that tends to go wrong in big government IT-enabled projects. Strong independent oversight and independent reviews that were published would have provided the accountability to counterbalance over-optimism.  But these things never seems to happen.

There are also questions about why the BBC took on the project from Siemens  and turned what could have been a success into a financial disaster.

NAO memorandum on the BBC’s Digital Media Initiative

BBC World at One’s focus on Government IT

By Tony Collins

The lead item on BBC R4’s World at One on Friday was about Government IT contracts.

On the programme were the government’s Chief Procurement Officer Bill Crothers, Cabinet Office minister Francis Maude, the chairman of the Public Accounts Committee Margaret Hodge, the UK IT Association, and me.

Some of the points made:

–  Bill Crothers gave an example of what he called “abuse” by some big IT suppliers. He said a young man who works for him lost his power cable. The supplier quoted £65 for a replacement. The price should have been £5 or £6.  When Crothers queried it, the supplier justified its price on grounds of security. Crothers could not believe that a power lead had security implications so he questioned the price again and received several pages of explanation from the supplier, which he did not read. Eventually the supplier “was good enough to reduce the price to £37”.

– HMRC was charged £30,000 for changing some text on its website.

– Francis Maude said a DWP team and a further 12 people from the Cabinet Office’s Government Digital Service had built – in only three months – a prototype of a digital solution to support the introduction of Universal Credit. The system cost just over £1m, he said. [Separately big IT suppliers at DWP have been paid £303m up to March 2013 for Universal Credit work.] Maude declined to predict the outcome of the “twin-track” work on the UC project.

– Some big legacy systems may soon need replacing – those that pay about £60bn a year in state pensions and collect nearly £100bn a year in VAT. “Those are going to be big projects,” said Margaret Hodge. “I don’t think we have seen the end of big projects, or the end of disasters.”

World at One in detail

Presenter Shaun Ley and BBC political correspondent Ross Hawkins focused on government IT because of an announcement by the Cabinet Office that it is drawing the line on “bloated and wasteful IT contracts”. The Cabinet Office was pitching its announcement as marking a “massive change,” said Hawkins.

Ley said Francis Maude announced the safeguards  in an attempt to ensure that IT contracts don’t become multi-billion pound failures. He said that the abandoned NPfIT had cost close to £10bn.

Hawkins quoted the UK IT Association as saying that  government did not know how to do deals with smaller suppliers. On the government’s relationship with big suppliers UKITA said the government was like a “battered wife or husband who doesn’t seem to know how to leave.”

Appalling

Hawkins said Crothers has the air of a man going to war. Crothers’ conclusion on the way things are at the moment:

“This is about the oligopoly, the cluster of big suppliers that have had it took good for too long. It’s reflective of monopolistic or oligopolistic behaviour.  It is not acting as if they are in hungry and in a competitive market.  That’s appalling.”

Universal Credit

Hawkins asked Francis Maude how confident he was that what was being put in place on Universal Credit would work.

“I hope it will work,” said Maude. “The digital solution was created by a team within DWP with a dozen or so GDS [Government Digital Service] staff assisting.

“They created a working prototype for a digital solution within 3 months at a cost of only a bit over £1m. That certainly can be basis of a successful long-term solution.”

Hawkins [to Maude] “I asked you whether you were confident the approach with DWP would work and you said you hoped it would. That suggests to me that maybe you are not (confident).”

Maude: “N0-one knows with these things. Anyone who says you are certain everything is going to succeed … the way we do things now is build something quickly, test it, prove it, test it with users, and so you can’t have certainty about any of these outcomes.”

Outsourcing failures

Hawkins said “We have had story after embarrassing story about outsourcing failures [such as the] government being charged for tagging dead people … now ministers  have an interest in coming out on the front foot and just for once being on the attack and having a whack at the IT companies.

“You don’t need to be a political genius to work out why they would like to do that rather than be endlessly explaining themselves after embarrassing stories in the papers.”

Ley (to me): “Is this the best way to deal with the problems government has experienced? The journalist Tony Collins has written widely  about project failures in IT in both the public and private sectors.”

I replied that big companies have sometimes charged a lot to make small software changes.  The Cabinet Office’s “red lines” were a good idea though they were a formalising of restrictions that had been in place some time.

The Cabinet Office doesn’t have the power to make changes happen because departments are accountable to Parliament for their spend and so don’t want much interference from the Cabinet Office. But the Cabinet Office is right to try and reduce the amounts spent on big projects.

Ley: “What will be the effect of breaking up contracts?”

I said I hoped the Cabinet Office’s restrictions would bring about a change in culture in departments against the assumption that big is beautiful. Big projects should be split into components which would give SMEs a greater involvement and could reduce the risks of projects failing.

More project disasters?

Hodge gave her reaction to the Cabinet Office’s restrictions in the context of the Universal Credit project.

“Francis Maude and Cabinet Office have been trying really hard to get some sense into the way that project has developed. But sadly the news we have had lately suggests to me that they have failed. It is about £400m so far on IT.

“What went wrong there was that the department [DWP] thought it [UC] was a big IT project instead of thinking:  we are going to be changing our business; we are going to get 6 benefits rolled into one. They [the DWP] have not written off that money [£303m] which is what my committee thinks they should have done, because they want to save face. Down the line I think we’ll see some disasters there.

“There are a lot of projects around  government, what are called legacy projects, where old systems need to be replaced . They are big projects – pensions in DWP where £60bn is given out a year;  VAT receipts  in HMRC where nearly £100bn is collected. Those are going to be big projects. I don’t think we have seen the end of big projects, or the end of disasters.”

Ley: “What about breaking them up into smaller projects? Won’t that reduce potential risks?”

Hodge: “The important thing is what Tony Collins was saying to you. What we find is that the skills don’t exist within departments, either to commission the IT properly or to manage the suppliers once they have the IT in place.

“We are about to examine the army recruitment contract – I think that is what we’ll find.  The MoD hasn’t got the skills to manage it.

Ley: “Do you welcome the ending of automatic contract extensions?”

“I warmly welcome that. This is a small step in the right direction. Having an expert as we have in Bill Crothers in the Cabinet Office is really important. What we haven’t got are skills in the departments. It is not like a business. If it was, Bill Crothers would probably run IT across the whole of government. Our departments run in silos. They haven’t got the skills. They have this demand for big, big programmes in the future and I don’t think we have seen, sadly, the end of IT disasters.”

Update

Thank you to Dave Orr for drawing my attention to an excellent piece on the World at One item by procurement expert Peter Smith who concludes:

“… There is a big issue – large suppliers have not covered themselves in glory, but small suppliers just can’t develop huge systems for DWP or MOD.

“The large suppliers must have a role, but we have to manage these contracts better. And the answer can’t just be a small hit squad in Cabinet Office. This needs real capability development across government, which we haven’t really seen as yet in a coordinated fashion.”

BBC World at One – Government IT contracts

Bill Crothers on BBC Radio 4 – suppliers get another good kicking

IT suppliers out of control of DWP on Universal Credit?

By Tony Collins

The Department for Work and Pensions is investigating with consultants PwC whether poor financial controls on payments to IT suppliers have “materialised into cash that should not have been spent”.

If there is evidence the DWP’s permanent secretary Robert Devereux says the DWP will raise the matter with suppliers.

It’s rare for details of central government’s relationship with specific suppliers to come into the public domain but this has happened to some extent on the Universal Credit IT project, thanks mainly to the National Audit Office.

Last week the NAO published a summary of a PwC report into the financial management of UC’s IT suppliers. PwC’s report was circulated to MPs on the Public Accounts Committee who read out some of its contents at a hearing this week.

The Committee’s MPs questioned Devereux, his Finance Director Mike Driver, and Dr Norma Wood, Interim Director General at the Cabinet Office’s Major Projects Authority.

Wood said the Major Projects Authority noticed that suppliers, in doing user acceptance testing, were increasing their average daily rates from £500 to about £800.

Said Wood:

“We came back down to about £500, in round figures. That could mean that you have much greater quality, so one has to be careful. We didn’t have an evidence base really to be able to probe this, which is why we recommended to the accounting officer that he undertake this [PwC] investigation.”

Wood agreed with Margaret Hodge, chair of the Public Accounts Committee, that financial control of the IT companies was a “shambles”.

Hodge said: “The PwC report reads more shockingly than the NAO report in terms of the lack of financial control.” She said that the DWP had sat on the PwC report for six months [before releasing it internally], a point the department has not denied.

Hodge said the PwC report referred to:
– incomplete contracts
– incomplete evidence to support contracts
– inappropriate authorisations
– insufficient information supporting contract management
– delegated authority given to a personal assistant to authorise purchase orders on the behalf of the chair of the strategic design authority

“This is a shambles,” said Hodge. “The fear that one has is that money was clearly paid out to the four big ones—Accenture, IBM, HP and BT—which they claimed on a time basis. It was not a tight contract; it was on a time-and-materials basis, which could well have paid out for no work being done.”

Wood: “I agree with you…it is quite clear that suppliers were out of control and that financial controls were not in place. As we did the reset, we ensured that everything was properly negotiated and contracted for, so that is very tight in terms of the reset going forward, but there are definitely questions about how it was handled… As with any payments you should have a proper audit trail and they should be properly governed. They should have been properly contracted for…”

Wood said that she would use the same suppliers again. “Under proper control why not?”

Hodge said the DWP appeared to have given suppliers a blank cheque. “Last night Mr Driver [DWP Finance Director] kindly sent me a copy of the PwC report, which is even more damning in my view [than the NAO report Universal Credit: early progress], particularly on the blank cheque that you appear to have given to suppliers and the failure to keep Ministers properly informed.”

Conservative MP Richard Bacon said the findings in the PwC report were “extraordinary”. Reading from the report he said there was:
– Limited cost control
– Ineffective end-to-end accounts payable processing
– Limited control over receipting against purchase orders
– Accenture and IBM accounted for almost 65% of total IT supplier spend, as at February 2013.
– Purchase orders for Accenture and IBM do not allow for granular verification of expenditure as they are raised and approved by value only. Thus, they cannot
be linked to individual delivery and grades of staff use. Receipting is completed by reference to time sheets. However, this confirmation is not complete and/or accurate as the majority of those individuals receipting do not have the capability and capacity to verify all time recording. This constraint has resulted in expenditure being approved with a nil return in many cases. As a result, payments may be made with no verification.

Bacon added:

“After all the history that we have had of IT projects going wrong, how can this
extraordinarily loose control—it is probably wrong to use the word “control”—how can this extraordinarily loose arrangement exist?”

Devereux, who was criticised by Hodge on several occasions for not answering questions directly, replied: “I will try at least to explain what was going on. Let me take you back to the process that we were operating. The process we were operating was seeking to work through, in the space of a four-week period -”

Hodge: “You are doing it again, Mr Devereux.”

Devereux: “I am afraid that I cannot answer the question without giving some facts.”

Hodge: “So is PwC wrong?”

Devereux: No, no. PwC is correct, but I am about to explain what else was going on. I have just had a long set of sessions with PwC, who as we speak, are doing further work for me to establish one particular, critical thing that you will want to know, which is that other things were being checked in the background here that enabled PwC to go back and do some ex post calculations about exactly how much was being paid for each of the outputs we had. It is absolutely right to say-”

Bacon “… Is it not utterly elementary that when you are paying a supplier for having given you something, you know what it is you are paying and what you are getting for it? This is basic!”

Devereux said his department had a resource plan agreed with Accenture (the main UC IT supplier) which was based on a computer model on what a piece of work would involve.

“The contract …in any one month was being based on that calculation of how much work we were likely to put into it in advance. Then the signing off of invoices was indeed based on looking at monthly time sheets. I agree with you that that is not a satisfactory position.”

Bacon: “What is amazing is that you said you did not know any of this until the supplier-led review brought it to you in the summer of 2012. This had been going on for quite a while. There was apparently nothing going on in the Department that was flagging this up. Internal assurance, internal audit—where was it?”

Devereux: “… I conclude this, and it is my responsibility—that more than one line of defence has gone wrong. We have talked so far about whether the programme was properly managing itself.”

Bacon: “This is extraordinary, and it is horribly familiar…it is absolutely central to your job as accounting officer to be sure that you have got lines of defence that are operating effectively. That is part of your job, isn’t it?”

Devereux: “It is part of my job.”

Bacon: “So to be surprised by this is an extraordinary admission, is it not?”

Devereux: “I can only be surprised by this if I am not getting signals from my second line of defence—my financial controllers—that they are worried about what is going on.”

Bacon: “You do sound as though you are blaming everybody underneath you, I am afraid.”

Devereux: “I do not intend to do that, but you are asking me what I knew and what I didn’t know. I am trying to take you through the process by which I am aware of things, and the action I have taken on them.”

Bacon: “But my point is that it was your job to know. It is your job to manage this. You are effectively the chief executive of the DWP.”

Devereux: “I am the chief executive of the DWP, I am the accounting officer, and I am accountable for it. Correct.”

Bacon: “But you didn’t know, did you?

Devereux: “I didn’t know on this, no.”

Hodge revealed that one of the conclusions of the PwC report was that there was a lack of evidence of ministerial sign-off of some contracts. PwC tested 25 contracts over £25,000, and only 11 could be traced with approval; and evidence of value for money provided to the Minister was limited in some cases.

Hodge said: “Basically it [PwC] found that you failed to consult properly with Ministers in signing off the IT contracts.”

Driver: “I think we had a weakness in the process that was operating…It has not always been possible to find all of the paper evidence to confirm a decision. We hold our hands up; we need to improve that. We have now significantly improved the control arrangements that operate within the Department ahead of ministerial sign-off.

“We have also significantly improved the arrangements that apply to any sign-off with the Cabinet Office. I personally chair what is called a star chamber group, which looks at all contracts before we seek authority from the Cabinet Office to go forward…”

Devereux: The work that I was trying to describe to the Chair earlier, which PwC is doing now, is to establish whether the risks we have been running, given this lack of control, have actually materialised into cash that should not have been spent…

“In the event that there is evidence of that, we will go back to the suppliers, obviously. I do not want to run this argument too hard, but there is a set of control weaknesses here which gives rise to a risk of loss of value for money. I accept that.”

MPs dig hard for truth on Universal Credit IT