Category Archives: project management

Ministers told of major problem on Capita NHS contract more than a year later

By Tony Collins

Today’s Financial Times and other newspapers cover a National Audit Office report into GP clinical notes and correspondence, some of it urgent, that was not directed to the patient’s GP.

The correspondence was archived by Capita under its contract to provide GP support services. But patient notes were still “live”. They included patient invitation letters, treatment/diagnosis notes, test results and documents/referrals marked ‘urgent’.

What isn’t well reported is that ministers were left in the dark about the problems for more than a year. The National Audit Office does not blame anyone – its remit does not include questioning policy decisions – but its report is impressive in setting out of the facts.

Before NHS England outsourced GP support services to Capita in 2015, GPs practices sent correspondence for patients that were not registered at their practice to local primary care services centres, which would attempt to redirect the mail.

By the time Capita took over GP support services on 1 September 2015, GPs were supposed to “return to sender” any correspondence that was sent to them incorrectly – and not send it to primary care services centres that were now run, in part, by Capita.

But some GPs continued to send incorrectly-addressed correspondence to the primary care services centres. Capita’s contract did not require it to redirect clinical correspondence.

An unknown number of GP practices continued to send mail to the centres, expecting the centre’s staff to redirect it. A further complication was that Capita had “transformation” plans to cut costs by closing the primary care services support centres.

Capita made an inventory of all records at each site and shared this with NHS England. The inventories made reference to ‘clinical notes’ but at this point no one identified these notes as live clinical correspondence. Capita stored the correspondence in its archive.

In line with its contract, Capita did not forward the mail. It was not until May 2016 – eight months after Capita took over the primary care services centres – that Capita told a member of NHS England’s primary care support team that there was a problem with an unquantified accumulation of clinical notes.

It was a further five months before Capita formally reported the incident to NHS England. At that time Capita estimated that there was an accumulation of hundreds of thousands of clinical notes. When the National Audit Office questioned Capita on the matter, it replied that, with hindsight, it believes it could have reported the backlog sooner.

In November 2016, Capita and NHS England carried out initial checks on the reported backlog of 580,000 clinical notes. It wasn’t until December 2016 that ministers were informed of problems – more than a year after Capita took over the contract.

Even in December 2016 ministers were not fully informed. Information about a backlog of live clinical notes was within in a number of items in the quarterly ministerial reports. NHS England did not report the matter to the Department of Health until April 2017 – about two years after the problems began.

Even then, officials told ministers that clinical notes had been sampled and were considered “low clinical and patient risk”. But a later study by NHS England’s National Incident Team identified a backlog of 1,811 high priority patient notes such as documents deemed to be related to screening or urgent test results.

The National Audit Office says, “NHS England expects to know by March 2018 whether there has been any harm to patients as a result of the delay in redirecting correspondence. NHS England will investigate further where GPs have identified that there could be potential harm to patients. The review will be led by NHS England’s national clinical directors, with consultant level input where required.”

Last month Richard Vautrey, chairman of British Medical Association’s General Practitioners Committee, wrote to the NHS Chief Executive Simon Stevens criticising a lack of substantial improvement on Capita’s contract to run primary care service centres.

In December, the GP Committee surveyed practices and individual GPs on the Capita contract. The results showed a little improvement across all service lines, when compared to its previous survey in October 2016, but a “significant deterioration” in some services. Vautrey’s letter said,

“While any new organisation takes time to take over services effectively, the situation has gone from bad to worse since Capita took over the PCSE [Primary Care Support England] service almost two and a half years ago …

“This situation is completely unacceptable. As a result of the lack of improvement in the service delivery of PCSE we are now left with no option but to support practices and individual doctors in taking legal routes to seek resolution. While this is taking place, we believe it is imperative that NHS England conducts a transparent and comprehensive review of all policy, procedures and processes used by PCSE across each service line.”

Comment:

It’ll be clear to some who read the NAO report that the problems with urgent patient notes going astray or being put mistakenly into storage, stems from NHS England’s decision to outsource a complex range of GP support services without fully considering – or caring about – what could go wrong.

It’s not yet known if patients have come to harm. It’s clear, though, that patients have been caught in the middle of a major administrative blunder that has complex causes and for which nobody in particular can be held responsible.

That ministers learned of a major failure on a public sector outsourcing deal over a year after live patient notes began to be archived is not surprising.

About four million civil and public servants have strict rules governing confidentiality. There are no requirements for civil and public service openness except when it comes to the Freedom of Information Act which many officials can – and do – easily circumvent.

Even today, the fourth year of Capita’s contract to run GP support services, the implications for patients of what has gone wrong are not yet fully known or understood.

It’s a familiar story: a public sector blunder for which nobody will take responsibility, for which nobody in particular seems to care about, and for which the preoccupation of officialdom will be to continue playing down the implications or not say anything at all.

Why would they be open when there is no effective requirement for it? It’s a truism that serious problems cannot be fixed until they are admitted. In the public sector, serious problems on large IT-related contracts are not usually fixed until the seriousness of the problems can no longer be denied.

For hundreds of years UK governments have struggled to reconcile a theoretical desire for openness with an instinctive and institutional need to hide mistakes. Nothing is likely to change now.

National Audit Office report – Investigation into clinical correspondence handling in the NHS.

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Companies nervous over HMRC customs IT deadline?

By Tony Collins

This Computer Weekly article in 1994 was about the much-delayed customs system CHIEF. Will its CDS replacement that’s being built for the post-Brexit customs regime also be delayed by years?

The Financial Times  reported this week that UK companies are nervous over a deadline next year for the introduction of a new customs system three months before Brexit.

HMRC’s existing customs system CHIEF (Customs Handling of Import Export Freight) copes well with about 100 million transactions a year. It’s expected a £157m replacement system using software from IBM and European Dynamics will have to handle about 255 million transactions and with many more complexities and interdependencies than the existing system.

If the new system fails post-Brexit and CHIEF cannot be adapted to cope, it could be disastrous for companies that import and export freight. A post-Brexit failure could also have a serious impact on the UK economy and the collection of billions of pounds in VAT, according to the National Audit Office.

The FT quoted me on Monday as calling for an independent review of the new customs system by an outside body.

I told the FT of my concern that officials will, at times, tell ministers what they want to hear. Only a fully independent review of the new customs system (as opposed to a comfortable internal review conducted by the Infrastructure and Projects Authority) would stand a chance of revealing whether the new customs system was likely to work on time and whether smaller and medium-sized companies handling freight had been adequately consulted and would be able to integrate the new system into their own technology.

The National Audit Office reported last year that HMRC has a well-established forum for engaging with some stakeholders but has

“significant gaps in its knowledge of important groups. In particular it needs to know more about the number and needs of the smaller and less established traders who might be affected by the customs changes for the first time”.

The National Audit Office said that the new system will need to cope with 180,000 new traders who will use the system for the first time after Brexit, in addition to the 141,000 traders who currently make customs declarations for trade outside the EU.

The introduction in 1994 of CHIEF was labelled a disaster at the time by some traders,  in part because it was designed and developed without their close involvement. CHIEF  was eventually accepted and is now much liked – though it’s 24 years old.

Involve end-users – or risk failure

Lack of involvement of prospective end-users is a common factor in government IT disasters. It happened on the Universal Credit IT programme, which turned out to be a failure in its early years, and on the £10bn National Programme for IT which was dismantled in 2010. Billions of pounds were wasted.

The FT quoted me as saying that the chances of the new customs system CDS [Customs Declaration Service) doing all the things that traders need it to do from day one are almost nil.

The FT quotes one trader as saying,

“HMRC is introducing a massive new programme at what is already a critical time. It would be a complex undertaking at the best of times but proceeding with it at this very moment feels like a high stakes gamble.”

HMRC has been preparing to replace CHIEF with CDS since 2013. Its civil servants say that the use of the SAFe agile methodology when combined with the skills and capabilities of its staff mean that programme risks and issues will be effectively managed.

But, like other government departments, HMRC does not publish its reports on the state of major IT-related projects and programmes. One risk, then,  is that ministers may not know the full truth until a disaster is imminent.

In the meantime ministerial confidence is likely to remain high.

Learning from past mistakes?

HMRC has a mixed record on learning from past failures of big government IT-based projects.  Taking some of the lessons from “Crash”, these are the best  things about the new customs project:

  • It’s designed to be simple to use – a rarity for a government IT system. Last year HMRC reduced the number of system features it plans to implement from 968 to 519. It considered that there were many duplicated and redundant features listed in its programme backlog.
  • The SAFe agile methodology HMRC is using is supposed to help organisations implement large-scale, business-critical systems in the shortest possible time.
  • HMRC is directly managing the technical development and is carrying out this work using its own resources, independent contractors and the resources of its government technology company, RCDTS. Last year it had about 200 people working on the IT programme.

These are the potentially bad things:

  • It’s not HMRC’s fault but it doesn’t know how much work is going to be involved because talks over the post-Brexit customs regime are ongoing.
  • It’s accepted in IT project management that a big bang go-live is not a good idea. The new Customs Declaration Service is due to go live in January 2019, three months before Britain is due to leave the EU. CHIEF system was commissioned from BT in 1989 and its scheduled go-live was delayed by two years. Could CDS be delayed by two years as well? In pre-live trials CHIEF rejected hundreds of test customs declarations for no obvious reason.
  • The new service will use, at its core,  commercially available software (from IBM) to manage customs declarations and software (from European Dynamics) to calculate tariffs. The use of software packages is a good idea – but not if they need large-scale modification.  Tampering with proven packages is a much riskier strategy than developing software from scratch.  The new system will need to integrate with other HMRC systems and a range of third-party systems. It will need to provide information to 85 systems across 26 other government bodies.
  • If a software package works well in another country it almost certainly won’t work when deployed by the UK government. Core software in the new system uses a customs declaration management component that works well in the Netherlands but is not integrated with other systems, as it would be required to do in HMRC, and handles only 14 million declarations each year.
  • The IBM component has been tested in laboratory conditions to cope with 180 million declarations, but the UK may need to process 255 million declarations each year.
  • Testing software in laboratory conditions will give you little idea of whether it will work in the field. This was one of the costly lessons from the NHS IT programme NPfIT.
  • The National Audit Office said in a report last year that HMRC’s contingency plans were under-developed and that there were “significant gaps in staff resources”.

Comment

HMRC has an impressive new CIO Jackie Wright but whether she will have the freedom to work within Whitehall’s restrictive practices is uncertain. It seems that the more talented the CIO the more they’re made to feel like outsiders by senior civil servants who haven’t worked in the private sector.  It’s a pity that some of the best CIOs don’t usually last long in Whitehall.

Meanwhile HMRC’s top civil servants and IT specialists seem to be confident that CDS, the new customs system, will work on time.  Their confidence is not reassuring.  Ministers and civil servants publicly and repeatedly expressed confidence that Universal Credit would be fully rolled by the end of 2017. Now it’s running five years late.  The NHS IT programme NPfIT was to have been rolled out by 2015.  By 2010 it was dismantled as hopeless.

With some important exceptions, Whitehall’s track record on IT-related projects is poor – and that’s when what is needed is known. Brexit is still being negotiated. How can anyone build a new bridge when you’re not sure how long it’ll need to be and what the many and varied external stresses will be?

If the new or existing systems cannot cope with customs declarations after Brexit it may not be the fault of HMRC. But that’ll be little comfort for the hundreds of thousands of traders whose businesses rely, in part, on a speedy and efficient customs service.

FT article – UK companies nervous over deadline for new Customs system

Capita under fire again over GP support contract – but NHS England praises “improvements”

By Tony Collins

Hundreds of trainee GPs have not received their salaries from Capita, which is under contract to pay them, reports The Guardian.

Some of the trainees have applied for emergency funds from The Cameron Fund, a charity for the prevention of hardship among GPs and their dependents.

Capita administers training grants for GPs under its wide-ranging £1bn contract with NHS England to provide primary care services.

In November 2016 the then Health minister Nicola Blackwood described failings on Capita’s GP support contract as “entirely unacceptable”. 

She said Capita had inadequately prepared for delivering a “complex transition”.

In response,  Capita said it adding the full-time equivalent of 500 extra staff on the contract.

But in February 2017, after continuing complaints,  the Health Secretary Jeremy Hunt said he would be prepared to end Capita’s contract if necessary.

Since then, though, NHS England has praised “improvements” in the contract, according to Pulse.

Yesterday The Guardian reported extracts from a letter the British Medical Association sent to NHS England on 30 October 2017.

It said some GP practices were “having to pay trainees out of already overstretched practice budgets, or trainees are going months without being paid if the practice cannot cover the shortfall”.

Capita confirmed it had outstanding payments to some trainee GPs but was unable to say how many it is responsible for paying, or how many it has not paid.

It said that it had not received all the information it needed to pay salaries from the relevant employers. A Capita spokesperson told The Guardian that the problems were an inevitable part of “a major transformation project to modernise a localised and unstandardised service”.

It added: “We have made significant investment to deliver improvements and these have been recognised by NHS England and demonstrated through improved service performance and improved customer satisfaction.”

The Cameron Fund’s treasurer Dr David Wrigley described the outsourcing of GP support services as a “botched privatisation”.

“NHS England has commissioned out what was a very efficient service run within the NHS, and now Capita runs this contract in what I’d call another botched privatisation.”

One trainee GP went unpaid two consecutive months.  At the end of October she posted on a private message board for GPs: “Anyone know of how I access hardship funds (quickly) to feed children/pay nursery/mortgage (quickly)?”

Her surgery gave her a loan last month to tide her over but did not have enough surplus funds to do the same thing again.

She said that in the last 24 hours partners have stepped forward and have all taken a pay cut to provide a loan “to get me through the month as they were worried about my family”.

An NHS England spokesperson said it was “holding Capita’s feet to the fire on needed improvements”.

It added: “In the meantime, the lead employer for Health Education England or the GP practice are responsible for paying their GP trainee salaries and are subsequently reimbursed for this. Backlogs are being prioritised by Capita.”

The BMA’s letter to the NHS chief executive Simon Stevens criticises Capita.

“We are disappointed at the lack of progress that has been made … These issues have been ongoing since NHS England commissioned Capita … and it is unacceptable that more progress has not been made to getting these resolved …

Wrigley wants the House of Commons’ public accounts committee to investigate the contract.

“NHS England have known about this for a while and the BMA has been putting constant pressure on, and it’s all promises that it’ll get better but it doesn’t.”

New systems for cervical screening and GP payments and pensions that are also contracted out to Capita are due to go live next July. The BMA has told NHS England that it has “no confidence” in Capita’s ability to deliver the services.

Comment

It’s possible to have some sympathy for Capita which has the daunting task of trying to standardize a wide range of systems for supporting disparate GP support services.

But, as Campiagn4Change has reported many times on Barnet Council’s Capita outsourcing contract, it can be difficult if not impossible to make huge savings in the cost of running services (£40m in the case of the GP support contract), deliver an IT-based transformation based on new investment and provide a healthy profit for the supplier’s shareholders while at the same time making internal efficiency savings.

Capita’s share price is relatively low and under continuing pressure but is holding up reasonably well given the company’s varied problems.

Still, we wonder whether the company can afford to put large sums into sorting out problems on the GP support contract, at Barnet Council and on other well-publicised contracts?

The MoD has ended a Capita contract early, the company faces litigation from the Co-op and its staff are staging nine days of strikes over pensions.

Who’s to blame?

If anyone is to blame in this NHS saga it is NHS England for not fully understanding the scale and complexity of the challenges when it outsourced to Capita.

The first rule of outsourcing is: Don’t outsource a problem.

Doctors warned NHS England against signing the contract. Under financial pressure to do so – it needed the promised savings  – NHS England’s public servants signed the deal.

Those public servants will not be held accountable for their decision. In which case, what’s to stop public and civil servants making the wrong decisions time and again?

Two further questions:

Is NHS England too close to Capita to see the faults?

Do public servants have a vested interest in not criticising their outsourcing suppliers, in case opprobrium falls on both parties? 

Thank you to Zara Pradyer for drawing my attention to the Guardian article.

Hundreds of trainee GPs facing hardship as outsourcing firm Capita fails to pay – The Guardian.

 

A proposed Bill and charter that could change the face of Whitehall IT and save billions

By Tony Collins

A government-commissioned review yesterday backed a Bill that could, if enacted and applied to Whitehall generally, prevent billions of pounds being lost on wasteful projects.

The Public Authority Accountability Bill – known informally as the Hillsborough Law – would establish an offence of intentionally or recklessly misleading the public, media or court proceedings.

It would also impose a legal requirement on public authorities to act with candour, transparency and frankness when things go wrong.

Although the Bill was a reaction, in part, to the cover up by public authorities of their failings in the light of Hillsborough, it could, if enacted, deter public authorities from covering up failings generally – including on major IT programmes.

For decades public authorities have had the freedom – unrestricted by any legislation – to cover up failures and issue misleading statements to the public, Parliament and the media.

In the IT sphere, early problems with the Universal Credit IT programme were kept secret and misleadingly positive statements issued. The National Audit Office later criticised a “good news” culture on the Universal Credit programme.

And still the DWP is fighting to block the disclosure of five project assessment reviews that were carried out on the Universal Credit IT programme between 2012 and 2015.

It could be argued that billions of pounds lost on the NPfIT – the National Programme for IT in the NHS – would have been avoided if the Department of Health had been open and candid at the start of the programme about the programme’s impractically ambitious aims, timescales and budgets.

The Department for Business, Energy and Industrial Strategy is currently keeping secret its progress reports on the £111bn smart meters rollout – which independent experts have said is a failing programme.  The department routinely issues positive statements to the media on the robust state of the programme.

The Public Authority Accountability Bill was drafted by lawyers who had been involved with representing bereaved Hillsborough families. It is aimed mainly at government inquiries, court proceedings and investigations into lapses of public services.

But it would also enshrine into law a duty on public authorities, public servants, officials and others to act within their powers with “transparency, candour and frankness”.

Lawyers who drafted the Bill refer on their website to “institutional defensiveness and a culture of denial” when things go wrong. They say,

“In 2017 we expect public authorities and individuals acting as public servants to be truthful and act with candour. Unfortunately, repeated examples have shown us that this is not generally the case.

“Instead of acting in the public interest by telling the truth, public authorities have tended to according to narrow organisational and individual motives by trying to cover up faults and deny responsibility …”

Backing for the Bill came yesterday from a 117-page report on the Hillsborough disaster by Bishop James Jones. The government commissioned him to produce a report on the experiences of the Hillsborough families so that their “perspective is not lost”.

Jones’ impressive report refers to institutions that “closed ranks, refused to disclose information, used public money to defend its interests and acted in a way that was both intimidating and oppressive”

His report refers to public bodies in general when it points to a “cultural condition” and “mindset” that features an “instinctive prioritisation of the reputation of an organisation over the citizen’s right to expect people to be held to account for their actions”. This, says the report, “represents a barrier to real accountability”.

It adds,

“As a cultural condition, this mindset is not automatically changed, still less dislodged, by changes in policies or processes. What is needed is a change in attitude, culture, heart and mind.”

The report urges leaders of “all public bodies” to make a commitment to cultural change by publicly signing a new charter.

The charter commits public bodies to:

  •  Place the public interest above its own reputation.
  • Approach forms of scrutiny with candour, in an open, honest and transparent way, making full disclosure of relevant documents, material and facts.
  • Learn from the findings of external scrutiny and from past mistakes.
  • Avoid seeking to defend the indefensible or to dismiss or disparage those who may have suffered where the organisation has fallen short.
  • When falling short, apologise straightforwardly and genuinely.
  • Not knowingly mislead the public or the media.

The report says that institutional defensiveness and a culture of denial are “endemic amongst public institutions as has been demonstrated not only by the Hillsborough cover up but countless other examples.”

Stuart Hamilton, son of Roy Hamilton who died at Hillsborough, is quoted in the report as saying,

“Police, officials and civil servants should have a duty of revealing the full facts and not merely selecting some truths to reveal but not others. Not lying or not misleading is simply not good enough. Without this, future disasters cannot be averted and appropriate policies and procedures cannot be developed to protect society.

“Such selective revealing of information also results in the delay of justice to the point where it cannot be served”.

He added,

“I believe that without a change not only in the law but also in the mindset of the public authorities (which a law can encourage) then very little exists to stop the post-event actions happening again.”

IT-enabled projects

Whitehall departments and the Infrastructure and Projects Authority publish their own narratives on the progress on major IT-enabled projects and programmes such as Universal Credit and smart meters.

But their source reports aren’t published.

Early disclosure of failings could have prevented hundreds of millions of pounds being lost on FireControl project, BBC’s Digital Media Initiative, the Home Office Raytheon e-borders and C-Nomis national offender management information projects and the Rural Payments Agency’s CAP delivery programme (which, alone, contributed to EU penalties of about £600m).

Comment:

Yesterday’s beautifully-crafted report into the Hillsborough disaster – entitled “The patronising disposition of unaccountable power” – is published on the Gov.uk website.

It has nothing to do with IT-enabled projects and programmes. But, in an unintentional way, it sums up a public sector culture that has afflicted nearly every Whitehall IT-based project failure in the last 25 years.

A culture of denial is not merely prevalent today; it is pervasive. All Whitehall departments keep quiet about reports on their failings. It is “normal” for departments to issue misleadingly positive statements to the media about progress on their programmes.

The statements are not lies. They deploy facts selectively, in a way that covers up failings. That’s the Whitehall culture. That’s what departments are expected to do.

According to Bishop Jones’ Hillsborough report, one senior policeman told bereaved families that he was not obliged to reveal the contents of his reports. He could bury them in his garden if he wished.

It’s the same with government departments. There is no legal duty to keep programme reports, still less any requirement to publish them.

If Bishop Jones’ charter is signed by leaders of public authorities including government departments, and Andy Burnham’s Bill becomes law,  the requirement for candour and transparency could mean that IT programme progress reports are made available routinely.

If this happened – a big if – senior public officials would have to think twice before risking billions of pounds on a scheme that held out the prospect of being fun to work on but which they knew had little chance of success within the proposed timescales, scope and budget.

It’s largely because of in-built secrecy that the impossibly impractical NPfIT was allowed to get underway. Billions of pounds was wasted.

Some may say that the last thing ministers and their permanent secretaries will want is the public, media and MPs being able to scrutinise what is really happening on, say, a new customs IT project to handle imports and exports after Brexit.

But the anger over the poor behaviour of public authorities after Hillsborough means that the Bill has an outside chance of eventually becoming law. Meanwhile public sector leaders could seriously consider signing Jones’ charter.

John Stuart Mill wrote in 1859 (On Liberty and The Subjection of Women) that the “only stimulus which can keep the ability of the [public] body itself up to a high standard is liability to the watchful criticism of equal ability outside the body”.

 

Does Universal Credit make a mockery of Whitehall business cases?

By Tony Collins

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

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

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

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

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

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

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

Will Universal Credit work?

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

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

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

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

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

Business cases are mandatory … sort of

The Treasury says that production of business cases is a

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

Yesterday, however, Computer Weekly reported that,

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

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

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

Why a business case is important

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

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

The business case provides a

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

The full business case, in particular, sets out the

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

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

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

Comment

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Treasury guidance on business cases

 

 

A classic “waterfall” IT project disaster – yet officials went by the book

By Tony Collins

Some of those who read “Crash – 10 easy ways to avoid a computer disaster” may remember a warning that buying an IT system on the basis that it works well in another country and can therefore be adapted to the UK’s needs, is flirting with disaster.

First published in 1999, Crash said,

“There are graveyards of computer projects that began life as a simple adaptation of a package used elsewhere in the world.”

One example at that time was the failure of the London Stock Exchange’s Taurus project.

Now a report published today by Audit Scotland on the “i6” project goes into forensic – but lucid – detail on what went wrong and the conflicting views of police and the supplier Accenture.

Says the report,

“The belief that most of the i6 system could be based on an existing IT system proved incorrect.”

It became clear well into project that

“a virtually fully bespoke system was required”.

The plan was for i6 to replace 130 paper-based processes and IT systems but on 1 July 2016, after many well-publicised difficulties and delays, the Scottish Police Authority and Accenture agreed to terminate the i6 contract.

Police in Scotland had chosen Accenture’s bid in 2013 largely because it had successfully implemented a system for Spain’s Guardia Civil police service.

To its credit Accenture refunded all the money the police in Scotland had paid for the i6 system, £11.06m, plus a further £13.56m – but Audit Scotland says the failure of the project …

“means that some of the benefits that should have arisen from implementing it, have been, at best, delayed. There was a need to modernise police ICT systems six years ago when the procurement of i6 began. That need has not been met. Police officers and staff continue to struggle with out-of-date, inefficient and poorly integrated systems.

“This also hinders how Police Scotland interacts and shares information and intelligence with the other parts of the justice system. There is an urgent need to determine what the next steps should be…”

The lessons are clear from the report:

  • Don’t buy an overseas system without realising that it’ll need to be built almost from scratch for the UK. The ideal is for the business processes to be greatly simplified and adapted to fit a tried and tested system, not the other way around. Audit Scotland says the police programme team and Accenture believed that the majority of the i6 system could be based on an existing IT system that Accenture had developed for Spain,  with the remainder being bespoke development work.  But there was an “over-reliance” on Accenture’s work for Guardia Civil”.
  • The “waterfall” systems development contributed to the fact that Police Scotland “only discovered the true extent of problems with the system when it was delivered for testing”.  Waterfall meant that Accenture produced the software in distinct phases, in a sequence resembling a waterfall. Once a phase was complete, the process moved to the next phase – and no turning back. “It meant that all of the design, coding and construction of i6 would be completed before Accenture released it to Police Scotland for testing. Police Scotland would pay for each phase when it was completed.” [Agile, on the other hand, is a “test and see” approach and is far more flexible. It can adapted according to what the end-user needs and wants, and changes in those needs and wants.]
  • Don’t trust the demonstration of a waterfall system. The demo may look great but rolling it out successfully across various regions may be a different story. Accenture had demonstrated i6 but much later, after a period of testing, the i6 programme team reported to the programme board in August 2015 that there were: critical errors in the technical coding, flaws that Accenture was unable to resolve as quickly as expected, serious concerns about the criminal justice module, which did not comply with the Integrated Scottish Criminal Justice Information System data standards, errors in the search and audit modules and “problems around the limited functionality in the administration module”.
  • External assurance reports may tell you that you have complied with good practice and they may give you detailed praise for your attention to detail but they probably haven’t looked at the big question: will the systems ever work? Audit Scotland said external assurance reports such as the Scottish Government’s “Gateway reviews” suggested improvements but “raised no major concerns”.  Throughout the course of the i6 programme, most of the external reviews suggested that delivery confidence was either amber or green.
  • If the plan is for a waterfall development, doing everything by the book before a contract is awarded will not guarantee success, or even make it more likely, if you haven’t asked the big question: Is this ever likely to work given the complexities we don’t yet understand? For officials in Scotland, everything went smoothly before the award of contract: there were even 18 months of pre-contract discussions. But within weeks of the contract’s start, Police Scotland and Accenture disagreed about whether the proposed system would deliver the requirements set out in the contract. Soon there was a “breakdown in relationships and a loss of trust between Police Scotland and Accenture that never fully recovered,” said Audit Scotland.
  • The supplier may be just as optimistic as you. “As the design and development of i6 progressed, it became apparent that Accenture would need to develop significantly more than had been originally anticipated. Despite delays and serious problems throughout the lifetime of the programme, Accenture provided regular assurance, in the face of strong challenge, about their confidence in delivering the i6 system. This assurance proved misplaced.”
  • When planning a waterfall system that has complexities and inter-dependencies that are not fully understood at the outset, expect ever-lengthening delays and projected costs to soar. At one point Police Scotland estimated that the level of effort Accenture would require to complete i6 was around eight times greater than the resources Accenture had estimated when signing the original contract. “The i6 programme team believed that the functionality of Accenture’s solution did not meet the requirements it had agreed in the contract. Accenture maintained that Police Scotland had not specified a detailed description of business requirements. This issue had not emerged during months of pre-award dialogue. Accenture also believed that it had set out clearly what its solution would do and maintained that Police Scotland, as part of procurement process, had accepted its qualified solution. A dispute followed about the interpretation of the contract requirements. Police Scotland argued that, after months of competitive dialogue, the requirements of the i6 system were well-defined, and that in line with the contract, these took precedence. Accenture argued its solution had precedence and that Police Scotland was trying to extend the scope of the programme. Accenture stated that, to meet Police Scotland’s interpretation of requirements, it would require more time and money.”
  • As soon as things start going badly awry, stop and have a re-think. Cancel all existing work if necessary rather than plough on simply because failure isn’t an option. Above all, take politics out of the equation. The Scottish Police Authority was anxious about i6 being seen to be a success after the failure of a previous police ICT project in 2012 – the Common Performance Management Platform. At the same time the i6 programme was “extremely important to Accenture at a global level. “This may have led to misplaced optimism about the prospects of success and unwillingness to consider terminating the programme,” says Audit Scotland.
  • When things start to go wrong, the truth is unlikely to emerge publicly. Even those accountable for the project may be kept in the dark. “Police Scotland were cautious of commercial sensitivities when providing assurances on i6 publicly. The Scottish Parliament’s Justice Sub-Committee on Policing held a number of evidence sessions with the Scottish Police Authority and Police Scotland to explore progress with the i6 programme. In March 2014, the Sub-Committee expressed frustration at the lack of information about the problems with the i6 programme that had been ongoing since August 2013. Police Scotland did not disclose the severity of the issues facing the programme, nor was it overly critical of Accenture. This may have reflected a desire to maintain relationships with Accenture to keep the programme on track or to maintain the commercial confidentiality of the contract.”

Accenture’s response

Accenture said,

“As the report acknowledges, the scope and the complexity of the solution for i6 increased significantly during the project.  This was driven by the client.  There were challenges and issues on both sides, but we worked closely with Police Scotland to review the programme and recommend revised plans to successfully deliver i6.

Despite our best efforts, it was not possible to agree the necessary changes and we mutually agreed to end the project.”

In May 2017 Audit Scotland is due to publish a report that summarises the lessons from a number of public sector ICT projects it has investigated.

Some of what i6 was intended to cover …

Comment

Tis a pity officials in Scotland hadn’t read Crash before they embarked on the i6 project – or if they had, taken more notice of the dangers of assuming a system that works overseas can be tweaked to work in the UK.

We commend Audit Scotland for its expert investigation and a fine report.

Clearly the failure of i6 is not entirely Accenture’s fault.  The project was commissioned on the basis of assumption and when things went wrong politics intervened to prevent a complete stop and a fundamental re-think.

Fatally, perhaps, there appears to have been no discussion about simplifying police administration to make the IT more straightforward. If police administration is so enshrined in law that it cannot be simplified, officials would have to accept before awarding the contract that they were buying an entirely new system.

The UK armed services simplified volumes of rules and practices before it introduced pay and personnel administration systems. It was hard, inglorious work. But simplifying ways of working first can make the difference between IT success and failure.

i6 – a review. Audit Scotland’s report. 

Waterfall approach damns £46m Scottish police system – Government Computing

Another public sector IT disaster – but useful if the lessons are learned.

Southwest One – a positive postscript

By Tony Collins

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

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

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

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

Outsourcing IT a “bad mistake” 

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

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

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

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

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

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

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

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

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

Task facing Somerset officials

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

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

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

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

The council’s officers hope this will lead to

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

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

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

Comment

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

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

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

It is an innovative approach for a council.

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

Does outsourcing IT ever make sense?

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

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

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

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

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

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

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

Days from taking back outsourced IT, Somerset Council is unsure what it’ll find

By Tony Collins

Facing the TV cameras, officials at Somerset County Council spoke with confidence about the new joint venture company they had set up with the “world-class” IT supplier IBM.

“The contract has to succeed; we will make it succeed, ” a senior official said at the time. Greater choice for residents, more control, sustained improvement of services, improved efficiency, tens of millions in savings and enhanced job prospects for staff.

These were some of the promises in 2007.

Since then, Somerset County Council has been through a costly legal dispute with IBM; projected savings have become losses, and Somerset is days away from taking back the service early.

Now the council faces new IT-related risks to its reputation and finances, warns a team of auditors.

In several audit reports on the exit arrangements, auditors warn of a series of uncertainties about:

  •  what exactly IT assets the council will own as of 1 December 2016, when the joint venture hands back IT and staff.
  • how much software may not be licensed, therefore being used illicitly.
  • how much software is being paid for without being needed or used, wasting council tax money.
  • whether thousands of pieces of hardware have been disposed of securely over the years of the contract, or whether confidential data could later turn up in the public domain.
  • the accuracy of some supplied information. “… the same networking hardware items have the same value associated with them even though one is twelve years old and the other only four” said auditors.

Comment

That Somerset County Council laments setting up the Southwest One joint venture with IBM is not new. What continues to surprise is the extent of the difficulties of ending the joint venture cleanly – despite months, indeed more than a year – of preparatory work.

The realty is that uncertainties and risks abound.

When IT journalists ask leading councillors and officers at the start of outsourcing/joint venture deals whether all the most potentially serious risks have been given proper consideration, the spokespeople inevitably sound supremely confident.

If things go wrong, they are sure the council will be able to take back the service under secure arrangements that have been properly planned and written into the contract.

Yet today some of the most potentially serious risks to Somerset’s finances and reputation come from continuing threats such as the possibility confidential data being found on old hardware not securely disposed of.

Or the council may be paying for unneeded software licences.

In short Somerset County Council is taking back the IT service on 1 December 2016 without being certain what it will find.

In future, therefore, when councillors and officials across the country talk with supreme confidence at the start of an outsourcing deal or joint venture about large savings, sustained efficiencies, and a step-change improvement in services that comes with the benefits of collaborating with a world-class private-sector partner, local residents will have every right to be deeply sceptical.

For the reality is more likely to be that the council and its world-class supplier are about to embark on a journey into the unknown.

Thank you to campaigner Dave Orr for alerting me to the council audit reports that made this post possible.

TV broadcast in 2007 days after the council and IBM signed the Southwest One joint venture deal.

**

Excerpts from reports due to be considered by Somerset County Council’s Audit Committee next week (29 November 2016):

“… laptops, servers, storage devices, networking equipment, etc.) have been disposed of without the correct documentation historically, throughout the term with SWO [Southwest One]. There is a high likelihood that without the documentation to show that SWO were meant to have previously disposed of any specific data baring assets in a compliant manner then subsequent fines and loss of reputation will need to be dealt with by the Council.

“This is being addressed as part of the exit works but initial investigations show an expected lack of documentation.

**

“The quality of asset management and therefore exposure to risk (over and above this inherited risk) is expected to improve significantly once asset management returns to SCC [Somerset County Council).”

**

“Asset locations have been updated and improved though there are still issues regarding all asset details not being recorded accurately in the Asset Register. There is a risk that if wrong details are recorded against an asset then incorrect decisions could be made regarding these assets which may in turn cause the Council financial loss and/or loss of reputation.”

**

“… the same networking hardware items have the same value associated with them even though one is twelve years old and the other only four.”

**

“Software assets are now included in the monthly asset register report though the information collected and lack of correlation to meaningful license information means the original risk is not fully mitigated.

“This continued lack of software asset usage information against licensing proof of entitlement as well as the obvious risk of illegally using non licensed software there is also a risk that the Council is wasting public funds and Council officer’s time to manage unnecessary software. This means the Council will not be able to show “Best Value” in these purchases which could lead to fines being imposed by Central Government and loss of reputation by the inefficiencies being reported in the media.”

**

“I cannot though see evidence of the warranty & support arrangements being recorded or accurate recording of end of life assets. Due to a lack of or incorrect detail on the asset information there is the risk of incorrect decisions being made regarding an asset’s usage which could then lead to loss of money or reputation for the Council.”

Record one-day fall in Capita share price – will customers care?

By Tony Collins

The share price of outsourcing specialist Capita fell 27% yesterday, a record one-day fall for the company. It was down a further 5% this morning (10.30 am, 30 September 2016).

The company said in a regulatory statement yesterday it is taking immediate steps to reduce the cost base in its underperforming businesses, which should benefit its 2017 results.

Some customers may be entitled to ask whether the transformation-based outsourcing services they are buying from Capita will be affected by any of the company’s financial pressures.

In local government Capita has what it calls “transformational partnerships” with Sheffield City Council, Southampton City Council, London Borough of Barnet, Blackburn with Darwen Council, North Tyneside, West Sussex County Council and Oxfordshire County Council.

Capita also has a joint venture agreement with Birmingham City Council, in a partnership that goes by the name of “Service Birmingham”.

Capita’s regulatory announcement yesterday said “our performance in the second half of the year to date has been below  expectations, as a result of a slow-down in specific trading businesses,  one-off costs incurred on the Transport for London (TfL) congestion charging contract and continued delays in client decision making”.

The company’s trading update said,

“Capita is taking immediate steps to reduce the cost base in the underperforming businesses, which should benefit 2017.”

Capita expects that capital expenditure will be lower than last year.

Outsourcing advocates may see the slow-down as temporary problem for Capita – and indeed the company has announced £949m of “major contract wins in the year to date,  including being recently selected by Three as the preferred bidder for a contract to provide customer management services in the UK, which is expected to start in 2017”.

It added, though, that “revenue from new major sales in the second half of this year is likely to be lower than expected, due to continued delays in decision making and lower conversion of our pipeline”.

Other observers of the outsourcing market may wonder whether major suppliers will always have enough margin to transform a customer’s business, including big new investments in ICT, while continuing to run the client’s operations successfully.

In yesterday’s trading update, Capita referred to problems on two contracts, one with Transport for London and another with the Co-op Bank. It said:

“We have experienced delays on the implementation of new IT systems on the  Transport for London (TfL) congestion charging contract.

“As a result, we expect  to incur between £20m and £25m of one-off costs, which will be included in our  underlying results. The systems have now gone live, the contract is performing  well operationally and these costs will not recur next year.

“Furthermore, we  are in a contractual dispute with the Co-op Bank regarding obligations relating  to the transformation of services.  The ongoing mortgage processing being  undertaken by Capita is performing well.  However, there is a risk of  litigation in respect of the transformation.”

Co-op dispute

Capita’s chief executive Andy Parker was reported in The Telegraph as saying there was a “high” risk of litigation with Co-op Bank over its contract to help administer mortgages.

“Everything’s ready to go and the client is refusing to sign off for one reason only – if they sign off, they have to pay us,” he is quoted s saying. “We’re still hitting targets and delivering for this bank.”

The Co-operative Bank, for its part, suggested it is owed money for delays, and denied it has failed to pay. “The bank strongly refutes Capita’s suggestion that they have delivered an element of the transformation programme which the bank has not paid for,” Co-op Bank was quoted as saying. “In addition, there are amounts which the bank regards as owing to it by Capita.”

Co-op added that it continues to “work through” the issues with the programme.

“The bank continues to work through the issues surrounding this transformation programme with Capita. The existing outsourcing of mortgage processing to Capita both for new and existing bank customers continues to operate in a satisfactory manner and the bank is committed to ensuring that this remains the case going forward,” said the Co-op.

Transport for London

On Capita’s TfL congestion charge contract, Andy Parker said,

“The upgrade proved more complex than we anticipated and the penalties ramped up very quickly.”

At Forbes, which has ranked Capita as one of the world’s most innovative companies, a writer and analyst warned (speculatively) of the possibility of “further profit downgrades in the months to come, allied with the possibility of subdued revenues growth in the years ahead.

Analysts say Capita’s prospects may be dented by uncertainties over Brexit.

The concluding paragraph of Capita’s trading update yesterday said,

“We remain confident of the strength of our business model and aim to return the Group to profit growth next year, excluding the benefit from TfL one-off costs  dropping out.”

Capita is a FTSE 100 company. In 1991 when it was floated its turnover was about £25m. Now it’s close to £5bn. It employs 75,000, about 17,000 of them abroad.

Thank you to campaigner Dave Orr for alerting me to Capita’s announcement yesterday.

Capita trading update

 

Excellent reports on lessons from Universal Credit IT project published today – but who’s listening?

By Tony Collins

“People burst into tears, so relieved were they that they could tell someone what was happening.”

The Institute for Government has today published one of the most incisive – and revelatory – reports ever produced on a big government IT project.

It concludes that the Universal Credit IT programme may now be in recovery after a disastrous start, but recovery does not mean recovered. Much could yet floor the programme, which is due to be complete in 2022.

The Institute’s main report is written by Nick Timmins, a former Financial Times journalist, who has written many articles on failed publicly-funded IT-based projects.

His invaluable report, “Universal Credit – from disaster to recovery?” – includes interviews with David Pitchford, a key figure in the Universal Credit programme, and Howard Shiplee who led the Universal Credit project.

Timmins also spoke to insiders, including DWP directors, who are not named, and the former secretary of state at the Department for Work and Pensions Iain Duncan Smith and the DWP’s welfare reform minster Lord Freud.

Separately the Institute has published a shorter report “Learning the lessons from Universal Credit which picks out from Timmins’ findings five “critical” lessons for future government projects. This report, too, is clear and jargon-free.

Much of the information on the Universal Credit IT programme in the Timmins report is new. It gives insights, for instance, into the positions of Universal Credit’s major suppliers HP, IBM, Accenture.

It also unearths what can be seen, in retrospect, to be a series of self-destructive decisions and manoeuvres by the Department for Work and Pensions.

But the main lessons in the report – such as an institutional and political inability to face up to or hear bad news – are not new, which raises the question of whether any of the lessons will be heeded by future government leaders – ministers and civil servants – given that Whitehall departments have been making the same mistakes, or similar ones, for decades?

DWP culture of suppressing any bad news continues

Indeed, even as the reports lament a lack of honesty over discussing or even mentioning problems – a “culture of denial” – Lord Freud, the minister in charge of welfare reform, is endorsing FOI refusals to publish the latest risk registers, project assessment reviews and other Universal Credit reports kept by the Department for Work and Pensions.

More than once Timmins expresses his surprise at the lack of information about the programme that is in the public domain. In the “acknowledgements” section at the back of his report Timmins says,

“Drafts of this study were read at various stages by many of the interviewees, and there remained disputes not just about interpretation but also, from some of them, about facts.

“Some of that might be resolvable by access to the huge welter of documents around Universal Credit that are not in the public domain. But that, by definition, is not possible at this stage.”

Churn of project leaders continues

Timmins and the Institute warn about the “churn” of project leaders, and the need for stable top jobs.

But even as the Institute’s reports were being finalised HMRC was losing its much respected chief digital officer Mark Dearnley, who has been in charge of what is arguably the department’s riskiest-ever IT-related programme, to transfer of legacy systems to multiple suppliers as part of the dismantling of the £8bn “Aspire” outourcing venture with Capgemini.

Single biggest cause of Universal Credit’s bad start?

Insiders told Timmins that the fraught start of Universal Credit might have been avoided if Terry Moran had been left as a “star” senior responsible owner of the programme. But Moran was given two jobs and ended up having a breakdown.

In January 2011, as the design and build on Universal Credit started, Terry Moran was given the job of senior responsible owner of the project but a few months later the DWP’s permanent secretary Robert Devereux took the “odd” decision to make Moran chief operating officer for the entire department as well. One director within the DWP told Timmins:

“Terry was a star. A real ‘can do’ civil servant. But he couldn’t say no to the twin posts. And the job was overwhelming.”

The director claimed that Iain Duncan Smith told Moran – a point denied by IDS – that if Universal Credit were to fail that would be a personal humiliation and one he was not prepared to contemplate. “That was very different from the usual ministerial joke that ‘failure is not an option’. The underlying message was that ‘I don’t want bad news’, almost in words of one syllable. And this was in a department whose default mode is not to bring bad news to the top. ‘We will handle ministers’ is the way the department operates…”

According to an insider, “Terry Moran being given the two jobs was against Iain’s instructions. Iain repeatedly asked Robert [Devereux] not to do this and Robert repeatedly gave him assurances that this would be okay” – an account IDS confirms. In September 2012, Moran was to have a breakdown that led to early retirement in March 2013. He recorded later for the mental health charity Time to Talk that “eventually, I took on more and more until the weight of my responsibilities and my ability to discharge them just grew too much for me”.

Timmins was told, “You cannot have someone running the biggest operational part of government [paying out £160bn of benefits a year] and devising Universal Credit. That was simply unsustainable,”

Timmins says in his report, “There remains a view among some former and current DWP civil servants that had that not happened (Moran being given two jobs), the programme would not have hit the trouble it did. ‘Had he been left solely with responsibility for UC [Universal Credit], I and others believe he could have delivered it, notwithstanding the huge challenges of the task,’ one says.”

Reviews of Universal IT “failed”

Timmins makes the point that reviews of Universal Credit by the Major Projects Authority failed to convey in clear enough language that the Universal Credit programme was in deep trouble.

“The [Major Projects Authority] report highlighted a lack of sufficient substantive action on the points raised in the March study. It raised ‘high’ levels of concern about much of the programme – ‘high’ being a lower level of concern than ‘critical’. But according to those who have seen the report, it did not yet say in words of one syllable that the programme was in deep trouble.”

Iain Duncan Smith told Timmins that the the Major Projects review process “failed me” by not warning early enough of fundamental problems. It was the ‘red team’ report that did that, he says, and its contents made grim reading when it landed at the end of July in 2012.

Train crash on the way

The MPA [Cabinet Office’s Major Projects Authority] reviewed the programme in March 2011. “MPA reports are not in the public domain. But it is clear that the first of these flagged up a string of issues that needed to be tackled …

” In June a member of the team developing the new government’s pan-government website – gov.uk – was invited up to Warrington [base for the Universal Credit IT team] to give a presentation on how it was using an agile approach to do that.

“At the end of the presentation, according to one insider, a small number from the audience stayed behind, eyeing each other warily, but all wanting to talk. Most of them were freelancers working for the suppliers. ‘Their message,’ the insider says, ‘was that this was a train crash on the way’ – a message that was duly reported back to the Cabinet Office, but not, apparently, to the DWP and IDS.”

Scared to tell the truth

On another occasion when the Major Projects Authority visited the IT team at Warrington for the purposes of its review, the review team members decided that “to get to the truth they had to make people not scared to tell the truth”. So the MPA “did a lot of one-on-one interviews, assuring people that what they said would not be attributable. And under nearly every stone was chaos.

“People burst into tears, so relieved were they that they could tell someone what was happening.

” There was one young lad from one of the suppliers who said: ‘Just don’t put this thing [Universal Credit] online. I am a public servant at heart. It is a complete security disaster.’

IBM, Accenture and HP

“Among those starting to be worried were the major suppliers – Accenture, HP and IBM. They started writing formal letters to the department.

‘Our message,’ according to one supplier, ‘was: ‘Look, this isn’t working. We’ll go on taking your money. But it isn’t going to work’.’ Stephen Brien [then expert adviser to IDS] says of those letters: ‘I don’t think Iain saw them at that time, and I certainly didn’t see them at the time.”

At one point “serious consideration was given to suing the suppliers but they had written their warning letters and it rapidly became clear that that was not an option”.

Howard Shiplee, former head of the project, told Timmins that he had asked himself ‘how it could be that a very large group of clever people drawn from the DWP IT department with deep experience of the development and operation of their own massive IT systems and leading industry IT suppliers had combined to get the entire process so very wrong? Equally, ‘how could another group of clever people [the GDS team] pass such damning judgement on this earlier work and at the stroke of a pen seek to write off millions of pounds of taxpayers’ money?’

Shiplee commissioned a review from PwC on the work carried out to date and discovered that the major suppliers “were genuinely concerned to have their work done properly, support DWP and recover their reputations”.

In addition, when funding had been blocked at the end of 2012, the suppliers “had not simply downed tools but had carried on development work for almost three months” as they ran down the large teams that had been working on it.

“As a result, they had completed the development for single claimants that was being used in the pathfinder and made considerable progress on claims for couples and families. And their work, the PwC evaluation said, was of good quality.”

On time?

When alarm bells finally started ringing around Whitehall that Universal Credit was in trouble,  IDS found himself under siege. Stephen Brien says IDS was having to battle with the Treasury to keep the funding going for the project. He had to demonstrate that the programme was on time and on budget.

‘The department wanted to support him in that, and didn’t tell him all the things that were going wrong. I found out about some of them, but I didn’t push as hard as I should have. And looking back, the MPA [Major Projects Authority] meetings and the MPA reports were all handled with a siege mentality. We all felt we had to stand shoulder to shoulder defending where we were and not really using them to ask: ‘Are we where we should be?’

‘As a result we were not helping ourselves, and we certainly were not helping others, including the MPA. But we did get to the stage between the end of 2011 and the spring of 2012 where we said: ‘Okay, let’s get a red team in with the time and space to do our own challenge.’”

The DWP’s “caste” system

A new IT team was created in Victoria Street, London – away from Warrington but outside the DWP’s Caxton Street headquarters. It started to take a genuinely agile approach to the new system. One of those involved told Timmins:

“It had all been hampered by this caste system in the department where there is a policy elite, then the operational people, and then the technical people below that.

“And you would say to the operational people: ‘Why have you not been screaming that this will never work?’ And they’d say: ‘Well, we’re being handed this piece of sh** and we are just going to have to make it work with workarounds, to deal with the fact that we don’t want people to starve. So we will have to work out our own processes, which the policy people will never see, and we will find a way to make it work.’

Twin-track approach

IBM, HP and Accenture built what’s now known as the “live” system which enabled Universal Credit to get underway, and claims to be made in jobcentres.

It uses, in part, the traditional “waterfall” approach and has cost hundreds of millions of pounds. In contrast there’s a separate in-house “digital” system that has cost less than £10m and is an “agile” project.

A key issue, Shiplee told Timmins, was that the new digital team “would not even discuss the preceding work done by the DWP and its IT suppliers”. The digital team had, he says, “a messiah-like approach that they were going to rebuild everything from scratch”.

Rather than write everything off, Shiplee wanted ideally to marry the “front-end” apps that the GDS/DWP team in Victoria Street was developing with the work already done. But “entrenched attitudes” made that impossible. The only sensible solution, he decided, was a “twin-track” approach.

“The Cabinet Office remained adamant that the DWP should simply switch to the new digital version – which it had now become clear, by late summer, would take far longer to build than they anticipated – telling the DWP that the problem was that using the original software would mean ‘creating a temporary service, and temporary will become permanent’.

“All of which led to the next big decision, which, to date, has been one of the defining ones. In November 2013, a mighty and fraught meeting of ministers and officials was convened. Pretty much everyone was there. The DWP ministers, Francis Maude (Cabinet Office minister), Oliver Letwin who was Cameron’s policy overlord, Sir Jeremy Heywood, the Cabinet Secretary, Sir Bob Kerslake, the head of the home civil service, plus a clutch of DWP officials including Robert Devereux and Howard Shiplee as the senior responsible owner along with Danny Alexander and Treasury representatives.

“The decision was whether to give up on the original build, or run a twin-track approach: in other words, to extend the use of the original build that was by now being used in just over a dozen offices – what became dubbed the ‘live’ service – before the new, and hopefully much more effective, digital approach was finished and on stream.

“It was a tough and far from pleasant meeting that is etched in the memories of those who were there…

“One of those present who favoured the twin-track approach says: There were voices for writing the whole of the original off. But that would have been too much for Robert Devereux [the DWP’s Permanent Secretary] and IDS.

” So the twin-track approach was settled on – writing a lot of the original IT down rather than simply writing it off. That, in fact, has had some advantages even if technically it was probably the wrong decision…

“It has, however, seen parts of the culture change that Universal Credit involves being rolled out into DWP offices as more have adopted Universal Credit, even if the IT still requires big workarounds.

“More and more offices, for example, have been using the new claimant commitment, which is itself an important part of Universal Credit. So it has been possible to train thousands of staff in that, and get more and more claimants used to it, while also providing feedback for the new build.”

Francis Maude was among those who objected to the twin-track approach, according to leaked minutes of the project oversight board at around this time.

Lord Freud told Timmins,

‘Francis was adamant that we should not go with the live system [that is, the original build]. He wanted to kill it. But we, the DWP, did not believe that the digital system would be ready on anything like the timescales they were talking about then …But I knew that if you killed the live system, you killed Universal Credit…”

In the end the twin-track approach was agreed by a majority. But the development of the ‘agile’ digital service was immediately hampered by a spat over how quickly staff from the GDS were to be withdrawn from the project.

Fury over National Audit Office report

In 2013 the National Audit Office published a report Universal Credit – early progress –  that, for the first time, brought details of the problems on the Universal Credit programme into the public domain. Timmins’ report says that IDS and Lord Freud were furious.

“IDS and, to an only slightly lesser extent, Lord Freud were furious about the NAO report; and thus highly defensive.”

IDS tried to present the findings of the National Audit Office as purely historical.

In November 2014, the NAO reported again on Universal Credit. It once more disclosed something that ministers had not announced – that the timetable had again been put back two years (which raises further questions about why Lord Freud continues to refuse FOI requests that would put into the public domain – and inform MPs – about project problems, risks and delays without waiting for an NAO report to be published)..

Danny Alexander “cut through” bureaucracy

During one period, the Treasury approval of cash became particularly acute. Lord Freud told Timmins:

“We faced double approvals. We had approval about any contract variation from the Cabinet Office and then approvals for the money separately from the Treasury.

“The Government Digital Service got impatient because they wanted to make sure that the department had the ability to build internally rather than going out to Accenture and IBM, who (sic) they hate.

“The approvals were ricocheting between the Cabinet Office and the Treasury and when we were trying to do rapid iteration. That was producing huge delays, which were undermining everything. So in the end Danny Alexander [Lib-dem MP who was chief secretary to the Treasury] said: ‘I will clear this on my own authority.’ And that was crucial. Danny cut through all of that.”

Optimism bias

So-called optimism bias – over-optimism – is “such a common cause of failure in both public and private projects that it seems quite remarkable that it needs restating. But it does – endlessly”.

Timmins says the original Universal Credit white paper – written long before the start of the programme – stated that it would involve “an IT development of moderate scale, which the Department for Work and Pensions and its suppliers are confident of handling within budget and timescale”.

David Pitchford told Timmins,

“One of the greatest adages I have been taught and have learnt over the years in terms of major projects is that hope is not a management tool. Hoping it is all going to come out all right doesn’t cut it with something of this magnitude.

“The importance of having a genuine diagnostic machine that creates recommendations that are mandatory just can’t be overstated. It just changes the whole outcome completely. As opposed to obfuscation and optimism bias being the basis of the reporting framework. It goes to a genuine understanding and knowledge of what is going on and what is going wrong.”

Sir Bob Kerslake, who also identified the ‘good news culture’ of the DWP as being a problem, told Timmins,

“All organisations should have that ability to be very tough about what is and isn’t working. The people at the top have rose-tinted specs. They always do. It goes with the territory.

And unless you are prepared to embrace people saying that ‘really, this is in a bad place’… I can think of points where I have done big projects where it was incredibly important that we delivered the unwelcome news of where we were on that project. But it saved me, and saved my career.”

Recovery?

Timmins makes good arguments for his claim that the Universal Credit programme may be in recovery – but not recovered – and that improvements have been made in governance to allow for decisions to be properly questioned.

But there is no evidence the DWP’s “good news” culture has changed. For instance the DWP says that more than 300,000 people are claiming Universal Credit but the figure has not been audited and it’s unclear whether claimants who have come off the benefit and returned to it – perhaps several times – are being double counted.

Timmins points out the many uncertainties that cloud the future of the Universal Credit programme  – how well the IT will work, whether policy changes will hit the programme, whether enough staff will remain in jobcentres, and whether the DWP will have good relations with local authorities that are key to the delivery of Universal Credit but are under their own stresses and strains with resourcing.

There are also concerns about what changes the Scots and Northern Irish may want under their devolved powers, and the risk that any ‘economic shock’ post the referendum pushes up the volume of claimants with which the DWP has to deal.

 Could Universal Credit fail for non-IT reasons?

Timmins says,

“In seeking to drive people to higher earnings and more independence from the benefits system, there will be more intrusion into and control over the lives of people who are in work than under the current benefits system. And there are those who believe that such an approach – sanctioning people who are already working – will prove to be political dynamite.”

The dire consequences of IT-related failure

It is also worth noting that Universal Credit raises the stakes for the DWP in terms of its payment performance, says Timmins.

“If a tax credit or a Jobseeker’s Allowance payment or any of the others in the group of six go awry, claimants are rarely left penniless in the sense that other payments – for example, Housing Benefit in the case of Jobseeker’s Allowance or tax credits, – continue.

“If a Universal Credit payment fails, then all the support from the state, other than Child Benefit or disability benefits not included within Universal Credit, disappears.”

This happened recently in Scotland when an IT failure left hundreds of families penniless. The DWP’s public response was to describe the failure in Scotland as “small-scale”.

Comment

What a report.

It is easy to see how much work has gone into it. Timmins has coupled his own knowledge of IT-related failure with a thorough investigation into what has gone wrong and what lessons can be learned.

That said it may make no difference. The Institute in its “lessons” report uses phrases such as “government needs to make sure…”. But governments change and new administrations have an abundance – usually a superfluity – of confidence and ambition. They regard learning lessons from the past as putting on brakes or “nay saying”. You have to get with the programme, or quit.

Lessons are always the same

There will always be top-level changes within the DWP. Austerity will always be a factor.  The culture of denial of bad news, over-optimism about what can be achieved by when and how easily it can be achieved, over-expectations of internal capability, over-expectation of what suppliers can deliver, embarking on a huge project without clearly or fully understanding what it will involve, not listening diligently to potential users and ridiculously short timescales are all well-known lessons.

So why do new governments keep repeating them?

When Universal Credit’s successor is started in say 2032, the same mistakes will probably be repeated and the Institute for Government, or its successor, will write another similar report on the lessons to be learned.

When Campaign4Change commented in 2013 that Universal Credit would probably not be delivered before 2020 at the earliest, it was an isolated voice. At the time, the DWP press office – and its ministers – were saying the project was on budget and “on time”.

NPfIT

The National Audit Office has highlighted similar lessons to those in the Timmins report, for example in NAO reports on the NPfIT – the NHS IT programme that was the world’s largest non-military IT scheme until it was dismantled in 2011. It was one of the world’s biggest IT disasters – and none of its lessons was learned on the Universal Credit programme.

The NPfIT had an anti-bad news culture. It did not talk enough to end users. It had ludicrous deadlines and ambitions. The politicians in charge kept changing, as did some of programme leaders. There was little if any effective internal or external challenge. By the time it was dismantled the NPfIT had lost billions.

What the Institute for Government could ask now is, with the emasculation of the Government Digital Service and the absence of a powerful Francis Maude figure, what will stop government departments including the DWP making exactly the mistakes the IfG identifies on big future IT-enabled programmes?

In future somebody needs the power to say that unless there is adequate internal and external challenge this programme must STOP – even if this means contradicting a secretary of state or a permanent secretary who have too much personal and emotional equity in the project to allow it to stop. That “somebody” used to be Francis Maude. Now he has no effective replacement.

Victims

It’s also worth noting in the Timmins report that everyone seems to be a victim, including the ministers. But who are perpetrators? Timmins tries to identify them. IDS does not come out the report smelling of roses. His passion for success proved a good and bad thing.

Whether the direction was forwards or backwards IDS  was the fuel that kept Universal Credit going.  On the other hand his passion made it impossible for civil servants to give him bad news – though Timmins raises questions about whether officials would have imparted bad news to any secretary of state, given the DWP’s culture.

Neither does the DWP’s permanent secretary Robert Devereux emerge particularly well from the report.

How it is possible for things to go so badly wrong with there being nobody to blame? The irony is that the only people to have suffered are the genuine innocents – the middle and senior managers who have most contributed to Universal Credit apparent recovery – people like Terry Moran.

Perhaps the Timmins report should be required reading among all involved in future major projects. Competence cannot be made mandatory. An understanding of the common mistakes can.

Thank you to FOI campaigner Dave Orr for alerting me to the Institute’s Universal Credit reports.

Thanks also to IT projects professional John Slater – @AmateurFOI – who has kept me informed of his FOI requests for Universal Credit IT reports that the DWP habitually refuse. 

Update 18.00 6 September 2016

In a tweet today John Slater ( @AmateurFOI ) makes the important point that he asked the DWP and MPA whether either had held a “lessons learned” exercise in the light of the “reset” of the Universal Credit IT programme. The answer was no.

This perhaps reinforces the impression that the DWP is irredeemably complacent, which is not a good position from which to lead major IT projects in future.

Universal Credit – from disaster to recovery?

Learning the lessons from Universal Credit