Category Archives: public sector

How is Post Office paying for increasing costs of Horizon IT litigation – MP asks questions

The Post Office has lost all four High Court rulings  (so far) in a series of hearings over its Horizon IT system. There are still three trials to go. With appeals, the number of hearings and judgements, and  the duration of the case, are indeterminate.

How is the publicly-funded Post Office paying for litigation that is, in essence, its defence of the Horizon system?

By Tony Collins

Labour MP Kevan Jones has this week asked a series of pertinent questions about costs and the Post Office’s dispute with former sub-postmasters over the Horizon branch accounting system.

His Parliamentary questions are likely to draw the attention of business secretary Greg Clark to the increasing costs of a High Court trial in which more than 550 former sub-postmasters seek compensation and damages from the Post Office. They say they were made to pay for unexplained shortfalls shown on Horizon that could have been caused by bugs or other system weaknesses.

The Post Office says Horizon is robust and the shortfalls were the result of dishonesty or mistakes by sub-postmasters or their staff. The Post Office has pursued sub-postmasters for “debts” shown on the Horizon system of millions of pounds in total.

Kevin Jones’ questions follow a judgement last month in which a High Court judge, Mr Justice Peter Fraser, referred to the Post Office’s approach to the costs of the litigation.

“The Post Office has appeared determined to make this litigation, and therefore resolution of this intractable dispute, as difficult and expensive as it can,” said the judge.

Since that judgement, costs have risen further because the Post Office has decided to appeal last month’s judgement. The Post Office has also applied for the judge to remove himself from three remaining trials over the Horizon system. which caused the second trial to be suspended.

This week it has emerged that costs, which could run into tens millions of pounds, are set to rise again. Although the judge has refused permission for the Post Office to appeal his refusal to remove – “recuse”  himself, the Post Office can ask the Court of Appeal to grant that permission.  BBC legal commentator Joshua Rozenberg has tweeted,

 

 

Kevan Jones has asked the business secretary Greg Clark:

  • what steps he is taking to ensure the Government is held accountable for the decisions and actions of Post Office Limited in the handling of postmasters’ problems with Horizon.
  • whether public money has been used to pay costs involved in the ongoing dispute with postmasters since 2000.
  • whether the Lord Chancellor will determine the extent of any conflict of interest on the part of Tim Parker by reason of his dual roles of (a) the Chairman of Post Office Limited; and (b) the Independent Chair of the HM Courts and Tribunal Service Board.
  • what the anticipated increased cost implications are for Post Office Limited in its dealing with serving Subpostmasters following the High Court decision handed down on 15 March 2019.
  • whether the Post Office has ever taken into profit from its suspense accounts any unreconciled sums recovered from Subpostmasters.

Former sub-postmaster Alan Bates, founder of Justice for Subpostmasters Alliance and lead claimant in the case, told Computer Weekly, 

“This move by Post Office Ltd to have the judge recused was just another act by an organisation abusing the use of public money to litigate a valid case into the ground in order to protect the reputations of just a few individuals and a dysfunctional business.”

The Post Office said, “We will be seeking to appeal the judgment on the recusal application and to continue to vigorously defend this litigation. We believe the overall litigation remains the best opportunity to resolve long-standing issues in order to ensure a stable and sustainable Post Office network for the benefit of the communities who rely on our services every single day.”

Freeths, solicitors for the sub-postmasters,  has submitted an application for the Post Office to pay the legal costs in the first trial, likely to be for several million pounds.

Comment:

Kevan Jones is right to ask questions about the publicly-funded Post Office and costs. The Post Office appears to have no cap on how much it is prepared to spend on the litigation; and it has shown little or no concern about how many years the case will continue.

Institutions, particularly public ones,  have a duty to spend money wisely. Not cutting your losses when you are losing a series of High Court hearings is poor judgement.

The Post Office has a choice: continue to pour money into a case that looks, on the basis of evidence so far, to be unwinnable.  Or pay the millions it is giving lawyers to its former sub-postmasters instead.

It’s a decision the Post Office will not make on its own – in which case Kevan Jones and his Parliamentary colleagues must continue their campaign for justice.

Thank you to sub-postmaster “Mrs Goggins”  and former sub-postmaster Jo Hamilton whose tweets alerted me to Kevan Jones’ questions.

Computer Weekly’s coverage

Journalist Nick Wallis’ coverage

Former sub-postmaster and campaigner Tim McCormack’s blog

 

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Businessman whose wife died from overdose has joined group legal action against the Post Office

By Tony Collins

The Post Office does not comment on individual cases. Its general position is that people who own and run local offices under contract to the Post Office take responsibility for any deficits shown on the Horizon  branch accounting system.

Fiona Cowan had such a deficit,. With a friend, she ran a local post office that her businessman husband Phil had bought in Edinburgh. They owned the local post office site but ran it under contract to the Post Office.

After the deficit appeared, the post office was closed and Fiona was asked how soon she could repay £30,000.

Phil asked if there could be a glitch in the Horizon system. He says he was told that, if so, it would be the only sub post office in the country to have such a problem.

Fiona was charged with false accounting. With no post office, the retail side of their post office business dwindled and Phil sold up at a substantial loss. The Post Office took £30,000 out of a redundancy offer.

Fiona, who suffered from on and off bouts of depression, died of an accidental overdose. She was 47.

Now Forecourt Trader has published an article saying that Phil Cowan has joined the group legal action against the post office.

Phil was quoted as saying, “She [Fiona] went to her grave with this criminal charge hanging over her.”

Forecourt Trader reports that the Post Office did not tell the Cowans that the charges had been  dropped.  Phil subsequently joined the Justice for Subpostmasters Alliance which, with solicitors Freeths, brought a group action against the Post Office.

An initial High Court judgment in the case is due later this month.

The FT reported last year that the Post Office dismissed Deirdre Connolly, a sub-postmistress, after an apparent shortfall of £15,600. The alleged deficit was found during an unannounced branch audit.

The FT said that, out of fear, Connolly made up the apparent loss with help from relatives. The Post Office did not prosecute. Her son later attempted suicide, which she attributed to his witnessing the stress she was under.

In 2015 the Daily Mail reported on Martin Griffiths, a sub-postmaster from Chester, who stepped in front of a bus one morning in September 2013.

An inquest heard that Griffiths, 59, was being pursued by the Post Office over an alleged shortfall of tens of thousands of pounds.

The Post Office reached a settlement with his widow and required the terms of it to be kept confidential.

A group legal action by about 560 sub-postmasters and sub-postmistresses against the Post Office is likely to continue for years if the case goes to appeal. The Post Office has set aside at least £5m in legal fees to fight the case.

It is thought that the Post Office has warned its shareholder – the government – that the legal fees could, ultimately, run into tens of millions of pounds.

The Post Office has said repeatedly that its Horizon system is extremely robust and operates over its entire Post Office network and successfully records millions of transactions each day.

Thank you to journalist Nick Wallis whose Tweet alerted me to the Forecourt Trader article. Wallis is crowdfunded to cover the group legal action in the High Court. He has written extensively on the trial, as has Karl Flinders of Computer Weekly.

Forecourt Trader article on Phil and Fiona Cowan

FT reports on a death following Horizon system shortfall

Government Digital Service loses “genius” and “national treasure”. Is Sir Humphrey winning campaign to dismember GDS?

,By Tony Collins

The dismembering of the Government Digital Service is underway, says Andrew Greenway, a former programme manager working on digital projects for the Cabinet Office. He now works as an independent consultant.

His comments in Civil Service World came, coincidentally, as another top GDS official prepared to leave.

Paul Downey, GDS’s Technical Architect – who is described by former colleagues as a “legend” and “national treasure” – has left to join the Ministry of Housing, Communities and Local Government.

Downey is the latest in a long line of leading government technologists to leave GDS, which will confirm in the minds of many that Sir Humphrey has won the campaign to stop GDS interfering in the 100 year-old autonomy of individual government departments.

Cabinet Office minister Francis Maude and entrepreneur Martha Lane Fox set up GDS in 2011 to break down departmental silos and have a “single version of the truth” for everything that government touches.

Former prime minister David Cameron said the creation of GDS “is one of the great unsung triumphs of the last Parliament”

Downey helped departments to create new digital services. He represented GDS on the UK government Open Standards Board. Formerly he was BT’s Chief Web Services Architect.

In reply to Downey’s tweet announcing his departure, Stephen Foreshew-Cain, former Executive Director of GDS, tweeted, “When people talked about standing on the shoulders of giants, they were talking about you.”

Mike Bracken, Foreshew-Cain’s predecessor as head of GDS, tweeted about Downey’s departure, “You’re a legend, my friend”.

Tom Loosemore, founder of GDS who, in 2012, wrote the Government Digital Strategy for GDS, also tweeted praise for Downey.

Loosemore left GDS in 2015 for the Co-op group. In an interview shortly after leaving, Loosemore said, “The shape of government needs to change … Businesses don’t run on siloed departments any more and neither should government.”

Liam Maxwell, National Technology Adviser at HM Government who used to be the government’s chief technology officer and who ran teams at GDS, tweeted,”You have been total inspiration to me and hundreds of others”.

Dismembering

Greenway said GDS retains people, prestige and power.  “There is no question that the civil service is in a much stronger position on digital than it was six years ago. Some of the work going on in government, including the teams in GDS building digital platforms, remains world-leading”.

Despite bleeding skills elsewhere, GDS has not experienced a terminal brain drain, says Greenway. “Many of those who have stayed are doing a heroic job in trying circumstances.”

But he added that officials working on digital programmes in other departments describe the GDS team as well-meaning but increasingly peripheral.

 It now looks as if the Department of Digital, Culture, Media and Sport will take over from GDS. But Greenway warns against replacing a weakened centre with diffuse departmental effort.

“The point of GDS was to have a single team that could act as the voice of users for government as a whole. To do that well, it needed a mandate covering data as well as design, operations and technology. It also had to have a clear mission. Increasingly, it has neither of these.

“The departmental shape of government gives no incentive for any non-central department to step in. It is a great shame that the two most well-placed advocates for an effective centre — the Treasury and Sir Jeremy Heywood — have proved unable or unwilling to stop the rot …

“The dismembering of GDS is underway.”

Comment

GDS was a great idea. But Sir Humphries tend not to like great ideas if they mean internal change. Permanent secretaries are appointed on the basis that they are a safe pair of hands.  Safe in this context means three things:

  • not spilling the beans however rancid they may be
  • valuing  department’s unique heritage, administrative traditions, staff and procedures
  • talking daily of the need for large-scale “transformative” change while ensuring it doesn’t happen.

Thus, for the past few years, GDS professionals have found that top civil servants want central government departments to continue to be run as separate bureaucratic empires with their uniqueness and administrative traditions preserved.

GDS technologists, on the other hand, want to cut the costs of running Whitehall and the wider public sector while making it easier for the public to interact with government. This puts GDS at odds with Whitehall officials who believe that each departmental board knows best how to run its department.

In the long run GDS cannot win – because it was set up by politicians who wanted change but whose stewardship was temporary while the will to dismember GDS comes from the permanent secretariat who do not welcome change and have the power to resist it.

More’s the pity because taxpayers will continue to spend a fortune on preserving departmental silos and huge, unnecessarily-complex technology contracts.

Andrew Greenway on the dismembering of GDS – Civil Service World

GDS deserves credit for its successes – Government Computing

GDS to lose some policy control? – Computer Weekly

Government Digital Service blog

Government Digital Service being “dismembered”

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

Judge in Post Office Horizon case calls for a “change of attitude”

By Tony Collins

The Law Society Gazette reports that the High Court judge in the Post Office Horizon case has called for a “change of attitude”.

At a case management conference, the judge Sir Peter Fraser listed some of the problems already reported during the group litigation:

  • Failure to lodge required documents with the court
  • Refusing to disclose obviously relevant documents
  • Threatening ‘pointless’ interlocutory skirmishes.
  • Failure to respond to directions for two months
  • Failure to even consider e-disclosure questionnaires

The case involves a class action – called a Group Litigation Order – against the Post Office brought by more than 500 mostly sub-postmasters.

Justice for Subpostmasters Alliance seeks damages related to the introduction of the Horizon computer system about  17 years ago, which is alleged to have caused financial distress and in some cases bankruptcy.

According to the Law Society Gazette, the judge said the behaviour of legal advisers in the case “simply does not begin to qualify as either cost-effective, efficient, or being in accordance with the over-riding objective”. He added,

“A fundamental change of attitude by the legal advisers involved in this group litigation is required. A failure to heed this warning will result in draconian costs orders.”

The court has heard of problems trying to establish a timetable for the litigation. The claimants sought a substantive hearing for October 2018, while the Post Office argued the case could be managed for another entire year without any substantive hearing being fixed. Under this proposal, the hearing would not happen until at least 2019.

Fraser noted that to describe this approach as ‘leisurely, dilatory and unacceptable in the modern judicial system would be a considerable understatement’.

The day after a trial was ordered for November 2018, the Post Office asked for a change because its leading counsel already had a commitment at the Companies Court.

The judge suggested it was a ‘clear case of the tail wagging the dog’ if clerks were allowed to dictate hearing date. He said there was reasonable notice to arrange for a replacement counsel.

Fraser added: ‘Fixing hearings in this group litigation around the diaries of busy counsel, rather than their fixing their diaries around this case, is in my judgment fundamentally the wrong approach.’

Comment:

It appears that the judge did not single out the claimants or the Post Office as the main target for his irritation. He was impartial. But his no-nonsense approach might have surprised some at the Post Office.

The Post Office is familiar with control. When the Horizon system has shown a shortfall in the accounts of a local branch, the Post Office has required the sub-postmasters to pay whatever amount is shown, in order to return the balance to zero.

Even when paying the shown amount has led to bankruptcy and destruction of the family life of the sub-postmaster, the Post Office has pursued the case.

It has had control.

It supplied the contract that sub-postmasters signed; it supplied the Horizon branch accounting system; it required payment of what the system showed as a deficit; it investigated complaints by sub-postmasters that the shown deficits might have been incorrect;  it was able to decide what information to release or withhold – the “known errors” Horizon log being one piece of information not disclosed – and it was the prosecuting authority.

It has also been free to rebut public criticisms, as when BBC’s Panorama and forensic accountants Second Sight focused on the concerns of sub-postmasters.

Now it’s a High Court judge who is questioning, among other things, a failure to lodge required documents with the court and refusing a to disclose obviously relevant documents.

The judge’s comments are refreshing. Since 2009, when Computer Weekly first reported on the concerns of sub-postmasters, control has been one-sided.

Now at last it is on an even keel.

We hope the Post Office will reappraise whether it should be using public funds at all to fight the case.

If the case does drag on for years – postponing a judicial decision – who will benefit? Certainly not the sub-postmasters.

Law Society Gazette article

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”.

 

Nine-year outsourcing deal caught on camera?

By Tony Collins

This photo is of a Southwest One board that was surplus to requirements.

Southwest One continues to provide outsourced services to Avon and Somerset Police. The 10-year contract expires next year.

But unless Southwest One continues to provide residual IT services to the police, the company – which is owned by IBM – will be left without its three original public partners.

Photo a metaphor?

IBM and Somerset County Council set up Southwest One in 2007  to propel council services “beyond excellence”.

Joining in the venture were Taunton Deane Borough Council and Avon and Somerset Police. The hope was that it would recruit other organisations,  bringing down costs for all.

It didn’t happen.

An outsourcing deal that was supposed to save Somerset residents about £180m over 10 years ended early, in 2016, with losses for the residents of about £70m. The council and Southwest One settled a High Court legal dispute in 2013.

Taunton Deane Borough Council also ended the deal early, in 2016.

Comment

Was it all the fault of Southwest One? Probably not. The success of the deal was always going to be judged, to some extent, on an assumption that other organisations would join Southwest One.

When that didn’t happen, two councils and a police force had to bear the main costs.

There was also the inherent problem that exists with most big council outsourcing deals: that it’s always difficult for a supplier to innovate, save money on the costs of running council services, invest significantly more in IT, spend less overall and still produce a healthy profit for the parent company.

It could be done if the council, police force or other public body was manifestly inefficient. But Somerset County Council outsourced what was, by its own admission, an excellent IT organisation.

Some at the time had no doubts about how the outsourcing deal would end up.

Southwest One – The complete story by Dave Orr

 

Is Barnet Council up to the job of managing its suppliers – including Capita?

By Tony Collins

Tonight (27 July 2017) Barnet Council’s audit committee meets to discuss the interim year-end findings of BDO, its external auditor.

BDO identifies a “significant risk” in relation to the council’s contract management and monitoring. There are “numerous issues”, says BDO.

Barnet is well known in the local government community for having adopted a “commissioning council” concept. This means it has outsourced the vast majority of its services, leaving officers and the ruling Conservative group to set policy and monitor suppliers.

Capita is a main supplier. Its responsibilities include cemeteries, ICT and collecting council tax.

BDO’s report for tonight’s council meeting says that, with the council’s services now being delivered through various outsourcing arrangements, “it is important to establish strong contract management and monitoring controls”.

It adds that such controls “allow the Council to ascertain whether or not it is receiving value for money from the use of its contractors, and to take remedial action where issues are identified”.

On this point – contract management and monitoring –  BDO says,

“During the course of 2016/17 we have noted a number of internal audit reports which have raised significant findings in this area.

“In addition, further concerns have been identified through our own audit work. As such, we have recognised a significant risk to our use of resources [value for money] opinion.”

BDO’s findings are interim. It cannot finalise its final statutory report until many questions are answered and errors, financial misstatements and lapses in disclosure are corrected in Barnet’s draft financial accounts.

The auditors comment in their report on the “number and value of errors found” and the “level of misstatement in the current year accounts”.

These are some of BDO’s findings so far:

  • Large advance payments (about £44m in prepayments) as part of the Customer Service Group contracts with Capita. Not all of the payments were set out in the payments profile of the original contract. Significant payments were made at the start of the contract (and in subsequent years) to cover capital investment and transformational expenditure. The financial profile of the contract anticipates the advance payments being used by 2023. One advance payment of £19.1m in December 2016 covers service charge payments relating to the first three quarters of 2017/18. The council receives a £0.5m discount for paying in advance. The council also paid for some projects in advance. BDO finds that there was proper council scrutiny of the decision to make the payments.
  • Barnet overspent on services in 2016/2017 by £8.3m.
  • There’s a budget gap prior to identified savings of £53.9m over the three years to 2020.
  • There’s a substantial depletion in the council’s financial reserves.
  • Will claimed savings materialise? “Savings targets remain significant and achievement of these will be inherently challenging, as evidenced by the overspend in 2016/17.”
  • Net spending on the Customer and Support Group contracts with Capita increased to £34.4m in 2016/17 from £26.9m the previous year.
  • More than 100 officials at Barnet receive at least £60,000 a year and twelve at least £100,000.
  • Some councillors have failed to make formal declarations. A “poor response rate as compared to other authorities” says BDO’s report.

Comment:

You’d think a “commissioning council” – one that outsources the delivery of most of its services – would, above all, have a firm grip on what its main suppliers are doing and what they’re charging for.

In fact BDO’s report for tonight council meeting rates the council’s contract management and monitoring at “red”. BDO has identified “numerous” issues.

It’s easy for Barnet Council to issue press releases on the tens of millions it claims to have saved on its contracts with Capita.

But BDO possesses the facts and figures; and it questions the council’s “use of resources” – in other words “value for money”.

At the outset of its joint venture with IBM, officials at Somerset County Council spoke of planned savings of £180m over 10 years. In fact the deal ended up losing at least £69m.

Barnet blogger “Mr Reasonable” who has long kept a close eye on payments made by Barnet to Capita doubts that the council is up to the job of properly scrutinising Capita. We agree.

It was clear to many in 2013 when Barnet signed contracts with Capita that the council was unlikely to find the money to acquire adequate contract monitoring expertise and resources, given that its suppliers were required to deliver such a wide range of complex services.

Barnet Council’s most adept scrutineers, rather than local councillors, have proved to be its dogged local bloggers who include Derek Dishman (Mr Mustard), John Dix (Mr Reasonable), Theresa Musgrove (Mrs Angry) and Roger Tichborne (The Barnet Eye).

Had ruling councillors taken local blogger warnings more seriously, would they have specifically avoided becoming a “commissioning council”?

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.

is London Ambulance Service’s back-up system “public endurance”?

By Tony Collins

In November 2016 London Ambulance Service had its busiest week for seriously ill and injured incidents in the history of the Service.

“The Service is …expecting demand to increase even further throughout December,” said London Ambulance Service at the time.

A few weeks later, on one of the busiest nights of the year, the systems went down, from 12.30am to 5.15am on 1 January 2017. The result was that 999 calls were logged  by pen and paper.

When systems are working normally  an incoming 999 call displays the address registered to that number – if the address is registered.  The London Ambulance operator confirms the location, assesses the severity and an ambulance can be despatched within seconds, with the address on its screen and a satnav pointing the way, according to a comment on The Register.

Pen and paper takes longer because the address and other details need to be given over a radio, which can take minutes.

But pen and paper is the London Ambulance Service’s back-up for IT failures.  Whether it can cope with unprecedented demand – or with a major incident in London – is in doubt.

A former London Ambulance Service paramedic told the BBC there had been waits of an hour for ambulances on 1 January 2017. He said call handlers had been “amazingly helpful”, but it was “easy to become overwhelmed especially in the midst of high call volumes”.

London Ambulance Service declined to answer any questions on its latest system failure.

Malcolm Alexander of the Patients’ Forum for the London Ambulance Service said: “We want to know why it is that this system that cost so much money and is supposed to be so effective is not fail-safe.”

He added: “If this system fails at a time when there is huge pressure in the system, for example if there was a major disaster or a terrorist attack, we are going to be in trouble. We really need to make sure it doesn’t collapse again.”

1992

A report into the collapse of London Ambulance Service systems found that they had had failed for many reasons. The Service had taken a “high-risk” IT approach and did not test systems thoroughly before putting them into service.

(Some may question how much has been learned since then.)

2006

In 2006 the London Ambulance Service systems crashed nine times in a fortnight. Each time staff reverted to pen and paper.

2008

In 2008, when systems failed,  repairs took 12 hours. Again the Service reverted to pen and paper.

2011

In June 2011 an IT upgrade caused the system to go down for about three and half hours. Pen and paper was again the back-up “system”. At the time the London Ambulance Service was upgrading the Commandpoint system, supplied by Northrop Grunman, which the Service deployed in 2010 and still uses.

2013

In 2013 on Christmas Day and Boxing Day the systems went down for separate reasons for several hours each day, with staff reverting to pen and paper.

2015

The Chief Inspector of Hospitals, Mike Richards, recommended that the London Ambulance Service be placed into special measures.

He said at the time,

“The Trust has been performing poorly on response times since March 2014. This is a very serious problem, which the trust clearly isn’t able to address alone, and which needs action to put right.”

Comment

It’s becoming the norm for parts of the public sector to regard the public as captive customers when it comes to going live with new IT or upgraded software.

Rather than test new systems, procedures and upgrades thoroughly before introducing them, some parts of the public sectors are going live with a “let’s see what happens and fix things then” approach.

This has become the semi-official approach to the introduction of Universal Credit – with long delays in payments for some claimants.

Within the NHS, at some hospitals introducing new patient record systems, there has been an internal acceptance that patients may suffer from delays,  perhaps with tragic consequences, at least for three year-old Samuel Starr.

The NHS e-referral service was launched with nine pages of known problems.  And when NHS England launched a streamlined GP support service with Capita, officials knew of the possible problems. But it launched anyway.

After the London Ambulance Service’s IT failure on New Year’s Day, it’s clear that many emergency workers did their best to give a normal 999 service. St John’s Ambulance helped.

But to what extent does senior management at the London Ambulance Service have a “stuff happens” mindset when IT goes seriously wrong?

There’s no individual accountability and no commercial imperative to learn lessons from any of the failures.

And there’s no fervent business or political will to ensure the same or similar mistakes don’t recur.

Every time systems fail, the London Ambulance Service promises an investigation. But where are the results published so that lessons can be learned?

Pen and paper is tried and tested. But demands on the London Ambulance Service are much greater than in the past.

With an unprecedented demand for its services how is it London Ambulance Service’s senior management can comfortably rely on pen and paper as its back-up system?

It can – if nobody in power requires an earnest answer to the question.

Another wider question is whether it’s acceptable to use the public as guinea pigs for new or upgraded IT, with potentially serious or even tragic consequences.

London Ambulance Service suffers New Year’s crash – Computer Weekly

London Ambulance Service hit by new year fault – BBC online