Category Archives: public sector

Tri-borough mutual plans to save £1m in costs for London councils

By David Bicknell

Council staff across three London boroughs who are setting up their own employee-led mutual to take over school support services expect to save a million pounds over four years.

The three councils – Hammersmith & Fulham, Westminster and Kensington & Chelsea – already share several services, which they say is enabling them to reduce back office costs to help protect frontline services from the public spending squeeze.

Now, a statement issued by Hammersmith & Fulham for the three councils says the staff involved in supplying support services for schools across the boroughs are “putting the finishing touches to plans to set themselves up as an employee-led mutual.”

Andy Rennison, assistant director in Hammersmith & Fulham children’s services, who has been leading the mutual project, said, “Staff in these areas have experience of trading with schools and are excited about the new challenge. We feel that having more control, flexibility and being able to develop a more commercial approach will benefit schools, the mutual staff and the three councils.

“If the venture is successful, and we have every reason to think so, the councils will receive 50% of the mutual’s net profit to reuse in providing educational opportunities.”

The mutual will pilot the new arrangements for four years, with support from a joint venture independent sector partner, currently being selected through European procurement processes.

Hammersmith & Fulham says an open day for potential bidders held on January 24 attracted around 60 delegates.

The project is being supported by the Cabinet Office which picked Hammersmith & Fulham to be a Pathfinder  to explore new ways of delivering public services more efficiently. The services include financial management support and budget planning, IT and building development projects, as well as strategic advice to councils.

Francis Maude, Minister for the Cabinet Office, said: “Front line staff know what local people want from public services. The mutual model being pioneered in Hammersmith & Fulham will give staff the power to do things the way they know works best. The evidence is clear, when staff have a real stake in their business productivity rises and customer satisfaction grows.

“This Pathfinder mutual is particularly groundbreaking as staff are forming a ‘joint venture’ with a partner organisation that will help to develop the business further. I commend the staff leading this exciting project for their achievements and hope many more will follow their lead.”

“We are very pleased that staff across the Tri-borough area are excited about this opportunity and taking the lead in this Pathfinder. After the initial four years, the service will be retendered on the open market to ensure that taxpayers continue to get the best possible value for money in the longer term,” said Hammersmith & Fulham cabinet member, Cllr Helen Binmore.

Independent adviser OPM was asked by the Cabinet Office to provide expert support to Rennison and his team as part of the Pathfinder programme.

OPM chief Executive Hilary Thompson said; “Elected members, managers and staff at Hammersmith and Fulham have shown real commitment and energy throughout the process of developing the staff mutual. This is an innovative example of a council recognising and seeking to realise the potential of employee ownership and new ways of working.”

It has emerged that academies and free schools will provide a future opportunity for the mutual to extend its services. There are currently two free schools and two academies in Hammersmith, with more in the pipeline.

Further background information on the mutual is being made available in a Hammersmith & Fulham Cabinet report.

(Thanks to Ian Makgill of government contracting specialist Govmark for his help with this story)

Related Links

Hammersmith & Fulham Pathfinder tender hints at September start for schools mutual

SMEs – when to choose them and when not

Public services can be delivered by knights and knaves mutually

IT crisis management – an ongoing NHS case study

By Tony Collins

When a public-facing go-live goes wrong should communications be neutral in tone – or accentuate the positive?

On 8 December 2011 North Bristol NHS Trust went live with the Cerner Millennium electronic patient records system under the NPfIT programme.

At first Trust staff thought the difficulties were confined to a mix-up over outpatient appointments but it later transpired that there were 16 “clinical incidents” between 1 December 2011 and 17 January 2012 that were related to the Cerner Millennium implementation.

The Trust has published regular public information notices on the benefits, expected benefits, and problems arising from the Cerner implementation.

Reassuring in tone, the notices have made no mention of anything more potentially serious than administrative “issues”:  non-existent appointments were set up and letters sent to patients in error. The notices said that though the “issues” caused disruption and frustration, patient safety had not been compromised. The Trust apologised to staff and patients.

Clinical incidents

No mention was made in the notices of staff having reported clinical incidents in which the new patient records system was a causal factor. The NHS usually categorises  each clinical incident as a  “near miss” or “actual harm”.

In Campaign4Change’s various conversations with the North Bristol Trust over the potential seriousness or otherwise of its IT problems, one thing has been clear: it is pleased with the level of public information it has given out over the problems:

–       regularly-updated messages on its website,

–       briefings to the media including interviews for regional BBC and ITV channels by Ruth Brunt, the Trust’s chief executive,

–       board papers,

–       on-time answers to requests under the Freedom of Information Act

–       leaflets and posters placed in outpatient clinics and on car parking machines explaining that the Trust was implementing a new computer system and apologising for any delays patients may experience

The Trust also gave GPs a dedicated telephone number, fax number and email address for GPs or their patients to contact for further advice.

Profuse public information

We agree that the Trust has run a diligent public information campaign; and its communications staff have always responded quickly to our calls –  and with the documents we requested. The staff were frank in answering our questions. They told us that no decision has been taken yet on whether the Trust will publish the results of an independent inquiry into the Cerner implementation.

But if the Trust doesn’t publish the lessons from its Cerner implementation, it may wish to be reminded of a warning by the Local Health Board of Merthyr Tidfil, at the top on its Clinical Incident Reporting Policy paper: –  To err is human; to cover up is unforgivable; to fail to learn is inexcusable.         

If the Trust does not publish how will others learn from its mistakes?

Accentuate the positive?

The quantity of public information released by North Bristol NHS Trust is not an issue – but how informative is  it? Does the wider culture of the Trust still force staff to accentuate the positive?

The first of the Trust’s website statements on the problems of the Cerner implementation came about five weeks after the go-live. The opening sections of the statement made no mention of any problems. Indeed a series of bullet points listed the benefits of the system:

  • Patient records will now be securely stored electronically on a single system, replacing paper records.
  • Authorised clinicians can quickly find and share information on patients and their medical history and no longer rely on paper filing records.
  • Clinicians will also be able to access records at the patient’s bedside and can input information and statistics immediately.
  • Patients will no longer have to repeat their details to different clinicians as they will be accessible in one place.
  • Tests and outpatient appointments can be set up immediately with the patient.

The Trust’s website statement went on to say that “many”wards as well as A&E at Frenchay Hospital [Bristol] are using the new system.

Only if you’ve read this far will you see a reference to problems.

“However, we have experienced some unexpected problems in the last few weeks with outpatient appointments…”

“Huge improvements”

The current media statement is, again, more upbeat than neutral.  The vague mention of problems is countered by the equally vague claim of “huge” improvements.

“At North Bristol NHS Trust we have been implementing a new electronic patient record system to replace an outdated, less efficient system. Our wards, two minor injuries units, the Emergency Department, theatres and maternity are using the new system.

“However, we have experienced some unexpected problems with some of our outpatient clinics resulting in non-existent appointments to be set up and letters sent to patients in error. Our priority is always patient safety and we are clear that this has not been compromised.

“These issues have caused disruption and frustration for our patients and our staff and we recognise that this has not delivered the level of service that we expect, and the public expect, from us. We apologise wholeheartedly for that.

“Our staff have shown real commitment, hard work and dedication to continue to deliver patient care. Our Information Management & Technology Team worked very hard to rectify these problems as quickly as possible and we have seen huge improvements.

“The system in all outpatient clinics has now been rebuilt and relaunched. These clinics are now in a position to effectively use the new electronic records system. We anticipate there will be a further transition period for staff in those clinics. We firmly believe that the new system, once fully implemented, will improve services for our patients and provide real value.”

Campaign4Change pointed out to North Bristol that board papers on the troubled Cerner implementations at Barts and The London were commendably detailed and informative.

Barts had referred breaches of government targets on waiting times, complaints from patients, delays in the reporting of statutory and other trust performance information, extra costs, losses of income because of reduced activity, and the effect of data errors. There has been little of any of this from North Bristol’s public information campaign.

Freedom of information

Indeed North Bristol has refused to answer questions that were asked under the FOI Act by D Haverstock of the South West Whistleblowers Health Action Group.

The Trust refused Haverstock’s requests for:

–        a copy of your Cerner implementation plan, including pilot

–        the criteria on which the go-live decision was taken

–       a copy of the issues log for the implementation, with a full history of closed and open items.

–        reports on Cerner Project Board/Steering Committee meetings.

The Trust did give Haverstock a vague answer to her question on whether the Trust will have to take over the running costs of Cerner from 2015 when the Department of Health’s NPfIT contract with BT ends.

The Trust said the running costs for Cerner will become the Trust’s responsibility from October 2015 – but it doesn’t know for certain what the costs will be.

“The exact costs are still being calculated, but will be around the same levels as our previous patient administration system, we estimate,” said the Trust.

North Bristol declined to answer Haverstock’s other questions because “at this time the Trust feels that to answer your questions regarding the Cerner Millennium implementation would compromise our position with BT and Cerner”.

Rightly, Haverstock challenges the Trust’s use of the word “feels”. Rejections of FOI requests should be based on facts not its feelings.

Says Haverstock in her request to the Trust for an internal review: “Subjective feelings are not a valid reason for rejecting an FOIA request. What is your objective, evidence base for rejecting this request? [Thank to Theyworkforyou.com for this information.]

Comment

Poorly-designed health IT can kill, according to a US Institute of Medicine report “Health IT and Patient Safety Building Safer Systems for Better Care” in November 2011.

The report says:

“Poorly designed health IT can create new hazards in the already complex delivery of care.

“Although the magnitude of the risk associated with health IT is not known, some examples illus­trate the concerns.

“Dosing errors, failure to detect life-threatening illnesses, and delaying treatment due to poor human–computer interactions or loss of data have led to serious injury and death …”

There’s no evidence that the problems at North Bristol have caused any harm to patients. Indeed the Trust, in reporting the clinical incidents in response to a BBC’s reporter’s FOI request, says its “robust safeguarding processes, as well as additional checks and balances in all departments” have “ensured that clinical safety was not compromised and no patients were put at risk”.

It adds: “Our priority is always patient safety and there is no indication that this has been affected.”

But would we know if patient safety had been affected? In its public information campaign the Trust has been prolific. But the accent on the positive, rather than a neutral and factual account of the specific problems, has left us with little confidence that all the truth has yet come out.

In an IT-related crisis it is not a mass of information that the public and media regard as helpful but specific answers to specific questions. Has North Bristol managed its IT-related crisis well? Up to a point, Lord Copper.

MP questions costs of North Bristol Cerner system

Sir David Nicholson challenged on North Bristol’s Cerner costs

North Bristol system has more problems than anticipated.

North Bristol hits appointment problems

Cerner system “too entrenched” to be scrapped.

Osborne’s Budget speech may provide update on Coalition’s mutuals plans

By David Bicknell

Will Wednesday’s Budget bring further news on the Coalition’s plans and prospects for public sector mutuals?

Yesterday’s Independent believes it might. An article by Business Editor James Ashton suggests that Chancellor George Osborne  is likely to “talk up the progress made in Whitehall reforms” in his Budget statement.

It argues that “thousands of civil servants will be transferred into the private sector under a blueprint to shake up Whitehall that will be unveiled next month.”

Ashton suggests that new recommendations on spin-outs are due to be outlined  in a report by Stephen Kelly, the Cabinet Office’s Crown Commercial Representative.

The report is expected to say that “there are numerous government operations that could be potentially commercialised, either through forging partnerships with outside firms or seeking capital injections.”

Related Link

Stephen Kelly – the man at the coal face of the Big Society

Is Francis Maude starting to spin – without realising it?

By Tony Collins

Francis Maude is, perhaps, the most effective Cabinet Office minister in decades.

If the business world divides into two main types of character, black and white, and grey – neither being better or worse than the other –  Maude is black and white.

He wants clarity. He shuns subtlety and complexity. He has no time for civil service sophistry and equivocation, or the coded language of some supplier representatives. He wants cuts in the cost of contracts and doesn’t want to hear long arguments on why things are not that simple. He had deep reservations over doing a new deal with CSC over the NPfIT.

A strength of Maude and his colleagues at the Cabinet Office has been the absence, or at least scarcity, of exaggerated and unsubstantiated statements of efficiency savings, of the sort made repeatedly during Labour’s tenure.

Is that beginning to change?

In the past fortnight Maude has made two major claims that are not based on published evidence.

• Maude said spending on SMEs has risen from 6.5% to 13.7%.  It’s not clear how that figure is calculated. There’s a good analysis of the tenuousness of the claim by Peter Smith of Spend Matters. How much of the increase in SME work is down to unaudited claims by large companies that they are giving their SMEs more work?

• He said that £200m has been cut from Capgemini’s Aspire contract with HMRC. [Aspire also involves Fujitsu and Accenture.] He has received much good publicity for the claim. Said the Telegraph yesterday:

“He [Maude]  announced that ministers had successfully renegotiated one deal on computers and tax systems for HM Revenue and Customs.

He said the new contract, with Capgemini, would save £200 million on the deal previously agreed.”

Last year Mark Hall, deputy CIO at HMRC was reported as saying that the Aspire contract was on course to save more than £1bn. Is the £200m quoted by Maude in many news articles this week new?

And none of the articles mention the total cost of the Aspire contract – so from what is £200m being cut?

At one point, according to Mark Hall, the estimated cost of Aspire rose to £10bn from its original estimate of £2.83bn over 10 years. This means that cost increases on the Aspire contract are measured in billions – which puts the £200m savings figure mentioned by Maude into context.

And have Maude and his team offered Capgemini anything in return for a price cut, such as an improved profit margin? [The contract is on an open-book accounting basis]. This week’s Cabinet Office statement on the £200m cut gives no help here. An HMRC FOI response in 2010 and an NAO report in 2006 show that costs of Aspire are fluid. They change according to internal demand; and pricing arrangements are complex. HMRC has refused FOI requests to publish the contract so how can anyone put the claimed £200m savings into a contractual content?

In 2007 negotiations between HMRC and Capgemini extended the 10-year contract by three years, to June 2017; and there’s an option to extend Aspire  for a further five years to 2022. In return for the contract extension Capgemini has already guaranteed savings of £70m a year and a further £110m a year from 2012. Are these savings in addition to the £200m a year Maude has announced? Or the £1bn savings mentioned by Mark Hall?

The good news is that HMRC’s CIO is Phil Pavitt who is a natural sceptic of big outsourcing deals. If anyone is going to achieve genuine savings on Aspire it is Pavitt. Indeed he has given some details of his negotiations. But the contractual context remains abstruse.

Comment

Doubtless Maude believes the figures he has announced on SMEs and Aspire are correct but without substantiation they will mean little to anyone except the media. Maude, perhaps, needs to trust his own cautious instincts than listen too much to his advisers. Otherwise he’ll begin to sound more like Labour ministers who repeatedly made claims the NAO found difficult to substantiate.

The important and impressive work Maude is doing to cut the costs of running government should not be trivialised and debased by spin. Announcements on what he is doing to cut costs and make government more open are usually helpful. But Maude should the first to differentiate the real – in other words the factually corroborated – from aggrandising and flimsy political claims.

London Borough of Hammersmith & Fulham mutual process ‘continuing’

By David Bicknell

The London Borough of Hammersmith & Fulham told Campaign4Change today that the council is continuing to work its way through tenders received in January in response to an invitation to tender (ITT) for  “an innovative independent sector partner (ISP) to participate and invest in the creation of a Mutual Joint Venture Company.”

The mutual, which is due to be up and running in September 2012, will cover services to schools across three London boroughs working together: Hammersmith & Fulham, Kensington & Chelsea, and Westminster City  Council.   

In response to a Campaign4Change call checking on progress, a spokesperson for the London Borough of Hammersmith & Fulham said the tender evaluation process was ‘continuing’, as normal.

The ITT which closed in January, had indicated that “the ISP will take responsibility for the creation of the joint venture company, whose shareholding will be shared between the ISP and the employees (held on the employees’ behalf in a trust). The Contracting Authority will have a contractual arrangement with the Mutual Joint Venture company to provide some of the services, supplies and works listed….. for a period of not less than 4 years.”

Hammersmith & Fulham Pathfinder tender hints at September start

Lean Procurement – an early bird analysis

 In this guest blog, John Pendlebury-Green and John Jones from strategic sales architects Landseer Partners discuss the Government’s plans to introduce lean procurements, an approach which should shorten procurement times, reduce bidders’ costs and encourage greater SME participation

Lean procurement is being piloted by the Government with six pilots underway across various departments. We at Landseer Partners have been extensively involved with one of these pilots. Also, we have discussed the emerging characteristics with service providers participating in other lean procurements.

Although it is early days, there are some emerging trends that the Government and bidders would do well to take on board for lean procurements to become successful and ubiquitous across government.

So, what are these emerging trends? Our “early bird” experience of being on a lean procurement pilot suggests that:

·         Lean procurements, by their very nature in attempting to reduce the overall procurement timeline significantly, have the potential benefit of reducing bidders’ costs. They also have the potential to reduce the opportunity to discuss in sufficient detail important commercials such as contract schedules and contractual terms and conditions.

·         Both the client and potential suppliers need to plan and resource better a lean, competitive dialogue. That means supplier submissions need to be submitted much sooner than in previous procurements. It also means that client bid reviews and quality assurance need to be undertaken much quicker and more efficiently.

·         There is an even greater need for strong leadership and decision-making on both the client and supplier side i.e. the need for empowered individuals is greater in lean procurements than in a traditional competitive dialogue. Decisions need to be taken swiftly in order to maintain pace in the procurement.

·         Stress levels for all parties can be high. All parties will be “doing more” in “less time” – so outcomes need to be kept in perspective with a view to the quality of deliverables/schedules not being compromised and

·         Bid teams need to be better resourced at the outset, especially in terms of having the right subject matter experts being available at the appropriate time. This seems to be especially so in the case of lean dialogue.

Finally, our experience, short though it is, suggests that incumbent suppliers, by virtue of their incumbent status, have a slight advantage over other short-listed competitors. They have greater knowledge of the existing services supplied. They need less time in the “data room” and are often able to provide a greater level of detail in their dialogue responses, simply by virtue of knowing the service in greater detail.

In summary, it is still very early days in the lean procurement world.  The obvious benefits of shorter procurement times (and hence reduced costs on all sides) though welcome, might actually mask additional costs that could subsequently emerge.  

Landseer Partners     http://www.landseerpartners.com/

SMEs – when to choose them and when not

By Ian Makgill

The key to giving business to SMEs is to understand when SME suppliers can meet the needs of government and when it is best not to try and resist the gravitational pull of a large supplier.  

Some of this is obvious.  You wouldn’t expect the government to award banking services or insurance contracts to an SME. On the other hand, there is no real reason why legal services or consulting contracts can’t be provided almost entirely by SMEs, with only a couple of larger providers required for national programmes with multiple sites. In fact, it is a great shame that Government Procurement Service’s (GPS) new tender for consulting services does not utilise the regional model that they’ve previously used for temporary medical staff.

GPS has scored a couple of hits with SMEs, firstly with the appointment of Redfern Travel as the preferred travel management provider and secondly, with the choice to let the G-Cloud IT framework. It may be that Redfern ceases to meet the exact criteria of being an SME once the contract is fully embedded in Central Government, but that’s the whole point, to drive growth through smaller businesses. The G-Cloud framework provides a meaningful opportunity for SME suppliers to sell complex services to government, and may also help government to break their addiction to monolithic, large scale IT projects (as typified by the CSA’s latest IT tender with 90,000 specified requirements.)

Cloud services offer a remarkable opportunity for small teams to serve millions of people. A good example is 37signals, a Chicago web design company that created a project management tool called Basecamp. Its team of 32 staff currently service three million customers.

It is equally important to know when not to try and counter market forces.

Take agency staff.

We’ve been doing some very detailed work in this area, and there is an inexorable move towards using large, national suppliers. These suppliers can provide much more competitive margins and better services and data to public bodies. The market is healthy in terms of competition and there is room for smaller suppliers to become second tier suppliers to some of the national companies. Clearly the option to become a second tier supplier, or to lose their existing business is not good news for smaller suppliers, but with such strong benefits available to public bodies it would make no sense to try and resist developments that are affecting the whole market.

There needs to be a much deeper understanding of the characteristics of contracts that can be fulfilled by SME suppliers and a comprehensive strategy to follow up on that work, and to prevent government issuing restrictive tenders that see SMEs unnecessarily barred from doing business with Government, or spin-out mutuals facing procurement hurdles that are inappropriate to them. Until that strategic work is done, then there is a risk that the appointment of SMEs to government contracts will be haphazard, with a few notable successes and far too many failures.

Ian Makgill is the Managing Director of Govmark, researchers who specialise in government contracting.

Download Govmark’s report into agency staff in local government

From The Sun: “Run fire service like John Lewis”

By David Bicknell

It’s not often that the prospects for mutuals – or John Lewis, for that matter – make it into The Sun. But this story takes the mutuals bandwagon into areas it hasn’t been previously.

The Sun’s story – ‘Run fire service like John Lewis – refers to the Cleveland Fire Brigade, which reportedly ‘plans to turn itself into a mutual — just like John Lewis stores where staff share profits.’

The story quotes Cleveland’s chief fire officer Ian Hayton saying: “Combining a public service ethos with an entrepreneurial drive for growth will empower our staff.”

It also quotes Cabinet Office Minister Francis Maude saying, “We are opening up public services to get more bang for the taxpayers’ buck.

“Frontline workers know best how to do their job. That’s why mutuals can be the best way to run things.”

However, an article on Public Finance makes the point that the ‘mutual option’ was always a non-starter for public audit.

It argues that the Audit Commission’s abandonment of the ‘mutual option’ for audit follows a weekend disclosure that police forces are being pressured by the Home Office ‘to outsource great swathes of front as well as back-office work.’

Audit Commission: the feeling’s not mutual

NAO says HMRC is tackling tax evasion but needs to further exploit IT systems’ potential

By David Bicknell

A report by the National Audit Office (NAO) has applauded HM Revenue & Customs’ (HMRC) work in tackling tax evasion to deliver £4.32 billion of additional tax yield between 2006 and 2011. HMRC also reduced staff numbers and introduced a range of improvements in its compliance work.

But, the NAO says, although the Department has introduced new IT capabilities to identify incidences of evasion more effectively, it is not yet exploiting the full potential of the new systems. It has also had to defer and reduce the scope of projects to keep within annual budgetary limits, leading to reductions in benefits.

According to the NAO’s report, the Compliance and Enforcement Programme cost £387 million to 2011-12 and was made up of over 40 projects intended to increase compliance yield – the measure of additional tax arising from compliance work – by £4.56 billion between 2006-2011.

Against that target, the Programme actually reported additional yield of £4.32 billion over the five years to March 2011, with HMRC forecasting that it will generate an additional £8.87 billion of yield between 2011-12 and 2014-15. However, the NAO points out, HMRC will not achieve all of the Programme’s forecast benefits because of changes to scope or slippage in delivering projects, as well as over-optimism in its forecasts.

HMRC reduced staff numbers by the planned amount of 3,374 full time equivalents by the end of 2008-09, two years ahead of schedule. It also generated an improvement in productivity -defined as the level of yield generated by each full time equivalent – of approximately 36 per cent, below its forecast of a 42 per cent improvement. HMRC did not routinely measure the impact of the Programme on customer experience.

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

“This major programme has helped HMRC to increase tax yield substantially and has introduced ways of working which will strengthen HMRC’s compliance work in future.

“The Department could, though, achieve better value for money from its investment in compliance work by improved understanding of the impact of individual projects and ensuring that its staff have the capacity to exploit new systems to the full.”

On improving HMRC’s compliance work, the NAO report says the following:

 “The Programme has improved HMRC’s ability to undertake compliance work but it has yet to exploit the full potential of the new systems. In particular, the new ICT systems can substantially improve how HMRC assesses evasion risks to identify cases for investigation. HMRC is embedding new systems and approaches into working practices. We assessed the implementation of a sample of projects:

Project design. Overall, HMRC managed design phases well but, particularly on projects to implement new ICT systems, it did not sufficiently consider redesigning business processes or developing the staff capability needed to exploit the full potential of the new technologies.

Implementation. HMRC did not always communicate clearly the rationale for projects and, although it provided training and guidance, these were not always timely or requirements were underestimated.

Assessing the performance of new systems. HMRC has established management information on the use and performance of new systems and, over time, will seek to use this to better understand the impact on business performance.

HMRC – The compliance and enforcement programme

New child support system has 90,000 requirements – in phase one

                               A new old-style government IT disaster?

By Tony Collins

While officials in the Cabinet Office offcials try to simplify and cut costs of Government IT, a part of the Department for Work and Pensions has commissioned a system with 90,000 requirements in phase one.

The projected costs of the child maintenance system have risen by 85% and the delivery date has slipped by more than two years.

Even with 90,000 requirements, phase one, which is due to go live in October, excludes 70 requirements that are “deemed critical” says a report published today by the National Audit Office.

The NAO report indicates that the Child Maintenance and Enforcement Commission has commissioned an old-style large IT system using traditional developing techniques and relying on large companies.

G-Cloud and SMEs have not featured in the Commission’s IT strategy – and it abandoned agile techniques last year on its child maintenance project.

The Commission put the cost of its new child maintenance system at £149m in January 2011. Ten months later it put the cost at £275m, an 85% increase. The Commission was unable to give the NAO a full explanation for the difference.

Lessons from past failures not learned?

Today’s NAO report says there is a risk the Commission will repeat mistakes by the Child Support Agency whose IT system and business processes were criticised in several Parliamentary reports. The Commission takes in the work of the Child Support Agency – and indeed runs its own systems and the Child Support Agency’s in parallel.

Officials at the Commission told the NAO they have a good track record of holding back IT releases until they are satisfied they will work.  “Nevertheless, we found that the Commission is at risk of repeating many of the mistakes of 2003,” said the NAO. Those mistakes include over-optimism and a lack of internal expertise to handle suppliers.

Mixing “agile” and “waterfall” doesn’t work

Initially civil servants at the Commission tried to “mix and match” agile and traditional developing techniques – which Agile advocates say should not be attempted.

In 2011 the Commission gave up on agile and “reverted to a more traditional approach to system development” says the NAO report.

The mix and match approach meant there were two distinct routes for specifying requirements and “resulted in duplicated, conflicting and ambiguous specifications”.  The Commission did not have previous experience of using the agile approach.

The Commission’s child maintenance system was due to go live in April 2010 but the delivery date has slipped three times. Phase one is now due to go live in October 2012 and phase two in July next year but the NAO report raises questions about whether the go-lives will happen successfully. The Commission has not planned in its financial estimates for the failure of the system.

The NAO finds that the Commission has struggled to make its requirements for the new system clear. The Commission’s main developer Tata Consulting Services has had protracted discussions over the meaning and implementation of requirements.

The NAO also hints that IT costs may be out of control. It says the Commission may not secure value for money without properly considering alternative options for restructuring and “adequately controlling its IT development …”

These are some of the NAO’s findings:

IT costs could increase further

“The new system is based on ‘commercial off-the-shelf’ products. However, a recent audit by Oracle identified that the performance, maintainability and adaptability of the new system would be key risks. This could increase the cost of supporting the system. The scheme does not yet include plans for the integration with HM Revenue & Customs’ Real Time Information system due to be implemented in 2013, or introducing Universal Credit because of the differing timescales,” says the NAO which adds:

“Achieving the Commission’s plans without further cost increases or delays appears unlikely. The Commission reported to the audit committee in October 2011 on the high risk that the change programme may not deliver phase two functionality within agreed timescales … The Commission did not develop a benefits realisation plan until November 2011.”

103,000 of Commission’s 1.1m cases are handled manually

“Ongoing technical problems have resulted in a large number of cases being removed from the IT system and managed manually. These are known as clerical cases … The Commission has had to operate the ‘old’ and ‘current’ schemes in parallel.  Due to flaws in the IT systems for each scheme, some 100,000 cases have had to be processe:d separately by clerical staff at a cost of £48 million,” says the NAO. It takes 900 contractors to manage the clerical cases.

Comment

Despite numerous NAO reports on failures of Government IT-based projects over the past 30 years the disasters are still happening, with the same mistakes repeated: over-optimism in every aspect of the project including timetables and financial estimates; excessive complexity and over-specification, no sign of cost-consciousness and, worst of all, an apparent indifference to being held accountable for a major failure.

A glance at the monthly outgoings of the Commission (well done to the coalition for requiring departments and agencies to publish contracts over £25,000) show sizeable and regular payments to familiar names among the large suppliers: HP Enterprise Services (formerly EDS), Capgemini, Tata Consultancy Services, BT Global Services and Capita. There is hardly an SME in sight and no sign of imaginative thinking.

Meanwhile some senior officials at the Commission put in monthly expenses for thousands of pounds in travel, accomodation and subsistence for “Commission meetings”. One wonders: to what useful effect?

Officials at the Cabinet Office are trying to change the culture of departments and agencies. They are encouraging departmental heads to do things differently. They advocate the use of  SMEs to show how new ways of working can trounce traditional approaches to projects.

But the Cabinet Office has little influence on the Department of Work and Pensions. Indeed the DWP has lost its impressive chief innovator James Gardner.

We praise the NAO for noting that the Commission risks repeating the IT-related and project management mistakes of the Child Support Agency. But we note with concern that the NAO still puts up with Whitehall’s non-publication of  Gateway reviews, which are independent reports on the progress or otherwise of big and risky IT-based projects.

Would the Commission have been so apparently careless of the risks if it had known that regular Gateway reports on its shortcomings would be published?

How many more government IT-based projects are late, over budget and at risk of failing, their weaknesses hidden by an unwritten agreement between the coalition and civil servants to keep Gateway reviews secret?

NAO report – Child Maintenance and Enforcement Commission: cost reduction

Government repeating child support mistakes – ComputerworldUK