Category Archives: supplier relationships

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

By Tony Collins

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Comment:

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

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

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

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

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

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

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

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

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

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Companies nervous over HMRC customs IT deadline?

By Tony Collins

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

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

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

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

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

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

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

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

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

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

Involve end-users – or risk failure

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

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

The FT quotes one trader as saying,

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

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

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

In the meantime ministerial confidence is likely to remain high.

Learning from past mistakes?

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

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

These are the potentially bad things:

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

Comment

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

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

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

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

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

Goodnewspeak and its Orwellian dark side

By Tony Collins

Orwell made no mention of goodnewspeak. But maybe today it’s an increasingly popular descendant of  Newspeak – a language devised by Orwell to show how the State could use words and phrases to limit thought.

This week, as a statue of Orwell was unveiled outside the BBC, a local council in Sussex made an announcement that was a fine example of goodnewspeak.

This was Horsham District Council’s way of not saying that it was scrapping weekly rubbish collections.

This was the benign side of goodnewspeak. The dark side is a growing acceptance in Whitehall, local authorities and the wider public sector that nothing negative can be thought of let alone expressed at work.

This suppression of negative thoughts means that the rollout of Universal Credit can be said officially to be going well and can be speeded up  despite the clamour from outsiders, including a former Prime Minister (John Major), for a rethink to consider the problems and delays.

[Labour MP Frank Field said last month that the DWP was withholding bad news on Universal Credit.]

It means that the Department for Business, Energy and Industrial Strategy can continue to praise all aspects of its smart meters rollout while its officials keep silent on the fact that the obsolescent smart meters now being installed do not work properly when the householder switches supplier.

It means that council employees can think only good about their major IT suppliers – and trust them with the council’s finances as at Barnet council.

[Nobody at Barnet council has pointed out the potential for a conflict of interest in having outsourcing supplier Capita reporting on the council’s finances while having a financial interest in those finances. It took a local blogger Mr Reasonable to make the point.]

Goodnewspeak can also mean that public servants do their best, within the law, to avoid outside scrutiny that could otherwise lead to criticism, as at Lambeth council.

Last month Private Eye reported the results of a “People’s Audit” in which local residents asked questions and scrutinised the authority’s accounts. The audit found that:

 – The number of managers earning between £50,000 and £150,000 has increased by 88, at a cost of more than £5.5m year.
-Spending on Lambeth’s new town hall has gone from a projected £50m to £140m.
– The council “invested” a total of £57,000 on its public libraries last year – closing three of them – while spending £13m on corporate office accommodation.
-£10.3m was spent making people redundant.

These disclosures (and there are many more of them) raise the question of what Lambeth is doing to dispel the impression that it manages public money badly and that its decisions could be routine in the world of local authorities.

Lambeth council’s reaction to the audit was to denounce it and issue its own goodnewspeak statement; and it is considering a proposal to lobby the government to allow councils to ban such People’s Audits in future.

Lambeth’s website, incidentally, is entitled “Love Lambeth”. Which, perhaps, shows that its leaders have, at least, a deep sense of irony.

Whitehall

The following lists of announcements on the websites of the Department for Work and Pensions and the Department of Transport are examples of how goodnewspeak manifests itself in Whitehall:

And the Department of Transport’s website:

Ministry of Truth

Orwell wrote in Nineteen Eighty-Four of the Ministry of Truth whose expertise was lying, the Ministry of Peace which organised wars and the Ministry of Plenty which rationed food.

Some of the Party’s slogans were:

War is peace.
Freedom is slavery.
Ignorance is strength.

And Orwell, whose wife worked at the Ministry of Information at Senate House, London (Orwell’s model for the Ministry of Truth) said,

“If you want to keep a secret, you must also hide it from yourself.”

Comment

Of course goodnewspeak doesn’t exist as a policy anywhere. But its practice is all-pervasive in the public sector. And it seems to change the way people think when they’re at work.

It blocks out any view other than the official line.

In Nineteen Eight-four, Orwell created “Newspeak” as a language of the Party to coerce the public to shape their thoughts around the State’s beliefs. Its much-reduced vocabulary stopped people conceiving of any other point of view.

Not using Newspeak was a thoughtcrime. The Party advocated Duckspeak – to speak without thinking – literally quack like a duck.

Has this already happened in a minor way at Barnet? A council document on the benefits of its outsourcing policies was peppered with abstractions that could have been constructed by software-driven random-phrase generators:

“Ahead of the game”
“Top to bottom organisational restructure”
“Flexibility to meet future challenges whilst ensuring we provide excellent services to residents today.”
“Root of our success”
“New solutions to complex problems”
“Pioneering partnerships”
“Investing for the future”
“Protect what makes Barnet such a great place to live”
“Increasing resident satisfaction”
“Paying dividends”
“Prepared for the future”
“Great strides”
“A radical, ‘whole place’ approach to designing and providing services”
“We have not been backwards in coming forwards”
“Pursuing alternatives to the norm”
“Vision into reality”
“Frame our future strategic direction”
“Future Shape”
“Drivers for change”
“Genuine innovation in Local Government”
“Bold in its decision making”
“Forward looking change strategy”
“A new relationship with citizens”
“A one public sector approach”
“A relentless drive for efficiency”
“Focus on stimulating the market”
“Best in class’ range of tradable services to win and deliver work for other authorities.”
‘Form follows function’.
“Clear roles and responsibilities”
“An internal escalation model”
“Renewed focus on improving engagement”
“Increasing transparency, and developing trust”
“Connect with people and build relationships of trust”
“A steep demand line to climb”

Dark side

One worrying consequence is that Whitehall civil servants and public servants and ruling councillors at, say Barnet and Somerset councils (and even at Cornwall), made the assumption that their IT suppliers shared the public sector’s goodnewspeak philosophy.

But suppliers are commercially savvy. They don’t exist purely to serve the public. They have to make a profit or they risk insolvency.

For years, goodnewspeak at Somerset County Council led to officers and councillors regularly praising the successes of a joint venture with IBM while covering up the problems and losses, in part by routine refusals of FOI requests.

Goodnewspeak at Liverpool Council meant that its officials had nothing but praise for BT when they ended a joint venture in 2015. They said that ending the joint venture would save £30m. But the joint venture itself was supposed to have saved tens of millions.

Somerset County Council made a similar good news announcement when it terminated its joint venture Southwest One with IBM.

Such announcements are consistent with Newspeak’s “Doublethink” – the act of simultaneously accepting two mutually contradictory beliefs as correct.

DWP

Outsiders can find goodnewspeak shocking. The Daily Mirror reported on how the DWP celebrated the rollout of Universal Credit at Hove, Sussex, with a cake. Were managers mindful of the fact that some failed UC claimants have been driven to the brink of suicide?

Disillusioned

Francis Maude, when minister for the Cabinet Office, was almost universally disliked in the civil service. He was an outsider who did not accept the Whitehall culture.  Even though he believed the UK had the best civil service in the world, he did not always show it.

He tried to reduce Whitehall spending on IT projects and programmes that could not be justified. He spoke an IT supplier oligopoly.

Now he has left government, most of his civil service reforms (apart from the Government Digital Service) have settled back to how they were before he arrived in 2010.

In a speech last month, Maude spoke of a “distressing” disillusionment with the civil service culture. He said:

“Based on my experience as a Minister in the eighties and early nineties my expectations (of the civil service) were high. And the disillusionment was steep and distressing.

“It remains my view that we have some of the  very best civil servants in the world … But the Civil Service as an institution is deeply flawed, and in urgent need of radical reform.

” And it is civil servants themselves, especially the younger ones, who are most frustrated by the Service and its culture and practices.”

World’s best civil service

He added that, as the new minister responsible for the civil service, every draft speech or article presented to him started: ‘The British Civil Service is the best in the world.’

But complaints by ministers in all parties about the lack of institutional capability, inefficiency and failed implementation were legion, he said.

“When we queried the evidential basis for this assertion, it turned out that the only relevant assessment was a World Bank ranking for ‘government effectiveness’, in which the UK ranked number 16.”

Speaking the unsaid

Perhaps more than any former minister, Maude has expertly summarised the civil service culture but in a way that suggests it’s unredeemable.

“I and others have observed that all too often the first reaction of the Civil Service when something wrong is discovered is either to cover it up or to find a scapegoat, often someone who is not a career civil servant and who is considered dispensable.
“There seems to be an absolute determination to avoid any evidence that the permanent Civil Service is capable of failure.
“Another indicator is that if a Minister decides that a Civil Service leader is not equipped for his or her task, this has to be dressed up as “a breakdown in the relationship”, with the unspoken suggestion that this is at least as much the fault of the Minister as of the civil servant.
“It can never be admitted that the mandarin was inadequate in any way.
“When I suggested that there might be room for improvement, the distinguished former Civil Service Head, Lord Butler, accused me of a failure of leadership. Actually the leadership failure is to pretend that all is well when no one, even civil servants themselves, really believes that.

The good news

All is not lost – thanks to a vibrant and investigative local press in some areas and resident auditors such as Mr Reasonable, Mrs Angry, David Orr, Andrew Rowson and the people’s auditors in Lambeth.

Along with the National Audit Office and some MPs, these resident auditors are the only effective check on goodnewspeak. They are reminder to complacent officialdom that it cannot always hide behind its barrier of unaccountability.

Long may these dogged protectors of the public interest continue to highlight financial mismanagement, excess and self-indulgent,wasteful decisions.

Earlier this year Nineteen Eight-Four hit the No 1 spot in Amazon’s book sales chart.

Perhaps copies were being scooped up by shortlisted candidates for top public sector jobs as vital homework before falling in with the culture at their interviews.

**

Outside the BBC, Orwell’s new statute is inscribed with a quotation from a proposed preface to Animal Farm that was never used:

“If liberty means anything at all, it means the right to tell people what they do not want to hear.”

Thank you for David Orr, one of the dogged local resident auditors referred to above, for drawing my attention to some of the articles mentioned in this post.

DWP good news announcements

Newspeak

Whitewashing history in education

 

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

By Tony Collins

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Comment

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

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

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

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

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

Who’s to blame?

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

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

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

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

Two further questions:

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

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

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

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

 

Did Gauke and Couling break free today of DWP “good news” stance on Universal Credit rollout?

By Tony Collins

Two leaders of the Universal Credit rollout, David Gauke and Neil Couling, faced MPs’ questioning this morning on problems with the rollout of Universal Credit.

They were asked, among other things, about excessive delays in payments and payments made on the basis of incorrect data.

Gauke and Couling appeared before the work and pensions committee. There is also a Commons debate today on the Universal Credit rollout.

Gauke, the work and pensions secretary, and civil servant Neil Couling, Director General of Universal Credit, are known to resent criticism of the Universal Credit programme or its rollout.

Couling tweeted last week, in response to academic Jonathan Portas:

But MPs on the work and pensions committee, particularly its chairman Frank Field,  are sensitive to the DWP’s “good news” culture.

Field is reported to have said he suspected that ministers had only pressed ahead with the accelerated rollout of universal credit this month because civil servants at the Department for Work and Pensions had withheld the true scale of the problems.

Field said:

“Given everything we have heard, I was surprised that David Gauke opted to proceed with the accelerated rollout.

“I strongly suspect his decision, together with the failure to tell us anything, reflects a culture at the DWP of those most invested in universal credit not telling anyone, including their ministers, bad news.”

In its 2013 report “Universal Credit Early Progress“, the National Audit Office said,

“Both the Major Projects Authority [now the Infrastructure and Projects Authority] and a supplier-led review in mid-2012 identified problems with staff culture; including a ‘fortress mentality’ within the programme.

“The latter also reported there was a culture of ‘good news’ reporting that limited open discussion of risks and stifled challenge.”

BBC Radio 4’s Today programme heard this morning (18 October 2017) that a Universal Credit claimant who’d been the victim of “mistake after mistake” on his claim had threatened to take his own life and police had been called.

Update:

Gauke and Couling told the work and pensions committee this morning that the rollout may be paused in January 2018 as part of the department’s test and learn philosophy. They called it a “fire-break.  Couling said the rollout was paused in February 2016 for two months and “nobody noticed”.

He added that he was prepared to advise his minister, the Treasury and the prime minister to pause the rollout whenever the “evidence merits”..

Gauke said the advantages of the Universal Credit system were of such a “prize” that there was  cost of slowing down the rollout. “It can transform lives and it’s my determination is to deliver this successfully,” said Gauke.

Gauke and Couling told MPs that the rollout was working successfully. Neither expressed any criticisms of the programme or the rollout; and neither accepted the many criticisms of the committee’s MPs of the programme. At one point, Couling helpfully suggested to the committee some of the questions they “should” have been asking.

Where there were problems it was outside the DWP’s control – because of information supplied, or not supplied, by claimants or employers. The real-time information supplied to DWP by HM Revenue and Customs was only as good as the information provided to HMRC by employers.

Comment:

There’s universal support for the idea of Universal Credit. But there is almost universal criticism of the way it is being rolled out. Critics of the rollout also find it difficult to understand the DWP’s continuing refusal to accept that there are any serious problems.

For decades the DWP and its predecessor the Department of Social Security have been culturally unable to accept criticism of any of their big IT-based projects and programmes, even after a project was aborted.

One DWP director last year used the word “paranoid” when referring to her colleagues and their concerns about leaks of any bad news on the Universal Credit programme.

The DWP routinely declines FOI requests to publish its performance reviews on the Universal Credit programme. This lack of official information on the DWP’s performance leaves officials and ministers free to say that criticism of the programme is subjective or anecdotal.

Stephen Crabb was one of the few politicians who have ever made a difference to the DWP’s closed culture of secrecy and defensiveness. He ordered that internal reports on the risks and progress of the Universal Credit programme be released, against the advice of his civil servants. But Crabb didn’t stay long.

And the “good news” culture has returned, as unremitting as ever. Will any minister or civil servant be able to change the DWP’s “good news” culture?

Probably not.

The DWP’s permanent secretary Robert Devereux is retiring in January 2018, which will open the door to a successor who could try and change the department’s defensive culture.

It’s more likely, however, that Devereux’s replacement will be chosen on the basis that he or she will be a “safe pair of hands” which, in civil service terms, means a staunch defender of the department, its performance, all it is doing and the civil service in general.

However many independent voices call for a brake on the Universal Credit rollout, it seems inevitable that the DWP’s mandarins (and their pliant ministers) will carry on doing whatever they can justify to themselves.

The DWP hasn’t let humility or democratic openness get in the way before. Why would it give in to them now?

 

HMRC appoints Microsoft executive as head of IT

By Tony Collins

Government Computing reports that HMRC has appointed a new chief digital and information officer, Jacky Wright, who is currently Microsoft’s corporate vice-president, Core Platform Engineering.

Theresa May ratified Wright’s appointment. Candidates were considered from across the civil service and the public and private sectors, and internationally.

The chief executive of HMRC Jon Thompson said,

“Jacky is a seasoned commercial leader with ‘best in class’ credentials, globally. Balancing strong operating experience with a record of driving innovation… Her influence as a technology leader and as a champion for the role of women and BAME [black, Asian, minority ethnic) in industry, is a major win for this organisation.”

Wright will take up her appointment from 16 October. She said,

“I am passionate about the impact innovation can have in truly transforming services for people and businesses in a positive way and want to continue the great work being done within HMRC and across the Civil Service at this time. I am proud to represent women and BAME in technology and will continue to promote the vital role of diversity within our industry and more broadly.”

One of HMRC’s biggest IT challenges in the coming months and years will be to detach itself from the £10bn “Aspire” outsourcing deal in which Capgemini and Fujitsu are the main suppliers.

Aspire is being broken up. HMRC says the contract is already “dead” but the department will rely on Capgemini as a strategic supplier until June 2020 and most probably beyond. HMRC has spent at least £720m a year on Aspire since 2008, including 2015/16.

Comment:

After spending years trying to distance itself from major IT suppliers, HMRC has appointed a top Microsoft executive as its new head of IT.

That said, Wright is an excellent appointment. She’s widely recognized for her contributions to the technology industry and for championing diversity. She has been in Britain’s Powerlist 100 of Most Influential People, the Top 100 BAME Leaders in Business, and Savoy Magazine’s Top Women list.

The challenge for Wright will be to use her influence and skills in a civil service that, at the top level, may not fully appreciate her. Will she feel sufficiently valued and stay?

Francis Maude – the former IT reformer and Cabinet Office minister – said in a Speaker’s Lecture this week that the civil service values policy experts more than operational and technical leaders.

“Policy nearly always trumps operational and technical skills for the leadership roles,” said Lord Maude.

“It feels like a class divide: there are the white-collar policy mandarins, and the blue-collar technicians who do operations, finance, procurement, IT and digital, project management, HR, and so on.

“All the attempts to create genuine parity of esteem have failed. This has to change in the future. Many government failures could have been prevented if operational and technical teams had the same access to Ministers as do policy officials.”

In working for HMRC,  Wright may need to acclimatise to a civil service culture that could, at times, strike her as frustrating, closed and irrational.  HMRC’s former IT chiefs include Steve Lamey, Phil Pavitt and Mark Dearnley.

Will an innovations specialist of Wright’s calibre last at HMRC? If she does, it could imply that HMRC is defying the civil service culture and is valuing a top international IT professional.

If she doesn’t last, it could imply that she has been hired as a Formula One driver and then given a Prius to race.

The Prius is an impressive piece of machinery. But it’ll never go particularly fast, however expertly it’s driven.

Microsoft’s Jacky Wright named as HMRC’s new CDIO

 

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”?

Why are councils hiding exit costs of outsourcing deals – embarrassment perhaps?

Tony Collins

Excerpt from Taunton Deane council’s confidential “pink pages”.
The last sentence contains a warning that IBM-owned SWO – Southwest One – may try to “maximise revenues” on exiting its joint venture with the council.

Somerset County Council has refused a Freedom of Information request for the costs of exiting its joint venture with IBM.

But a secret report written last year by officers at Taunton Deane Borough Council – which was a party to the IBM-owned joint venture company Southwest One  – warned that the supplier could attempt to “maximise revenues on exit”.

It said,

“… from experience anything slightly ambiguous within the contract is likely to be challenged by SWO [Southwest One] in order to push it into the chargeable category as they attempt to maximise revenues on exit”.

A separate section of the confidential report said,

“disaggregating from the SWO [Southwest One] contract will be complex and expensive …”

Taunton Deane Borough Council did not tell councillors what the exit turned out to be. The figures are also being kept secret by Somerset County Council which signed the “transformative” SWO joint venture deal with IBM in 2007.

Both councils have now brought back services in-house.

Secrecy over the exit costs is in contrast to Somerset’s willingness to talk in public about the potential savings when local television news covered the setting up of Southwest One in 2007.

The silence will fuel some local suspicions that exit costs have proved considerable and will have contributed to the justifications for Somerset’s large council tax rise this year.

£69m losses?

David Orr, a former Somerset County Council IT employee, has followed closely the costs of the joint venture, and particularly its SAP-based “transformation.

It was his FOI request for details of the exit costs that the council refused.

Orr says that Somerset has lost money as a result of the Southwest One deal. Instead of saving £180m, the joint venture has cost the council £69m, he says.

FOI

Under the Freedom of Information Act, Orr asked Somerset for the “total contract termination costs” including legal, consultancy, negotiation, asset valuations, audit and extra staffing.

He also asked whether IBM was paid compensation for early termination of the Southwest One contract. In replying, the council said,

“The Authority exited from a significant contract with Southwest One early, and the services delivered through this contract were brought back in-house in November 2016.

“The Authority expects the costs to fall significantly now it has regained control of those services.

“Somerset County Council made payment under the ‘Termination for Convenience’ provisions of the original contract. We do hold further information but will not be releasing it at this point as we believe to do so would damage the commercial interests of the County Council, in that it would prejudice the our negotiating position in future contract termination agreements in that it would give contractors details on what terms the Council was willing to settle …”

Orr will appeal. He says the Information Commissioner has already established a principle with Suffolk Coastal District Council that the termination costs of a contract with a third party should be disclosed. The commissioner told Suffolk Coastal council that, in opting out of FOI,

“there is no exemption for embarrassment”

Hidden costs

Taunton’s pink pages paper said that the Southwest One contract’s Exit Management Plan provided for a smooth transfer of services and data, and for access to staff to assess skills and do due diligence.

In practice, though, there were many exit-related complications and costs – potential and actual. The paper warned that Taunton would need to find the money for:

  • Exit programme and project management costs
  • Early termination fees
  • Contingency
  • ICT infrastructure disaggregation
  • Service transition and accommodation costs
  • Disaggregating SAP from Southwest One. Also the council would need to exit its SAP-based shared services with Somerset County Council because the estimated costs were lower when run on a non shared services basis. SAP covered finance, procurement, HR, payroll, website and customer relationship management.
  • Costs involved in a “soft” or “hard” (adversarial) exit.
  • Estimating council exit costs when IBM was keeping secret its own Southwest One running costs.
  • Staff transfer issues.

Comment

So much for open government. It tends to apply when disclosures will not embarrass local government officials.

In 2007 Somerset County Council enjoyed local TV, radio and newspaper coverage of the new joint venture with IBM. Officials spoke proudly on camera of the benefits for local taxpayers, particularly the huge savings.

Now, ten years later, the losses are stacking up. Former Somerset IT employee and FOI campaigner Dave Orr puts the losses at £69m. And local officials are keeping secret the further exit costs.

Suffolk Coastal District Council lost an FOI case to withhold details of how much it paid in compensation to a third party contractor to terminate a contract. But at least it had published its other exit costs.

Somerset is more secretive. It is withholding details of the sums it paid to IBM in compensation for ending the joint venture early; it also refuses to publish its other exit costs.

Trust?

Can anything said by councils such as Somerset or Barnet in support of major outsourcing/joint venture deals be trusted if the claimed savings figures are not audited and the other side of the story – the hidden costs – are, well, hidden?

In local elections, residents choose councillors but they have no say over the appointment of the permanent officials. It’s the officials who decide when to refuse FOI requests; and they usually decide whether the council will tell only one side of the story when public statements are made on outsourcing/joint ventures.

Across the UK, local councils employed 3,400 press and communications staff –  about double the total number in central government – in part to promote the authorities’ services and activities.

What’s the point if they publicise only one side of the story – the benefits and not the costs?

Somerset’s decision to refuse Orr’s reasonable FOI request makes, in its own small way, a mockery of open government.

It also gives just cause for Somerset residents to be sceptical about any council statement on the benefits of its services and activities.

Whitehall to auto-extend outsourcing deals using Brexit as excuse?

By Tony Collins

Type of government procurement spend 2014-2015. ICT is the top item.
Source: National Audit Office

Under a headline “UK outsourcing deals extended because of Brexit workload”, the Financial Times has reported that “hundreds of government contracts with the private sector that were due to expire are to be automatically extended because civil servants are too busy with Brexit to focus on new and better-value tenders”.

The FT says the decision to roll over the contracts could prove expensive for taxpayers because it limits competition and undermines government efforts to improve procurement.

A “procurement adviser to the government” whom the FT doesn’t name, said more than 250 contracts were either close to expiring or had already expired in 2016-17. The adviser told the FT,

“Brexit has pushed them down the list of priorities so there are lots of extensions and re-extensions of existing deals.”

The adviser added that this was the only way civil servants could prioritise the huge increase in Brexit-related work since the referendum.

Extensions

The FT provides no evidence of automatic contract extensions or the claim that deals will be extended because of the civil service’s Brexit workload.

There is evidence, however, that Whitehall officials tend to extend contracts beyond their original expiry date.

In a report published this year on the Cabinet Office’s Crown Commercial Service, the National Audit Office identified 22 framework contracts that were due to expire in 2016-17. Half of them (eleven) were extended beyond their original expiry date.

[The Crown Commercial Service was set up in 2014 to improve state procurement.]

The NAO also found that Whitehall departments – and the Crown Commercial Service – have been awarding contracts using expired framework deals, even though this contravenes public contracting regulations.

In 2015-16, 21 of the 39 frameworks that were due to expire were extended without competition or market testing, according to the NAO.

One example of an extended contract is a deal between Capita and the Department for Work and Pensions which started in 2010. Capita provides eligibility assessments for the personal independent payment allowance, which supports for people with long-term ill health or disability.

The five-year deal was extended by two years until July 2019.

Capita has also won a three-year extension to a contract with the Pensions Regulator and the BBC has extended a deal with Capita that was signed originally in 2002 to June 2022 – a total of at least 20 years.

Open competition?

The NAO has found that extending ICT contracts may not always be good for taxpayers. In the later years of their government contracts, suppliers tend to make higher margins (though not always).

There are also suggestions that civil servants will sometimes sign contract extensions when the performance of the supplier does not meet expected standards.

On ICT, the Cabinet Office asks central departments to complete a return every six months for each business process outsourcing and facilities management contract above £20m with strategic suppliers.

The survey asks whether the contract is being delivered on time, to scope, to budget, to the appropriate standards, and whether there have been any disputes.

In one study of government contracts with ICT suppliers, the NAO found that, of 259 returns from departments, 42 highlighted problems that included,

  • failure to achieve milestones
  • dissatisfaction with quality of outputs
  • errors and other issues with delivery
  • poor customer engagement and end user dissatisfaction and
  • failure to meet key performance indicators.

Comment

For taxpayers there is some good news.

A break-up of “Aspire”, the biggest IT outsourcing long-term deal of all, between HMRC and Capgemini (and to a lesser extent Fujitsu) – worth about £9bn – is going ahead this June. An HMRC spokesman says,

“HMRC is on track to complete the phased exit from Aspire, as planned, by June 2017.”

And according to Government Computing, Defra’s IT outsourcing contracts with IBM and Capgemini under a £1.6bn contract called “Unity” are due to expire in 2018 and there are no signs the deals will be extended.

But the Department for Work and Pensions’ huge IT outsourcing contracts with the same major suppliers are renewed routinely and not always with open competition. The DWP says on its website,

“DWP contracts are awarded by competition between potential suppliers, unless there are compelling reasons why competition cannot be used.”

The DWP doesn’t define “compelling”. Nor is it clear whether its auditors look at whether the DWP has put up a compelling case for not putting a large IT contract out to open competition.

In 2014 the Public Accounts Committee, after investigating major suppliers to government, concluded,

“Government is clearly failing to manage performance across the board, and to achieve the best for citizens out of the contracts into which they have entered.

“Government needs a far more professional and skilled approach to managing contracts and contractors, and contractors need to demonstrate the high standards of ethics expected in the conduct of public business, and be more transparent about their performance and costs”.

Breaking up is hard to do

The break up of the huge Aspire IT outsourcing contract at HMRC is an exception, not the rule. The NAO has found that civil servants regard their major incumbent suppliers as safe and less risky than hiring a smaller company (that’s not steeped in Whitehall’s culture).

The NAO has also found that in some cases officials don’t know whether their suppliers are performing well or not. On many ICT contracts there is “open book” accounting, but not all departments have the staff or expertise to check regularly on whether their suppliers’ profits are excessive.

If Whitehall, with exceptions, is continuing to roll over contracts whether it’s legal to do so or not, what incentive exists to stick to the rules?

Brexit?

The FT story suggests Brexit is the reason hundreds of contracts are to be extended automatically. There’s probably truth in the automatic extension of some contracts – but it’s unlikely to be because of Brexit.

It’s unlikely that the civil servants involved in Brexit will be the same ones who are handling ICT contract extensions. That said, Brexit will inevitably put a higher workload on lawyers working for government.

If contracts are being extended automatically, it’s probably because that’s the way it has always been, at least within living memory.

While Sir Humphrey and his senior officials remain only nominally accountable to Parliament for how they spend taxpayers’ money, the easiest option of renewing or extending existing contracts will usually be seen as the best option.

It can be justified with “compelling” arguments such as a need to make an urgent decision in difficult circumstances, or the absence of alternative suppliers who have the necessary skills or the financial strength to accept the risks of failure.

Will anything change?

Until departments have to publish contemporaneously their intentions to award contracts without open competition or there is effective accountability within the civil service for major decisions, little is likely to change.

It hasn’t happened yet and there’s no reason to believe it will.  Many politicians including prime ministers have tried to reform the civil service and they haven’t ruffled a single carpet in the corridors of Whitehall.

As Antony Jay, co-writer of Yes Minister,  said in January 2013,

“The central anomaly is that civil servants have years of experience, jobs for life, and a budget of hundreds of billions of pounds, while ministers have, usually, little or no experience of the job and could be kicked out tomorrow.

” After researching and writing 44 episodes and a play, I find government much easier to understand by looking at ministers as public relations consultants to the real government – which is, of course, the Civil Service.”

In short, Brexit is likely to be officialdom’s up-to-date excuse for carrying on much as before.

Thank you to @TimMorton2 for alerting me to the FT article.

Another Whitehall failure: no officials responsible, fluid facts and doubtful ethics. Plus ça change?

By Tony Collins

It’s rare for truth to emerge from the ashes of a failed contract.

The disastrous contract between Siemens and the BBC (the so-called Digital Media Initiative) was a rarity. Various reports provided confidence that the relevant facts had emerged.

It’s more usual for MPs to report that they haven’t got to bottom of what happened after a Whitehall contract failure.

Indeed today’s report by the Public Accounts Committee says of its inquiry into PA Consulting’s contract with the UK Trade and Investment:

“We cannot remember a previous inquiry in which so many witnesses corrected their evidence after a public session.”

UK Trade and Investment, now the Department for International Trade,  helps UK businesses to export more goods and services and encourages overseas organisations to invest in the UK.

It is funded by the Department for Business, Innovation & Skills and the Foreign & Commonwealth Office.

In May 2014, UK Trade and Investment’s  officials entered into a three-year contract with PA Consulting for the supply of consultants in a contract that involved ICT support.

On small example of unclear facts: in its bid, PA stated that cost categories including ICT were “already included in the costings and will not be charged for separately”. This implied that ICT would be included in the consultants’ day rates.  Today’s Public Accounts Committee report says,

“However, there were separate charges in the pricing schedule for HR, ICT,  legal and professional, quality, and knowledge management.”

After the contract had started, officials became concerned about:

  • the way PA had priced the contract
  • PA’s transparency in its communications with Whitehall.

The contractual relationship eventually broke down and officials terminated the contract in January 2016.

The two sides agreed a settlement in which the taxpayer would pay the balance of PA’s outstanding invoices less a £3m reduction. Officials paid £18.8m for the first 11 months of the contract.

Labour MP Meg Hillier, chairman of the Public Accounts Committee, said today (5 April 2017),

“Even now, ten months after the parties reached a settlement and four months after we took oral evidence, our Committee cannot say with confidence that it has got to the bottom of what happened.”

Poor record-keeping

Even the National Audit Office was unable to obtain a full picture. The NAO said in its 2016 report on PA’s contract,

“Understanding exactly what happened in letting and negotiating this contract is difficult due to the lack of proper documentation, the disagreement between parties and, now, the absence of a number of people who were involved on either side.”

MPs on the Public Accounts Committee say that Whitehall officials:

  • did not keep proper records
  • negotiated significant changes to the contract with PA when they should have gone back to the market
  • pushed for a signing of the contract before they had finished negotiations.

For its part, PA “fell well short of the appropriate duty of care that we expect contractors to demonstrate when in receipt of taxpayers’ money”.

According to the Public Accounts Committee, PA

  • took advantage of the department’s poor decision making
  • sold Whitehall a service it is not clear it needed
  • failed to give the fair breakdown of its costs and profit that officials had asked for
  • used the negotiations to pass on costs to Whitehall that it had said in its bid that it would bear
  • increased its profit from the contract while telling officials that its profit had not increased.

PA Consulting obfuscation?

The Committee says in its report,

“PA has not convinced us that it takes full responsibility for its actions. Its many explanations of its charges both at the time and since have been loosely worded, inconsistent and seemingly designed to obfuscate.

“It is unclear to us how such behaviour would be possible in a well managed professional practice.”

The Committee adds,

“Government’s lack of commercial expertise to get the best deals on behalf of the taxpayer has been a regular cause for concern for this Committee.”

In 2015 RSM UK Consulting produced a draft report on the contract. It included a finding that PA had “consistently made incorrect and misleading representations relating to £3.9m of the overheads charged”.

PA disputed RSM’s findings, stating that it had invoiced according to the agreed charging mechanism.

Overly long contract?

The contract was 596 pages – “difficult to read, understand and use, for a relatively simple service”. The Committee adds,

“The contract incorporates the ITT and bid, both of which are focused on the outcomes and how they will be achieved, and not on the way the contract would actually be run and charged for.

“Furthermore, the bid and contract are not clear on important aspects of the pricing and are often self-contradictory.”

[One would have thought that after decades of practice, Whitehall departments would understand how to commission a clear and unambiguous contract.]

Comment:

There is not even any evidence that some key decisions by Whitehall officials were approved by any formal decision-making body.

This and other findings by the National Audit Office and the Public Accounts Committee are astonishing, not because of their momentousness but because of they are almost routine.

There were similar findings after National Audit Office investigations into early spending on the Universal Credit IT programme.

It’s beginning to look as if Whitehall officials can sometimes hand over money to the private sector without any firm controls at all, which could encourage corruption and, at the least, incompetence and waste.

What’s the civil service’s solution?

To make sure that no officials are held responsible. The civil service is all about collective responsibility. In other words no responsibility.

Is the civil service’s message to the private sector now clear: “Get whatever Whitehall business you can because though the terms of the contract may be tough, what we pay you afterwards may be, for us, a matter of indifference.”

PA Consulting’s contract with UK Trade and Investment