Category Archives: Universal Credit

More IT-based megaprojects derail amid claims all is well

Posted on 30/10/2013 | 2 comments

By Tony Collins

If one thing unites all failing IT-based megaprojects in the public sector it is the defensive shield of denial that suppliers and their clients hold up when confronted by bad news.

It has happened in the US and UK this week. On the Universal Credit  project, the minister in charge of the scheme, Lord Freud, accepted none of the criticisms in a National Audit Office report “Universal Credit: early progress”.   In a debate in the House of Lords Lord Freud quoted from two tiny parts of the NAO report that could be interpreted as positive comments.

“Spending so far is a small proportion of the total budget … and it is still entirely feasible that [universal credit] goes on to achieve considerable benefits for society,” said Lord Freud, quoting the NAO report.

But he mentioned none of the criticisms in the 55-page NAO report which concluded:

“At this early stage of the Universal Credit programme the Department has not achieved value for money. The Department has delayed rolling out Universal Credit to claimants, has had weak control of the programme, and has been unable to assess the value of the systems it spent over £300 million to develop.

“These problems represent a significant setback to Universal Credit and raise wider concerns about the Department’s ability to deal with weak programme management, over-optimistic timescales, and a lack of openness about progress.”

And a shield of denial went up in the US this week where newspapers on the east and west coast published stories on failing public sector IT-based megaprojects.  The LA [Los Angeles] Times said:

As many as 300,000 jobless affected by state software snags

“California lawmakers want to know why Deloitte’s unemployment benefits system arrived with major bugs and at almost double the cost estimate. The firm says the system is working.”

The LA Times continued:

“Problems are growing worse for the state’s Employment Development Department after a new computer system backfired, leaving some Californians without much-needed benefit cheques for weeks.”

The Department said the problems affected 80,000 claims but the LA Times obtained internal emails that showed the software glitches stopped payment to as many as 300,000 claimants.

Now lawmakers are setting up a hearing to determine what went wrong with a system that cost taxpayers $110m, almost double the original estimate.

Some blame the Department’s slow response to the problems. Others point the finger at a Deloitte Consulting.

The LA Times says that Deloitte has a “history of delivering projects over budget and with problematic results”. Deloitte also has been blamed, in part, for similar troubles with upgrades to unemployment software in Massachusetts, Pennsylvania and Florida, says the paper.

“We keep hiring the same company, and they keep having the same issues,” said Senator Anthony Cannella.  “At some point, it’s on us for hiring the same company. It’s faulty logic, and we’ve got to get better.”

In 2003 California planned to spend $58m upgrading its 30-year-old unemployment benefits system. By the time the state awarded Deloitte the contract in 2010  the cost estimate had grown by more than $30m.

The Department handed out $6.6bn to about 1 million unemployed Californians in 2012. The software was expected to ease the agency’s ability to verify who was eligible to receive benefits.

Problems began when the Department transferred old unemployment data to the new system. The software flagged claims for review — requiring state workers to manually process them.

The LA Times says that officials thought initially the workload would be manageable, but internal emails showed the agency was quickly overwhelmed. Phone lines were jammed. For weeks, the Department’s employees have been working overtime to clear the backlog.

A poor contract?

In a contract amendment signed two months ago California agreed to pay Deloitte $3.5m for five months of maintenance and operations costs. Those costs should have been anticipated in the contract said Michael Krigsman, a software consultant who is an expert on why big IT-based contracts go awry. He told the LA Times:

“It’s a striking oversight that maintenance was not anticipated at the beginning of the contract when the state was at a much stronger negotiation position.”

By the time the middle of a project is reached, the state has no choice but to stick with Deloitte to work out bugs that arise when the system goes live, he said.

System works

Loree Levy, a spokeswoman for the Department, said the system is working, processing 80% of claims on time. As for the troubles, she said, “There is a period of transition or adjustment with any large infrastructure upgrade like this one.”

Deloitte spokeswoman Courtney Flaherty said the new California system is working and that problems are not the result of a “breakdown or flaw in the software Deloitte developed”.

System not working?

While there seems to be no project disaster in the eyes of the Department and Deloitte Consulting, some of the unemployed see things differently. One wrote:

“I am a contract worker who had to fight for my unemployment benefits. I won my case and yet they still cannot pay me… It’s been more than 3 weeks since I won my appeal and as of this moment, I am owed 13 weeks of back payments. To add insult to injury, they cannot send me current weeks to certify and they refuse to even try to help me to get back into the online system.

“I blame Deloitte, but it is California that carries the heaviest burden of fault… We’re nearing November and they still haven’t fixed an issue that began over Labor Day? Nonsense!

“This is untenable for everyone affected …We are owed reparations as well as our money at this point. It’s a funny word, affected. That means families and individuals are going hungry but can’t get food stamps or welfare. It means evictions and repossessed cars. It means destroyed credit, late fees, years of turmoil and shame for people already dealing with unemployment. Shame on you California.”

Another wrote:

“ … Not communicating is NOT an answer. Unemployed individuals caught up in the nightmare were told to be patient.  Rents and other expenses were still accumulating.  But [when you] add on additional fees: late fees, restoral fees, interest fees, etc…….you get the picture.

“Dear Governor Brown,

“Please reimburse me for all additional fees I’ve had to absorb to survive this fiasco.  You are going to make me payback any overpayments, but ignore the cost to the unemployed taxpayer.  This is  appears to unfair.  Perhaps Deloitte should pay us back from their contracted funds before they receive their final payment.  I am saving all of my receipts to deduct from my 2013 tax return.

“BTW Gov Brown – I am still waiting on additional payments as of today and DMV registration for my vehicle was due on 10/20/13.  Are you going to waive the penalty for late payment? Am I the only one with this question?”

Scrutiny

California’s state Assembly has set a date of 6 November 2013 for a hearing into the Department’s system upgrade.

“We’re going to look at EDD, the contractors and others to see how the system broke down so we can avoid this in the future,” said Henry Perea, chair of the Assembly’s Insurance Committee, which has oversight over the jobless benefits program.

On its website Deloitte says:

“Deloitte continues to help EDD [Employment Development Department] transform the level of service it provides to unemployed workers and improve the quality of information collected by EDD. The next time unemployment spikes, California should be ready to meet the increased demand for services.”

Massachutsetts IT disaster?

On the opposite coast the Boston Globe reported on an entirely separate debacle (which also involved Deloitte):

          None admit fault on troubled jobless benefits system

“… even with the possibility that unemployed workers could face months more of difficulties and delays in getting benefits, officials from the Labor Department and contractor, Deloitte Consulting of New York, testified before the Senate Committee on Post Audit that the rollout of the computer system was largely a success.

“‘I am happy with the launch,’ said Joanne F. Goldstein, secretary of Labour and Workforce Development, noting that she would have liked some aspects to have gone better.

“Mark Price, a Deloitte principal in charge of the firm’s Massachusetts business, acknowledged that software has faced challenges during the rollout, but insisted, ‘We have a successful working system today. ‘’’

NPfIT shield

A shield of denial was up for years at the Department of Health whose CIOs and other spokespeople repeatedly claimed that the NPfIT was a success.

Comment

If you didn’t know that Universal Credit IT wasn’t working, or that thousands of people on the east and west coasts of the US hadn’t been paid unemployment benefits because of IT-related problems, and you had to rely on only the public comments of the IT suppliers and government spokespeople, you would have every reason to believe that Universal Credit and the jobless systems in Massachusetts and California were working well.

Why is it that after every failed IT-based megaproject those in charge can simply blow the truth gently away like soap bubbles?

When confronted by bad news, suppliers and their customers tend to join hands behind their defensive shields. On the other side are politicians, members of the public affected by the megaprojects and the press who have all, according to suppliers and officials, got it wrong.

Is this why lessons from public sector IT-based project disasters are not always learned? Because, in the eyes of suppliers and their clients, the disasters don’t really exist?

None admit fault on troubled jobless benefit system

State fired Deloitte

Complaints continue despite claims system is under control

As many as 300,000 affected by California’s software problems

California’s predictable fiasco?

2 Comments

Posted in Campaign4Change, change management, CIO, consultants, contractors, culture, Deloitte, ERP, Government IT, IT projects, IT-related failures, managing outsourced services, npfit, openness and transparency, operational issues, outsourcing, oversight, private sector lessons for the public sector, public sector, public-private partnerships, supplier relationships, Universal Credit

IT suppliers out of control of DWP on Universal Credit?

Posted on 13/09/2013 | 7 comments

By Tony Collins

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

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

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

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

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

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

Said Wood:

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

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

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

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

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

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

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

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

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

Bacon added:

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

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

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

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

Hodge: “So is PwC wrong?”

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

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

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

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

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

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

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

Devereux: “It is part of my job.”

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

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

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

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

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

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

Bacon: “But you didn’t know, did you?

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

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

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

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

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

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

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

MPs dig hard for truth on Universal Credit IT

7 Comments

Posted in Accenture, Agile, BT, Campaign4Change, DWP, Government IT, HP, IBM, IT-related failures, Major Projects Authority, outsourcing, oversight, procurement, project management, public sector, public services, public-private partnerships, PWC, Universal Credit

MPs dig hard for truth on Universal Credit IT

Posted on 13/09/2013 | 4 comments

By Tony Collins

“Just answer the question … please!”

Rarely has any chair of the Public Accounts Committee pleaded so frequently with a permanent secretary not go round the houses when answering questions.

Margaret Hodge’s irritation was obvious on Tuesday [9 September] at a hearing of the Committee into a National Audit Office report on the Universal Credit IT-based programme: Universal Credit: early progress.

Before the Committee was Robert Devereux, the top civil servant at the Department for Work and Pensions. Beside him was UC’s latest project director Howard Shiplee who successfully led and managed construction contracts, budgets and timelines for all permanent and temporary venues for the Olympics. He has a CBE for services to construction.

It’s unclear how much experience Shiplee has had with IT-based projects and dealing with IT suppliers, though given his success as a big projects leader and construction expert,  IT leadership experience may be unnecessary.

There were signs from the hearing that Universal Credit project is following the events that have typically preceded IT-related disasters in government, especially in the way facts were interpreted in opposing and irreconcilable ways by the project’s defenders on one side and the “independents” on the other.

The “independents”, whose criticisms of the project have been withering, include a director at the National Audit Office Max Tse who led the NAO’s inquiry into the UC programme, and Dr Norma Wood, who has held several relevant positions in recent months, first as review team leader for a UC review in February, then as Transformation Director for the UC programme “re-set” in May 2013 and then as Interim Director General for the Cabinet Office’s Major Projects Authority. She is a consultant, not a civil servant. She appeared before the PAC on Wednesday.

Another “independent” is the auditor and consultancy PWC which reported to the government on financial mismanagement on the UC project. The NAO revealed the existence of the PWC report, which Hodge said was even more damming the NAO’s. [see separate blog post.]

A possible outcome of deeply conflicting views on the success or otherwise of a big and controversial project is that truth remains beyond anyone’s grasp within the life of the project and emerges only within the scheme’s post mortem audit report.

At Tuesday’s PAC hearing, the evidence given by Devereux and Shiplee on one hand, and Wood on the other was at times conflicting.

Wood’s evidence

Wood said that one of the lessons from the Universal Credit programme so far was that it was not conceived as a business transformation but was “very IT driven”. Of the £303m that has been spent on IT so far a sizeable part will need to be written off, beyond the £34m write-off so far.

Conservative MP Richard Bacon asked her how much could eventually be written off on the IT spend. “I think it will be substantial. I could not give you a figure,” she said.

When Bacon asked if it could be more than £140m she replied: “It will be at least that I would think.”

Her answer implied that the DWP will need to write off a large part of the £162m it currently estimates its IT assets are worth, after the £303m IT spend. Hodge said the write-off could be in excess of £200m – but this was later denied by Devereux, who also denied the write-off would be at least £140m.

Wood revealed that the figure for the write-off so far was derived from information given by suppliers, after the DWP asked them to judge how much of their equipment and software would be of use.

Conservative MP Stephen Barclay asked Wood whether suppliers were assessing the usability of their own work.

“Yes they were,” replied Wood.

Barclay: “So they were marking their own homework?”

“Yes they were.”

“Does that not carry a conflict of interest?”

“Yes it does.”

“Does it concern you?”

“It did,” replied Wood. “Therefore in the review we recommended an independent investigation.”

Barclay: “Building on Mr Bacon’s point, it is highly likely that with the initial write-off, if they have been marking their homework, comes a risk that the eventual figure is going to be bigger?”

“That’s true.”

Barclay’s questioning will indicate to some that the DWP and its IT suppliers were so close it could have been difficult for the department’s officials to be objective about what they were being told.

Steady-state solution

Wood spoke of how DWP and the Major Projects Authority had designed a “steady-state solution” which was a simplified version of UC , from which a more comprehensive system could be developed.

Said Wood: “There is a steady-state solution … with business requirements, that was handed over to the SRO [senior responsible owner] on 17 May, so there is a complete design and there is a multidisciplinary team working that design through to the next level.”

She said the steady-state solution is twin-tracked. “There is a piece that designs the interactive activity with the user and with the agents, and there is a part that uses existing systems, such as the payment system and the customer information system, but there are some 32 legacy systems in between, the utility of which we did not know at the time we completed the reset on 17 May.”

The interactive part is managed by a multi-disciplinary team that involves the GDS [Government Digital Service] and used agile, with waterfall for legacy systems.

“So yes, there is a design, and it is a very good design.”

On the use of agile she said the important thing is to apply rigour and discipline as you go through those methodologies. “It is not an issue of methodology; it is an issue of the rigour and discipline that is applied to those approaches.”

Pathfinder

Instead of a national roll-out starting in October, which was the original plan, the DWP is running “pathfinder” projects which accept only simplified claims and use limited IT without full anti-fraud measures.

Wood said: “It [the pathfinder scheme] is not hopeless. As it was currently configured there was a limit to the volume of payments it could handle because of the manual interfaces required – the manual support it required. So there is a very limited number of cases it could handle …”

Bacon asked if she would describe the pathfinder as so substantially de-scoped it was not fit for purpose.

“At the time we did the review [earlier this year] that was our conclusion.”

“ Is it correct that the pathfinder technology platform will not support UC in the future – that it is not scalable?” asked Bacon

“Unless it can handle all the functionality we have just described I fail to see how it can be scalable,” replied Wood.

Lessons

Liberal Democrat MP Ian Swales said: “We have exactly the same names of suppliers failing to deliver on government contracts time after time. Poor specifications, very vague penalties involved, and a sense that they have a vested interest, almost, in failure and we are again sat around this table discussing the same sort of thing. What can be learned?

Wood replied that there are some important lessons. “One is that this is not just a procurement exercise; this is actually a contract management exercise. It is really important that one understands what the business needs to deliver. That is why I stress that this was constituted not as a business transformation programme, but as an IT programme. It is important that the business drives the IT requirements and manages the contracts accordingly.”

Is 2017 feasible?

Wood: “It is feasible to deliver the whole thing by 2017.”

Bacon pointed out that there is no approval for further spending on UC until November 2013 and only then if criteria is met. He asked Wood on what basis approval for more spending would be given. Wood said it will be based on whether the project is affordable, value for money, deliverable within timescales, and has the appropriate management place.

DWP’s evidence

Hodge complained repeatedly that the civil servants before her were not answering questions directly – perhaps a sign of how hard it can be to establish the truth when an IT-based project goes awry.

“I would be really grateful if you would answer the question,” asked Hodge when questioning Devereux about whether Universal Credit had a proper business plan, a strategy.

At another point Devereux said: “Let me try and answer these questions which have been bandied around.”

Hodge: “You do go round the houses. Just answer them directly.”

Later in the hearing:

Hodge: “What you are so good at is giving us a whole load of stuff that is completely irrelevant to what we are trying to get at. Just answer the question.”

And another occasion…

Hodge: “No just answer the question … please.”

And again …

Hodge: “What would be utterly delightful is if you simply answered the questions. Just answer the questions.”

Again …

Hodge: “I just don’t get where this is going. I am honestly trying to be fair to you today. Ask the question again Meg [Meg Hillier MP] and then see if we can get an answer.” [Hillier’s question was about why the DWP has treated Universal Credit as an IT project instead of what it actually is, a business transformation programme which changes the way people work and act rather than introduces new technology. Devereux gave no clear answer.]

An exchange about the UC’s pathfinder projects characterised the relationship between Hodge and Devereux. Critics of the pathfinders say they are pointless because the claimants are atypical, much of the claims process relies on manual work, the technology is largely without any agreed anti-fraud measures, and it cannot yet handle everyday circumstances.

Supporters of the pathfinders, particularly Devereux, say they are a useful step in assessing the behaviour of people when making claims and testing the interfaces between new technology and the DWP’s legacy systems.

Hodge: “You are not answering any of the questions Mr Devereux. I don’t mind a little bit of history and a little bit of what you want to say but answer the questions. Do you think the pilot was fit for purpose – yes or no?”

Devereux: “The pathfinder is testing useful things that we have fixed.”

Hodge: “Was it fit for purpose?”

Devereux: “It has been useful.”

“Was it fit for purpose?”

“What purpose did you have in mind?”

“No – you.”

“Ok well, for my purpose it has worked fine thank you. “

“To do what?”

“To make sure I can construct some brand new software to connect it to a –“

“On which you spent £300m …”

“To connect it to a very complicated legacy estate and then demonstrate all of those things – let me give you one example; we will not get anywhere otherwise. I have sat in front of this Committee and we have talked about the Work Programme. You have grilled me on the—

“Please don’t talk about the Work programme.”

“In that conversation—

“Please talk about the pathfinder…”

And subsequently …

“Can I really plead with you, if you can answer questions without going off on a sideline it would be really really helpful – really really helpful.”

MPs kept uninformed

Stephen Barclay put it to Devereux and Shiplee that the DWP was aware of serious UC problems in July 2013 but the public, media and Parliament were being given the impression all was well. Said Barclay: “In July you realised there were problems. In September [2013] your Department’s press office was telling Computer Weekly:

‘The IT is mostly built. It is on time and within budget.’

Barclay said in July 2013 Shiplee was asked by the chair of work and pensions select committee[Dame Anne Begg]: “So rumours that there is a large chunk of the IT that simply do not work and has been dumped are not true?”

“No,” replied Shiplee.

Barclay told Devereux and Shiplee: “Parliament seems to be getting told two different things.” He referred to the DWP’s “culture of denial”.

IT supplier reassurances

Shiplee said he has spent 12 of the 16 weeks since he started reviewing the UC project in great detail with IT suppliers.

“That is something that hasn’t been done to this level before. I have spent with experts from within DWP and with external experts and we have reviewed in detail what has been produced, what works, where it has got to. There are a number of points to make –

Barclay: “Could you clarify you wrote to the chair of the DWP committee to clarify that answer if you have done further work …”

Shiplee: “I have not concluded the work. I believe that from that work already, it is my view, supported by reports, that there is substantial utility in what has been produced… The use of agile is by itself very iterative and therefore to a certain extent it is potentially high risk.

“I wanted to look at how we could de-risk this, this utilisation of agile, and one of the ways to do that is to look at what we have already spent a great deal of money on, and whether it was usable and would actually serve to de-risk the programme…

“What I have discovered is that the Pathfinder does not represent the amount of development work that has been undertaken by suppliers. It [Pathfinder] has been heavily de-tuned from where they have actually got to.”

Why?

“Mainly around security, said Shiplee. “This is a unique piece of work. It [the DWP] is the only bank anywhere – effectively a bank – in which customers do not put money it. They simply take money out. It is therefore attractive from all sort of fraud point of view and therefore security is very important. The key element of security is personal identification. Nobody has yet found a way to do that effectively and totally online.”

Hodge: “Are you telling us that the technology developed so far is capable of being scaled up for a national roll-out?”

Shiplee: “On the basis of what I have been told and what I have seen so far, I believe it has been demonstrated that the suppliers have got the capability to scale this up. They have, for example, dealt with couples [Pathfinder system deals now only with single people.]

“The suppliers have explained where they have got to. It is very interesting. Some of the challenges we are facing now the suppliers have already faced in the past and have resolved those issues. I am trying to make sure that we use all of this to the best good and we don’t have to relearn every lesson again.”

Replaced project leaders

Devereux told of how he had replaced project leaders who , he suggested, were not solving problems but pushing ahead regardless, and were not good listeners.

“People I put in place here had experience and confidence. The challenge they had was very large and there came a point in my judgment they were no longer on top of it. There were cumulative issues to be resolved.

“When the cumulative bow wave of things that had not been resolved was being called out as not resolvable by just pushing on through, that is the point at which we decided to change, because it was also then that the point the Chair made about a good news culture within the programme was crystallising. Those two things cannot work.

“I need people who will drive things through. Howard is very good at driving things through, but the person that drives things through and does not listen to anyone at all is not going to help me at all.”

Comment

Last week James Naughtie on BBC’s R4 Today programme, R2’s Jeremy Vine, journalists at the BBC World Service and at other news services asked me whether Universal Credit was another government IT disaster. I said in essence that it was a good idea badly executed. The IT project has been dogged by an over-ambitious timetable, poor control and validation of supplier payments and a good news culture that to some extent still exists.

In past government IT disasters such as the NPfIT, C-NOMIS and the Rural Payments Agency’s Single Payment Scheme, ministers were not given bad news until it could be hidden no longer. Senior officials gave ministers only good news because that’s what they wanted to hear.

Deniability

Civil servants, perhaps, wanted to give ministers credible “deniability”. The less ministers knew of serious problems the more credibly they could deny in public the existence of them.

Thank goodness, then, for the scrutiny of the National Audit Office and the Public Accounts Committee on Universal Credit. Some important truths have now come to the surface. With the NAO and the Cabinet Office’s Major Projects Authority rightly breathing down its neck, the DWP is doing all it can to put the project back on track. But the DWP is still marred by a good news culture. Even after the NAO and PWC reports the DWP’s press office is still talking of the Universal Credit project as a success.

A DWP spokesperson told the Guardian this week:

“The IT for universal credit is up and running well in the early rollout of the new benefit.”

And Iain Duncan Smith and his senior officials appear to be dismissing the NAO’s report as historic – which it is to some extent – but much of it is also forward-looking.

Duncan Smith, Devereux and Shiplee are all very positive about the future of the project. But would it be better if they were genuinely sceptical, as would be a private sector board that was confronting a big and challenging IT-enabled change project?

Politics and IT don’t go well together and never have. There is every chance Universal Credit will follow what has happened with the last huge benefit computerisation project, Operational Strategy in the 1980s. It eventually worked but in a much more fragmented way than expected. It was several years late, cost several times the original estimate, and did not make the savings predicted. The likely fate of Universal Credit IT?

Learn from failure: the key lesson that Universal Credit should take from agile [Institute for Government]

 

4 Comments

Posted in Accenture, Agile, BT, Campaign4Change, change management, DWP, GDS, Government digital Service, Government IT, HP, IBM, Major Projects Authority, managing change, managing outsourced services, Universal Credit

Tagged ,

A reason many govt IT-enabled projects fail?

Posted on 11/09/2013 | 6 comments

By Tony Collins

Last week’s highly critical National Audit Office report on Universal Credit was well publicised but a table in the last section that showed how the Department for Work and Pensions had, in essence, passed control of its cheque-book to its IT suppliers, was little noticed.

The NAO  in 2009 reported that the Home Office had handed over £161m to IT suppliers without knowing where the money had gone.

Now something similar has happened again, on a much bigger scale, with Universal Credit. The National Audit Office said last week that the Department for Work and Pensions has handed over £303m to IT suppliers. The NAO found that the DWP was unclear on what the £303m was providing. Said the NAO

“The Department does not yet know to what extent its new IT systems will support national roll-out … The Department will have to scale back its original delivery ambition and is reassessing what it must do to roll-out Universal Credit to claimants.”

After paying £303m, the “current programme team is developing new plans for Universal Credit,” said the NAO.

Surprising?

More surprising, perhaps, are the findings by PWC on its investigations into the financial management of Universal Credit IT. I and others in the media little noticed the summary of PWC’s work when I first read the NAO report.

PWC’s findings in the NAO’s report are in figure 15 on page 36. The table summarises PWC’s work on Linking outcomes to supplier payments and financial management. This is some of what the NAO says

– Insufficient challenge of supplier-driven changes in costs and forecasts because the programme team did not fully understand the assumptions driving changes.

– Inadequate controls over what would be supplied, when and at what cost because deliverables were not always defined before contracts were signed.

– Over-reliance on performance information that was provided by suppliers without Department validation.

– The Department did not enforce all the key terms and conditions of its standard contract management framework, inhibiting its ability to hold suppliers to account.

– Insufficient review of contractor performance before making payments – on average six project leads were given three days to check 1,500 individual timesheets, with payments only stopped if a challenge was raised.

– 94% of spending was approved by just four people but there is limited evidence that this was reviewed and challenged.

– Inadequate internal challenge of purchase decisions; ministers had insufficient information to assess the value for money of contracts before approving them.

– the presentation of financial management information risked being misleading and reducing accountability.

– Limited IT capability and ‘intelligent client’ function leading to a risk of supplier self-review.

– Charges were on the basis of time and materials, leaving the majority of risks with the Department.

Comment

How can civil servants knowingly, or through pressure of other work, effectively give their suppliers responsibility for the sums they are paid? This is a little like asking a builder to provide and install a platinum-lined roof, then giving it the authority to submit invoices up to the value of its needs, which you pay with little or no validation.

On BBC Newsnight this week, Michael Grade, a past chairman of the BBC Board of Governors, told Jeremy Paxman about the Corporation’s corporate culture. 

“I think the BBC suffers more and more from a lack of understanding of the value of money. A cheque comes in every April – for £3.5bn – and if you don’t have to earn the money, and you have that quantity of money, it is very hard to keep to keep a grip on the reality of the value of money.

“If you run a business, if you own a business, you switch the lights out at 6 O’Clock. Everybody’s gone. You walk around yourself. You own the business. It’s your money. You have earned it the hard way. The culture of the BBC of late has been, definitely, a loss of the sense of the value of money.”

Does this help to explain why so many government IT-enabled change programmes fail to meet expectations? One can talk about poor and changing specifications, over-ambitious timescales, poor leadership and inadequate accountability as reasons that contribute to failures of public sector IT-enabled change programmes.

But, at bottom, is there simply too much public money available and too few people supervising payments to suppliers? Is it asking too much of senior civil servants and ministers to treat public money as their own? Is there a lack of the reality of the true value of money, as Michael Grade says when he refers to the BBC?

It is perhaps inconceivable that any private company would spend £303m and not be sure exactly what it is getting for the money.

It may also be inconceivable that a private company would accept supplier-driven changes in costs and forecasts without fully understanding the assumptions driving those changes.

And would a private company not control what is to be supplied, when it is to be delivered and at what cost? Would it not define what is to be delivered before contracts are signed?

Would a private company not check properly whether submitted invoices are fully justified before making payments?

Perhaps central government is congenitally ill-suited to huge IT-based projects and programmes and should avoid them – unless ministers and their officials are prepared to accept the likelihood of delays of many years and costs that are many times the amounts in the early business cases. They would also need to accept that success, even then, is not guaranteed, as we know from the NPfIT.

6 Comments

Posted in Agile, Campaign4Change, change management, DWP, Government IT, IT-related failures, managing outsourced services, npfit, outsourcing, private sector lessons for the public sector, procurement, project management, public sector, public services, PWC, supplier relationships, Universal Credit

Will Universal Credit ever work? – NAO report

Posted on 05/09/2013 | 8 comments

By Tony Collins

Today’s National Audit Office report Universal Credit: early progress is one of most excoriating the NAO has published on a government IT-enabled project or programme.

Iain Duncan Smith, secretary of state for work and pensions, has already responded to the NAO report by implying it is out of date and that the problems are in the past. This is a standard government response to well researched and highly critical NAO reports.

But the authors of the NAO report have pointed to some UC problems that are so fundamental that it may be difficult for any independent observer to credibly regard the project’s problems as historic. Says the NAO:

“The Department [DWP] is unable to continue with its ambitious plans for national roll-out until it has agreed the future service design and IT architecture for Universal Credit.”

So can the UC project ever be a success if, years after its start, there is no agreed design or IT architecture? Says the NAO

“The Department may also decide to scale back the complexity and ambition of its plans.”

Although the DWP has spent more than £300m on UC IT, mostly with the usual large IT suppliers, complex claims cannot yet be handled without manual work and calculations.

In February 2013, the Cabinet Office’s Major Projects Authority reviewed Universal Credit and raised “serious concerns about the programme’s progress”, says the NAO report. “The review team was concerned that the pathfinder [pilot project] could not handle changes in circumstances and complex cases which had to be dealt with manually, and that this meant the pathfinder could not be rolled out to large volumes.”

The Independent says the DWP gave false assurances on the project’s progress. The Daily Mail says the scheme has got off to a “disastrous start”.

The NAO’s main findings:

 Is £303m spent on IT value for money?

 “At this early stage of the Universal Credit programme the Department has not achieved value for money. The Department has delayed rolling out Universal Credit to claimants, has had weak control of the programme, and has been unable to assess the value of the systems it spent over £300m to develop [up to the end of March 2013].

“These problems represent a significant setback to Universal Credit and raise wider concerns about the Department’s ability to deal with weak programme management, over-optimistic timescales, and a lack of openness about progress.”

A projected IT overspend of £233m?

The NAO puts the expected cost of implementing Universal Credit to 2023 at £2.4bn. The spend to April 2013 is £425m, including £303m on the IT. The planned IT investment in the current spending review period from the May 2011 business case was £396m, but the December 2012 business case puts the planned IT investment in the current review period at £637m – and increase of £233m, or 60%. The DWP wants to make changes elsewhere in its budgets to accommodate the extra IT spend.

Ministers and DWP spokespeople have said repeatedly that the project is within budget.

Some of the IT spend breakdown

– Core software applications including a payment management component  – £188m

– Interface with HMRC real time information – £10m

– Case management module – £6m

– Licences – £31m

– Supplier support – £26m

– Hardware, telephony and changes to old systems – £50m

– Departmental staff costs on the Business and IT Solution team – £29m.

– Staff contractors provided by suppliers to support departmental staff  – £26m.

Main IT suppliers – spend to end of 2012/13

– Accenture. Software design, development and testing including: interview system; evidence capture, assessment and verification; and staff contractors – £125m

– IBM. Software design, development and testing including: real time earnings; process orchestration and payment management; and staff contractors – £75m

– HP. Hardware and legacy system software, and staff contractors – £49m

– BT. Telephony. It also supplied specialist advice on agile development methods – £16m

A further £9m was spent on live system support costs provided by HP; bringing total spending with suppliers to £312m, says the NAO.

 Is the IT high quality or not?

The NAO report suggests there may be conflicting views between those in DWP who believe the IT is high quality and others who are not so sure.

“The Department believes that the majority of the built IT is high quality, but has not been fully developed and cannot support scaling up the programme as it stands. Some assessments have commented that systems are inflexible or over-elaborate.”

Will the IT support a national roll-out?

The NAO says it’s uncertain that the IT can support full national roll-out of Universal Credit without further work and investment.

“The Department does not yet know to what extent its new IT systems will support national roll-out. Universal Credit pathfinder systems have limited function and do not allow claimants to change details of their circumstances online as originally intended. The Department does not yet have an agreed plan for national roll-out and has been unclear about how far it will build on pathfinder systems or replace them.”

Will timetable and scope have to change further?

“The Department will have to scale back its original delivery ambition and is re-assessing what it must do to roll-out Universal Credit to claimants. The current programme team is developing new plans for Universal Credit. Our experience of major programmes supported by IT suggests that the Department will need to revise the programme’s timing and scope, particularly around online transactions and automation.”

Over-optimism?

“It is unlikely that Universal Credit will be as simple or cheap to administer as originally intended. Delays to roll-out will reduce the expected benefits of reform…”

Rushed?

“ The ambitious timetable created pressure on the Department to act quickly…”

Open to fraud?

“The Department’s current IT system lacks the ability to identify potentially fraudulent claims. Within the controlled pathfinder environment, the Department relies on multiple manual checks on claims and payments. Such checks will not be feasible or adequate once the system is running nationally.

“Without a system in place, the Department will be unable to make the savings it had planned, by reducing overpayments from fraud and error. In December 2012, it estimated these savings to be worth £1.2 billion per year in steady state.”

Separately the NAO states that there have been “unanticipated security problems from putting transactions online”. The DWP may now scale back all that was planned to be online.

In January 2013 the technical director of CESG and other reviewers said that the UC security solution was “over-complex” and could have conflicted with DWP plans to encourage people to claim online.

Delay in national roll-out

“The Department has delayed rolling out Universal Credit nationally. The Department will not introduce Universal Credit for all new out-of-work claims nationally from October 2013 as planned. Instead it will add a further six pathfinder sites from October 2013

 “Pause UC immediately”

In early 2013 the Cabinet Office’s Major Projects Review Group noted that the Department had not addressed issues with governance, management and programme design despite their having been raised in previous reports. The Authority “recommended that the Universal Credit programme be paused immediately”.

All  post-2015 plans under review

The original plans were for UC roll-out to finish by late 2017. All statements by officials and Iain Duncan Smith have confirmed this 2017 deadline. In fact, says the NAO, all milestones beyond the start of 2015 are “currently under review” including:

• National roll-out of all new claims

• Closedown of tax credits new claims

• Roll-out of Pension Credit Plus on Universal Credit platform

• Completion of claimant migration

The NAO says the DWP has considered completing the roll-out beyond 2017.

Complete rethink needed

 The Cabinet Office’s Major Projects Authority reviewed and reported on Universal Credit in February 2013. The Authority’s found that:

“Universal Credit Programme needs a complete rethink of the delivery approach together with streamlining potentially over-elaborate solutions.”

A separate review of the project by Capgemini in January 2013 and a “Reset IT stocktake” in April 2013 concluded that the UC “architecture is of limited extensibility”.

Pathfinders of limited value

“The pathfinder lacks a complete security solution. Claimants cannot make changes in circumstances online. This increases the need for manual work as changes must be made by telephone. The pathfinders also require more staff intervention than planned, because of reduced automation and links between systems.”

100 day planning period

 “In May 2013, the Department appointed the current senior responsible owner [Howard Shiplee] to lead the Universal Credit programme. The team is now conducting a ‘100-day planning period’, which will end at the end of September 2013. The Department will then submit a new business case to HM Treasury, and ask for ministerial sign-off for delivery plans in late 2013.”

Secrecy – even internally?

“The reset took place between February and May 2013. The reset team included departmental, Cabinet Office and Government Digital Services staff. The reset team developed an extensive set of materials as part of a ‘blueprint’ covering design and implementation, and 99 detailed recommendations. The reset team shared the blueprint with the Department’s Executive Team who approved it at each stage of its development. The Department shared the blueprint with a small number of people but did not initially share it widely.”

A £34m write-off – so far

“The Department has acknowledged that it needs to write off some of the value of its Universal Credit IT assets. By the end of 2012-13, the Department had spent £303m on its IT systems and created assets which it valued at £196m – a difference of £107m. But the DWP has decided to write-off £34m – 17% – though it may increase the size of the write-off later.

“The Department is conducting further impairment reviews of the value of its Universal Credit IT assets before finalising its 2012-13 accounts.” The £34m write-off was based on a “self-assessment which it asked its suppliers to conduct”.

Number of claimants well below planned level

“In its October 2011 business case, the Department expected the Universal Credit caseload to reach 1.1 million by April 2014, but reduced this to 184,000 in the December 2012 business case.”

Planned savings down by nearly £500m

“The cost to government of implementing Universal Credit will be partly offset by administrative savings. In December 2012, the Department estimated that a three-month delay in transferring cases from existing benefits to Universal Credit would reduce savings by £240m in the current spending review period and by £247m after April 2015.”

 Anyone know who decided on October 2013 for planned UC roll-out?

 “The Department was unable to explain to us why it originally decided to aim for national roll-out from October 2013. It is not clear whether the Department gave decision-makers an evaluation of the relative feasibility, risks and costs of this target date.”

 Agile … with a 1,000-strong team?

“In 2010, the Department was unfamiliar with the agile methodology and no government programme of this size had used it. The Department recognised that the agile approach would raise risks for an organisation that was unfamiliar with this approach. In particular, the Department

• was managing a programme which grew to over 1,000 people using an approach that is often used in small collaborative teams;

• had not defined how it would monitor progress or document decisions;

• needed to integrate Universal Credit with existing systems, which use a waterfall approach to managing changes; and

• was working within existing contract, governance and approval structures.

“To tackle concerns about programme management, the Department has repeatedly redefined its approach. The Department changed its approach to ‘Agile 2.0’ in January 2012. Agile 2.0 was an evolution of the former agile approach, designed to try to work better with existing waterfall approaches that the Department uses to make changes to old systems.

“After a review by suppliers raised concerns about the achievability of the October 2013 roll-out the Department then adopted a ‘phased approach’ and created separate lead director roles for the pathfinder (phase 1), October roll-out (phase 2) and subsequent migration (phase 3).

“The Cabinet Office does not consider that the Department has at any point prior to the reset appropriately adopted an agile approach to managing the Universal Credit programme.”

Anyone know how UC is meant to work?

“The source of many problems has been the absence of a detailed view of how Universal Credit is meant to work. The Department has struggled to set out how the detailed design of systems and processes fit together and relate to the objectives of Universal Credit.

“This is despite this issue having been raised repeatedly in 2012 by internal audit, the Major Projects Authority and a supplier-led review. This lack of clarity creates problems tracking progress, and increases the risk that systems will not be fit for purpose or that proposed solutions are more elaborate or expensive than they need to be…

“The Department was warned repeatedly about the lack of a detailed ‘blueprint’, ‘architecture’ or ‘target operating model’ for Universal Credit. Over the course of 2011 and the first half of 2012, the Department made some progress but did not address these concerns as expected.

“By mid-2012, this meant that the Department could not agree what security it needed to protect claimant transactions and was unclear about how Universal Credit would integrate with other programmes. These concerns culminated, in October 2012, in the Cabinet Office rejecting the Department’s proposed IT hardware and networks.

“ Given the tight timetable, unfamiliar programme management approach and lack of a detailed operating model, it was critical that the Department should have good progress information and effective controls. In practice the Department did not have any adequate measures of progress.”

High turnover among IT leaders?

“Including the reset and the current director general for Universal Credit, the programme has had five different senior responsible owners since mid-2012.

“The Department has also had high turnover in important roles other than the senior responsible owner. The Department has had five Universal Credit programme directors since 2010.”

The NAO said that the director of Universal Credit IT was “removed from the programme in late 2012 and the Department has replaced the role with several roles with IT responsibilities”. During and since the ‘reset’ the Government Digital Service has helped to redesign the systems and processes supporting transformation.

Good news culture and a fortress mentality

“The culture within the programme has also been a problem…Both the Major 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.”

“Inadequate control of suppliers”

The Department had to manage multiple suppliers. Three main suppliers – Accenture, IBM and HP – developed components for Universal Credit. The Department commissioned IBM to act as an Applications Development Integrator from January 2012, providing some oversight and overall management of IT development, but creating risks of supplier self-management.

The NAO found that there were inappropriate contractual mechanisms; charges were on the basis of time and materials, leaving the majority of risks with the Department. The NAO said there were “inadequate controls over what would be supplied, when and at what cost because deliverables were not always defined before contracts were signed.”

There was “over-reliance on performance information that was provided by suppliers without Department validation”. And weak contractual relationships with suppliers meant that the DWP “did not enforce all the key terms and conditions of its standard contract management framework, inhibiting its ability to hold suppliers to account”

Said the NAO:

“Various reviews have criticised how the Department has managed suppliers. In June 2012, CESG reported the lack of an agreed, clearly defined and documented scope with each supplier setting out what they should provide. This hampered the Department’s ability to hold suppliers to account and caused confusion about the interactions between systems developed by different ones. In February 2013, the Major Projects Authority reported there was no evidence of the Department actively managing its supplier contracts and recommended that the Department needed to urgently get a grip of its supplier management.”

Suppliers paid without proper checks

“The Department has exercised poor financial control over the Universal Credit programme. The Department commissioned an external review in early 2013 of financial management in Universal Credit. The review found several weaknesses including poor information about the basis for supplier invoices, payments being made without adequate checks and inadequate governance and oversight over who approved spending. The review team checked a sample of invoices against the timesheets of suppliers and found no evidence of inappropriate charging, although timesheet information is not complete and cannot be linked to specific activity…”

The NAO went on to emphasise that there was “insufficient review of contractor performance before making payments. “On average six project leads were given three days to check 1,500 individual timesheets, with payments only stopped if a challenge was raised.”

The NAO added that inadequate internal challenge of purchase decisions meant that ministers had “insufficient information to assess the value for money of contracts before approving them”.

50 people on the UC programme board

“The programme board acts as the programme’s main oversight and decision-making body… The programme board has been too large and inconsistent to act as an effective, accountable group. Over the course of 2012, the programme board had 50 different people attending as core members…

“The board did not have adequate performance information to challenge the programme’s progress. In particular, while the board had access to activity measures for IT system development, it could not track the actual value of this activity against spending.

“In the absence of such measures of progress, the board relied on external reviews to assess progress. Such external reviews were not sufficiently frequent for the board to use them as a substitute for timely, adequate management information.”

Programme board disbanded

 “… during the reset [Feb-May 2013], [the DWP] suspended the programme board entirely.

Failure to act on recommendations

“From mid-2012, it became increasingly clear that the Department was failing to address recommendations from assurance reviews… the key areas of concern raised by the Major Projects Authority in February 2013 had appeared in previous reports.

“From mid-2012, the underlying concerns about how Universal Credit would work meant that the Department could not address recommendations from assurance reviews; it failed to fully implement two-thirds of the recommendations made by internal audit and the Major Projects Authority in 2012. Without adequate, timely management information, the Department relied on periodic external assurance reports to assess progress.”

Ceasing work for national roll-out

“By late 2012, the Department had largely stopped developing systems for national roll-out and concentrated its efforts on preparing short-term solutions for the pathfinder…”

Slippery Parliamentary answers

The NAO lists almost imperceptible changes in the language of Parliamentary answers on Universal Credit.

In 2011 the DWP said in a Parliamentary answer that “all new applications” for out-of-work financial help would be treated as a UC claim; and in November 2012 the DWP said in a Parliamentary reply that in October 2013 it would start to migrate claimants from the old system to the new. But by June 2013 the DWP’s line had changed. By then it was saying in a Parliamentary reply that Universal Credit will “progressively roll-out” from October 2013 with all those who are entitled to UC claiming the new benefit by 2017. In fact all new applications for out-of-work help are not being treated as a UC claim. The NAO says that new claimants in the pathfinder must be “single, without children, newly claiming a benefit, fit for work, not claiming disability benefits, not have caring responsibilities, not be homeless or in temporary accommodation, and have a valid bank account and National Insurance number”.

Will UC ever work?

“ …it is still entirely feasible that it [UC] goes on to achieve considerable benefits for society. But to do so the Department will need to learn from its early mistakes.

“As it revises its plans the Department must show it can: exercise effective control of the programme; develop sufficient in-house capability to commission and manage IT development; set clear and realistic expectations about the timescale and scope of Universal Credit; and, address wider issues about how it manages risks in major programmes.”

**

Margaret Hodge MP, Chair of the Public Accounts Committee, says of the NAO report:

“The Department for Work and Pensions has made such a mess of setting up Universal Credit that the Major Projects Authority had to step in to rescue the programme.

“DWP seems to have embarked on this crucial project, expected to cost the taxpayer some £2.4bn, with little idea as to how it was actually going to work.

“Confusion and poor management at the highest levels have already resulted in delays and at least £34m wasted on developing IT. If the Department doesn’t get its act together, we could be on course for yet another catastrophic government IT failure.

“This damning indictment from the NAO gives me no confidence that we will see the £38 billion of predicted benefits between 2010-11 and 2022-23. Vulnerable benefit claimants need a secure system they can rely on.”

NAO report – Universal Credit: early progress

8 Comments

Posted in Accenture, Agile, BT, Campaign4Change, Capgemini, change management, excessive secrecy, Government digital Service, Government IT, HP, IBM, IT-related failures, Major Projects Authority, managing outsourced services, openness and transparency, Oracle, procurement, project management, public sector, public services, Universal Credit

Tagged , , ,

Why does truth on Universal Credit emerge only now?

Posted on 04/09/2013 | 2 comments

By Tony Collins

For nearly a year the Department for Work and Pensions, its ministers and senior officials, have told Parliament that Universal Credit IT is on track and on budget.

Together with DWP press officers, they have criticised parts of the media and some MPs for suggesting otherwise.

Now the truth can be held back no longer: the National Audit Office is expected tomorrow to report on UC’s problems. Ahead of that report’s publication, and perhaps to take the sting out of it, work and pensions secretary Iain Duncan Smith has allowed Howard Shiplee, the latest DWP lead on delivery of UC, to own up to the project’s difficulties.

IDS has given permission for Shiplee to write an article for the Telegraph on the UC project. Every word is  likely to have been checked by senior DWP communications officers.

It’s the first time anyone on the UC project has publicly acknowledged the project’s difficulties though, as with nearly every government response to critical NAO reports, the administration depicts the problems as in the past. Shiplee’s article says

“… it’s also clear to me there were examples of poor project management in the past, a lack of transparency where the focus was too much on what was going well and not enough on what wasn’t and with suppliers not managed as they should have been.

“There is no doubt there have been missteps along the way. But we’ve put that right…

“I’m not in the business of making excuses, and I think it’s always important to acknowledge in any project where things may have gone wrong in order to ensure we learn as we go forward.

“To that end, the key decision taken by the Secretary of State to reset the programme to ensure its delivery on time and within budget has been critical.

“When David Pitchford arrived from the Major Projects Authority earlier this year, at the Secretary of State’s request, he began this process in line with those twin objectives…

“I’ve also ensured that as a programme we have a tight grip on our spending, and I have put in place a post for a new Director who will be dedicated to ensuring that suppliers deliver value for money. I am confident we are now back on course and the challenges are being handled.”

Parliament has a right to ask why nearly every central government IT project that goes wrong – whatever the government in power – is preceded for months and sometimes years in the case of the NPfIT by public denials.

From the over-budget and fragmented Operational Strategy project for welfare benefits in the 1980s, to the repeatedly delayed and over budget air traffic control IT at the New En Route Centre at Swanwick, Hampshire, and the abandoned Post Office “Pathway” project in the 1990s, to the failed National Programme for IT – NPfIT –  in the NHS in the last decade, ministers and senior officials were telling Parliament that all was well and that the project’s critics were misinformed. Until the facts became only too obvious to be denied any longer.

These are some of the reassurances ministers and DWP officials have been giving Parliament and the media about the UC project. None of their statements has given a hint of the  “missteps along the way” that Shiplee’s article refers to now.

House of Commons, 20 May 2013

Universal Credit (IT System)

Clive Betts (Lab): What assessment he [the secretary of state for work and pensions] has made of the preparedness of the universal credit IT delivery system.

Iain Duncan Smith: The IT system to support the pathfinder roll-out from April 2013 is up and running…

Betts: I thank the Secretary of State for that answer, but will he confirm that three of the pathfinders are not going ahead precisely because the computer system is not ready? …

Duncan Smith: The hon. Gentleman is fundamentally wrong. All the pathfinders are going ahead. The IT system is but a part of that, and goes ahead in one of the pathfinders. The other three are already testing all the other aspects of universal credit and in July will, essentially, themselves roll out the remainder of the pathfinder, and more than 7,000 people will be engaged in it. All that nonsense the hon. Gentleman has just said is completely untrue.”

**

BBC – 9 Sept 2012

 “A Department for Work and Pensions spokeswoman said: “Liam Byrne [Labour] is quite simply wrong. Universal Credit is on track and on budget. To suggest anything else is incorrect.”

**

Iain Duncan Smith, House of Commons, 20 May 2013

“This [Universal Credit] system is a success. We have four years to roll it out, we are rolling it out now, we will continue the roll-out nationwide and we will have a system that works—and one that works because we have tested it properly.”

Howard Shiplee – FT July 2013

“… Howard Shiplee, who has led UC since May, denied claims from MPs that the original IT had been ‘dumped’ because it had not delivered. ‘The existing systems that we have are working, and working effectively,’ he said. He added, however, that he had set aside 100 days ‘not to stop the programme, but to reflect on where we’ve got to and start to look at the entire total plan’.”

**

DWP spokesperson 16 August 2013

“… a DWP spokesperson said: “The IT supporting Universal Credit is working well and the vast majority of people are claiming online.”

**

Howard Shiplee Work and Pensions Committee, House of Commons, 10 July 2013.

“…The pathfinder, first of all, has demonstrated that the IT systems work…”

Mark Hoban, DWP minister, House of Commons, 6 March 2013.

“The shadow Secretary of State has been touting this story for months. No it has been longer than that. The last outing was in today’s Guardian. I want to make it clear that nobody has walked off the project; all the contractors are in place and the project is on schedule to be delivered at the end of April. Now, if he thinks the idea is good in theory, it is about time he supported it. It is working and the contractors are in place, doing the job and ensuring that the pilots will be up and running at the end of April.”

[Hoban’s response was to a question on whether personnel or contractors at Accenture, Atos Origin, Oracle, Red Hat, CACI or IBM UK had been stepped down, or in any way notified by the Department, that they were to suspend work on Universal Credit. The main IT contractors for UC are Accenture, Hewlett Packard and BT plus input from Agile specialists Emergn. The DWP awarded UC IT contracts without any specific open competitive tender.]

Comment

On this site various posts have questioned whether Iain Duncan Smith has been getting the whole truth on the state of the UC IT project. He repeatedly went before MPs of the Work and Pensions Committee and gave such confident reassurances on the state of the UC project that it was difficult to believe that he knew what was really going on.

What we now know about the UC project’s “missteps along the way” shows, if nothing else, how gullible ministers are in believing their officials.

It is hard or impossible to believe that officials would lie but it is probable they would tell their ministers what they want to hear – and IDS has been in no mood to hear about problems.

Every big IT-based project in government that is failing ends up in a pantomime. From the back of the auditorium the media and MPs shout out when they receive leaks about problems. “Look behind you – there’s chaos,” they call out to departmental ministers and officials who don’t look behind them and reply “Oh no there isn’t!”

One reason this pantomime is repeated over decades is that independent reports on the progress or otherwise on big IT-based projects and programmes in central government are kept under departmental lock and key.  Even FOI requests for the keys consistently fail. 

So it’s usual for ministers and officials to answer media and Parliamentary questions about departmental projects without fear of authoritative contradiction.

Until the NAO is in imminent danger of publishing  a revealing report.

Perhaps it’s a lack of openness and accountability that contributes to IT-enabled change projects in central government going seriously awry in the first place.

With openness would come early and public recognition of a scheme that’s too ambitious to be implementable. With secrecy and the gung-ho optimism that seems to pervade projects like Universal Credit many on the project pretend to each other and perhaps even themselves that it’s all doable, while money continues to be thrown away.

When will the pantomime of misinformation and long-delayed revelation stop? Perhaps when Whitehall becomes genuinely open and accountable on the progress or otherwise of its IT-enabled projects. In other words: never.

Thank you to David Moss for drawing my attention to Howard Shiplee’s article in the Telegraph.

Time for truth on Universal Credit

Millions of pounds worth of secret DWP reports

2 Comments

Posted in Accenture, Agile, BT, change management, DWP, Gateway reviews, HP, IT projects, IT-related failures, Major Projects Authority, managing outsourced services, npfit, openness and transparency, operational issues, oversight, procurement, project management, public sector, public services, Real-Time Information, Universal Credit

Tagged , ,

Universal Credit IT working well claims DWP

Posted on 21/08/2013 | 2 comments

By Tony Collins

Staff in job centres working on Universal Credit system are writing jobseekers’ personal information down on paper because their IT systems are so “clunky and cumbersome”, Dame Anne Begg, chair of the Commons’ Work and Pensions Committee, told Civil Service World.

“When we visited the Bolton Jobcentre Plus the IT system seemed clunky and cumbersome,” Begg said. Staff making appointments for UC applicants at the Bolton pilot scheme “had to write out some of the [jobseekers’] personal details, just to transfer them from one computer system to another. That’s something that we would have expected to be ironed out.”

The handwriting of jobseekers’ details “could lead to transposing errors”, she said.  Further, the Universal Credit IT system doesn’t allow jobseekers to save their data midway through an online application, Begg said.  She warned that this will penalise those who don’t own computers, who will have to remember to take all of their personal details in one batch to open access computers such as those at local libraries.

But a spokesperson for the Department for Work and Pensions said:

“The IT supporting Universal Credit is working well and the vast majority of people are claiming online. Making a claim to Universal Credit in one session… helps ensure the security of a claimant’s information.”

Last month a leaked survey of staff at the Department of Work and Pensions who are working on Universal Credit programme found dishonesty, secrecy, poor communications, inadequate leadership and low morale.

[ Computer Weekly reports that the DWP placed just 0.5% of its Universal Credit IT spending directly with SMEs, and that the department’s major suppliers – Accenture, Atos, BT, IBM, Capita, HP and SCC – subcontracted little to SMEs. “The Universal Credit supply chain flowed downstream mostly to multinational technology suppliers such as Oracle, Nuance, Genband and RedHat.” Most Universal Credit IT spending has gone to Accenture, IBM and HP: £57m, £41m and £34m respectively, between January 2011 and May 2013.]

Comment

While keeping secret internal reports on the Universal Credit IT project, and while all the signs are that Universal Credit’s IT is in trouble – it’s easier to handle claims at least in part by hand – the DWP’s senior officials, spokespeople and Iain Duncan Smith are telling the public and Parliament that all is well.

Perhaps the next logical step is that they come onto the public stage in costume to tell us nursery tales, while playing stock characters who sing, dance, and perform skits. Maybe then they’ll be more believable.

2 Comments

Posted in Accenture, Agile, Campaign4Change, Capita, DWP, excessive secrecy, IBM, managing change, openness and transparency, Oracle, procurement, public sector, public services, Universal Credit

Is HMRC’s RTI project really a success?

Posted on 10/07/2013 | 1 comment

By Tony Collins

On  Eddie Mair’s “PM” programme on R4, I suggested that HMRC’s real-time information project was not the failure many had expected it to be.

“Even some hawk-eyed critics of government IT projects like journalist Tony Collins think that HMRC may have something of a success on its hands,” said BBC reporter Chris Vallance who produced the RTI item.

I was quoted as saying that many had expected RTI to become another government IT disaster. “But given that there are millions of PAYE employees who are on the system at the moment, if there were any major difficulties we’d expect to have seen them by now.”

Now an HMRC expert has questioned whether my comments were justified. He says parts of RTI are in chaos. He doesn’t want to be named. He writes:

“The RTI system was intended to report on a weekly or monthly basis the same information as had previously been reported by employers on an annual basis. Although details of pay and tax would be forwarded to HMRC far more frequently the same core logic applied. Details of the statutory deductions by the employer would have to be reconciled with payments made, and details of the income and tax paid recorded against the employee’s PAYE record.

“What appears to have happened is that HMRC has designed a system that takes details of employees’ earned or pension income, and statutory PAYE deductions, and then makes various illogical assumptions.

“For instance it would appear that where an employee receives no earnings in a particular pay period, the RTI system assumes that no information is “transmitted” for this employee, indicating that the employee has “left the employment”.

“Similarly where an employer undertakes a re-order of the pay identities (codes on the payroll system called Works Numbers that identify employees), the fact that payroll information is transmitted to HMRC with a Works Number different to that used previously triggers an assumption that the employee has two employments, with the same employer.

“This has the consequence of allowing the NPS (New PAYE Computer System – costing in excess of £400 million) to assume that the employee’s estimated income for the tax year has doubled. The NPS then looks to see if the employee has any part-time or other employment, and in many cases it changes the PAYE code number of these part-time employments from Basic Rate, which deducts tax at 20%, to Code D0, which deducts tax at 40%. All because of an incorrect and invalid assumption.

“Similarly, this failure to understand how PAYE and payroll interact has lead to the situation where an employee who leaves an employment that has attracted a PAYE coding deduction for Car Benefit in Kind and starts another Employment, has the PAYE Coding Deduction removed. The fact that the new employment may well involve a company car is completely ignored, with the result that the employee is more than likely to have a large underpayment of income tax at the year end, despite being on PAYE.

“This failure to understand the basic operation and logic of PAYE would appear to be due to that fact that HMRC has been influenced by those who have an understanding of data flows and cash transfers. The rush to modernise PAYE and move away from “a 1940’s system” has completely omitted the fact that basic operations for employments, tax and NI deductions and the accountability of these remains exactly the same, even if the calculations are undertaken electronically rather than with a quill pen and large ledger book.

“The old PAYE system had as part of its reporting system two components: the forms P14 detailing each individual’s pay, tax etc. and a summary of all employees information, the form P35. The P14 passed information to the NPS system and the P35 information was passed to the accounts computer systems. This allowed HMRC to determine the income of the employee and calculate if sufficient income tax etc had been paid. It also allowed HMRC to match the figure of tax / NIC due and payable on the P35 with the amount actually received from the employer. RTI has failed to comply with this basic logic and chaos is ensuing, to the extent that the National Audit Office recently commented

 ‘The financial and accounting systems supporting RTI are not yet fully accredited. Financial accreditation is a formal requirement of HMRC’s Change Programme and provides assurance that any new systems are acceptable for accounting and financial control purposes. The RTI systems went live on the basis that action would be taken to resolve identified financial design issues by 31 October 2013.

‘These issues do not affect an employer’s ability to submit data to HMRC but do weaken HMRC’s ability to produce and report financial information on PAYE. HMRC is currently undertaking work to understand the impact of these issues and how best to address them.’

“Why the RTI system was not designed in the same logical manner is of great concern.

“The system failures that are occurring are not due to computer components or programs not being fit for purpose. Indeed the processing of the PAYE data streamed to HMRC as a result of the RTI system could reasonably be compared to any other large commercial organisation, albeit that the NAO has concerns over the fall-back planning HMRC has in place should there be any hardware failures and commented

‘The resilience needed to maintain the RTI service if there is a major technical failure is not in place. Online and time-sensitive system implementations are usually developed with formal technical resilience and disaster recovery capability.

‘HMRC chose not to pay for full resilience because of the cost implications and because PAYE could be operated in an emergency without RTI. However, although RTI has the potential to be used by other government departments, the lack of full resilience may inhibit its use in areas of activity where a temporary disruption to service cannot be tolerated.

‘Data submissions can be held temporarily in a queue but this would not provide continuity of service in the event of a catastrophic failure. The RTI service failing at a critical processing time could increase the volume of customer communications and lead to more effort for employers.’

“The RTI system is a very clear example of basic failures to properly prepare a Business Analysis Requirement for a system which in essence does no more that increase the number of times payroll information is passed to HMRC. Claims for the reinvention of PAYE for the 21st Century are as invalid as the claim that the ability to write has been done away with due to email and electronic communication. There has been a flawed reliance on the thoughts and views of those who have little or no experience in PAYE or payroll.”

On the PM programme, Ruth Owen, Director General of PersonalTax at HMRC, accepted that all was not perfect. She said

“We have had over 1.4 million PAYE schemes come into Real-Time Information [each PAYE scheme may have many employees on it] and that exceeds our expectations at this point in the year. But there’s still more to do. We have got to get everybody on and there are still people who need our help to get on.”

She added: “We have had a small number of difficult issues… We have had issues where people have got the wrong tax codes.”

Owen said the links between RTI and Universal Credit were “going well” but conceded that there have been only a tiny number of UC claimants so far.

“We have had around 100 claimants who we have helped DWP identify income stream data for. So it’s going to plan at the moment.”

Chris Vallance concluded the item by saying that some of the largest employers have yet to be added to RTI. “It’s only when it works at scale that we will really know how good real-time information really is,” he said.

Update: Chartered accountant Baker Tilly says on its website  that thousands of people have been issued wrong tax codes as a result of RTI-related problems. 

Audio of PM programme item on RTI – 4 July 2013 (approx 5 mins)

1 Comment

Posted in change management, Disaster recovery, Government IT, HMRC, IT projects, procurement, Real-Time Information, Universal Credit

Is Major Projects annual report truly ground-breaking?

Posted on 29/05/2013 | 3 comments

By Tony Collins

Francis Maude, the Cabinet Office minister, describes as “nothing short of groundbreaking” a report of the Major Projects Authority which gives the RAG (Rred/Amber/Green) status of more than 100 major projects.

That the report came out late on Friday afternoon as most journalists were preparing to go home, some of them for the whole bank holiday weekend, suggests that the document was a negotiated compromise: it would be published but in such a way as to get minimal publicity.

Indeed the report is a series of compromises. It has the RAG status of projects but not the original text that puts the status into context.

Another compromise: senior civil servants in departments have persuaded Maude to publish the RAG decisions when they are at least six months old.

This enables departmental officials to argue their case in the “narrative” section of the MPA annual report that a red or amber/red decision is out-of-date and that there has been significant improvement since. This is exactly the DWP’s justification for the amber/red status on Universal Credit.

The DWP says in the MPA report: “This rating [amber/red] dates back to September 2012, more than seven months ago. Since then, significant progress has been made in the delivery of Universal Credit. The Pathfinder was successfully launched and we are on course both to expand the Pathfinder in July 2013 and start the progressive national roll-out of Universal Credit in October.”

That the Pathfinder was launched successfully might have nothing to do with Universal Credit’s amber/red status which could be because of uncertainties over how the IT will perform at scale, given the complexities and interdependencies.  The MPA report says nothing about the uncertainties and risks of Universal Credit.

More compromises in the MPA annual report: the Cabinet Office appears to have allowed departments to hide their cost increases on projects such as HMRC’s Real-time Information [RTI] in the vague phrase “Total budgeted whole life costs (including non-government costs).”

The Cabinet Office has also allowed departments to write their own story to accompany the RAG status. So when HMRC writes its story on RTI it says that “costs have increased” but not by how much or why. We know from evidence that HMRC gave to the Public Accounts Committee that RTI costs have risen by “tens of millions of pounds”. There is nothing to indicate this in the MPA annual report.

Another compromise in the MPA annual report: there are no figures to compare the original forecast costs of a project with the projected costs now. There are only the 2012/13 figures compared with whole-life projected costs (including non-government projected spend).

And the MPA report is not comprehensive. It came out on the same day the BBC announced that it was scrapping its Digital Media Initiative which cost the public £98m. The MPA report does not mention the BBC.

The report is more helpful on the G-Cloud initiative, showing how cheap it is – about £500,000. But there is little information on the NHS National Programme for IT [NPfIT] or the Summary Care Record scheme. 

Yet the MPA annual report is ground-breaking. Since Peter Gershon, the then head of the Office of Government Commerce, introduced Gateway reviews of risky IT projects about 12 years ago with RAG decisions, they have remained unpublished, with few exceptions. The Cabinet Office is now publishing the RAG status of major departmental projects for the first time. Maude says

“A tradition of Whitehall secrecy is being overturned. And while previous Governments buried problems under the carpet, we are striving to be more open. By their very nature these works are high risk and innovative.

“They often break new ground and dwarf anything the private sector does in both scale and complexity. They will not always run to plan. Public scrutiny, however uncomfortable, will bring about improvement. Ending the lamentable record of failure to deliver these projects is our priority.”

Comment

The MPA annual report is a breath of fresh air.

Nearly every sentence, nearly every figure, represents compromise. The report reveals that the Universal Credit project was last year given an amber/red status – but it doesn’t say why. Yet the report has the DWP’s defence of the amber/red decision. So the MPA report has the departmental defences of the RAG decisions, without the prosecution evidence. That’s a civil service parody of openness and accountability: Sir Humphrey is allowed to defend himself in public without the case against him being heard.

But it’s still useful to know that Universal Credit is at amber/red.  It implies well into the project’s life that the uncertainties and risks are great. A major project at amber/red at this stage, a few months before go-live, is unlikely to turn green in the short term, if ever.

Congratulations

The Cabinet Office deserves congratulations for winning the fight for publication of the RAG status of each major project. Lord Browne, the government’s lead non-executive director and a member of the Cabinet Office’s Efficiency and Reform group, has said  that billions of pounds of taxpayers’ money is being frittered away because of “worryingly poor” management of government projects.

“Nobody ever stops or intervenes in a poor project soon enough. The temptation is always to ignore or underreport warning signs,” he says.

The management of some large projects – usually not the smaller ones – is so questionable that departments ignore advice to have one senior responsible owner per major project, says the MPA.

The MPA annual report will not stop the disasters. Its information is so limited that it will not even enable the public – armchair auditors – to hold departments to account. Senior civil servants have seen to that.

But the report’s publication is an important development: and it provides evidence of the struggle within Whitehall against openness. Francis Maude and Sir Bob Kerslake, head of the civil service, have had to fight to persuade departmental officials to allow the RAG status of projects to be published. The Guardian’s political editor Patrick Wintour says of the MPA annual report

“Publication led to fierce infighting in Whitehall as government departments disputed the listings and fought to prevent publication.”

Large-scale change

If Maude and Kerslake struggled to get this limited distance, and there is still so much left to reform, will large-scale change ever happen?

Maude and his officials have as comprehensive mandate for change from David Cameron as they could hope for. Yet still the Cabinet Office still seems to have little influence on departments. When it comes to the big decisions, Sir Humphrey and his senior officials hold onto real power. That’s largely because the departments are responsible to Parliament for their financial decisions – not the Cabinet Office.

Maude and his team have won an important battle in publishing the MPA annual report. But the war to bring about major change is still in its very early stages; and there’s a general election in 2015 that could halt Maude’s reform plans altogether.

The Major Projects Authority Annual Report.

3 Comments

Posted in capacity building, change, change management, DWP, excessive secrecy, Gateway reviews, Government IT, HMRC, IT-related failures, Major Projects Authority, private sector lessons for the public sector, procurement, project management, public sector, public services, Universal Credit

Tagged , , , , , , ,

Report on status of big Gov’t projects to be published at last

Posted on 09/05/2013 | Leave a comment

By Tony Collins

The Telegraph reports that the Cabinet Office’s Major Projects Authority is about to publish its first annual report – and it will reveal the status of schemes that include Universal Credit, says the article.

The Cabinet Office said in 2011 that the MPA’s annual report would be published by the end of December that year. In 2012 Sir Bob Kerslake, head of the civil service, told the Public Accounts Committee’s Conservative MP Richard Bacon that the MPA’s annual report would be published in June 2012.

But senior departmental  civil servants have objected repeatedly to the red-amber-green “traffic light” status of projects being published, which contradicts the wishes of Kerslake and Francis Maude, the Cabinet Office minister.

One reason for the delay in publishing the MPA annual report is that Maude and Kerslake have been weighing objections to the reporting of the red-amber-green status against the need for departmental cooperation to implement civil service reforms.

From the Telegraph article it appears that Maude has persuaded (or forced) departmental heads to accept the publication of the traffic light status on big and risky projects. The Major Projects Authority reviews IT and other projects costing more than £50m.

The Telegraph says the MPA annual report will reveal Government troubleshooters’ concerns about multi-billion pound projects like the Universal Credit.

The article says the MPA annual report will show that about a third of projects it has reviewed are late or over budget. Says the Telegraph: “Government sources said that the MPA will show that management of big projects has improved significantly since 2010, when two-thirds of programmes were in trouble.

“But the report, expected later this month, will confirm that Whitehall ‘still has a long way to go’ to improve its handling of major projects, a source said.”

The article adds that publication of the annual report “follows a lengthy internal struggle between ministers and civil servants about the disclosure of problems with big Government schemes”.

Some ministers, says the article, are privately concerned that civil servants are bad at managing big, expensive projects but repeatedly cover up their failings and refuse to tell ministers about problems.  Disclosing “candid” assessments about big projects will improve management, ministers believe.

The Telegraph says that a “new publication scheme that will start later this month” will publicly rate each project at red, amber, or green. 

Each central department will be told to publish details of its major projects every six months, including the red-amber-green ratings and the data behind them, says the article.

The Telegraph quotes as a coalition source as saying: “Releasing a candid report about Whitehall’s major projects is a big and brave step for Government…”

Management of big projects better but still generally poor? 

Lord Browne, a lead non-executive in the Cabinet Office and the man appointed to recruit business leaders to Whitehall departmental boards, has criticised the management of major projects as “worryingly poor”.

He said that insufficient attention was given to identifying risks in the planning stage, and that there had been a “consistent failure” to appoint leaders with the right skills and experience.

Browne said the creation of the Major Projects Authority (MPA) in the Cabinet Office in 2011 had improved their delivery, but “nobody ever intervenes in a poor project soon enough” and that warning signs were often ignored or under-reported.

He called for an “ongoing and rigorous review process with real teeth” which would monitor measures of progress and call “time out” on failing projects, allowing them either to be fixed or stopped.

Browne said the government could learn from the private sector, where projects are scrutinised to a “very high standard” before work begins. In line with this, he suggested that the MPA should have a strengthened “stage-gate approval process” to ensure that projects achieve objectives.

He said that projects should not be allowed to begin until a team with the right skills – including a leader who had previously delivered a large, complex project – had been identified.

He also suggested that the MPA nominate leaders and veto unsuitable candidates. He said that expensive projects should “never be seen as a personal development opportunity”.

He advocated using pay, benefits and bonuses to give team members incentives to work on the project “until appropriate milestones are reached”. This, Browne said, had been key to the success of major projects delivered by the private sector.

Departments still sceptical of Maude’s reforms?

Meanwhile the FT has reported that Maude’s attempts to inject commercial acumen into Whitehall by putting leading business figures on departmental boards is failing to live up to its billing, with some departments rarely consulting their external non-executive directors.

The FT says that the Treasury department’s supervisory board met only once in the year to April 2012, according to a report by Insight Public Affairs, a consultancy. The energy department’s board met twice, compared to 15 meetings in the transport department, reflecting the inconsistent involvement of non-executive directors.

John Lehal, managing director of Insight Public Affairs, said the ad hoc manner in which departments held board meetings reflected the need for greater accountability – as underlined by the Treasury’s failure to engage its non-executives.

Comment

At long last the Major Projects Authority, under the straight-talking Australian David  Pitchford, will publish its annual report; and it may contain more detail on major projects than has been published by any government.

As departments fear public embarrassment more than any other sanction, publication of the traffic light status of projects – with the underlying detail – should genuinely discourage the starting of ill-considered projects.

Although the MPA annual report is much delayed Maude has succeeded in getting agreement for it to be published. Provided it contains enough detail to allow the status of projects to be judged by armchair auditors, it should begin to make a real difference.

Telegraph article

Leave a comment

Posted in change management, Gateway reviews, Government IT, IT projects, IT-related failures, Major Projects Authority, openness and transparency, project management, public sector, public services, Real-Time Information, Universal Credit

Tagged , , ,