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.

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

Has 2 decades of outsourcing cut costs at HMRC?

Posted on 12/08/2013 | 2 comments

By Tony Collins

If HMRC’s experience is anything to go by, outsourcing can, in the long-term, at least triple an organisation’s IT costs.

When Inland Revenue contracted out its 2,000-strong IT department to EDS, now HP, in 1994 it was the first major outsourcing deal in central government.

Costing a projected £1.03bn over 10 years the outsourcing was a success, according to the National Audit Office in a report in March 2000. The deal  enabled Inland Revenue to bring about changes in tax policy to a tight timetable, said the NAO’s Inland Revenue/EDS Strategic Partnership – Award of New Work.

But costs soared for vague reasons. Something called “post-contract verification” added £203m to the £1.03bn projected cost over 10 years. A further increase of £533m was because of “workload increases including new work”. Another increase of £248m was put down to inflation.

By now the deal with HP had risen from £1.03bn to about £2bn.

When the contract expired in 2004, HM Revenue and Customs and HP successfully transferred the IT staff to Capgemini. The new 10-year contract from 2004 to 2014 (which was later extended 2017) had a winning bid price of £2.83bn over 10 years.

So by 2004 the costs of outsourcing had risen from £1.03bn to £2.83bn.

The new contract in 2004 was called ASPIRE – Acquiring Strategic Partners for Inland Revenue. HMRC then added £900m to the ASPIRE contract for Fujitsu’s running of Customs & Excise systems. By now there were about 3,800 staff working on the contract.

The NAO said in its report in July 2006  – ASPIRE, the re-competition of outsourced IT services – that Gateway reviews had identified the need for a range of improvements in the management of the contract and projects.

Now costing £7.7bn over 10 years

The latest outsourcing costs have been obtained by Computing. It found that annual fees paid to Capgemini under ASPIRE were:

  • 2008/09:  £777.1m
  • 2009/10:  £728.9m
  • 2010/11:  £757.8m
  • 2011/12:  £735.5m
  • 2012/13:  £773.5m

So IT outsourcing costs have soared again. The original 10-year costs of outsourcing in 1994 were put at £1.03bn. Then the figure became about £2bn, then £2.83bn, then £3.7bn when Fujitsu’s contract was added to ASPIRE. Now annual IT outsourcing costs are running at about £770m a year – £7.7bn over 10 years.

So the original IT running costs of Inland Revenue and Customs & Excise have, under outsourcing contracts, more than tripled in about two decades.

Comment:

What happened to the prevailing notion that IT costs fall over the long-term, and that outsourcing brings down costs even further?

Shouldn’t HMRC’s IT costs be falling anyway because of reduced reliance on costly Fujitsu VME mainframes, reductions in data centres, modernisation of PAYE, and the clearance of time-consuming unreconciled items on more than 10 million tax files?

HMRC knows how much profit Capgemini makes under “open book” accounting. It’s a margin of about 10-15% says the NAO. Lower margins are for value-added service lines and higher margins for riskier projects. If the overall target profit margin of 12.3% is exceeded, HMRC can obtain an equal share of the extra profits.

There were 10 failures costing £3.25m in the first 15 months. Capgemini refunded £2.67m in service credits in the first year of the contract.

It’s also worth mentioning that Capgemini doesn’t get all the ASPIRE fees. It is the lead supplier in which there are around 300 subcontractors – including Fujitsu and BT.  Capgemini pays 65% of its fees to its subcontractors.

The outsourcing has helped to enable HMRC to bring in self-assessment online and other changes in tax policy. But HMRC’s quality of service generally (and not exclusively IT) is mixed, to put it politely.

The adjudicator for HMRC who intervenes in particularly difficult complaints identifies as particular problems the giving out of inaccurate information and recording information incorrectly.

She says in her 2013 annual report:

“I am disappointed at the number of complaints HMRC customers feel they need to refer to me in order to get resolution. My role should be to consider the difficult exceptions, not handle routine matters that are well within the capability of departmental staff to resolve successfully. At a time of austerity it is also important to note that the cost of dealing with customer dissatisfaction increases exponentially with every additional level of handling.”

RTI

There are complaints among payroll companies and specialists that real-time information  is not working as well as HMRC has claimed. There seems to be growing irritation with, for example, HMRC’s saying that companies owe much more than they do actually owe. And HMRC has been sending out thousands of tax codes that are wrong or change frequently – or both.

HMRC says it has made improvements but the helpline is appalling. It’s not unusual for callers to wait 30 minutes or more for an answer – or to hang on through multifarious automated messages only to be cut off.

That said there are signs HMRC is, in general, improving slowly. Chief executive of HMRC since 2012 Lin Homer is more down-to-earth and slightly more willing to own up to HMRC’s mistakes than her predecessors, and the fact that RTI and the modernisation of PAYE has got as far as it has is creditable.

But is HMRC a shining example of outsourcing at its best, of outsourcing that cuts costs in the long term? No. A decade of HP and a decade of Capgemini has shown that with outsourcing HMRC can cope, just about, with major changes in tax policy to demanding timetables. But the costs of the outsourcing contracts in the two decades since 1994 have more than tripled.

What about G-Cloud? We look forward to a change in direction from the incoming head of IT Mark Dearnley (if he has much say).

**

A Deloitte survey “The trend of bringing IT back in-house” dated February 2013, said that 48% of respondents in its Global Outsourcing and Insourcing survey 2012 reported that they had terminated an outsourcing agreement early, or for cause, or convenience. Those that took IT services back in-house mentioned cost reduction as a factor. Deloitte said factors included:

– the need for additional internal quality control due to poor quality from the outsourcer

– an increase in the price of service delivery through scope creep and excessive change orders.

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Posted in Accenture, BT, Campaign4Change, change management, CIO, Fujitsu, G-Cloud, Gateway reviews, Government IT, HMRC, IT projects, IT-related failures, managing outsourced services, operational issues, outsourcing, oversight, procurement, project management, public sector, public services, public-private partnerships, supplier relationships

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Universal Credit IT – is the DWP still deceiving itself and the public?

Posted on 07/08/2013 | 6 comments

By Tony Collins

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.

So has the department’s culture changed little over 35 years?

One respondent to the latest UC staff survey wrote: “After 29 years of service this has been the most soul destroying work I have done. There is too much dishonesty and no one ever admits to making a mistake.”

Another comment: “I have never worked somewhere where decision-making was so apparently poor at senior levels…and communications from that level was totally nonexistent.”

Another: “There is a divisive culture of secrecy around current programme developments and very little in the way of meaningful messages for staff or stakeholders explaining what will happen and when.”

Another: “This is the third review in 16 months, no rollout plans, no confidence in going forward and stakeholders losing confidence in our ability to deliver.”

One respondent to the survey complained that stress was damaging people’s health.

The Government Digital Service is helping with UC but one employee in the survey says this has not been well received, according to Computer Weekly. “The involvement of GDS and the apparent secrecy around what they’re doing is bad for morale”.

Some of the interim results of the staff survey were in an email to UC programme staff on 23 July from the DWP’s business change director, a civil servant. The email said there was “much room for improvement”.

 A DWP spokesman implied that the concerns were not ones that reflected a decades-old culture within the department . He said: “A new management team with clear strategic leadership is in place led by Howard Shiplee, one of the UK’s leading experts in delivering major projects including the Olympic Park. As a part of this, we are working with staff to understand the issues they were facing, just as any responsible employer would.”

DWP’s history of deceiving itself and the public

In 1982, the DWP (then the DHSS) abandoned “Camelot” – its attempt at the computerisation of welfare benefits. Around £6m was written off. Camelot stood for computerisation and mechanisation of local office tasks. While it was failing senior managers were assuring their bosses that all was going well.

Camelot’s having  been abandoned because it was too complex and ambitious, the government launched, in 1984, a much more ambitious programme to unify benefits systems. It was called Operational Strategy. It was several times the size of Camelot; and it too proved a financial disaster.

When an MP Eric Deakins asked a senior Whitehall official whether the projected costs of Operational Strategy – then put at £713m – were likely to rise in real terms, the official replied: “No, they are unlikely to rise in real terms the equipment costs if anything are going to come down.”

A £1.9bn cost increase

Ten years later, on 5 May 1994, the then benefits minister Nicholas Scott confirmed to the House of Commons that the costs of Operational Strategy had risen by £1.9bn – from £713m to £2.6bn, which included £315m for consultancy.

Yet at the time, in the 1980s, ministers were portraying Operational Strategy as a success, as Iain Duncan Smith today writes and speaks about the Universal Credit project.

In the 1980s the then welfare benefits minister John Moore said that Operational Strategy “has arrived ahead of schedule, within budget” – exactly what Duncan Smith has been saying about Universal Credit.

But Operational Strategy proved to be not just a financial failure. [At one point the project occupied more than 360 consultants who were staying in the finest hotels on a more or less permanent basis, some of them claiming the sort of expenses parodied in Evelyn Waugh’s “Scoop”. ]

The technical hopes for the system went unrealised. Moore had said that at “the touch of a button” benefits staff would be able to “call up the information they require”.  A claimant would be treated as a “whole person” – staff would be able to view a claimant’s welfare entitlements on one system without, say, logging off income support to go into the separate pension system.

Even today, 30 years on, welfare benefit systems remain largely separate – which is one reason for Universal Credit which is supposed to merge six systems into one.

UC trials too small to prove anything?

Duncan Smith can claim UC is a success because existing welfare claimants are being kept off the new technology. Even when the UC systems are due to start going live nationally in October  2013 the numbers of claimants will be so small their claims could be calculated by hand or using a spreadsheet.

If the UC system remains inadequately tested until after the general election in 2015 – which looks likely –  and then proves unfit for purpose, will ministers and senior officials have any responsibility or accountability for problems that first arose in a previous administration?

Comment:

It seems likely that Universal Credit’s £300m IT systems will be redesigned. There are some signs the IT is already in the process of being “reset”.  But secrecy on the project ensures that the public, Parliament and particularly the opposition will not have the full facts on which to judge the project’s success or otherwise.

If IT work has been aborted what is the cost and have major suppliers been paid regardless?

Universal Credit could end up like Camelot and the Operational Strategy  which failed to meet expectations – unless, perhaps, ministers and officials break with tradition and change the DWP’s age-old culture.

Dishonesty, secrecy, poor communications, inadequate leadership and low morale have characterised the welfare benefits administration for decades. Will a new project leader make much difference? Howard Shiplee who becomes the fourth person to run UC in six months may be world’s most inspirational and talented project leader.

But in trying to change the DWP’s secretive culture he stands without climbing gear at the foot a mountain that’s as wide and high as the eye can see.

David Cameron and the Cabinet Office minister Francis Maude could force a change of culture at the DWP – at least make it publish its consultancy reports on the progress or otherwise of UC – but they would need the support of Duncan Smith who seems as stuck in the old departmental culture as Moore was in the 1980s.

Replace Duncan Smith?

It would probably help if Cameron replaced Duncan Smith with an outsider who could see the organisation’s faults. But Duncan Smith will probably not go until the general election.  Maybe then UC could start to make genuine progress, though the DWP’s culture may always put its management of big projects at a disadvantage.

**

An authoritative account of how and why Operational Strategy did not meet expectations is given by Helen Margetts in Information Technology in Government – Britain and America.

A further account of Operational Strategy is here.

“Crash”, which was written by David Bicknell and me, has a chapter on a series of IT failures at the DWP.

Universal Credit IT reset?

Continuing problems on Universal Credit IT?

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Posted in Campaign4Change

Will HMRC’s new £180,000-a-year IT chief want to stay?

Posted on 01/08/2013 | 6 comments

By Tony Collins

HMRC has appointedMark Dearnley as its new Chief Digital and Information Officer Mark Dearnley who is CIO at Vodafone.

He’ll join HMRC in October – perhaps at a time when the UK’s biggest companies will have gone live with RTI [real-time information] and at a time when there may be increased criticism over how well the new system works – or doesn’t. [Criticisms of aspects of RTI are becoming more trenchant despite the system’s good start.]

Dearnley will take control of a £500m-a-year IT operation that seeks to serve 45 million individuals, 4.8 million businesses and 65,000 HMRC employees. He will be responsible for implementing HMRC’s £200m digitisation programme and accelerating the planned delivery of online services for all taxpayers. He will also lead HMRC’s physical, personnel and information security.

Dearnley has been CIO at Vodafone UK since 2010 with responsibility for IT supporting 19 million customers. He led a programme to overhaul Vodafone’s business-critical information systems and was named Oracle Global Business Unit CIO of the Year in 2012 for this achievement. He restructured Vodafone’s IT operating model and introduced Cloud-based technologies into the mobile operator.

David Gauke, Exchequer Secretary to the Treasury, said:

“It is an indication of the scale and seriousness of the Government’s digital ambition that one of the UK’s most experienced CIOs is leaving the private sector to take on this major role.

“Mark Dearnley’s appointment to HMRC is evidence that Government has the cutting-edge challenges that can attract the very best leaders in IT to public service.”

HMRC Chief Executive, Lin Homer, said:

“Mark is an exceptionally experienced CIO, with strong leadership and change management skills as well as an accomplished technical background across a spectrum of IT disciplines. HMRC has already embarked on an ambitious programme of digitisation to provide taxpayers with modern online services and Mark is the right person to deliver that for the UK.”

Dearnley said:

“I have spent my entire career in the private sector, mostly in customer-facing businesses. But no private business in the UK can match the customer base, scale or complexity of HMRC, which makes this role irresistible. I am thrilled to have been appointed and can’t wait to get started.”

HMRC says that Dearnley was recruited through a fair and open competition under the Government’s business appointment procedures for senior civil servants. The recruitment process was overseen by the Civil Service Commissioner, who led a panel that included two Permanent Secretaries and a Non-Executive Director.  David Camerson approved the appointment.

The annual salary for Dearnley’s director general role is £180,000.

Before Vodafone Dearnley spent six years at Cable and Wireless as CIO and in other senior IT roles. He also spent three years at Boots the Chemists, first as COO for the start-up of Boots.com and latterly as programme director.

He has a degree in electrical and electronic engineering from Brunel University and is a Fellow of the Institute of Engineering and Technology and British Computer Society.

Comment:

Few good senior IT people in central government departments seem to last long. Those from the private sector who have taken high-profile IT jobs in central government but not stayed include Phil Pavitt, Steve Lamey, Joe Harley and James Gardner.

Could it be that the public sector has a muddy, bureaucratic culture of careless, resistant-to-interference spending that is so incompatible with private sector values that a long stay becomes inconceivable?

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Posted in Campaign4Change

Trust spends £16.6m on consultants for Cerner EPR

Posted on 01/08/2013 | 2 comments

By Tony Collins

Reading-based Royal Berkshire NHS Foundation Trust says in an FOI response that its spending on “computer consultants since the inception of the EPR system is £16.6m”.

The Trust’s total spend on the Cerner Millennium system was said to have been £30m by October 2012.

NHS IT suppliers have told me that the typical cost of a Trust-wide EPR [electronic patient record] system, including support for five years, is about £6m-£8m, which suggests that the Royal Berkshire has spent £22m more than necessary on new patient record IT.

Jonathan Isaby, Taxpayers’ Alliance political director, said: “This is an astonishing amount of taxpayers’ money to have squandered on a system which is evidently failing to deliver results.

“Every pound lost to this project is a pound less available for frontline medical care. Those who were responsible for the failure must be held to account for their actions as this kind of waste cannot go unchecked.”

 The £16.6m consultancy figure was uncovered this week through a Freedom of Information request made by The Reading Chronicle. It had asked for the spend on consultants working on the Cerner Millennium EPR [which went live later than expected in June 2012].

The Trust replied: “Further to your request for information the costs spent on computer consultants since the inception of the EPR system is £16.6m.”

The Chronicle says that the system is “meant to retrieve patient details in seconds, linking them to the availability of surgeons, beds or therapies, but has forced staff to spend up to 15 minutes navigating through multiple screens to book one routine appointment, leading to backlogs on wards and outpatient clinics”.

Royal Berkshire’s chief executive Edward Donald had said the Cerner Millennium go live was successful.  A trust board paper said:

 “The Chief Executive emphasised that, despite these challenges, the ‘go-live’ at the Trust had been more successful than in other Cerner Millennium sites.”

A similar, stronger message had appeared was in a separate board paper which was released under FOI.  Royal Berkshire’s EPR [electronic patient record] Executive Governance Committee minutes said:

“… the Committee noted that the Trust’s launch had been considered to be the best implementation of Cerner Millennium yet and that despite staff misgivings, the project was progressing well. This positive message should also be disseminated…”

Comment

Royal Berkshire went outside the NPfIT. But its costs are even higher than the breathtakingly high costs to the taxpayer of NPfIT Cerner and Lorenzo implementations.

As senior officials at the Department of Health have been so careless with public funds over NHS IT – and have spent millions on the same sets of consultants – they are in no position to admonish Royal Berkshire.

So who can criticise Royal Berkshire and should its chief executive be held accountable?

When it’s official policy to spend tens of millions on EPRs that may or may not make things better for hospitals and patients – and could make things much worse – how can accountability play any part in the purchase of the systems and consultants?

The enormously costly Cerner and Lorenzo EPR implementations go on – in an NHS IT world that is largely without credible supervision, control, accountability or regulation.

Cash squandered on IT help

Trust loses £18m on IT system

The best implementation of Cerner Millennium yet?

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Posted in BT Health, Cerner, consultants, CSC, culture, e-health, Freedom of Information, health records, IT-related failures, NHS, npfit, oversight, Politics, procurement, public sector, public services, software quality, supplier relationships

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High Court sheriffs confront Fujitsu Services

Posted on 29/07/2013 | 4 comments

By Tony Collins

BBC One’s “The Sheriffs Are Coming” shows what happens when people and companies take a civil action over money they say are owed, win their case, and don’t get payment.

Last week’s broadcast showed a car dealer, a builder, a jeweller’s shop – and Fujitsu Services – facing high court enforcement officers, who are also known as sheriffs, over unpaid debts of thousands of pounds.

After sheriffs called on a car dealer and asked him to pay a debt of about £6,000 the police were called along with tow-away trucks to carry off cars to be sold at auction to pay the debt.

After three  hours of discussions the dealer paid up.  In the same programme the sheriffs seized items worth £28,000 from a jewellery shop in Kingston. A couple had won a case over a missold engagement ring.

The appointment of the sheriffs is the final stage of a civil legal action where the debt remains unpaid.  Armed with enforcement paperwork from the High Court, the sheriffs have a legal right to seize goods there and then. Whether it’s business premises or private property they have the power to force entry.

Fujitsu staff “shaken”

Which is where Fujistu Services comes in. A unnamed company had been to court and been awarded  £149, 481.93 against Fujitsu. As Fujitsu hadn’t paid, the company asked the High Court to collect payment – and enforcement officer Lawrence Grix went with a colleague Kevin McNally to Fujitsu’s Stevenage’s offices to collect the money.

That the sheriffs were dealing with one of world’s biggest IT services companies in Europe, Middle East and Africa, which employs 14,500 people in more than 20 countries, did not faze them.

The sheriffs in a black Ford Transit van pull up at the manned security barrier at Fujitsu Stevenage where the supplier has had a presence for 43 years.

The unexpected visit  leaves Fujitsu staff “shaken” according to the broadcast.

At first Fujitsu’s security staff refuse admission to the sheriffs’ van.

Sheriff: “You can’t actually stop me.”

Fujitsu: “I can stop you.”

Sheriff: “You can’t.”

Police?

Some time later, and still without access to Fujitsu Services Stevenage, Grix warns Fujitsu that he can call the police. He tells a Fujitsu security guard:

“To be honest I don’t think we have been treated particularly professionally or courteously so far. We have done the utmost to be professional and respectful to your situation here.”

“Ok,” says a guard at the security barrier. It appears that the guard has just come on duty and is unaware that the sheriffs have been trying to gain access for some time.

The sheriff continues: “We not looking to come storming round the place and see your latest technology. That’s not what we are here for. We are here to execute a high court writ and we are asking to be treated in a courteous manner.

“We have the right to enter. If you are not going to allow me to enter I am just going to park my vehicle here (at the entrance barrier) and go in on foot and if anybody tries to stop me I will call the police because it is an arrestable offence to obstruct an enforcement officer in the execution of a writ.

“We don’t want to go down that road. We just want to be treated with some courtesy.”

Eventually the sheriffs gain access – but still don’t get payment and so they seize on paper sufficient Fujitsu goods to cover the debt.  The sheriff listed property he could remove later if the debt remained unpaid. The programme’s narrator David Reed told viewers that the sheriffs now owned just about everything at Fujitsu’s head office.

In the end Fujitsu paid the debt in full, without having any of its goods actually seized and it gave a statement to the BBC saying the delay in payment was a genuine oversight on its part and that it took immediate steps which rectified the situation.

Comment

At one level it’s a trivial incident, perhaps an amusing one.

Yet it left some Fujitsu security staff and senior managers having to deal with high court enforcement officers who felt the company had been discourteous, who had to warn that they could force entry, who said at one point that they could call police if refused entry, and who ended up listing a large quantity of Fujitsu’s goods for seizure if the debt remained unpaid.  Much of the confrontation was filmed by the BBC.

It’s surprising that a company the size of Fujitsu – a company with the legal wherewithal to sue the Department of Health for £700m and carry on negotiations and discussions over the NPfIT-related money for five years – had such an oversight.

How was it that Fujitsu’s internal controls apparently did not prevent a court-endorsed business debt of £149,000 going unpaid until high court sheriffs were called in? Not a good advert for Fujitsu Services.

Sheriffs are coming – BBC’s Fujitsu debt episode in full

 BBC:  “Sometimes writs are issued against some of the largest companies in the world. Today Lawrence and Kev are enforcing a high court writ against one of the world’s largest IT services companies – Fujitsu.

Sheriff: : “Absolutely no doubt whatsoever they [Fujitsu] have the money to pay this. At the end of the day it doesn’t matter what excuses they come up with and how big their company is. They have got a debt and we are here to collect it.”

BBC: “Fujitsu has over £30bn in revenues. Time for Lawrence to get the ball rolling.”

A black Ford Transit van with number plate smudged out pulls up to the manned entrance security barrier at Fujitsu Stevenage.

Sheriff, through an open van window: “We are here to execute a writ against Fuijitsu Services.”

Security guard says “no” – that they cannot come in until they have had the ok  from above.

Sheriff: “You can’t stop us coming in. I know what you are saying and I fully respect your position and I am quite happy for you to try and contact somebody who can deal with this but when it comes to a point of law you cannot actually stop us coming in.”

BBC: If necessary sheriffs can force entry to commercial premises but for the time being they decide to park around the corner and wait.

A sign at Fujitsu’s entrance says:

“Visitors – please report to security.

“Restrictions: Plerase declare all electrical equipment

“Please park as instructed

“All vehicles and hand baggage are liable to be searched on departure.”

BBC: “After 15 minutes at the side of the road Lawrence and Kev are finally approached by someone in authority.” A woman in dark clothing (and in the background a man in white shirt and dark trousers) talks to the sheriffs through an open passenger window.

Fujitsu: “Got any details of what this is about? Because I cannot get anybody for you unless we have more details.”

Sheriff: “They’ve have got a judgment for £149, 481.93.”

Fujitsu: “I can’t let you into the building. I am not allowed to let you into the building.”

Sheriff: “Right, unfortunately you can’t actually stop me.”

Fujitsu: “I can stop you.”

Sheriff: “You can’t.”

Fujitsu: “At the moment I can stop you coming into the building.until I get back.”

Sheriff: “You can’t. You can’t, whether you hear back – I am not trying to be awkward.”

Fujitsu: “We are not either.”

Sheriff: “We have been very cooperative at the moment. The security staff have asked us to wait here. I can understand the sensitivity of your business –”

Fujitsu: “My policy is that I don’t let you into this building. I am in control of this building and I am not allowed to let you in.”

Sheriff: “Unfortunately, as a high court officer enforcing a writ, I can force entry to a commercial premises if necessary. We do not need permission to enter your building.”

Fujitsu: “What do you need to enter the building for? Because we don’t know –”

Sheriff: “To seize goods. To seize goods. We are here to seize goods.”

Fujitsu: “Let me go and ring you back.

Fujitsu man in white shirt : “We’ll come back to you in as second …”

BBC:  “The shaken Fujitsu employees head off to talk to their superiors leaving Lawrence and Kev to continue waiting outside. After half-an-hour of sitting beside thew road, with no sign of any progress, Lawrence has had enough.”

He pulls up from a side road and stops at Fujitsu’s security barrier. A security guard comes out.

Fujitsu: “You want to come in do you?”

Sheriff: “To be honest I don’t think we have been treated particularly professionally or courteously so far. We have done the utmost to be professional and respectful to your situation here.”

Fujitsu: “Ok.”

Sheriff: “We are not looking to come storming round the place and see your latest technology. That’s not what we are here for. We are here to execute a high court writ and we are asking to be treated in a courteous manner. We have the right to enter. If you are not going to allow me to enter I am just going to park my vehicle here (at the entrance barrier) and go in on foot and if anybody tries to stop me I will call the police because it is an arrestable offence to obstruct an enforcement officer in the execution of a writ. We don’t want to go down that road. We just want to be treated with some courtesy.”

Fujitsu: “Some of us have just got here. We didn’t know you were coming.”

Sheriff: “I can appreciate that.”

Fujitsu: “Can you give me a couple of minutes?”

BBC: “Finally things seem to be happening. Lawrence is invited inside to discuss matters with someone in authority. It’s progress, but does it mean payment is on its way? … Lawrence is inside for nearly an hour before he emerges and in the chess game that is Lawrence Grix versus Fujitsu Lawrence has captured some major pieces.”

Sheriff: “He was quite insistent they were not going to pay today. So I have basically seized the entire contents of the building or as much as need be to cover the debt. If it doesn’t  get paid or resolved in a satisfactory manner we will be back and if necessary we will remove goods.”

BBC: “Lawrence has carried out a walking possession which means he has listed property he can remove at a later date if the debt isn’t paid. Thanks to Lawrence the high court now owns just about everything in Fujitsu’s head office.”

Soon after the visit Fujitsu pays the £149, 481.93.

Fujitsu gives a statement to the BBC saying that the delay in payment was a genuine oversight on its part and it took immediate steps which rectified the situation.

The sheriffs are coming.

Sheriffs set for TV stardom

The Sheriffs are coming – again.

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Posted in Fujitsu, law, legal disputes

Ban the “g” word from outsourcing lexicon?

Posted on 25/07/2013 | 2 comments

By Tony Collins

Is the word “guaranteed” as in “guaranteed savings” just spin –  perhaps the most misused word  in the lexicon of outsourcing? Should it be banned by general voluntary agreement?

It’s commonly used when suppliers are bidding for council contracts; and it is used almost as much by cabinet councillors when they are marketing an outsourcing proposal to fellow councillors and the public.

 It was used a lot by BT in its bid marketing documents that were shown to Cornwall councillors before  they signed a contract with the company. Cornwall’s ruling councillors last year, too, used the phrase “guaranteed savings” to batter their outsourcing critics. 

These are mentions of “guaranteed” from a single marketing document – BT’s Cornwall Council Briefing Strategic Partnership for Support Services, October 2012

– “£149.6m of guaranteed savings”

–  “jobs supported by formal commitments and guarantees on delivery along with clarity on the nature and type of jobs”

– “Guaranteed savings of £60.6m year Core Contract Savings Years 1-10”

– Contractual guarantees for both job creation and performance levels reached

– sales and marketing team and guarantees – £2mpa

But when “guaranteed” faces its most critical test –  in a legal dispute – it appears to mean little or nothing. It’s not a contractual word. [That’s wrong. It is a contractual word says Ali Mehmet in a comment at the end of this blog.]

Somerset County Council portrayed the lowered costs of outsourcing as guaranteed when it contracted out IT and other services to the IBM-owned “Southwest One” joint venture.

Said an IBM-sponsored article on Southwest One in 2008, a year after the joint venture was formed,

“The contract calls for guaranteed [the article’s emphasis] lower costs for service delivery. IBM knows it can lower costs for the partners’ processes, so all three government agencies come out ahead. So do citizens.”

In the end the claimed savings were not achieved, the contract between the council and IBM went into a legal dispute which was settled at a cost to the council of £5.9m, and Somerset’s Cabinet member for resources, David Huxtable, told the BBC last week:

“It was a very complex contract and lots of the savings were predicated on an ever-increasing amount of money being put into public services and we know in the last four years that has gone into reverse.”

Barnet Council uses the word “guaranteed” liberally as it prepares to outsource its New Customer Services Organisation [NCSO] to Capita in a 10-year £320m contract which is part of the One Barnet transformation programme. Says a Barnet statement on the choice of Capita as preferred supplier for NCSO: 

“The contract is worth £320 over ten years and guarantees a saving to the council of £126 million over that period.”

Guarantees are subject to …

The g word may have little meaning in a contract because it is usually tied to variables – such as level of spend – which the public and most councillors rarely ever know the detail of, because the contract is kept confidential.

And against what – subjective? – basis, and baseline, are the guaranteed savings measured? Again it is in the commercially confidential contracts.

Once in a legal dispute between outsourcing supplier and customer, lawyers will argue over the sense, meaning and purpose of contractual guarantees that are subject to an ambiguous string of variables.

 If political parties made manifesto commitments that were “guaranteed” would anyone believe them? If a double-glazing salesmen offered security and thermal insulation that was guaranteed would anyone believe them? 

So why are ruling councillors so inclined to believe outsourcing bidders when they sprinkle their documents with the “g” word? How does it come to mean so much at the pre-contract stage – and nothing afterwards?

A ban on the “g” word? 

If a voluntary ban on the “g” word, at least with reference to outsourcing and related proposals, would be a good idea, please let me know when you see it used and, most likely, abused.  tony@tonyrcollins.co.uk

2 Comments

Posted in BT, Campaign4Change, IBM, IT-related failures, jargon, legal disputes, local government, public sector, public services

Firecontrol disaster and NPfIT – two of a kind?

Posted on 23/07/2013 | 5 comments

By Tony Collins

Today’s report of the Public Account Committee on the Firecontrol project could, in many ways, be a report on the consequences of the failure of the National Programme for IT in the NHS in a few years time.

The Firecontrol project was built along similar lines to the NPfIT but on a smaller scale.

With Firecontrol, Whitehall officials wanted to persuade England’s semi-autonomous 46 local fire authorities to take a centrally-bought  IT system while simplifying and unifying their local working practices to adapt to the new technology.

NPfIT followed the same principle on a bigger scale: Whitehall officials wanted to persuade thousands of semi-autonomous NHS organisations to adopt centrally-bought technologies. But persuasion didn’t work, in either the fire services or the NHS.

More similarities

The Department for Communities and Local Government told
the PAC that the Firecontrol control was “over-specified” – that it was unnecessary to have back-up to an incident from a fire authority from the other side of the country.

Many in the NHS said that NPfIT was over-specified. The gold-plated trimmings, and elaborate attempts at standardisation,  made the patient record systems unnecessarily complicated and costly – and too difficult to deliver in practice.

As with the NPfIT, the Firecontrol system was delayed and local staff  had little or no confidence it would ever work, just as the NHS had little or no faith that NPfIT systems would ever work.

Both projects failed. Firecontrol wasted at least £482m. The Department of Communities and Local Government cancelled it in 2010. The Department of Health announced in 2011 that the NPfIT was being dismantled but the contracts with CSC and BT could not be cancelled and the programme is dragging on.

Now the NHS is buying its own local systems that may or may not be interoperable. [Particularly for the long-term sick, especially those who have to go to different specialist centres, it’s important that full and up-to-date medical records go wherever the patients are treated and don’t at the moment, which increases the risks of mistakes.]

Today’s Firecontrol report expresses concern about a new – local – approach to fire services IT. Will the local fire authorities now end up with a multitude of risky local systems, some of which don’t work properly, and are all incompatible, in other words don’t talk to each other?

This may be exactly the concern of a post-2015 government about NHS IT. With the NPfIT slowly dying NHS trusts are buying their own systems. The coalition wants them to interoperate, but will they?  

Could a post-2015 government introduce a new (and probably disastrous) national NHS IT project – son of NPfIT – and justify it by drawing attention to how very different it is to the original NPfIT eg that this time the programme has the buy-in of clinicians?

The warning signs are there, in the PAC’s report on Firecontrol. The report says there are delays on some local IT projects being implemented in fire authorities, and the systems may not be interoperable. The PAC has 

” serious concerns that there are insufficient skills across all fire authorities to ensure that 22 separate local projects can be procured and delivered efficiently in so far as they involve new IT systems”.

National to local – but one extreme to the other?

The PAC report continues

“There are risks to value for money from multiple local projects. Each of the 22 local projects is now procuring the services and systems they need separately.

“Local teams need to have the right skills to get good deals from suppliers and to monitor contracts effectively. We were sceptical that all the teams had the appropriate procurement and IT skills to secure good value for money.

“National support and coordination can help ensure systems are compatible and fire and rescue authorities learn from each other, but the Department has largely devolved these roles to the individual fire and rescue authorities.

“There is a risk that the Department has swung from an overly prescriptive national approach to one that provides insufficient national oversight and coordination and fails to meet national needs or achieve economies of scale. 

Comment

PAC reports are meant to be critical but perhaps the report on Firecontrol could have been a little more positive about the new local approach that has the overwhelming support of the individual fire and rescue authorities.  

Indeed the PAC quotes fire service officials as saying that the local approach is “producing more capability than was expected from the original FiReControl project”. And at a fraction of the cost of Firecontrol.

But the PAC’s Firecontrol Update Report expresses concern that

– projected savings from the local approach are now less than originally predicted

– seven of the 22 projects are running late and two of these projects have slipped by 12 months

– “We have repeatedly seen failures in project management and are concerned that the skills needed for IT procurement may not be present within the individual fire and rescue authorities, some of which have small management teams,” says the PAC.

On the other hand …

The shortfall in projected savings is small – £124m against £126m and all the local programmes are expected to be delivered by March 2015, only three months later than originally planned.

And, as the PAC says, the Department for Communities and Local Government has told MPs that a central peer review team is in place to help share good practice – mainly made up of members of fire and rescue authorities themselves.

In addition, part of the £82m of grant funding to local fire services has been used by some authorities to buy in procurement expertise.

Whether it is absolutely necessary – and worth the expense – for IT in fire services to link up is open to question, perhaps only necessary in a national emergency.

In the NHS it is absolutely necessary for the medical records of the chronically sick to link up – but that does not justify a son-of-NPfIT programme. Linking can be done cheaply by using existing records and having, say, regional servers pull together records from individual hospitals and other sites.

Perhaps the key lesson from the Firecontrol and the NPfIT projects is that large private companies can force their staff to use unified IT systems whereas Whitehall cannot force semi-autonomous public sector organisations to use whatever IT is bought centrally.

It’s right that the fire services are buying local IT and it’s right that the NHS is now too. If the will is there to do it cheaply, linking up the IT in the NHS can be done without huge central administrative edifices.

Lessons from FireControl (and NPfIT?) 

The National Audit Office identifies these main lessons from the failure of Firecontrol:

– Imposing a single national approach on locally accountable fire and rescue authorities that were reluctant to change how they operated

–  Launching the programme too quickly without applying basic project approval checks and balances

– Over optimism on the deliverability of the IT solution.

– Issues with project management including consultants who made up half of the management team and were not effectively managed

MP Margaret Hodge, chair of the Public Accounts Committee, today sums up the state of Firecontrol

“The original FiReControl project was one of the worst cases of project failure we have seen and wasted at least £482 million of taxpayers’ money.

“Three years after the project was cancelled, the DCLG still hasn’t decided what it is going to do with many of the specially designed, high-specification facilities and buildings which had been built. Four of the nine regional control centres are still empty and look likely to remain so.

“The Department has now provided fire and rescue authorities with an additional £82 million to implement a new approach based on 22 separate and locally-led projects.

“The new programme has already slipped by three months and projected savings are now less than originally predicted. Seven of the 22 projects are reportedly running late and two have been delayed by 12 months. We are therefore sceptical that projected savings, benefits and timescales will be achieved.

“Relying on multiple local projects risks value for money. We are not confident that local teams have the right IT and procurement skills to get good deals from suppliers and to monitor contracts effectively.

“There is a risk that the DCLG has swung from an overly prescriptive national approach to one that does not provide enough national oversight and coordination and fails to meet national needs or achieve economies of scale.

 “We want the Department to explain to us how individual fire and rescue authorities with varied degrees of local engagement and collaboration can provide the needed level of interoperability and resilience.

“Devolving decision-making and delivery to local bodies does not remove the duty on the Department to account for value for money. It needs to ensure that national objectives, such as the collaboration needed between fire authorities to deal with national disasters and challenges, are achieved.”

Why weren’t NPfIT projects cancelled?

 NPfIT contracts included commitments that the Department of Health and the NHS allegedly did not keep, which weakened their legal position; and some DH officials did not really want to cancel the NPfIT contracts (indeed senior officials at NHS England seem to be trying to keep NPfIT projects alive through the Health and Social Care Information Centre which is responsible for the local service provider contracts with BT and CSC).

PAC report on Firecontrol

What Firecontrol and the NPfIT have in common (2011)

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Posted in BT, BT Health, Campaign4Change, change management, consultants, CSC, data sharing, e-health, efficiency savings, Firecontrol, Government IT, health records, IT-related failures, managing outsourced services, NHS, outsourcing, project management, public sector, public services, shared services, Summary Care Record, supplier relationships

BT gets termination notice on £300m outsourcing contract

Posted on 22/07/2013 | 4 comments

By Tony Collins

Sandwell Council has issued BT with a 30-day termination notice on a 15-year £300m outsourcing contract that has yet to reach its half-way point.

The metropolitan borough council says there are various defaults BT needs to resolve. Based at Oldbury, West Midlands, about five miles from Birmingham, Sandwell has been an outsourcing reference site for BT.

The company quoted Sandwell Council in its presentations that formed part of the bidding for Cornwall Council’s planned outsourcing work.

The “guaranteed” savings in Sandwell’s contract with BT appear to be based on a level of spending the council is not maintaining. One point of contention appears to be the council’s wish for BT to reduce its charges to the council in line with the authority’s lower levels of activity.

In June 2012 Sandwell submitted a change request that asked BT to recalculate the annual service charge because the service volumes delivered through the contract had reduced significantly.

The council wanted the recalculation to be based on a reduction in the workforce from around 7,400 in 2007 when the contract with BT was signed to 4,688 in mid 2012.

Government Computing quotes a council document on the dispute as saying

“A reduction in the workforce should have a corresponding reduction in volumes such as the size of the ICT estate, the payroll, HR support and budget holders. There have been volume reductions in invoices, the number of contracts administered and calls to the contact centre for some services.”

Sandwell’s 30-day termination notice to BT was issued on 16 July so it will expire around that time next month. The council says it is prepared to take back staff.

Sandwell council leader, Councillor Darren Cooper, told Government Computing: “Cabinet has approved a recommendation to start the process of ending our contract with BT. That termination will take effect in 30 days’ time unless BT puts right various defaults we have asked them to resolve.

“If we have to, I am confident we will be able to bring the services BT currently supplies to us back to the council and run them in the most effective way in future.”

Guaranteed

In 2007 BT and its joint bidder, outsourcing provider Liberata, had set out to run the council’s back-office functions at what was announced as a “guaranteed” reduced cost over the lifetime of the contract.

The deal was aimed at cutting costs and improving Sandwell’s IT infrastructure, HR, finance, payroll and customer services functions.

There was some success. The BT-led ‘Transform Sandwell’ team won the UK’s Best Customer Services Management Team at the National Customer Services Awards in December 2010.

BT built a 75,000 square foot office block for Transform Sandwell. It accommodated 400 employees of Transform Sandwell and a 300-strong customer service team working for BT.

Massive mistake?

Independent socialist councillor Mick Davies said “Someone somewhere has obviously made a massive mistake and the taxpayers of Sandwell will have to foot the bill… The writing seemed to be on the wall when BT’s partner in the project, Liberata, was dumped unceremoniously a couple of years ago.”

Sandwell Council’s deputy leader and cabinet member for strategic resources Councillor Steve Eling said: “In view of the current climate and public expenditure reductions, the council is engaging with its partner to determine services that are needed over the medium term and to reduce the overall costs in light of public spending reductions.”

Technologies used in the Transform Sandwell contact centre have included Verint Impact 360, Siebel CRM and Nortel Contact Centre 6.0.

A BT spokesman told the Halesowen News

“BT continually looks at ways to improve the service it provides to its customers. The original contract was signed in 2007 and as is normal with long-term partnerships BT constantly looks at ways to service the changing needs of both the council and citizens of Sandwell.”

BT told Government Computing it “has throughout – and remains – fully committed to delivering the commitments it made through the Transform Sandwell Partnership.”

The European Services Strategy Unit which has carried out detailed research on outsourcing contracts lists some of the terminated and reduced local authority strategic partnership contracts.

Sandwell has 72 councillors, 67 of which represent Labour.

Comment

At some point in a 10 or 15-year outsourcing contract a major dispute seems almost inevitable because a supplier’s business objectives will rarely change when the council’s priorities change.

BT’s deal with Sandwell was signed in 2007 – as was Southwest One’s deal with IBM – at a pre-austerity period.

Now that councils have been making, and continue to make, radical savings, they want the flexibility to cut their outsourcing costs too. But it may not be in the supplier’s interests to take profits that are much lower than expected.

No such thing as a free lunch

How can the business interests of outsourcing providers and their council clients ever completely align and move in time like synchronised swimmers?

The growing number of disputes in local authority outsourcing deals suggests that councils are not properly weighing up the risks when they sign deals.

Perhaps small groups of ruling councillors – such as those at Barnet – are too easily persuaded by the “guaranteed” savings on offer at the start of a contract.

There is no such thing as a free lunch. But try telling that to council Cabinet councillors who have cartoon-character pound signs in their eyes in the Disney period before a big outsourcing contract is well underway.

Let’s hope BT and Sandwell kiss and make up. It looks like the lawyers are already in the middle of them, though; and at whose expense?

Sandwell and BT consider end of strategic partnership – Government Computing

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Posted in BT, change management, efficiency savings, ERP, IT projects, IT-related failures, law, legal disputes, local government, managing outsourced services, outsourcing, private sector lessons for the public sector, public sector, public services, public-private partnerships, risk, shared services, supplier relationships

The story of Southwest One

Posted on 16/07/2013 | 2 comments

By Tony Collins

Dave Orr worked in a variety of IT and project management roles for Somerset County Council and retired in 2010. For years he has campaigned with extraordinary tenacity to bring to the surface the truth over an unusual joint venture between IBM, Somerset County Council, a local borough council and the local police force.

Now he has written an account of the joint venture and the lessons. It is published on the website of procurement expert Peter Smith.

Orr questions whether Southwest One was ever a good idea, since it was formed in 2007.

The deal has not made the savings intended, a SAP implementation went awry, the contract has been mired in political controversy and criticism, Southwest One has repeatedly lost money, and many of the transferred staff and services have returned to the county council, and some services returned to the borough council. IBM and the county council have ended up in a legal dispute that cost the county council £5.5m to settle. Southwest One was not exactly the partnership it set out to be.

The contract may show how an outsourcing deal that doesn’t have the support of the staff being transferred is flawed fundamentally from the start (which is one reason few people will be surprised if a 10-year £320m deal for Capita to run Barnet Council’s new customer service organisation [NSCSO]  ends in tears).

These are some of Orr’s points:

–  Like other light-touch regulators, the Audit Commission repeatedly gave Southwest One positive reports, without ever qualifying the accounts, even as problems with SAP implementation mounted in 2009 and procurement savings were not being made in line with forecasts.

 – The contract called for transformation based upon ‘world-class technologies’, yet all of the IT Service was placed into Southwest One with no IT expertise back in the Somerset County client (until after a poor SAP implementation in 2009). Was the lack of retained IT skills in the Somerset County client behind the formal acceptance of a badly configured SAP implementation?

– Large scale outsourcing over a long contract of 10 years or more requires an ability to foresee the future that is simply not possible to capture in a fixed contract. In a 10-year contract, there will be three changes of national government and three changes of local government. That is a great deal of unpredictable change to cope with via a fixed, long-term contract.

– Local Government will always be at a disadvantage in resources and skills, to a large multi-national contractor like IBM, when it comes to negotiating, letting and managing a complex multi-service contract.

– What was the culture of Southwest One (75% owned by IBM)? Was it private, public or a hybrid? The management culture remained firmly IBM, yet the councils and police workforces were seconded and remained equally firmly public sector rooted. There is such a thing as a public service ethos. In fact, Southwest One was run like a mini-IBM based upon global divisions, complete with IBM standard structures and processes. Southwest One seconded employees were not allowed anything like a full access to IBM internal systems, thus creating additional complexity, as “real” IBM employees relied entirely upon on-line systems.

–  Mixed teams in a single shared service were hard to amalgamate. This meant the IBM managers of Southwest One never really gained the sort of command & control of the multi-tier workforces that their bonus-oriented model needs to function. “I doubt that IBM would ever again contemplate the seconded staff model over the TUPE transfer model,” says Orr.

– Somerset County Council ran with a “thin” client management team that, in Orr’s view, did not have sufficient expertise or enough staff resources to effectively manage this complex contract with IBM. The councils relied upon definitions of “partnership” that meant one thing to the councils’ side and quite another thing to IBM, says Orr.

– In Southwest One, Somerset County Council handed their entire IT Service over lock, stock and barrel. “Can you really consider IT as wholly a ‘back office’ service? Many successful private Companies see IT as a strategic service to be kept under their own control.”

– The real savings might have been found in optimising processes in big departments (like Social Care, Education, Highways) that lay outside of Southwest One’s reach. “The focus on IT rather than service processes was another flaw in the model.”

Orr  concludes that nobody who played a major part in the Southwest deal has in any way been held to account for what has gone wrong.

Southwest One – the complete story from Dave Orr

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Posted in Campaign4Change, change management, excessive secrecy, FOI, Freedom of Information, governance, IBM, IT-related failures, legal disputes, local government, managing change, managing outsourced services, openness and transparency, Politics, private sector lessons for the public sector, procurement, project management, public-private partnerships, SAP, shared services, supplier relationships