Tag Archives: Cabinet Office

Crazy – millions of citizens offered two competing government identity systems

 

From HMRC’s website on Gov.UK … Which should you choose to confirm your identity?
HMRC and other government departments are offering millions of citizens the choice of two “competing” identity systems – the Cabinet Office’s GOV.UK Verify, or HMRC’s Government Gateway.
There’s no guidance offered on which to choose; and no explanation for the absence of joined-up thinking.

By Tony Collins

When Whitehall departments do their own thing, the public rarely notices the duplicated time, effort and cost, at least when it comes to IT.  Now the “silo” approach has spilled out into the public arena.

The Government Digital Service – part of the Cabinet Office – developed GOV.UK Verify to enable people to confirm their identify when they want to use government services online.

At the same time, HMRC continued to work on a separate identity system: Government Gateway.

The cost of the two developments isn’t known.

HMRC prefers its own development work on Government Gateway because it enables companies as well as individuals to identify themselves. Verify is designed for individual use.

But instead of adapting one or the other to serve individuals and companies, or using Government Gateway for companies only, central departments are offering both  – with no guidance on which system citizens should choose; and there’s no explanation for the absence of a joined-up approach to IT.

The BBC’s technology correspondent Rory Cellan-Jones says of the two separate identity systems that GDS and HMRC are engaged in a “bitter turf war”.

Comment

Today I went online to renew a driving licence and was shepherded by DVLA to use the Government Gateway identity system. A few weeks ago I had already successfully registered with GOV.UK Verify.

Government Gateway didn’t work properly, for me at least, although I had all the correct documents.

When I registered to use a different government service a few weeks I had no choice but to use GOV.UK Verify to confirm my identity. Verify was thorough, seamless and worked perfectly. Impressive. It left the impression of a system that had been well thought out, with the citizen in mind.

Putting aside the fact that Government Gateway did not work for me, it seemed dated, much less thorough than Verify, and left an impression of transience – that it was a temporary “make-do” system. For instance, the help screens were not tailored to the particular question being asked. Not impressive.

For me. GOV.UK Verify is the identity system of choice. It could surely be adapted to confirm the identities of companies – unless HMRC would rather continue to do its own thing.

It’s ludicrous that central government is spending billions of IT annually without a joined-up approach. Ministers keep promising it. Officials at conferences keep promising it. Whitehall press releases promise it.

A few weeks ago departments were offering only Government Gateway or GOV.UK Verify. Now many of them are offering both.

That’s progress?

Disturbing

A wider point of Whitehall’s dual IT approach to identity verification is that it’s the tip of the iceberg (apologies for the cliché but it’s apt).

With their ICT budgets, collectively, of billions of pounds a year, central departments are, in the main, doing their own thing.

A politician with the clout of Francis Maude may be needed to bang the heads of permanent secretaries together. But even if Maude’s replacement Ben Gummer had that clout – and he doesn’t – permanent secretaries and departmental boards would complain that the Cabinet Office was interfering.

Complaints along these lines would be made, perhaps, in off-the-record briefings to friendly journalists and to the National Audit Office in departmental responses to NAO surveys of senior officials, with the result that the Cabinet Office would end up backing away from trying to enforce a joined up IT approach.

That a genuine joined-up approach to government IT has been talked about for decades and hasn’t happened is largely because, outside of determining of the size of budgets, it is the permanent secretaries and their senior officials who hold power in Whitehall,  not transient politicians.

And bureaucracies always want to keep their departmental empires as intact as possible.

The current two top Whitehall officials, Cabinet Secretary Sir Jeremy Heywood and John Manzoni, chief executive of the civil service, are consensus-seeking people, not at all confrontational. Probably their lack of a controversial edge is one of the main reasons they were chosen for their jobs.

All of which means there’s no chance of permanent secretary heads being banged together in an effort to cut costs and help bring about joined up government IT .

In 2012, Francis Maude, then Cabinet Office minister,  said, in a speech to the FT Innovate Conference,

“In the last decade our IT costs have gone up – while our services remained patchy. According to some estimates, we spend more on IT per capita than any other government.”

Is government ICT spending much less today? Perhaps HMRC’s Government Gateway officials would let us know.

**

Some Twitter comments





What Google looks for when hiring staff … traits Whitehall’s culture abhors?

By Tony Collins

The contrast between what Google looks for when hiring staff and what Whitehall looks for when making some of its top appointments, could give clues as to why many government IT-based projects and programmes fail.

First, the strengths Google looks for.  These were set out yesterday on BBC R4 by Laszlo Bock,  human resources chief at Google for 10 years.

Google was named “Best Company to Work For” more than 30 times around the world and received over 100 awards as a top employer during Bock’s time.

In 2010, he was named “Human Resources Executive of the Year”. Under him, Google changed its clunky, arduous recruitment processes that relied on gimmicks like maths puzzles to those that helped the company grow to about 60,000 employees in less than two decades.

In 2015 he  published his first book, The New York Times bestseller Work Rules!, a practical guide to help people find meaning in work and improve the way they live and lead. He resigned from Google in 2016.

On the BBC  “Analysis” programme on Monday evening – which looked at intelligence and talent and what they mean, if anything, in job interviews –  Bock said the least important attribute Google screens for is whether someone knows about the job they are taking on. Crunching the data on successful hiring led Google instead to look for these characteristics:

  • Humility
  • Conscientiousness
  • A sense of responsibility not to quit until the job is done well
  • Comfort with ambiguity
  • A sense of fun
  • Courage

Why courage?

Bock said,

“It’s about the importance of people being able to raise their voices in organisations. One of the things that happens is, when organisations get large, people stop raising their voices and really bad things happen as a result. That’s where you get whistleblowing, insider trading, all kinds of things.

“Human beings are evolved, biologically, as social, hierarchy-seeking animals. We tend to conform. So courage is important because the really innovative, creative stuff comes from ‘I got this crazy idea’ and the bad problems get flagged by people who are willing to raise their hand and say ‘I don’t think this is a good thing to do’.

“Without that you can’t do great things.”

Comment

It’s too easy to generalise about the hiring and appointment of senior civil servants. But it’s possible to understand a little about the hiring culture within Whitehall’s biggest department, the Department for Work and Pensions.

An insight into DWP culture and thinking can be gleaned from the many Lever arch folders of documents filed by the DWP as part of an FOI case in which it spent several years fighting to stop the release of documents about the Universal Credit IT programme.

The documents include DWP witness statements on the “harm” that would be caused if the IT documents in question were published.

The judge in the case, Chris Ryan, challenged most of the DWP’s arguments.

In one of his rulings, Judge Ryan described the DWP’s claims as:

  • alarming and surprising
  • overstated
  • unconvincing
  • close to fanciful

He said that public confidence in the Universal Credit IT programme had been maintained for some time “on a false basis”; and he raised the possibility that an “unhealthily collegiate relationship had developed” between the DWP and private sector IT suppliers. [Campaign4Change will publish a separate blog post on this ruling in the next few days.]

As well as the insight into DWP culture that one can gain from the FOI case, it’s possible to gauge culture and thinking within Whitehall departments from the talented, free-thinking IT individualists who have joined the top layer of the civil service, quit and returned to the private sector.

It would be invidious to pick out some names as there are so many.

What all this suggests is that Whitehall’s culture appreciates conformity and consensus and shuns boat-rocking.

When top IT professionals who joined HMRC and the DWP spoke publicly at conferences about institutional problems that needed to be tackled, mandarins reacted quickly – and such disclosures were never repeated.

And after a leak to the Guardian about the results of a DWP staff survey of morale on the Universal Credit IT programme, the department launched a formal leak inquiry headed by a senior member of the security services.

At the same time, Universal Credit IT programme documents were no longer emailed but transferred around in taxis.

This bout of nervous introspection (the judge described the DWP’s arguments in the FOI case as “defensive”) when taken together with what else we know, indicate that Whitehall’s culture is insular, distrustful and inimical to open challenge and problem-solving (though there are some within the senior Whitehall ranks who successfully defy that culture).

When Bock talks of conformity being a danger within large organisations he would not have had the DWP in mind – but he aptly describes its culture.

When he speaks about the “importance of people being able to raise their voices in organisations” he was probably unaware of the extent to which Whitehall culture abhors raised voices.

As Bock says, when people don’t raise their voices “really bad things happen as a result”. Perhaps the lack of internal challenge was one reason the NHS IT programme – NPfIT – lost billions of pounds, and the DWP’s Universal Credit programme went badly awry for several years.

When Bock says the “really innovative, creative stuff comes from ‘I got this crazy idea’, he could have been describing the culture of the Government Digital Service. But that refreshing GDS culture is being slowly choked by the conservatism of traditional Whitehall departments.

As Bock says, “the bad problems get flagged by people who are willing to raise their hand and say ‘I don’t think this is a good thing to do’.”  But bad problems are things senior civil servants avoid talking about, even internally. A Disneyland”good news” culture pervades central departments.

A National Audit Office report on the Universal Credit programme referred to a “fortress mentality” within the DWP.

Maybe the consensus-seeking John Manzoni, head of the civil service, and his colleague Sir Jeremy Heywood, Cabinet Secretary, could seek to employ Bock as an adviser on appointments and recruitment.

Bock’s brief? To turn around the senior civil service’s culture of conformity, groupthink, denial, selective use of “good news” facts and a lack of open challenge.

Recognising the destructiveness within a big organisation of having the wrong culture – as Bock does – could be the start of a genuine Whitehall transformation.

BBC R4 “Analysis” on talent, intelligence and recruitment

Laszlo Bock steps down

Central buying of IT and other services is a bit of a shambles – just what Sir Humphrey wants?

By Tony Collins

Cabinet Office entrance

Cabinet Office entrance

Like the Government Digital Service, the Crown Commercial Service was set up as a laudable attempt to cut the huge costs of running central government.

The Cabinet Office under Francis Maude set up the Crown Commercial Service [CCS] in 2014 to cut the costs of buying common products and services for Whitehall and the wider public sector including the NHS and police.

It has a mandate to buy commodity IT, other products and services and whatever can be bought in bulk. It has had some success – for example with negotiating lower prices for software licences needed across Whitehall. The skills and knowledge of its civil servants are well regarded.

But, like the Government Digital Service, CCS has had limited support from permanent secretaries and other senior officials who’d prefer to protect their autonomy.

It has also been hindered by unachievable promises of billions of pounds in savings. Even CCS’s own managers at the time regarded the Cabinet Office’s plans for huge savings as over-optimistic.

Yesterday [13 December 2016] the National Audit Office published a report that questioned whether CCS has paid its way, let alone cut public sector costs beyond what civil and public servants could have achieved without it.

CCS employed 790 full-time equivalent staff in 2015/16 and had operating costs in one year alone of £66.3m

This was the National Audit Office’s conclusion:

“CCS has not achieved value for money. The Cabinet Office underestimated the difficulty of implementing joint buying for government. With no business case or implementation plan CCS ran into difficulties. Net benefits have not been tracked so it cannot be shown that CCS has achieved more than the former Government Procurement Service would have.

“However, the strategic argument for joint buying remains strong and CCS is making significant changes to improve future services.”

Some of the NAO’s detailed findings:

  • The public sector spends £2.5bn directly with CCS – £8bn less than originally forecast.
  • Seven departments buy directly through CCS – 10 fewer than originally forecast
  • The forecast of £3.3bn net benefits from the creation of CCS over the four years to 2017-18 are  unlikely to materialise.
  • The National Audit Office says the actual net benefits of CCS to date are “unknown”.
  • The Cabinet Office did not track the overall benefits of creating CCS.
  • Most of the planned transfers of procurement staff from central departments and the wider public sector to CCS haven’t happened.
  • Where some of the workforce has transferred, some departments have rehired staff to replace those who transferred.
  • Departments continue to manage their own procurement teams, although they use CCS’s frameworks.
  • CCS was set up with the power to force central departments to use its bulk buying services. But that power wasn’t enforced.
  • The National Audit Office says it is “no longer clear whether CCS has a clear mandate that requires all departments to use it for direct buying… it no longer has a clear timetable or expectation that further departments will transfer staff or buying functions to CCS”.

It’s all a far cry from the expectations set by a Cabinet Office announcement in 2013 which said that CCS will “ensure maximum value for the taxpayer is extracted from every commercial relationship”.

The then Cabinet Office minister Francis Maude said at the time,

“The new Crown Commercial Service will ensure a step change in our commercial capability, giving government a much tighter grip on all aspects of its commercial performance, from market engagement through to contract management.”

Comment

Why CCS has failed so far to make much difference to Whitehall’s costs is not clear. It seems to have been hit by a combination of poor management at the outset, a high turnover of senior officials and ludicrously high expectations, combined with a civil service reluctance in central departments and the wider public sector to cede control over procurement to CCS –  even when it comes to common products and services.

The NAO report is a reminder of a fundamental flaw in the way government works: central departments can’t in practice be forced to do anything. They are a power unto themselves. The Cabinet Office has powers to mandate a change of practice and behaviour in central departments – to which Sir Humphrey can shrug his shoulders and change nothing

Even the Prime Minister is, in practice, powerless to force departments to do something they don’t want to do (except in the case of the miscarriage of justice that involved two Chinook pilots who were eventually cleared of gross negligence because the then defence secretary Liam Fox, through a series of manoeuvres, forced the MoD to set the finding aside).

The CCS may be doomed to failure unless the Cabinet Office rigorously enforces its mandate to make government departments use its buying services.

If the Cabinet Office does not enforce its power, Sir Humphrey will always protect his turf by arguing that the products and services his officials buy – including IT in general – are specific and are usually tailored to the department’s unique and complex needs.

Much to the relief of Sir Humphrey, Francis Maude, the battle-hardened enforcer at the Cabinet Office, has left the House of Commons. He has no comparable replacement.

Are all central initiatives aimed at making  a real dent in the costs of running Whitehall now doomed to failure?

Sir Humphrey knows the answer to that; and he’s wearing a knowing grin.

Crown Commercial Service – National Audit Office report

 

Barnet Council claims £31m savings with Capita – and not an auditor in sight.

By Tony Collins

capita

It’s commendable that Barnet Council has published much material on its three-year review of a £322m 10-year outsourcing contract with Capita.

More than a dozen council reports and appendices cover every aspect of the contract.

The quantity of material seems, on the face of it, to answer critics of the outsourcing deal, among them local bloggers, who have pointed to the lack of reliable evidence of the savings achieved. The suspicion is that costs have increased and council services including ICT have deteriorated since Capita took over in 2013.

Now the council has ostensibly proved that the opposite is the case. Barnet’s press release says,

Barnet Council and Capita contract delivers £31m savings

“A review of a contract between Barnet Council and Capita has demonstrated it is delivering significant benefits to the borough with overall savings of £31 million achieved alongside increased resident satisfaction…

“In terms of satisfaction with services provided, the review, showed 76 per cent of residents were satisfied with the outward-facing customer services, up from 52 per cent before the contract was established.

“This increase was even more significant in respect of face to face services, as 96 per cent of residents who engaged with the council in this way said they were satisfied compared with a previous 35 per cent.

“The review also showed that the cost of delivering the bundle of services provided in the contract is now £6m a year less than before the contract was signed and that 90 per cent of the contract’s key performance indicators being met or exceeded.”

The press release quotes two leaders of the council saying how pleased they were with the contract. Capita calls it a “positive review”.

The review has various mentions of items of additional spending including £9m on ICT and it’s not clear whether the extra sums are taken into account in the savings figures.

Among the review’s suggestions is that the council pay Capita’s annual management fee of £25m up front – a year in advance – instead of every quarter in return for extra savings.

The review also raises the possibility of extending the contract beyond the 10 years in return for additional savings. Capita is “keen” to explore this suggestion (though it could tie the hands of a future council administration).

The review reports were compiled by council officers who reported to a working group of Tory and Labour councillors, under a much-respected Tory chairman. By a small margin, Conservatives run the council.

Lack of independent challenge?

It’s unclear why the council did not commission its audit committee, or auditors, to review the contract. In the past the audit committee has been critical of some aspects of the contract.

For this reason the reports are unlikely to silence critics of Barnet’s outsourcing deal. Council officers compiled the review’s findings, not auditors.

As a result, despite the volume of published written material, there is no evidence that the figures for savings have been independently verified as accurate.

Neither is there independent verification of the methods used by officers for obtaining the figures.

Further, some observers may question the positive tone of the review findings. The “good news” tone may be said to be at odds with the factual neutrality of, say, reports of the National Audit Office.

There are also questions about whether the council is providing enough effective challenge to Capita’s decisions and figures.

At a council committee meeting in November 2016 to discuss the review reports, the most informed challenges to the findings appear to have come not from Barnet councillors but two local bloggers, Mrs Angry and Mr Reasonable, who questioned whether the claimed savings could be more than wiped out by additional spending – including an extra £9m on ICT. They appear to have received no clear answers.

Concerns of some officials

The body of the review reports outline some of the concerns of staff and directors. Mrs Angry quotes some of the concerns from the review reports:

“Transparency of costs, additional charges and project spend were raised as key concerns. It was felt that CSG [Barnet’s Customer and Support Group, for which Capita is responsible] are often reluctant to go above and beyond the requirements of the contract without additional charges.

“Directors reported that the council needs to be more confident that solutions suggested by CSG, particularly for projects and capital spend are best value.

“Concerns were raised that CSG has a disproportionate focus on the delivery of process and KPIs over outcomes, creating a more contractual rather than partnership relationship between CSG and the council. Directors noted that many KPIs are not relevant and their reporting does not reflect actual service performance.”

The Capita contract began in September 2013, under which it provides finance, ICT, HR, Customer Services, Revenues and Benefits, Procurement, Estates and Corporate Programmes.

Comment

On the face of it, Barnet Council’s review of the Capita contract looks comprehensive and impressively detailed.

Looked at closely it’s disappointing – a wasted opportunity.

Had the council wanted the review’s findings to be widely believed, it would have made it uncompromisingly independent, in line with reports by the National Audit Office.

As it is, the review was carried out by council officers who reported to a working group of councillors. The working group comprised Labour as well as Tory councillors but the facts and figures were compiled by officers.

Nearly every page of every Barnet review report has a “good news” feel. There’s an impression that negative findings are played down.

Example:

“It should be noted that the failure to meet the target for KPI 30 related to one quarter only [my italics] and discussions are continuing regarding the application of the above service credit.”

Some negative findings are immediately countered by positive statements:

“CIPFA benchmarking data shows that the cost of the ICT service is slightly above the median, but below upper quartile in terms of the cost of the service as a percentage of organisational running costs.”

Another example of a negative finding immediately countered by a positive one, which may be said to be one hallmark of a non-independent report:

“One key area of concern in terms of overall performance is internal customer satisfaction… Survey results in respect of the financial year 2015/16 were universally poor, with all services failing to meet the target of upper quartile customer satisfaction. As a result, service credits to a total value of £116k have been applied in respect of these KPIs.

“To some extent, a degree of dissatisfaction amongst internal service users is to be expected, given the fact that cost reductions have been achieved to a large extent through increased self-service for both managers and staff, along with more restrictive processes and controls over things like the payment of invoices and the appointment of staff.

“Despite the survey outcomes indicating a low level of satisfaction, the interviews conducted with staff and managers as part of this Review suggest that services are generally considered to be improving.”

Integra ERP financial system a “success” – ?

The review report describes Capita’s introduction of the Integra financial system as “successful”. Elsewhere, however, it says,

“Many users raised issues with the Integra finance system, describing it as clunky and not user-friendly or intuitive.”

Double counting?

There’s no evidence that savings figures have been checked for possible inadvertent double counting on overlapping services. Double counting of savings is regularly found in National Audit Office reports.

“There are no standardised way for departments to evidence the reductions in ongoing expenditure,” said the National Audit Office in a report on Cabinet Office savings in July 2014. “Departments provided poor evidence, and double counting was highly likely as projects reduced staff or estates requirements.”

In a separate report on claimed savings in central government, the National Audit Office quoted the findings of an internal audit …

“A number of errors (instances where the evidence did not support the assertion) were found during our review and total adjusted accordingly … In addition, a number of savings were double counted with other savings categories and these have now been removed…

“We assessed some £200m of other savings as Red because they were double counted due to the same savings having been claimed by different units or, for example, because savings on staff were also claimed through reductions in average case costs.”

Omitted costs?

The omission of relevant costs could skew savings figures. It’s unclear from Barnet’s review reports whether extra spending of millions of pounds on, for example, ICT have been taken into account. Barnet blogger Mr Reasonable, who has a business background, raises the question of whether £65m of additional spending has been taken into account in the savings figures.

Reverse Sir Humphrey phenomenon?

The biggest single flaw in the review reports is that they appear worded to please the councillors who made the decision to outsource – the reverse of the “Sir Humphrey” caricature. The positive tone of Barnet’s reports implies that officers are – naturally – deferring to their political leaders.

In a BBC Radio 4 documentary on Whitehall, former minister Peter Lilley talked about how some officials spend part of their working lives trying to please their political leaders.

“Officials are trying to work out how to interpret and apply policy in line with what the minister’s views on the policy is …. They can only take their minister’s written or spoken word for it and that has a ripple effect on the department far greater than you imagine… Making speeches is the official policy of the department and that creates action.”

Another former minister Francis Maude told the BBC he found that too few officials were willing to say anything the minister did not want to hear.

“The way it should work is for civil servants give very candid well informed advice to ministers about what it is ministers want to do – the risks and difficulties,” said Maude. “My experience this time round in government, 20 years on from when I was previously government, is that the civil service was much less ready to do that.

“There were brilliant civil servants who were perfectly ready to tell you things that they thought you might not want to hear but there were too few of them.”

Barnet’s reviewing officers might have been dispassionately independent in reporting their findings and double checking the supplied figures – but who can tell without any expert independent assessment of the review?

The US Sabanes-Oxley Act, which the Bush administration introduced after a series of financial scandals, defines what is meant by an “independent” audit. The Act prohibits auditing by anyone who has been involved in a management function or provided expert services for the organisation being audited.

That would disqualify every Barnet officer from being involved in an independent audit of their own council’s contract with Capita.

The Act also says that the auditor must not have been an employee of the organisation being audited. Again that would disqualify every Barnet officer from an independent audit of their own council’s contract.

Review a waste of time and money?

It would be wrong to imply that the review is a pointless exercise. It identifies what works well and what doesn’t. It will help officers negotiate changes to the contract and to key performance indicators. For example it’s of little value having a KPI to answer phone calls within 60 seconds if the operator is unable to help the caller.

What the review does not provide is proof of the claimed savings. Barnet’s press release announcing savings of £31m is just that – a press release. It does not pretend to be politically neutral.

But without independent evidence of the claimed savings, it’s impossible for the disinterested observer to say that the Capita contract so far has been a success. Neither does evidence exist it has failed.

Capita share price at 10-year low

What is clear is that fixing some of the more serious problems identified in the report, such as obsolescent IT, will not be easy given the conflict between the continuing need for savings and Capita’s pressing need to improve the value of its business for shareholders, against a backdrop of difficulties on a number of its major contracts [Transport for London, Co-op Bank, NHS] and a share price that was yesterday [30 November 2016] at a ten-year low.

The review also raises a wider question: are most of a council’s busy councillors who come to council meetings in their free time equipped to read through and digest a succession of detailed reports on the three-year interim results of a complex outsourcing contract?

If they do glance through them, will they have enough of a close interest in the subject, and a good understanding of it,  to provide effective challenge to council officers and their political leaders?

If nothing else, the Barnet review shows that councillors in general cannot provide proper accountability on an outsourcing contract as complex as Capita’s deal with Barnet.

Either council tax payers have to put their faith in officers, irrespective of the obvious pressure for officialdom to tell its political leaders what they want to hear, or council taxpayers can put their faith in an independent audit.

Barnet Council has not given its residents any choice.

It’s a pity that when it comes to claimed savings of £31m there’s not an auditor in sight.

Barnet declares its contract a success – Barnet and Whetstone Press

Mr Reasonable – important questions on the Capita review

Mrs Angry – who writes compellingly on the council meeting where the review reports were discussed.

Long may Government Digital Service bring about “creative tension” in Whitehall

By Tony Collins

In a report published yesterday (25 October 2016) the National Audit Office said it will shortly be undertaking a review of the Government Digital Service.

It will study GDS’s “achievements and the  challenges it faces, looking in particular at whether the centre of government is  supporting better use of technology and business transformation in government”.

It mentioned its review of GDS in a report on Progress on the Common Agricultural Policy Delivery Programme. Among other things the report looked at the IT that is supposed to support payments of farmer subsidies.

With GDS’s help Defra’s Rural Payments Agency adopted an agile approach to paying subsidies but the two parties fell out and GDS stopped working on the programme.

The NAO’s report suggests that the Rural Payments Agency is glad to be rid of GDS.

“The GDS no longer has significant involvement in the Programme and the Rural Payments Agency told us it has not sought any further support.

“Its distance from the Programme has allowed the Department [DEFRA] to shift from a focus on agile and digital delivery to an approach that combines agile software development with programme management and governance arrangements with which the RPA is more familiar.”

Government Computing has a good analysis of the NAO report.

Mandarin power

Francis Maude, meanwhile, has warned that the work of GDS, which has helped to “stop the wrong things happening”, is being undermined, reports Public Finance.

Maude, who set up GDS in 2011, blamed mandarins who were trying to reassert their autonomy.

Maude said that developments such  as controls on spending and improvements in service standard assessment processes do not happen spontaneously.

“You have to drive it centrally, and departments, separate ministries and separate agencies prize their autonomy and they will always want to take it back, and that is now happening.

“Just at the moment when the UK has just recently been ranked top in the world for digital government, we are beginning to unwind precisely the arrangements that had led to that and which were being copied in America and Australia and also some other countries as well,” said Maude.

“This is, for me, a pity – there is a sense these old structures in government, which are essentially about preserving the power of the mandarins, are being reasserted.”

He said there was a “continuing need for very strong central strategic leadership with the power backing it up to stop the wrong things happening.”

Tom Kibasi, director of the Institute for Public Policy Research, said any dismantling of GDS illustrated “government’s extraordinary propensity to self harm”.

He said it was very odd that GDS was being “scaled back and unwound at just the moment that it appears to be successful”.

In August 2016 Maude warned that it would be a “black day” if GDS were dismantled.

That said, GDS has its critics.

Comment

A clash of cultures between GDS and the Rural Payments Agency made it almost inevitable that the two sides would fall out. This is also what happened between GDS and the DWP.

Agile-wedded idealists?

If some senior civil servants had their way, particularly at the DWP, GDS would slowly lose its identity and its staff gradually dispersed throughout the civil and public services.

Clearly civil servants at the Rural Payments Agency looked at GDS  as comprising mostly agile-wedded idealists obsessed with technological innovation rather than paying subsidies to farmers.

But long before the arrival of GDS, the RPA had a history of IT failure. Perhaps the RPA would rather be left on its own to fail without GDS’s help?

The latest NAO report is a little more positive about the RPA’s achievements than some past reports.

But this week’s Farmers Weekly, which has reported extensively on delays of correct subsidy payments to farmers, quoted the National Farmers Union as saying that problems from 2015 claims were still far from over.

The future of GDS?

How easy is it for senior officials in any large central department to work closely with the Government Digital Service?

Departments – particularly HMRC and the DWP – cherish their autonomy, so GDS is seen by some permanent secretaries as an unnecessary interference.

And when it comes to the IT of central departments, GDS has no clear role.

But GDS’s creation was a good idea. Without it, departments will be left alone to continue IT spending on a vast scale.

GDS’s admittedly brief challenge at the Rural Payments Agency and at the DWP on the Universal Credit IT programme has, arguably, slightly modernised IT approaches within those departments.

And even if the costs of big Whitehall IT contracts have not changed much, there’s no doubt that the public face of government IT has improved noticeably (eg using digital passport photos for online driving licence renewals),

The more its people are resented by high-ranking civil servants, the better job GDS is probably doing on behalf of the public.

Consensus can sometimes mean complacency. Long may GDS’s relationship with departments be characterised by a state of creative, noble tension.

National Audit Office report “Progress on the Common Agricultural Policy Delivery Programme”.

GDS’s departure from CAP programme leads RPA to ditch agile approach – Government Computing

Is Sir Humphrey trying to kill off GDS and the innovations it stands for?

 

Atos pleased after it’s cleared of “sharp practice”

By Tony Collins

atos

A Cabinet Office review of the Whitehall contracts of IT services company Atos following a Public Accounts Committee allegation of “sharp practice” has more than  exonerated the supplier.

After looking at 12 Atos government contracts, the Cabinet Office has written to the Public Accounts Committee praising Atos for going beyond its contractual obligations. Where the company has fallen short, it has taken remedial steps.

Rarely are any government statements on an IT supplier replete with praise.

It’s likely the vindication will take some MPs by surprise after failings in a project to gather and collect in one place data from all the various GP practice systems – the so-called General Practice Extraction Service.

Now Atos may in future be a position to use the statement as evidence, when bidding, of its success in delivering government IT services and projects.

Millions written off

In December 2015 the Public Accounts Committee was highly critical of Atos in its report on the extraction service project.

The NHS Information Centre accepted the system from Atos although it didn’t work properly. The Centre also made public announcements at the time on the system’s success.  In fact the system had “fundamental design flaws” and millions of pounds was written off.

The Committee said,

“Very common mistakes from past projects were repeated, such as failing to adopt the right contracting approach, failing to ensure continuity of key staff on the project, and failing to undertake proper testing before accepting the system.

“GPES [General Practice Extraction Service] started some five years later than planned; it is over-budget; and it still does not provide the full service required.

“Atos, supplier for a key part of the system, may have met the letter of its contractual obligations but took advantage of a weak client by taking the client’s money while knowing full well that the whole system had not been properly tested.”

The Committee said that the NHS official who was chief executive of the Information Centre when it accepted the flawed system was “awarded total emoluments of £470,000 for the financial year 2012–2013 including a redundancy payment of £330,000”.

Tests

The Committee found that in its approach to the project, “Atos did not show an appropriate duty of care to the taxpayer”.

“We are not satisfied Atos provided proper professional support to an inexpert client and are very concerned that it appears to have acted solely with its own short term best interests in mind.

“Atos admitted that end-to-end testing should always be undertaken and that it was supposed to have happened in this case. However, NHS IC and Atos agreed a more limited test of the Atos component due to delays in completing other parts of the system.

“The Atos software passed this test, but after NHS IC accepted the system—and to Atos’s professed surprise—the system as a whole was found not to work. Atos claims it fixed the issues relating to its software at its own expense and that the additional £1.9 million it received while doing so was for additional work related to 15 new features.

“We found that Atos’s chief executive, Mr Adrian Gregory—the company’s witness in our enquiry—appeared rather indifferent to the plight of the client; we expect more from those contracting with government and receiving funds from the taxpayer.”

“Sharp practice”

The Committee recommended that the Cabinet Office undertake a “full review of Atos’s relationships as a supplier to the Crown”.

“We expect the Cabinet Office to note carefully this example of sharp practice when determining what obligations a duty of care on contractors should entail and what sanctions would apply when performance falls short.”

The government agreed to have a review.

Findings of Cabinet Office review of Atos contracts

The Cabinet Office found no “examples of behaviour that might be described as sharp commercial practice in the course of this review”.

The review team looked at 12 Atos contracts worth a total of more than £500m a year – 80% of Atos’s work with central government.

 

No: Department Contract Name
1 Department for Work and Pensions (DWP) Personal Independence Payments (PIP)
2 Department for Work and Pensions (DWP) Government Gateway Agreement
3 Department for Work and Pensions (DWP) ICT in support of medical assessments
4 HM Treasury (HMT) National Savings and Investments (NS&I)
5 Ministry of Justice (MOJ) Development, Innovation and Support Contracts (DISC) Infrastructure Services Agreement
6 Ministry of Justice (MOJ) End User Computing Services (EUCS)
7 Nuclear Decommissioning Authority (NDA) Shared Service Alliance
8 Home Office (HO) IND Procurement of Infrastructure Development and Support (IPIDS) Agreement
9 Home Office (HO) Contain Agreement
10 Department of Health (DH) Information Management Services (IMS 3)
11 Ministry of Defence (MOD) Strategic Partner Framework Defence Core Network Services (DCNS01)
12 Driver and Vehicle Standards Agency (DVSA) ICT Managed Services Agreement (IS2003)

Far from finding examples of sharp practice, the review team found “examples to the contrary”. In some of the contracts, Atos was “working at risk” and going “beyond their contractual obligations to act in the client’s interests”.

“Specific examples include expediting change control notices at the client’s request in advance of formal approval, taking financial risk ahead of contract extensions and proactively supporting the redeployment of resource to assist in the avoidance of client cost. On one contract, a notice period for a number of major decommissioning events lapsed and Atos continued to deliver the services flexibly to the client’s requirements until the service could be safely decommissioned.”

Where Atos did not meet monthly performance targets, service penalties were incurred and charged to Atos. “It was evident that when operational performance fell short appropriate sanctions were applied.”

Commitment

The Cabinet Office went on to say that Atos proactively and constructively engaged in the review and provided information as requested, “sometimes over and above their contractual commitments”.

The review team added,

“It is clear that Atos values its relationship as a supplier to the Crown; it has a comprehensive approach to the governance of all the contracts reviewed and the Atos leadership team shows commitment to its customers.

“In response to the PAC [Public Accounts Committee] hearing Atos has undertaken a number of initiatives to address PAC’s concerns.

“The Atos corporate programme ‘Client at the Heart’ aims to deepen the client-focussed culture within the organisation by embedding a set of values and action plans to deliver improved service for each contract they run, including all government contracts.

“In addition, whilst employees have always been recognised for achievement in quantitative and qualitative objectives, financial targets vary but typically account for only a small proportion of total reward packages.

“We see this as evidence that Atos client executives are incentivised to provide the appropriate professional support.”

An Atos spokesman told civilserviceworld that the company was “proud to be a trusted supplier” and had welcomed the review as an opportunity to demonstrate the quality of its services.

“We are pleased that the Cabinet Office has concluded that we deliver the appropriate level of professional support to our government clients,” he said.

Comment

It’s clear that Atos deserves credit for going beyond the call of duty on some contracts. It is also clear that those departmental officials the Cabinet Office spoke to as part of the review were happy with Atos.

What’s not so clear is the extent to which civil servants in general are in a position to know how well their major IT suppliers are performing.

Evidence from National Audit Office reports is that departments may not always have comprehensive, accurate and up-to-date information – and enough staff time – to give sound judgements on how well a major IT supplier is performing on a complex contract.

Indeed the National Audit Office can be scathing about the quality of contract management within departments.

In 2013 the Audit Office, in its report “Universal Credit: early progress” identified a series of astonishing failings that, taken together,  suggested that the DWP had little understanding of what its major IT suppliers were charging for, or why, let alone what their performance was like.

The DWP is the largest central government department – which leaves one to wonder whether some other departments, which have smaller budgets and fewer staff, are better or worse off in terms of understanding their IT contracts.

These were some of the contract management weaknesses at the DWP as identified by the National Audit Office in 2013:

  • Over-reliance on performance information that was provided by suppliers without Department validation.
  • Inadequate controls over what would be supplied, when and at what cost because deliverables were not always defined before contracts were signed.
  • Weak contractual relationships with supplier
  • 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.
  • Limited line of sight on cost of delivery, in particular between expenditure incurred and progress made in delivering outputs.
  • Poorly managed and documented financial governance, including for delegated financial authorities and approvals; for example 94 per cent of spending was approved by just four people but there is limited evidence that this was reviewed and challenged.
  • Limited IT capability and ‘intelligent client’ function leading to a risk of supplier self-review.
  • 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.
  • Ministers had insufficient information to assess the value for money of contracts before approving them.
  • Insufficient challenge of supplier-driven changes in costs and forecasts because the programme team did not fully understand the assumptions driving changes.

The Cabinet Office, in its review of Atos, found “inconsistencies” in departmental compliance with guidelines on contract management. It said,

“Where the evidence suggests that contract management is inconsistent [with National Audit Office guidelines on contract management] the Cabinet Office is discussing improvements with the contract owners in the Departments concerned.”

Praise where praise is due and Atos may well be a good – and perhaps outstanding – IT supplier to central government.

But if departments don’t have enough solid information on how well their major IT suppliers are performing, to what extent is any Cabinet Office statement praising an IT supplier likely to be a hopeful panegyric, based on what officials in departments believe they are expected to say?

Cabinet Office statement on Atos to the Public Accounts Committee – 8 September 2016

Public Accounts Committee report on Atos and the General Practice Extraction Service – December 2015

 

DWP derides claimant complaints over digital rollout of Universal Credit

By Tony Collins

dwpLess than 24 hours after the Institute for Government criticised the DWP’s “tendency not to acknowledge bad news”, the department’s press office has poured scorn on complaints to an MP about problems with the rollout of Universal Credit’s “digital” system.

A spokesman for the Department for Work and Pensions has described as “anecdotal” complaints by the public about the “full” digital Universal Credit system in south London.

The DWP has declined to publish reports that would give a factual account of the performance of the Universal Credit digital system during rollout.  Its spokespeople can therefore describe claimant complaints as “anecdotal”.

Cheap

Ministers hope that the in-house and cheaply-developed “full”  digital system will ultimately replace a “live” service that has many workarounds, has cost hundreds of millions of pounds,  has been built by the DWP’s traditional IT suppliers, and deals with only limited groups of claimants.

But the agile-developed digital system has had its problems at a pilot site in Scotland – where the DWP described claimant complaints of being left penniless as “small-scale”.

Now similar problems with the digital system have emerged in south London.

Carshalton and Wallington Liberal Democrat MP Tom Brake told the Guardian yesterday that “on a weekly basis I see residents who don’t receive payments or are forced to use a clunky system which is unusable and unsuitable for people with disabilities.”

He added,

“Every day new problems arise as a result of poor staff training, IT failures and poor IT systems.”  He said problems with a local pilot scheme of the digital system is having a serious effect on many people’s lives.

Problems highlighted by Brake include:

  • Flaws in the online system that prevent people from uploading copies of bank statements and other documents needed to secure payments for childcare places.
  • Long administrative delays and mix-ups over payments to claimants, frequently resulting in their running up arrears or being forced to turn to food banks.
  • Failure to pay, or abruptly ceasing without warning to pay, housing costs on behalf of vulnerable claimants, leaving them at risk of eviction.

A DWP spokesman told the Guardian, “It’s misleading to draw wider conclusions from the anecdotal evidence of a small number of people.

“The reality is people claiming universal credit are moving into work faster and staying in work longer than under the previous system. We are rolling out the UC service to all types of benefit claimants in a safe and controlled way so we can ensure it is working effectively for everyone.”

universal creditNot accepting bad news

Yesterday the Institute for Government published two reports on Universal Credit, focusing on the political, managerial and IT aspects. One of the reports “Learning Lessons from Universal Credit” by Emma Norris and Jill Rutter referred to the DWP’s need to combat its ‘no bad news’ culture.

It said the DWP had a “tendency to not acknowledge bad news, or to acknowledge it insufficiently”. It said “good news culture that prevailed within the DWP, with a reluctance to tell ministers of emerging problems, was a real barrier to identifying and addressing them”. 

Two Parliamentary committees, the Public Accounts Committee and the Work and Pensions have criticised the DWP’s inability to face up to bad news, and its selective approach to the dissemination of information.

“Burst into tears”

The other Institute for Government report published yesterday on Universal Credit – Universal Credit, from disaster to recovery? –  quoted an insider as saying that some of those in the  DWP’s IT team at Warrington burst into tears, so relieved were they to discover that they could tell someone the truth about problems with Universal Credit’s digital system.

In a DWP paper that an FOI tribunal judge has ruled can be disclosed, the DWP conceded that officials lacked “candour and honesty throughout the [Universal Credit IT] Programme and publicly”.

Comment

Problems with the digital system are to be expected.

What’s not acceptable is the DWP’s patronising or scoffing attitude towards claimants who’ve experienced problems with the systems.

In describing the complaints to MP Tom Brake as “anecdotal” the DWP’s hierarchy is aware that it is keeping secret reports that give the facts on the performance of the digital system at pilot sites.

Indeed the DWP is habitually refusing FOI requests to publish reports on the performance of its IT systems. Which enables it to describe all clamant complaints as “anecdotal”.

Test and see

The DWP is taking a “test and see” approach to the roll-out of Universal Credit’s digital system. This means in essence it is using the public as test guinea pigs.

Harsh though this will sound, the DWP’s testing philosophy is understandable. Trying out the digital system on claimants may be the only practical way to bring to the surface all the possible problems. There may be too many complexities in individual circumstances to conduct realistic tests offline.

But why can’t the DWP be open about its digital test strategy? Are its officials – including press officers – locked forever into the culture of “no bad news”?

This denial culture, if it’s maintained, will require the DWP to mislead Parliamentary committees, MPs in general, the public and even stakeholders such as local authorities.

Two select committee reports have criticised the DWP’s prevarications and obfuscations. A chairwoman of the Work and Pensions Committee Dame Anne Begg referred to the DWP’s  tendency to “sweep things under the carpet”.

The Institute for Government referred to even ministers being kept away from bad news.

Other evidence emerged in July 2016 of the DWP’s deep antipathy to external scrutiny and criticism.

It seems that the DWP, with its culture of denial and accepting good news only, would be more at home operating in the government administrations of China, North Korea or Russia.

Isn’t it time the DWP started acknowledging complaints about Universal Credit systems, apologising and explaining what it was doing about resolving problems?

That’s something the governments of China, North Korea and Russia are unlikely to do when something goes wrong.

For decades the DWP has been defensive, introspective and dismissive of all external criticism. It has misled MPs.

And it has done so with an almost eager, cheerful willingness.

But it’s never too late to change.

Digital Universal Credit system is plagued with errors, says MP

Excellent reports on lessons from Universal Credit IT are published today – but who’s listening?

Analysis of Universal Credit IT document the DWP didn’t want published

 

Excellent reports on lessons from Universal Credit IT project published today – but who’s listening?

By Tony Collins

“People burst into tears, so relieved were they that they could tell someone what was happening.”

The Institute for Government has today published one of the most incisive – and revelatory – reports ever produced on a big government IT project.

It concludes that the Universal Credit IT programme may now be in recovery after a disastrous start, but recovery does not mean recovered. Much could yet floor the programme, which is due to be complete in 2022.

The Institute’s main report is written by Nick Timmins, a former Financial Times journalist, who has written many articles on failed publicly-funded IT-based projects.

His invaluable report, “Universal Credit – from disaster to recovery?” – includes interviews with David Pitchford, a key figure in the Universal Credit programme, and Howard Shiplee who led the Universal Credit project.

Timmins also spoke to insiders, including DWP directors, who are not named, and the former secretary of state at the Department for Work and Pensions Iain Duncan Smith and the DWP’s welfare reform minster Lord Freud.

Separately the Institute has published a shorter report “Learning the lessons from Universal Credit which picks out from Timmins’ findings five “critical” lessons for future government projects. This report, too, is clear and jargon-free.

Much of the information on the Universal Credit IT programme in the Timmins report is new. It gives insights, for instance, into the positions of Universal Credit’s major suppliers HP, IBM, Accenture.

It also unearths what can be seen, in retrospect, to be a series of self-destructive decisions and manoeuvres by the Department for Work and Pensions.

But the main lessons in the report – such as an institutional and political inability to face up to or hear bad news – are not new, which raises the question of whether any of the lessons will be heeded by future government leaders – ministers and civil servants – given that Whitehall departments have been making the same mistakes, or similar ones, for decades?

DWP culture of suppressing any bad news continues

Indeed, even as the reports lament a lack of honesty over discussing or even mentioning problems – a “culture of denial” – Lord Freud, the minister in charge of welfare reform, is endorsing FOI refusals to publish the latest risk registers, project assessment reviews and other Universal Credit reports kept by the Department for Work and Pensions.

More than once Timmins expresses his surprise at the lack of information about the programme that is in the public domain. In the “acknowledgements” section at the back of his report Timmins says,

“Drafts of this study were read at various stages by many of the interviewees, and there remained disputes not just about interpretation but also, from some of them, about facts.

“Some of that might be resolvable by access to the huge welter of documents around Universal Credit that are not in the public domain. But that, by definition, is not possible at this stage.”

Churn of project leaders continues

Timmins and the Institute warn about the “churn” of project leaders, and the need for stable top jobs.

But even as the Institute’s reports were being finalised HMRC was losing its much respected chief digital officer Mark Dearnley, who has been in charge of what is arguably the department’s riskiest-ever IT-related programme, to transfer of legacy systems to multiple suppliers as part of the dismantling of the £8bn “Aspire” outourcing venture with Capgemini.

Single biggest cause of Universal Credit’s bad start?

Insiders told Timmins that the fraught start of Universal Credit might have been avoided if Terry Moran had been left as a “star” senior responsible owner of the programme. But Moran was given two jobs and ended up having a breakdown.

In January 2011, as the design and build on Universal Credit started, Terry Moran was given the job of senior responsible owner of the project but a few months later the DWP’s permanent secretary Robert Devereux took the “odd” decision to make Moran chief operating officer for the entire department as well. One director within the DWP told Timmins:

“Terry was a star. A real ‘can do’ civil servant. But he couldn’t say no to the twin posts. And the job was overwhelming.”

The director claimed that Iain Duncan Smith told Moran – a point denied by IDS – that if Universal Credit were to fail that would be a personal humiliation and one he was not prepared to contemplate. “That was very different from the usual ministerial joke that ‘failure is not an option’. The underlying message was that ‘I don’t want bad news’, almost in words of one syllable. And this was in a department whose default mode is not to bring bad news to the top. ‘We will handle ministers’ is the way the department operates…”

According to an insider, “Terry Moran being given the two jobs was against Iain’s instructions. Iain repeatedly asked Robert [Devereux] not to do this and Robert repeatedly gave him assurances that this would be okay” – an account IDS confirms. In September 2012, Moran was to have a breakdown that led to early retirement in March 2013. He recorded later for the mental health charity Time to Talk that “eventually, I took on more and more until the weight of my responsibilities and my ability to discharge them just grew too much for me”.

Timmins was told, “You cannot have someone running the biggest operational part of government [paying out £160bn of benefits a year] and devising Universal Credit. That was simply unsustainable,”

Timmins says in his report, “There remains a view among some former and current DWP civil servants that had that not happened (Moran being given two jobs), the programme would not have hit the trouble it did. ‘Had he been left solely with responsibility for UC [Universal Credit], I and others believe he could have delivered it, notwithstanding the huge challenges of the task,’ one says.”

Reviews of Universal IT “failed”

Timmins makes the point that reviews of Universal Credit by the Major Projects Authority failed to convey in clear enough language that the Universal Credit programme was in deep trouble.

“The [Major Projects Authority] report highlighted a lack of sufficient substantive action on the points raised in the March study. It raised ‘high’ levels of concern about much of the programme – ‘high’ being a lower level of concern than ‘critical’. But according to those who have seen the report, it did not yet say in words of one syllable that the programme was in deep trouble.”

Iain Duncan Smith told Timmins that the the Major Projects review process “failed me” by not warning early enough of fundamental problems. It was the ‘red team’ report that did that, he says, and its contents made grim reading when it landed at the end of July in 2012.

Train crash on the way

The MPA [Cabinet Office’s Major Projects Authority] reviewed the programme in March 2011. “MPA reports are not in the public domain. But it is clear that the first of these flagged up a string of issues that needed to be tackled …

” In June a member of the team developing the new government’s pan-government website – gov.uk – was invited up to Warrington [base for the Universal Credit IT team] to give a presentation on how it was using an agile approach to do that.

“At the end of the presentation, according to one insider, a small number from the audience stayed behind, eyeing each other warily, but all wanting to talk. Most of them were freelancers working for the suppliers. ‘Their message,’ the insider says, ‘was that this was a train crash on the way’ – a message that was duly reported back to the Cabinet Office, but not, apparently, to the DWP and IDS.”

Scared to tell the truth

On another occasion when the Major Projects Authority visited the IT team at Warrington for the purposes of its review, the review team members decided that “to get to the truth they had to make people not scared to tell the truth”. So the MPA “did a lot of one-on-one interviews, assuring people that what they said would not be attributable. And under nearly every stone was chaos.

“People burst into tears, so relieved were they that they could tell someone what was happening.

” There was one young lad from one of the suppliers who said: ‘Just don’t put this thing [Universal Credit] online. I am a public servant at heart. It is a complete security disaster.’

IBM, Accenture and HP

“Among those starting to be worried were the major suppliers – Accenture, HP and IBM. They started writing formal letters to the department.

‘Our message,’ according to one supplier, ‘was: ‘Look, this isn’t working. We’ll go on taking your money. But it isn’t going to work’.’ Stephen Brien [then expert adviser to IDS] says of those letters: ‘I don’t think Iain saw them at that time, and I certainly didn’t see them at the time.”

At one point “serious consideration was given to suing the suppliers but they had written their warning letters and it rapidly became clear that that was not an option”.

Howard Shiplee, former head of the project, told Timmins that he had asked himself ‘how it could be that a very large group of clever people drawn from the DWP IT department with deep experience of the development and operation of their own massive IT systems and leading industry IT suppliers had combined to get the entire process so very wrong? Equally, ‘how could another group of clever people [the GDS team] pass such damning judgement on this earlier work and at the stroke of a pen seek to write off millions of pounds of taxpayers’ money?’

Shiplee commissioned a review from PwC on the work carried out to date and discovered that the major suppliers “were genuinely concerned to have their work done properly, support DWP and recover their reputations”.

In addition, when funding had been blocked at the end of 2012, the suppliers “had not simply downed tools but had carried on development work for almost three months” as they ran down the large teams that had been working on it.

“As a result, they had completed the development for single claimants that was being used in the pathfinder and made considerable progress on claims for couples and families. And their work, the PwC evaluation said, was of good quality.”

On time?

When alarm bells finally started ringing around Whitehall that Universal Credit was in trouble,  IDS found himself under siege. Stephen Brien says IDS was having to battle with the Treasury to keep the funding going for the project. He had to demonstrate that the programme was on time and on budget.

‘The department wanted to support him in that, and didn’t tell him all the things that were going wrong. I found out about some of them, but I didn’t push as hard as I should have. And looking back, the MPA [Major Projects Authority] meetings and the MPA reports were all handled with a siege mentality. We all felt we had to stand shoulder to shoulder defending where we were and not really using them to ask: ‘Are we where we should be?’

‘As a result we were not helping ourselves, and we certainly were not helping others, including the MPA. But we did get to the stage between the end of 2011 and the spring of 2012 where we said: ‘Okay, let’s get a red team in with the time and space to do our own challenge.’”

The DWP’s “caste” system

A new IT team was created in Victoria Street, London – away from Warrington but outside the DWP’s Caxton Street headquarters. It started to take a genuinely agile approach to the new system. One of those involved told Timmins:

“It had all been hampered by this caste system in the department where there is a policy elite, then the operational people, and then the technical people below that.

“And you would say to the operational people: ‘Why have you not been screaming that this will never work?’ And they’d say: ‘Well, we’re being handed this piece of sh** and we are just going to have to make it work with workarounds, to deal with the fact that we don’t want people to starve. So we will have to work out our own processes, which the policy people will never see, and we will find a way to make it work.’

Twin-track approach

IBM, HP and Accenture built what’s now known as the “live” system which enabled Universal Credit to get underway, and claims to be made in jobcentres.

It uses, in part, the traditional “waterfall” approach and has cost hundreds of millions of pounds. In contrast there’s a separate in-house “digital” system that has cost less than £10m and is an “agile” project.

A key issue, Shiplee told Timmins, was that the new digital team “would not even discuss the preceding work done by the DWP and its IT suppliers”. The digital team had, he says, “a messiah-like approach that they were going to rebuild everything from scratch”.

Rather than write everything off, Shiplee wanted ideally to marry the “front-end” apps that the GDS/DWP team in Victoria Street was developing with the work already done. But “entrenched attitudes” made that impossible. The only sensible solution, he decided, was a “twin-track” approach.

“The Cabinet Office remained adamant that the DWP should simply switch to the new digital version – which it had now become clear, by late summer, would take far longer to build than they anticipated – telling the DWP that the problem was that using the original software would mean ‘creating a temporary service, and temporary will become permanent’.

“All of which led to the next big decision, which, to date, has been one of the defining ones. In November 2013, a mighty and fraught meeting of ministers and officials was convened. Pretty much everyone was there. The DWP ministers, Francis Maude (Cabinet Office minister), Oliver Letwin who was Cameron’s policy overlord, Sir Jeremy Heywood, the Cabinet Secretary, Sir Bob Kerslake, the head of the home civil service, plus a clutch of DWP officials including Robert Devereux and Howard Shiplee as the senior responsible owner along with Danny Alexander and Treasury representatives.

“The decision was whether to give up on the original build, or run a twin-track approach: in other words, to extend the use of the original build that was by now being used in just over a dozen offices – what became dubbed the ‘live’ service – before the new, and hopefully much more effective, digital approach was finished and on stream.

“It was a tough and far from pleasant meeting that is etched in the memories of those who were there…

“One of those present who favoured the twin-track approach says: There were voices for writing the whole of the original off. But that would have been too much for Robert Devereux [the DWP’s Permanent Secretary] and IDS.

” So the twin-track approach was settled on – writing a lot of the original IT down rather than simply writing it off. That, in fact, has had some advantages even if technically it was probably the wrong decision…

“It has, however, seen parts of the culture change that Universal Credit involves being rolled out into DWP offices as more have adopted Universal Credit, even if the IT still requires big workarounds.

“More and more offices, for example, have been using the new claimant commitment, which is itself an important part of Universal Credit. So it has been possible to train thousands of staff in that, and get more and more claimants used to it, while also providing feedback for the new build.”

Francis Maude was among those who objected to the twin-track approach, according to leaked minutes of the project oversight board at around this time.

Lord Freud told Timmins,

‘Francis was adamant that we should not go with the live system [that is, the original build]. He wanted to kill it. But we, the DWP, did not believe that the digital system would be ready on anything like the timescales they were talking about then …But I knew that if you killed the live system, you killed Universal Credit…”

In the end the twin-track approach was agreed by a majority. But the development of the ‘agile’ digital service was immediately hampered by a spat over how quickly staff from the GDS were to be withdrawn from the project.

Fury over National Audit Office report

In 2013 the National Audit Office published a report Universal Credit – early progress –  that, for the first time, brought details of the problems on the Universal Credit programme into the public domain. Timmins’ report says that IDS and Lord Freud were furious.

“IDS and, to an only slightly lesser extent, Lord Freud were furious about the NAO report; and thus highly defensive.”

IDS tried to present the findings of the National Audit Office as purely historical.

In November 2014, the NAO reported again on Universal Credit. It once more disclosed something that ministers had not announced – that the timetable had again been put back two years (which raises further questions about why Lord Freud continues to refuse FOI requests that would put into the public domain – and inform MPs – about project problems, risks and delays without waiting for an NAO report to be published)..

Danny Alexander “cut through” bureaucracy

During one period, the Treasury approval of cash became particularly acute. Lord Freud told Timmins:

“We faced double approvals. We had approval about any contract variation from the Cabinet Office and then approvals for the money separately from the Treasury.

“The Government Digital Service got impatient because they wanted to make sure that the department had the ability to build internally rather than going out to Accenture and IBM, who (sic) they hate.

“The approvals were ricocheting between the Cabinet Office and the Treasury and when we were trying to do rapid iteration. That was producing huge delays, which were undermining everything. So in the end Danny Alexander [Lib-dem MP who was chief secretary to the Treasury] said: ‘I will clear this on my own authority.’ And that was crucial. Danny cut through all of that.”

Optimism bias

So-called optimism bias – over-optimism – is “such a common cause of failure in both public and private projects that it seems quite remarkable that it needs restating. But it does – endlessly”.

Timmins says the original Universal Credit white paper – written long before the start of the programme – stated that it would involve “an IT development of moderate scale, which the Department for Work and Pensions and its suppliers are confident of handling within budget and timescale”.

David Pitchford told Timmins,

“One of the greatest adages I have been taught and have learnt over the years in terms of major projects is that hope is not a management tool. Hoping it is all going to come out all right doesn’t cut it with something of this magnitude.

“The importance of having a genuine diagnostic machine that creates recommendations that are mandatory just can’t be overstated. It just changes the whole outcome completely. As opposed to obfuscation and optimism bias being the basis of the reporting framework. It goes to a genuine understanding and knowledge of what is going on and what is going wrong.”

Sir Bob Kerslake, who also identified the ‘good news culture’ of the DWP as being a problem, told Timmins,

“All organisations should have that ability to be very tough about what is and isn’t working. The people at the top have rose-tinted specs. They always do. It goes with the territory.

And unless you are prepared to embrace people saying that ‘really, this is in a bad place’… I can think of points where I have done big projects where it was incredibly important that we delivered the unwelcome news of where we were on that project. But it saved me, and saved my career.”

Recovery?

Timmins makes good arguments for his claim that the Universal Credit programme may be in recovery – but not recovered – and that improvements have been made in governance to allow for decisions to be properly questioned.

But there is no evidence the DWP’s “good news” culture has changed. For instance the DWP says that more than 300,000 people are claiming Universal Credit but the figure has not been audited and it’s unclear whether claimants who have come off the benefit and returned to it – perhaps several times – are being double counted.

Timmins points out the many uncertainties that cloud the future of the Universal Credit programme  – how well the IT will work, whether policy changes will hit the programme, whether enough staff will remain in jobcentres, and whether the DWP will have good relations with local authorities that are key to the delivery of Universal Credit but are under their own stresses and strains with resourcing.

There are also concerns about what changes the Scots and Northern Irish may want under their devolved powers, and the risk that any ‘economic shock’ post the referendum pushes up the volume of claimants with which the DWP has to deal.

 Could Universal Credit fail for non-IT reasons?

Timmins says,

“In seeking to drive people to higher earnings and more independence from the benefits system, there will be more intrusion into and control over the lives of people who are in work than under the current benefits system. And there are those who believe that such an approach – sanctioning people who are already working – will prove to be political dynamite.”

The dire consequences of IT-related failure

It is also worth noting that Universal Credit raises the stakes for the DWP in terms of its payment performance, says Timmins.

“If a tax credit or a Jobseeker’s Allowance payment or any of the others in the group of six go awry, claimants are rarely left penniless in the sense that other payments – for example, Housing Benefit in the case of Jobseeker’s Allowance or tax credits, – continue.

“If a Universal Credit payment fails, then all the support from the state, other than Child Benefit or disability benefits not included within Universal Credit, disappears.”

This happened recently in Scotland when an IT failure left hundreds of families penniless. The DWP’s public response was to describe the failure in Scotland as “small-scale”.

Comment

What a report.

It is easy to see how much work has gone into it. Timmins has coupled his own knowledge of IT-related failure with a thorough investigation into what has gone wrong and what lessons can be learned.

That said it may make no difference. The Institute in its “lessons” report uses phrases such as “government needs to make sure…”. But governments change and new administrations have an abundance – usually a superfluity – of confidence and ambition. They regard learning lessons from the past as putting on brakes or “nay saying”. You have to get with the programme, or quit.

Lessons are always the same

There will always be top-level changes within the DWP. Austerity will always be a factor.  The culture of denial of bad news, over-optimism about what can be achieved by when and how easily it can be achieved, over-expectations of internal capability, over-expectation of what suppliers can deliver, embarking on a huge project without clearly or fully understanding what it will involve, not listening diligently to potential users and ridiculously short timescales are all well-known lessons.

So why do new governments keep repeating them?

When Universal Credit’s successor is started in say 2032, the same mistakes will probably be repeated and the Institute for Government, or its successor, will write another similar report on the lessons to be learned.

When Campaign4Change commented in 2013 that Universal Credit would probably not be delivered before 2020 at the earliest, it was an isolated voice. At the time, the DWP press office – and its ministers – were saying the project was on budget and “on time”.

NPfIT

The National Audit Office has highlighted similar lessons to those in the Timmins report, for example in NAO reports on the NPfIT – the NHS IT programme that was the world’s largest non-military IT scheme until it was dismantled in 2011. It was one of the world’s biggest IT disasters – and none of its lessons was learned on the Universal Credit programme.

The NPfIT had an anti-bad news culture. It did not talk enough to end users. It had ludicrous deadlines and ambitions. The politicians in charge kept changing, as did some of programme leaders. There was little if any effective internal or external challenge. By the time it was dismantled the NPfIT had lost billions.

What the Institute for Government could ask now is, with the emasculation of the Government Digital Service and the absence of a powerful Francis Maude figure, what will stop government departments including the DWP making exactly the mistakes the IfG identifies on big future IT-enabled programmes?

In future somebody needs the power to say that unless there is adequate internal and external challenge this programme must STOP – even if this means contradicting a secretary of state or a permanent secretary who have too much personal and emotional equity in the project to allow it to stop. That “somebody” used to be Francis Maude. Now he has no effective replacement.

Victims

It’s also worth noting in the Timmins report that everyone seems to be a victim, including the ministers. But who are perpetrators? Timmins tries to identify them. IDS does not come out the report smelling of roses. His passion for success proved a good and bad thing.

Whether the direction was forwards or backwards IDS  was the fuel that kept Universal Credit going.  On the other hand his passion made it impossible for civil servants to give him bad news – though Timmins raises questions about whether officials would have imparted bad news to any secretary of state, given the DWP’s culture.

Neither does the DWP’s permanent secretary Robert Devereux emerge particularly well from the report.

How it is possible for things to go so badly wrong with there being nobody to blame? The irony is that the only people to have suffered are the genuine innocents – the middle and senior managers who have most contributed to Universal Credit apparent recovery – people like Terry Moran.

Perhaps the Timmins report should be required reading among all involved in future major projects. Competence cannot be made mandatory. An understanding of the common mistakes can.

Thank you to FOI campaigner Dave Orr for alerting me to the Institute’s Universal Credit reports.

Thanks also to IT projects professional John Slater – @AmateurFOI – who has kept me informed of his FOI requests for Universal Credit IT reports that the DWP habitually refuse. 

Update 18.00 6 September 2016

In a tweet today John Slater ( @AmateurFOI ) makes the important point that he asked the DWP and MPA whether either had held a “lessons learned” exercise in the light of the “reset” of the Universal Credit IT programme. The answer was no.

This perhaps reinforces the impression that the DWP is irredeemably complacent, which is not a good position from which to lead major IT projects in future.

Universal Credit – from disaster to recovery?

Learning the lessons from Universal Credit

 

Inside Universal Credit IT – analysis of document the DWP didn’t want published

dwpBy Tony Collins

Written evidence the Department for Work and Pensions submitted to an FOI tribunal – but did not want published (ever) – reveals that there was an internal “lack of candour and honesty throughout the [Universal Credit IT] Programme and publicly”.

It’s the first authoritative confirmation by the DWP that it has not always been open and honest when dealing with the media on the state of the Universal Credit IT programme.

FOI tribunal grants request to publish DWP's written submission

FOI tribunal grants request to publish DWP’s written submission

According to the DWP submission, senior officials on the Programme became so concerned about leaks that a former member of the security services was brought in to lead an investigation. DWP staff and managers were the subjects of “detailed interviews”. Employee emails were “reviewed”, as were employee access rights to shared electronic areas.

Staff became “paranoid” about accidentally leaving information on a printer. Some of the high-security measures appear still to be in place.

Unpublished until now, the DWP’s written legal submission referred, in part, to the effects on employees of leak investigations.

The submission was among the DWP’s written evidence to an FOI Tribunal in February 2016.

The Government Legal Service argued that the DWP’s written evidence was for the purposes of the tribunal only. It should not be published or passed to an MP.

The Legal Service went further: it questioned the right of an FOI Tribunal to decide on whether the submission could be published. Even so a judge has ruled that the DWP’s written evidence to the tribunal can be published.

Excerpts from the submission are here.

Analysis and Comment

The DWP’s submission gives a unique glimpse into day-to-day life and corporate sensitivities at or near the top of the Universal credit IT programme.

It reveals the lengths to which senior officials were willing to go to stop any authoritative “bad news” on the Universal Credit IT programme leaking out. Media speculation DWP’s senior officials do not seem to mind. What appears to concern them is the disclosure of any credible internal information on how things are progressing on Universal Credit IT.

Confidential

Despite multiple requests from IT suppliers, former government CIOs and MPs, for Whitehall to publish its progress reports on big IT-based change programmes (some examples below), all central departments keep them confidential.

That sensitivity has little to do with protecting personal data.

It’s likely that reviews of projects are kept confidential largely because they could otherwise expose incompetence, mistakes, poor decisions, risks that are likely to materialise, large sums that have been wasted or, worst of all, a project that should have been cancelled long ago and possibly re-started, but which has been kept going in its original form because nobody wanted to own up to failure.

Ian watmore front cover How to fix government IROn this last point, former government CIO and permanent secretary Ian Watmore spoke to MPs in 2009 about how to fix government IT. He said,

“An innovative organisation tries a lot of things and sometimes things do not work. I think one of the valid criticisms in the past has been when things have not worked, government has carried on trying to make them work well beyond the point at which they should have been stopped.”

Individual accountability for failure?

Oblivious to MPs’ requests to publish IT progress reports, the DWP routinely refuses FOI requests to publish IT progress reports, even when they are several years old, even though by then officials and ministers involved will probably have moved on. Individual accountability for failure therefore continues to be non-existent.

Knowing this, MPs on two House of Commons select committees, Public Accounts and Work and Pensions, have called for the publication of reports such as “Gateway” reviews.

This campaign for more openness on government IT projects has lasted nearly three decades. And still Whitehall never publishes any contemporaneous progress reports on big IT programmes.

It took an FOI campaigner and IT projects professional John Slater [@AmateurFOI] three years of legal proceedings to persuade the DWP to release some old reports on the Universal Credit IT programme (a risk register, milestone schedule and issues log). And he had the support of the Information Commissioner’s legal team.

universal creditWhen the DWP reluctantly released the 2012 reports in 2016 – and only after an informal request by the then DWP secretary of state Stephen Crabb – pundits were surprised at how prosaic the documents were.

Yet we now know, thanks to the DWP’s submission, the lengths to which officials will go to stop such documents leaking out.

Understandable?

Some at the DWP are likely to see the submission as explaining some of understandable measures any government department would take to protect sensitive information on its largest project, Universal Credit. The DWP is the government largest department. It runs some of the world’s biggest IT systems. It possesses personal information on nearly everyone in Britain. It has to make the protection of its information a top priority.

Others will see the submission as proof that the DWP will do all it can to honour a decades-old Whitehall habit of keeping bad news to itself.

Need for openness

It’s generally accepted that success in running big IT-enabled change programmes requires openness – with staff and managers, and with external organisations and agencies.

IT-based change schemes are about solving problems. An introspective “good news only” culture may help to explain why the DWP has a poor record of managing big and successful IT-based projects and programmes. The last time officials attempted a major modernisation of benefit systems in the 1990s – called Operational Strategy – the costs rose from £713m to £2.6bn and the intended objective of joining up the IT as part of a “whole person” concept, did not happen.

Programme papers“watermarked”

The DWP’s power, mandate and funding come courtesy of the public. So do officials, in return, have the right to keep hidden mistakes and flawed IT strategies that may lead to a poor use – or wastage – of hundreds of millions of pounds, or billions?

The DWP’s submission reveals that recommendations from its assurance reports (low-level reports on the state of the IT programme including risks and problems) were not circulated and a register was kept of who had received them.

Concern over leaks

The submission said that surveys on staff morale ceased after concerns about leaks. IT programme papers were no longer sent electronically and were delivered by hand. Those that were sent were “double-enveloped” and any that needed to be retained were “signed back in”. For added security, Universal Credit programme papers were watermarked.

When a former member of the security services was brought in to conduct a leaks investigation, staff and mangers were invited by the DWP’s most senior civil servant to “speak to the independent investigator if they had any information”. This suggests that staff were expected to inform on any suspect colleagues.

People “stopped sharing comments which could be interpreted as criticism of the [Universal Credit IT] Programme,” said the submission. “People became suspicious of their colleagues – even those they worked closely with.

“There was a lack of trust and people were very careful about being honest with their colleagues…

“People felt they could no longer share things with colleagues that might have an honest assessment of difficulties or any negative criticism – many staff believed the official line was, ‘everything is fine’.

“People, even now, struggle to trust colleagues with sensitive information and are still fearful that anything that is sent out via email will be misused.

“For all governance meetings, all documents are sent out as password protected, with official security markings included, whether or not they contain sensitive information.”

“Defensive”

dwpLines to take with the media were added to a “Rolling Brief”, an internal update document, that was circulated to senior leaders of the Universal Credit IT programme, the DWP press office and special advisors.

These “lines to take” were a “defensive approach to media requests”. They emphasised the “positive in terms of progress with the Programme without acknowledging the issues identified in the leaked stories”.

This positive approach to briefing and media management “led to a lack of candour and honesty through the Programme and publically …”

How the DWP’s legal submission came about is explained in this separate post.

Were there leaks of particularly sensitive information?

It appears not. The so-called leaks revealed imperfections in the running of the Universal Credit programme; but there was no personal information involved. Officials were concerned about the perceived leak of a Starting Gate Review to the Telegraph (although the DWP had officially lodged the review with the House of Commons library).

The DWP also mentioned in its statement a leak to the Guardian of the results of an internal “Pulse” survey of staff morale – although it’s unclear why the survey wasn’t published officially given its apparent absence of sensitive commercial, personal, corporate or governmental information.

NPfIT

The greater the openness in external communications, the less likely a natural scepticism of new ways of working will manifest in a distrust of the IT programme as a whole.

The NHS’s National Programme for IT (NPfIT) – then the UK’s biggest IT programme costing about £10bn – was dismantled in 2011 after eight fraught years. One reason it was a disaster was the deep distrust of the NPfIT among clinicians, hospital technologists, IT managers, GPs and nurses. They had listened with growing scepticism to Whitehall’s oft-repeated “good news” announcements.

Ex-Government CIO wanted more openness on IT projects

When MPs have asked the DWP why it does not publish reports on the progress of IT-enabled projects, it has cited “commercial confidentiality”.

But in 2009, Ian Watmore (the former Government CIO) said in answer to a question by Public Account Committee MP Richard Bacon that he’d endorse the publication of Gateway reviews, which are independent assessments of the achievements, inadequacies, risks, progress and challenges on risky IT-based programmes.

“I am with you in that I would prefer Gateway reviews to be published because of the experience we had with capability reviews (published reports on a department’s performance). We had the same debate (as with Gateway reviews) and we published them. It caused furore for a few weeks but then it became a normal part of the furniture,” said Watmore.

Capability reviews are no longer published. The only “regular” reports of Whitehall progress with big IT programmes are the Infrastructure and Projects Authority’s annual reports. But these do not include Gateway reviews or other reports on IT projects and programmes. The DWP and other departments publish only their own interpretations of project reviews.

In the DWP’s latest published summary of progress on the Universal Credit IT programme, dated July 2016, the focus is on good news only.

But this creates a mystery. The Infrastructure and Projects Authority gave the Universal Credit programme an “amber” rating in its annual report which was published this month. But neither the DWP nor the Authority has explained why the programme wasn’t rated amber/green or green.

MPs and even IT suppliers want openness on IT projects

Work and Pensions Committee front coverIn 2004 HP, the DWP’s main IT supplier, told a Work and Pensions Committee inquiry entitled “Making IT work for DWP customers” in 2004 that “within sensible commercial parameters, transparency should be maintained to the greatest possible extent on highly complex programmes such as those undertaken by the DWP”.

The Work and Pensions Committee spent seven months investigating IT in the DWP and published a 240-page volume of oral and written in July 2004. On the matter of publishing “Gateway” reviews on the progress or otherwise of big IT projects, the Committee concluded,

“We found it refreshing that major IT suppliers should be content for the [Gateway] reviews to be published. We welcome this approach. It struck us as very odd that of all stakeholders, DWP should be the one which clings most enthusiastically to commercial confidentiality to justify non-disclosure of crucial information, even to Parliament.”

The Committee called for Gateway reviews to be published. That was 12 years ago – and it hasn’t happened.

Four years later the Committee found that the 19 most significant DWP IT projects were over-budget or late.

DWP headline late and over budget

In 2006 the National Audit Office reported on Whitehall’s general lack of openness in a report entitled “Delivering successful IT-enabled business change”.

The report said,

“The Public Accounts Committee has emphasised frequently the need for greater transparency and accountability in departments’ performance in managing their programmes and projects and, in particular, that the result of OGC Gateway Reviews should be published.”

But today, DWP officials seem as preoccupied as ever with concealing bad news on their big IT programmes including Universal Credit.

The costs of concealment

The DWP has had important DWP project successes, notably pension credits, which was listed by the National Audit Office as one of 24 positive case studies.

But the DWP has also wasted tens of millions of pounds on failed IT projects.

Projects with names such as “Camelot” [Computerisation and Mechanisation of Local Office Tasks] and Assist [Analytical Services Statistical Information System) were cancelled with losses of millions of pounds. More recently the DWP has run into problems on several big projects.

“Abysmal”

On 3 November 2014 the then chairman of the Public Accounts Committee Margaret Hodge spoke on Radio 4’s Analysis of the DWP’s ‘abysmal’ management of IT contracts.”

1984

As long ago as 1984, the House of Commons Public Accounts Committee called for the civil service to be more open about its progress on major computer projects.

Today there are questions about whether the Universal Credit IT will succeed. Hundreds of millions has already been spent. Yet, as mentioned earlier, current information on the progress of the DWP’s IT programmes remains a state secret.

It’s possible that progress on the Universal Credit IT programme has been boosted by the irregular (but thorough) scrutiny by the National Audit Office. That said, as soon as NAO reports on Universal Credit are published, ministers and senior officials who have seen copies in advance routinely dismiss any criticisms as retrospective and out-of-date.

Does it matter if the DWP is paranoid about leaks?

A paper published in 2009 looks at how damaging it can be for good government when bureaucracies lack internal challenge and seek to impose on officials a “good news” agenda, where criticism is effectively prohibited.

The paper quoted the then Soviet statesman Mikhail Gorbachev as saying, in a small meeting with leading Soviet intellectuals,

“The restructuring is progressing with great difficulty. We have no opposition party. How then can we control ourselves? Only through criticism and self-criticism. Most important: through glasnost.”

Non-democratic regimes fear a free flow of information because it could threaten political survival. In Russia there was consideration of partial media freedom to give incentives to bureaucrats who would otherwise have no challenge, and no reason to serve the state well, or avoid mistakes.

The Chernobyl nuclear disaster, which occurred on April 26, 1986, was not acknowledged by Soviet officials for two days, and only then after news had spread across the Western media.

The paper argued that a lack of criticism could keep a less democratic government in power. But it can lead to a complacency and incompetence in implementing policy that even a censored media cannot succeed in hiding.

As one observer noted after Chernobyl (Methvin in National Review, Dec. 4, 1987),

“There surely must be days—maybe the morning after Chernobyl—when Gorbachev wishes he could buy a Kremlin equivalent of the Washington Post and find out what is going on in his socialist wonderland.”

Red team

Iain DuncanSmithA lack of reliable information on the state of the Universal Credit IT programme prompted the then secretary of state Iain Duncan Smith to set up his own “red team” review.

That move was not known about at the time. Indeed in December 2012 – at a point when the DWP was issuing public statements on the success of the Universal Credit Programme – the scheme was actually in trouble. The DWP’s legal submission said,

“In summary we concluded (just before Christmas 2012) that the IT system that had been developed for the launch of UC [Universal Credit] had significant problems.”

One wonders whether DWP civil servants kept Duncan Smith in the dark because they themselves had not been fully informed about what was going on, or because they thought the minister was best protected from knowing what was going on, deniability being one key Whitehall objective.

But in the absence of reliable internal information a political leader can lose touch completely, said the paper on press freedom.

“On December 21, 1989, after days of local and seemingly limited unrest in the province of Timi¸ Ceausescu called for a grandiose meeting at the central square of Bucharest, apparently to rally the crowds in support of his leadership. In a stunning development, the meeting degenerated into anarchy, and Ceausescu and his wife had to flee the presidential palace, only to be executed by a firing squad two days later.”

Wrong assumptions

Many times, after the IT media has published articles on big government IT-based project failures, TV and radio journalists have asked to what extent the secretary of state was responsible and why he hadn’t acted to stop millions of pounds being wasted.

But why do broadcast journalists assume ministers control their departments? It is usually more likely that ministers know little about the real risks of failure until it is too late to act decisively.

Lord Bach, a minister at DEFRA, told a House of Commons inquiry in 2007 into the failure of the IT-based Single Payment Scheme that he was aware of the risks but still officials told him that systems would work as planned and farmers would receive payments on time. They didn’t. Chaos ensued.

Said Lord Bach,

“I do think that, at the end of the day, some of the advice that I received from the RPA [Rural Payments Agency] was over-optimistic.”

Lord WhittyAnother DEFRA minister at the time Lord Whitty, who was also party in charge of the Single Payment Scheme, told the same inquiry,

“Perhaps I ought also to say that this was the point at which I felt the advice I was getting was most misleading, and I have used the term ‘misleading’ publicly but I would perhaps prefer to rephrase that in the NAO terms …”

Even the impressive Stephen Crabb – who has now quit as DWP secretary of state – didn’t stand much of chance of challenging his officials. The department’s contracts, IT and other affairs, are so complex and complicated – there are bookcases full of rules and regulations on welfare benefits – that any new ministers soon find themselves overwhelmed with information and complexity.

They will soon realise they are wholly dependent on their officials; and it is the officials who decide what to tell the minister about internal mistakes and bad decisions. Civil servants would argue that ministers cannot be told everything or they would be swamped.

But the paper on press freedom said that in order to induce high effort within a bureacucracy, the leader needs “verifiable information on the bureaucrats’ performance”.

The paper made a fascinating argument that the more complacent the bureaucracy, the more aggressively it would control information. Some oil-rich countries, said the paper, have less media freedom than those with scarcer resources.

“Consistent with our theory, [some] non-democratic countries … have vast resources and poor growth performance, while the Asian tigers (South Korea, Taiwan, Hong Kong, and Singapore), while predominantly non-democratic in the 1970s and 1980s, have high growth rates and scarce natural resource.”

In an apparent opening up of information, the government in China passed a law along the lines of the U.S. Freedom of Information Act (“China Sets Out to Cut Secrecy, but Laws Leave Big Loopholes,” New York Times, Apr. 25, 2007). But was this law self-serving? It, and the launch of local elections, provided the central government with relatively reliable information on the performance of provincial bosses.

These stories from less democratic countries may be relevant in Britain because politicians here, including secretaries of state, seem to be the last to know when a big IT-based programme is becoming a disaster.

Bad news

Whtehall’s preoccupation with “good news only” goes well beyond the DWP.

T auditors Arthur D Little, in a forensic analysis of the delays, cost over-runs and problems on the development of a huge air traffic control IT project for National Air Traffic Services, whose parent was then the Civil Aviation Authority, which was part of the Department for Transport, referred to an “unwillingness to face up to and discuss bad news”.

Ministers helpless to force openness on unwilling officials?

Francis Maude came to the Cabinet Office with a reforming zeal and a sophisticated agenda for forcing through more openness, but the effects of his efforts began to evaporate as soon as he left office. Even when he was at the height of his power and influence, he was unable to persuade civil servants to publish Gateway reviews, although he’d said when in opposition that he intended to publish them.

His negotiations ended with central departments agreeing to publish only the “traffic light” status of big projects – but only after a minimum delay of at least six months. In practice the delay is usually a year or more.

Brexit

Brexit campaigners argue that the EC is undemocratic, that decisions are taken in Brussels in secret by unelected bureaucrats. But the EC is at least subject to the scrutiny, sometimes the competing scrutiny, of 29 countries.

Arguably Whitehall’s departments are also run by unelected bureaucrats who are not subject to any effective scrutiny other than inspections from time to time of the National Audit Office.

Yes Minister parodied Sir Humphrey’s firm grip on what the public should and should not be told. Usually his recommendation was that the information should be misleadingly reassuring. This was close enough to reality to be funny. And yet close enough to reality to be serious as well. It revealed a fundamental flaw in democracy.

Nowhere is that flaw more clearly highlighted than in the DWP’s legal submission. Is it any surprise that the DWP did not want the submission published?

If officials had the choice, would they publish any information that they did not control on any of their IT projects and programmes?

That’s where the indispensable work of the National Audit Office comes into the picture – but it alone, even with the help of the Public Accounts Committee, cannot plug the gaping hole in democracy that the DWP’s submission exposes.

These are some thoughts I am left with after reading the legal submission in the light of the DWP’s record on the management of IT-based projects …

  • Press freedom and the free flow of information cannot be controlled in a liberal democracy. But does Whitehall have its own subtle – and not so subtle – ways and means?
  • In light of the DWP’s track record, the public and the media are entitled to distrust whatever ministers and officials say publicly about their own performance on IT-related programmes, including Universal Credit.
  • More worryingly, would the DWP’s hierarchy care a jot if the media and public didn’t believe what the department said publicly about progress on big projects such as Universal Credit?
  • Is the DWP’s unofficial motto: Better to tell a beautiful lie than an ugly truth?
  • AL Kennedy mentioned the “botched” Universal Credit programme  when she gave a “point of view” on Radio 4 last week. Not referring specifically to Universal Credit she said facts can be massaged but nature can’t be fooled. A girder that won’t hold someone’s weight is likely to fail however many PR-dominated assurance reports have gone before. “Facts are uncompromising and occasionally grim. I wish they weren’t. Avoiding them puts us all at increased risk,” she said.

 Excerpts from the DWP submission

Some Twitter comments on this post:

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Aspire: eight lessons from the UK’s biggest IT contract

By Tony Collins

How do you quit a £10bn IT contract in which suppliers have become limbs of your organisation?

Thanks to reports by the National Audit Office, the questioning of HMRC civil servants by the Public Accounts Committee, answers to FOI requests, and job adverts for senior HMRC posts, it’s possible to gain a rare insight into some of the sensitive commercial matters that are usually hidden when the end of a huge IT contract draws closer.

Partly because of the footnotes, the latest National Audit Office memorandum on Aspire (June 2016) has insights that make it one of the most incisive reports it has produced on the department’s IT in more than 30 years.

Soaring costs?

Aspire is the government’s biggest IT-related contract. Inland Revenue, as it was then, signed a 10-year outsourcing deal with HP (then EDS) in 1994, and transferred about 2,000 civil servants to the company. The deal was expected to cost £2bn over 10 years.

After Customs and Excise, with its Fujitsu VME-based IT estate, was merged with Inland Revenue’s in 2005, the cost of the total outsourcing deal with HP rose to about £3bn.

In 2004 most of the IT staff and HMRC’s assets transferred to Capgemini under a contract known as Aspire – Acquiring Strategic Partners for Inland Revenue. Aspire’s main subcontractors were Accenture and Fujitsu.

In subsequent years the cost of the 10-year Aspire contract shot up from about £3bn to about £8bn, yielding combined profits to Capgemini and Fujitsu of £1.2bn – more than double the £500m originally modelled. The profit margin was 15.8% compared to 12.3% originally modelled.

The National Audit Office said in a report on Aspire in 2014 that HMRC had not handled costs well. The NAO now estimates the cost of the extended (13-year) Aspire contract from 2004 to 2017 to be about £10bn.

Between April 2006 and March 2014, Aspire accounted for about 84% of HMRC’s total spending on technology.

Servers that typically cost £30,000 a year to run under Aspire – and there are about 4,000 servers at HMRC today – cost between £6,000 when run internally or as low as £4,000 a year in the commodity market.

How could the Aspire spend continue – and without a modernisation of the IT estate?

A good service

HMRC has been generally pleased with the quality of service from Aspire’s suppliers.  Major systems have run with reducing amounts of downtime, and Capgemini has helped to build many new systems.

Where things have gone wrong, HMRC appears to have been as much to blame as the suppliers, partly because development work was hit routinely by a plethora of changes to the agreed specifications.

Arguably the two biggest problems with Aspire have been cost and lack of control.  In the 10 years between 2004 and 2014 HMRC paid an average of £813m a year to Aspire’s suppliers.  And it paid above market rates, according to the National Audit Office.

By the time the Cabinet Office’s Efficiency and Reform Group announced in 2014 that it was seeking to outlaw “bloated and wasteful” contracts, especially ones over £100m, HMRC had already taken steps to end Aspire.

It decided to break up its IT systems into chunks it could manage, control and, to some extent, commoditise.

HMRC’s senior managers expected an end to Aspire by 2017. But unexpected events at the Department for Work and Pensions put paid to HMRC’s plan …

Eight lessons from Aspire

1. Your IT may not be transformed by outsourcing.  That may be the intention at the outset. But it didn’t happen when Somerset County Council outsourced IT to IBM in 2007 and it hasn’t happened in the 12 years of the Aspire contract.

 “The Aspire contract has provided stable but expensive IT systems. The contract has contributed to HMRC’s technology becoming out of date,” said the National Audit Office in its June 2016 memorandum.

Mark DearnleyAnd Mark Dearnley, HMRC’s Chief Digital Information Officer and main board member, told the Public Accounts Committee last week,

“Some of the technology we use is definitely past its best-before date.”

2. You won’t realise how little you understand your outsourced IT until you look at ending a long-term deal.

Confidently and openly answering a series of trenchant questions from MP Richard Bacon at last week’s Public Accounts Committee hearing, Dearnley said,

“It’s inevitable in any large black box outsourcing deal that there are details when you get right into it that you don’t know what’s going on. So yes, that’s what we’re learning.”

3. Suppliers may seem almost philanthropic in the run-up to a large outsourcing deal because they accept losses in the early part of a contract and make up for them in later years.

Dearnley said,

“What we are finding is that it [the break-up of Aspire] is forcing us to have much cleaner commercial conversations, not getting into some of the traditional arrangements.

” If I go away from Aspire and talk about the typical outsourcing industry of the last ten years most contracts lost money in their first few years for the supplier, and the supplier relied on making money in the later years of the contract.

“What that tended to mean was that as time moved on and you wanted to change the contract the supplier was not particularly incented to want to change it because they wanted to make their money at the end.

“What we’re focusing on is making sure the deals are clean, simple, really easy to understand, and don’t mortgage the future and that we can change as the environment evolves and the world changes.”

4. If you want deeper-than-expected costs in the later years of the contract, expect suppliers to make up the money in contract extensions.

Aspire was due originally to end in 2004. Then it went to 2017 after suppliers negotiated a three-year extension in 2007. Now completion of the exit is not planned until 2020, though some services have already been insourced and more will be over the next four years.

The National Audit Office’s June 2016 memorandum reveals how the contract extension from 2017 to 2020 came about.

HMRC had a non-binding agreement with Capgemini to exit from all Aspire services by June 2017. But HMRC had little choice but to soften this approach when Capgemini’s negotiating position was unexpectedly strengthened by IT deals being struck by other departments, particularly the Department for Work and Pensions.

Cabinet Office “red lines” said that government would not extend existing contracts without a compelling case. But the DWP found that instead of being able to exit a large hosting contract with HP in February 2015 it would have to consider a variation to the contract to enable a controlled disaggregation of services from February 2015 to February 2018.

When the DWP announced it was planning to extend its IT contract with its prime supplier HP Enterprise, HMRC was already in the process of agreeing with Capgemini the contract changes necessary to formalise their agreement to exit the Aspire deal in 2017.

“Capgemini considered that this extension, combined with other public bodies planning to extend their IT contracts, meant that the government had changed its position on extensions…

“Capgemini therefore pushed for contract extensions for some Aspire services as a condition of agreeing to other services being transferred to HMRC before the end of the Aspire contract,” said the NAO’s June 2016 memo.

5. It’s naïve to expect a large IT contract to transfer risks to the supplier (s).

At last week’s Public Accounts Committee hearing, Richard Bacon wanted to know if HMRC was taking on more risk by replacing the Aspire contract with a mixture of insourced IT and smaller commoditised contracts of no more than three years. Asked by Bacon whether HMRC is taking on more risk Dearnley replied,

“Yes and no – the risk was always ours. We had some of it backed of it backed off in contract. You can debate just how valuable contract backing off is relative to £500bn (the annual amount of tax collected).  We will never back all of that off. We are much closer and much more on top of the service, the delivery, the projects and the ownership (in the gradual replacement of Aspire).”

6. Few organisations seeking to end monolithic outsourcing deals will have the transition overseen by someone as clear-sighted as Mark Dearnley.

His plain speaking appeared to impress even the chairman of the Public Accounts Committee Meg Hillier who asked him at the end of last week’s hearing,

Meg Hillier

Meg Hillier

“And what are your plans? One of the problems we often see in this Committee is people in very senior positions such as yours moving on very quickly. You have had a stellar career in the private sector…

“We hope that those negotiations move apace, because I suspect – and it is perhaps unfair to ask Mr Dearnley to comment – that to lose someone senior at this point would not be good news, given the challenges outlined in the [NAO] Report,” asked Hillier.

Dearnley then gave a slightly embarrassed look to Jon Thomson, HMRC’s chief executive and first permanent secretary. Dearnley replied,

“Jon and I are looking at each other because you are right. Technically my contract finishes at the end of September because I was here for three years. As Jon has just arrived, it is a conversation we have just begun.”

Hiller said,

“I would hope that you are going to have that conversation.”

Richard Bacon added,

“Get your skates on, Mr Thompson; we want to keep him.”

Thompson said,

“We all share the same aspiration. We are in negotiations.”

7. Be prepared to set aside millions of pounds – in addition to the normal costs of the outsourcing – on exiting.

HMRC is setting aside a gigantic sum – £700m. Around a quarter of this, said the National Audit Office, is accounted for by optimism bias. The estimates also include costs that HMRC will only incur if certain risks materialise.

In particular, HMRC has allowed around £100m for the costs of transferring data from servers currently managed by Aspire suppliers to providers that will make use of cloud computing technology. This cost will only be incurred if a second HMRC programme – which focuses on how HMRC exploits cloud technology – is unsuccessful.

Other costs of the so-called Columbus programme to replace Aspire include the cost of buying back assets, plus staff, consultancy and legal costs.

8. Projected savings from quitting a large contract could dwarf the exit costs.

HMRC has estimated the possible minimum and possible maximum savings from replacing Aspire. Even the minimum estimated savings would more than justify the organisational time involved and the challenge of building up new corporate cultures and skills in-house while keeping new and existing services running smoothly.

By replacing Aspire and improving the way IT services are organised and delivered, HMRC expects to save – each year – about £200m net, after taking into account the possible exit costs of £700m.

The National Audit Office said most of the savings are calculated on the basis of removing supplier profit margins and overheads on services being brought in-house, and reducing margins on other services from contract changes.

Even if the savings don’t materialise as expected and costs equal savings the benefits of exiting are clear. The alternative is allowing costs to continue to soar while you allow the future of your IT to be determined by what your major suppliers can or will do within reasonable cost limits.

Comment

HMRC is leading the way for other government departments, councils, the police and other public bodies.

Dearnley’s approach of breaking IT into smaller manageable chunks that can be managed, controlled, optimised and to some extent commoditised is impressive.  On the cloud alone he is setting up an internal team of 50.

In the past, IT empires were built and retained by senior officials arguing that their systems were unique – too bespoke and complex to be broken up and treated as a commodity to be put into the cloud.

Dearnley’s evidence to the Public Accounts Committee exposes pompous justifications for the status quo as Sir Humphrey-speak.

Both Richard Feynman and Einstein said something to the effect that the more you understand a subject, the simpler you can explain it.

What Dearnley doesn’t yet understand about the HMRC systems that are still run by Capgemini he will doubtless find out about – provided his contract is renewed before September this year.

No doubt HMRC will continue to have its Parliamentary and other critics who will say that the risks of breaking up HMRC’s proven IT systems are a step too far. But the risks to the public purse of keeping the IT largely as it is are, arguably, much greater.

The Department for Work and Pensions has proved that it’s possible to innovate with the so-called digital solution for Universal Credit, without risking payments to vulnerable people.

If the agile approach to Universal Credit fails, existing benefit systems will continue, or a much more expensive waterfall development by the DWP’s major suppliers will probably be used instead.

It is possible to innovate cheaply without endangering existing tax collection and benefit systems.

Imagine the billions that could be saved if every central government department had a Dearnley on the board. HMRC has had decades of largely negative National Audit Office reports on its IT.  Is that about to change?

Update:

This morning (22 June 2016) on LinkedIn, management troubleshooter and board adviser Colin Beveridge wrote,

“Good analysis of Aspire and outsourcing challenges. I have seen too many business cases in my career, be they a case for outsourcing, provider transition or insourcing.

“The common factor in all the proposals has been the absence of strategy end of life costs. In other words, the eventual transition costs that will be incurred when the sourcing strategy itself goes end of life. Such costs are never reflected in the original business case, even though their inevitability will have an important impact on the overall integrity of the sourcing strategy business case.

“My rule of thumb is to look for the end of strategy provision in the business case, prior to transition approval. If there is no provision for the eventual sourcing strategy change, then expect to pay dearly in the end.”

June 2016 memorandum on Aspire – National Audit Office

Dearney’s evidence to the Public Accounts Committee