Tag Archives: Cabinet Office

Any point in today’s IT report by Public Administration Committee?

By Tony Collins

We congratulate the Public Administration Committee for following up its excellent Government and IT – “A recipe for rip-offs: time for a new approach” which was published in July 2011.

Too often MPs on Parliamentary committees, including those on the Public Accounts Committee, issue reports then forget about them.

Today’s report of the Public Administration Committee is disappointing though. It’s a fog of well-meant words. It comments in detail on the government’s response to the “recipe for rip-offs” report and for the most part uses civil service language. Last year’s report had specific, hard-hitting messages. Today’s is like a marshmallow sandwich: nothing much to bite on.

There is not even a mention of the need to publish progress reports on the government’s biggest IT-related projects.

If Francis Maude, the Cabinet Office minister, forced the civil service to publish these “Gateway” review reports, it would make departments accountable in a unprecedented way for the success or otherwise of projects and programmes while the schemes are running.

As it is, the government is being let off the hook in not publishing Gateway reports on Universal Credit or HM Revenue and Customs’ Real-Time Information programmes. These are two of the largest and riskiest of coalition schemes. Their monthly or quarterly progress, or lack of, will continue to go unreported.

Who cares? Certainly not the Public Administration Committee.

The Committee rightly describes the money wasted on IT in govermment as “obscene”. But its cloud of vague messages will do little more than indulge some civil servants who enjoy playing intellectually with ambiguous words and phrases to render them more uncertain.

Today’s Public Administration Committee report will change nothing. Fortunately Maude knows what needs to be done, with or without the Committee’s help.

Whitehall refuses to probe cartel claims, say MPs

New Gov’t CIO – a perfunctory appointment?

By Tony Collins

The Cabinet Office announced yesterday that the new government Chief Information Officer is Andy Nelson who will “hold the role alongside his existing position as the Ministry of Justice CIO”.

Nelson takes over from Joe Harley who will be retiring from the civil service at the end of March.

Ian Watmore, Permanent Secretary, Cabinet Office, said “It is fantastic to be able to assign the role of government CIO to someone who has held major CIO roles in private sector and has been involved in the ICT strategy since the very beginning.

“Andy has worked closely with Joe over the past months and will continue to do so – ensuring that we continue to deliver ICT services fit for a modern civil service.”

When the MoJ advertised for a CIO in May 2009 it asked for a candidate to “drive a harmonisation, simplification and streamlining agenda, creating a more efficient and effective IT framework”. That’s close to what Nelson will be expected to do as government CIO.

But there are some signs that the Cabinet Office considers the government CIO role as more titular than strategic. Nelson’s CIO job at the Ministry of Justice is challenging enough without the wider government CIO role.

Last month a report published by the National Audit Office highlighted how limitations in Libra, a case management IT system in use across magistrates’ courts, has contributed towards  HM Courts Service’s inability to provide basic financial information to support the accounts.

Yesterday UK authority.com reported that the recruitment process for a government CIO did not involve external advertising and that interviews were held last week, which suggests the appointment did not involve a long and difficult process.

Sir Ian Magee, a senior fellow at the Institute for Government has called for a “truly independent government CIO”, adding that “doubling-up” was not the answer to meet the demands of the Government ICT Strategy, reports publicservice.co.uk.

Nelson does, however, have the credentials for working at the top of government IT: he was a management consultant at Accenture if only briefly, and has a private sector CIO background.

Unison ready to fight against mutuals and rails against ‘self-interested’ third sector

By David Bicknell

It would be nice to think that the unions might see something positive in mutuals, a new (old) way of doing business, perhaps. Maybe an open mind?

But no. The latest communication from Unison – call to arms might be a better description – is profoundly depressing for anyone who sees the possibilities offered by mutuals and co-operatives. It is dismissively critical of what it calls the ‘self interested’ third sector. I suppose I shouldn’t have been that surprised by the tone.

Here’s a taste of its invective:

“Whilst the Cabinet Office desperately struggles to reinvent the failing ‘big society’ policy the LGA recently reported that less than 3% of councils responding to a survey have had any interest from staff in setting up employee led mutual arrangements and very few intend to encourage or push this route.
 
“Despite these figures which would depress the most committed ‘big society’ proponent The Cabinet Office are intent on flogging a dead horse are now issuing guidance and changes to legislation to take forward coops and mutuals to make it easier to set them up to run public services:
http://www.cabinetoffice.gov.uk/news/mutuals-get-go-ahead
 
“This is now for the unions a ‘back to CCT’ moment. In the late 80’s and early 90s we made sure anyone who wanted to pick over the bones of public services were able to support the continuance of staff terms and conditions and we fought hard to enforce TUPE.
 

“We fought for continuation of staff pensions and made pensions a key negotiating point. We fought against the cowboy contractors by insisting that they had proper health and safety assessments, method statements, competency to do the work and financial security to run public services without going into bankruptcy.

“This latest missive from the Cabinet Office should remind us as a union to dust down the old CCT advice. It is no different now to then in many ways – if enthusiastic amateurs attempt to run local public services they should be held to account in the same way that we held private companies to account under CCT.

“Public services shouldn’t be put at risk nor public sector workers thrown onto the scrap heap because councils or other employers are seduced by the language of good intent spun by the self-interested third sector intent on privatising public services.”

So, I guess we should probably take that as a ‘No to mutuals’ then.

G-Cloud – it’s starting to happen

By Tony Collins

Anti-cloud CIOs should “move on” says Cabinet Office official, “before they have caused too much harm to their business”.

For years Chris Chant, who’s programme director for G Cloud at the Cabinet Office, has campaigned earnestly for lower costs of government IT. Now his work is beginning to pay off.

In a blog post he says that nearly 300 suppliers have submitted offers for about 2,000 separate services, and he is “amazed” at the prices. Departments with conventionally-good rates from suppliers pay about £700-£1,000 a month per server in the IL3 environment, a standard which operates at the “restricted” security level. Average costs to departments are about £1,500-a-month per server, says Chant.

“Cloud prices are coming in 25-50% of that price depending on the capabilities needed.”  He adds:

“IT need no longer be delivered under huge contracts dominated by massive, often foreign-owned, suppliers.  Sure, some of what government does is huge, complicated and unique to government.  But much is available elsewhere, already deployed, already used by thousands of companies and that ought to be the new normal.

“Rather than wait six weeks for a server to be commissioned and ready for use, departments will wait maybe a day – and that’s if they haven’t bought from that supplier before (if they have it will be minutes).  When they’re done using the server, they’ll be done – that’s it.  No more spend, no asset write down, no cost of decommissioning.”

Chant says that some CIOs in post have yet to accept that things need to change; and “even fewer suppliers have got their heads around the magnitude of the change that is starting to unfold”.

“In the first 5 years of this century, we had a massive shift to web-enabled computing; in the next 5 the level of change will be even greater.  CIOs in government need to recognise that, plan for it and make it happen.

“Or move on before they have caused too much harm to their business.”

He adds: “Not long from now, I expect at least one CIO to adopt an entirely cloud-based model.  I expect almost all CIOs to at least try out a cloud service in part of their portfolio.

“Some CIOs across government are already tackling the cloud and figuring out how to harness it to deliver real saves – along with real IT.  Some are yet to start.

“Those that have started need to double their efforts; those that haven’t need to get out of the way.”

Cloud will cut government IT costs by 75% says Chris Chant

Chris Chant’s blog post

CSC to change hands in 2012?

By Tony Collins

Techmarketview analyst Tola Sargeant who has followed the NPfIT closely, and particularly the ups and downs of CSC, says the implications for CSC of the government’s tough stance against the company are “dire”. She adds:

“Indeed, we wouldn’t be at all surprised to see CSC change hands in 2012 as a result”.

Maude gets tough 

Within the Department of Health and CSC in May last year executives were confident a new memorandum of understanding under the NPfIT would be signed.

Now the Government, in the form of the Cabinet Office minister Francis Maude, has declined so far to sign any new deal with CSC. This is the way CSC put it in a filing to the SEC, the US regulators, on 27 December 2011:

“… Since mid-November 2011, the parties [Department of Health, Cabinet Office and CSC) have been engaged in further discussions relating to the MOU [Memorandum of Understanding], which have included discussions regarding a proposed contract amendment with different scope modifications and contract value reductions than those contemplated by the MOU.

“However, CSC recently was informed that neither the MOU nor the contract amendment then under discussion would be approved by the government.

“Notwithstanding the failure to reach agreement, CSC anticipates that the parties will continue discussions in January 2012 regarding proposals advanced by both parties reflecting scope modifications and contract value reductions that differ materially from those contemplated by the MOU.

“As a result of the circumstances described above, CSC has concluded, as of the date of this filing, that it will be required to recognize a material impairment of its net investment in the contract in the third quarter of fiscal year 2012.

“Until CSC and NHS conclude their on-going discussions concerning a possible contract amendment, including any scope modifications and contract value reductions that might be part of any such amendment, the Company is unable to estimate the amount of such impairment.

“However, depending on the terms of such an amendment or if no amendment is concluded, such impairment could be equal to the Company’s net investment in the contract, which, as of November 30, 2011, was approximately £943m ($1.5bn).

“Additional costs could be incurred by CSC depending on the nature of such an amendment, or if no amendment is concluded. The Company is unable to estimate the amount of such additional costs; however, such costs could be material.”

Why the Cabinet Office has left draft MoU unsigned?

The non-signing of a new deal with CSC is the firmest indication so far that the Cabinet Office is prepared to bring a rigorous, independent scrutiny to big IT projects and contracts.

Though the DH had wanted to sign a new deal with CSC, at least to assure continued support and upgrades to the few NHS trusts that have installed CSC and iSoft’s “Lorenzo” patient records system,  Maude is said to have seen a new deal with CSC as rewarding the company for failings in the past.

Also Cabinet Office officials regarded the terms of a new deal with CSC as unattractive. One Cabinet Office official wrote in a memo dated March 2011 that CSC’s proposals would mean a reduction in Trusts using CSC IT from the original number of 220 Trusts to 80.

 “My view is that, on the face of it, while the additional savings are appealing, the offer is unattractive. This is because the unit price of deployment (per Trust) under offer roughly doubles the cost of each deployment from the original contract.

“Ultimately, we [Cabinet Office] are not convinced the [Department of] Health commercial team are approaching this in the best way.”

It is possible that a new deal for signing was put before Maude – and went unsigned. Had any appeal gone to the Prime Minister David Cameron it is highly likely he would have given his full backing to Maude.

David Cameron’s view?

Cameron may be delighted that at least £2bn remains uncommitted to the NPfIT and could be saved by not signing a new deal with CSC.

Conservative MP Richard Bacon, a member of the Public Accounts Committee who has become an authority on the NPfIT, said of CSC’s warning of write-offs on the Programme:

“It was always a worry that the Department of Health was initially keen to sign a new deal with CSC that would have been poor value. Now it seems the Cabinet Office has done its job as an independent scrutineer and has made sure the interests of taxpayers are protected.

“This shows how important it is for the Cabinet Office to have the final say on big Government IT-based projects.”

What does CSC’s plight mean for the NHS?

NHS trusts have long wanted open competitive tendering and now, to a large extent, they have it. More than a dozen acute trusts are likely to tender for major systems replacements this year which is a big increase on the annual rate for past years.

Some iSoft and Cerner sites may also seek to renew contracts or find replacement systems. CSC, which may be lifted of the burden of meeting high-priced NPfIT commitments, may be a strong competitor in the UK health market.

One problem for NHS trusts will be finding enough strong candidates for their shortlists. They may look to the US market – but end up with products that need anglicising, which will be risky process.

Techmarketview says that what is doom and gloom for CSC is an opportunity for others. Rival suppliers “will be cheered by the prospect of more NHS Trusts procuring systems that CSC should have delivered by now”.

School report on Govt ICT Strategy – a good start

By Tony Collins

In a review of progress on the Government’s ICT Strategy after six months, the National Audit Office says that the Cabinet Office has made a “positive and productive start to implementing the Strategy”.

The NAO says that at least 70 people from the public sector have worked on the Strategy in the first six months though the public sector will need “at least another 84 people to deliver projects in the Plan”.

The UK Government’s ICT Strategy is more ambitious than the strategies in the US, Australia, Netherlands and Denmark, because it sets out three main aims:

– reducing waste and project failure

– building a common ICT infrastructure

– using ICT to enable and deliver change

The US Government’s ICT Strategy, in contrast, encompasses plans for a common infrastructure only – and these plans have not produced the expected savings, says the NAO.

In a paragraph that may be little noticed in the report, the NAO says that senior managers in central government have plans to award new ICT contracts (perhaps along the pre-coalition lines) in case the common solutions developed for the ICT Strategy are “not available in time”.

The NAO report also says that “suppliers were cautious about investing in new products and services because of government’s poor progress in implementing previous strategies”.

Of 17 actions in the Strategy that were due by September 2011, seven were delivered on time. Work on most of the other actions is underway and a “small number” are still behind schedule says the NAO.

The NAO calls on government to “broaden the focus to driving business change”.

Some successes of the UK’s ICT Strategy as identified by the NAO:

* The Cabinet Office has set up a small CIO Delivery Board led by the Government CIO Joe Harley to implement the ICT Strategy. The Board’s members include the Corporate IT Director at the DWP, CIOs at the Home Office, MoD, HMRC, Ministry of Justice and Department for Health, together with key officials at the Cabinet Office. The departmental CIOs on the Board are responsible directly to Francis Maude, Minister for the Cabinet Office, for implementing the ICT Strategy in their departments and are accountable to their own minister. No conflicts have arisen

* Senior managers in central government and the ICT industry are willing to align their strategies for ICT with new cross-government solutions and standards but need more detail.

*  Some suppliers have offered help to government to develop its thinking and help accelerate the pace of change in ICT in government.

* The Cabinet Office intended that delivering the Strategy would be resourced from existing budgets. Staff have been redirected from other tasks to work on implementing the Strategy. “We have found collaborative working across departmental boundaries. For example HMRC and the MoD have combined resources to develop a strategy for greener ICT. Teams producing the strategies for cloud computing and common desktops and mobile devices have worked together to reduce the risk of overlap and gaps.

* The BBC has shown the way in managing dozens of suppliers rather than relying on one big company. For BBC’s digital media initiative, the Corporation manages 47 separate suppliers, says the NAO.

* The Cabinet Office intends that departments will buy components of ICT infrastructure from a range of suppliers rather than signing a small number of long-term contracts; and to make sure different systems share data the Cabinet Office is agreeing a set of open technical standards.

* Some of the larger departments have already started to consolidate data centres, though the NAO said that the programme as a whole is moving slowly and no robust business case is yet in place.

* The Cabinet Office is starting to involve SMEs. It has established a baseline of current procurement spending with SMEs – 6.5% of total government spend – and hopes that the amount of work awarded to SMEs will increase to 25%. Government has started talking “directly to SMEs”, says the NAO.

Some problems identified in the NAO report:

* Cloud computing and agile skills are lacking. “Government also lacks key business skills. Although it has ouitsourced ICT systems development and services for many years, our reports have often stated that government is not good at managing commercial relationships and contracts or procurement.”

* Suppliers doubt real change will happen. The NAO says that suppliers doubted whether “government had the appropriate skills to move from using one major supplier to deliver ICT solutions and services, to managing many suppliers of different sizes providing different services”.

* The Government CIO Joe Harley, who promoted collaboration, is leaving in early 2012, as is his deputy Bill McCluggage. The NAO suggests their departures may “adversely affect” new ways of working.

* The NAO interviewed people from departments, agencies and ICT suppliers whose concern was that “short-term financial pressure conflicted with the need for the longer-term reform of public services”.

* The culture change required to implement the Strategy “may be a significant barrier”.

* The Cabinet Office acknowledges that the government does not have a definitive record of ICT spend in central government (which would make it difficult to have a baseline against which cuts could be shown).

* The Cabinet Office has not yet defined how reform and improved efficiency in public services will be measured across central government, as business outcomes against an agreed baseline.

**

Amyas Morse, head of the National Audit Office, said today: ” ICT is going to play an increasingly important role in changing how government works and how services are provided.

“The Government’s ICT Strategy is in its early days and initial signs are good. However, new ways of working are as dependent on developing the skills of people in the public sector as they are on changes to technology and processes; the big challenge is to ensure that the Strategy delivers value in each of these areas.”

NAO report:  Implementing the Government ICT Strategy: six-month review of progress.

Mutuals Briefing updated

By David Bicknell

One of the most popular areas of Campaign4Change is Mutuals Briefing, a digest of useful information and links around mutuals and mutualisation.

Mutuals Briefing has now been updated to reflect recent announcements by the Cabinet Office covering a report on Mutual Pathfinders, the Mutuals Taskforce Evidence Paper, and the launch of the Mutuals Information Service.  You can also find links to stories covering mutuals issues at the London Borough of Hammersmith & Fulham, and at the Defence Equipment & Support ( DE&S) arm of the Ministry of Defence.

CSC criticised again in The Times

By Tony Collins

The Times has followed up its three pages of coverage of the NPfIT yesterday with an article in which the chair of the Public Accounts Committee, Labour MP Margaret Hodge, criticises one of the programme’s main suppliers CSC.

Hodge tells The Times she was surprised to learn that CSC was hoping for a revised NHS deal – worth about £2bn – after it failed to deliver fully functional software to any of 166 NHS trusts in England.

CSC has said in a filing to the US Securities and Exchange Commission that, based on events to date, it does not does not anticipate that the NHS will terminate its contract.

CSC gave a series of reasons in its SEC filing why the UK Government may retain CSC and its NPfIT contracts, though it conceded that the outcome of its talks with the Department of Health, is uncertain.

CSC also said it has cured or is in the process of curing the alleged events of default. It asserted that failures and breaches of contract on the part of NHS have caused delays and issues; and it said that if the NHS wrongfully terminated the contract on the basis of alleged material breach, CSC could recover substantial damages.

Hodge told The Times:

“Any private sector company that cares so little about the public interest that they are prepared to extract this kind of money from the public purse should not be given the right to work for the Government again.

“If they are going to take such a private sector attitude to it that they don’t give a toss about the public interest they should be treated like a cowboy builder.”

CSC says it has made a significant investment in developing systems for the NHS and has demonstrated a strong and continuing commitment to improving the quality of healthcare in England. It says it has a demonstrable track record of successful and widescale delivery to NHS within the National Programme and beyond.

The Times also reported that Christine Connelly, the Department of Health’s former CIO,  was bought a £416 first-class train ticket for a visit to a hospital at Morecambe, and was flown to San Francisco and Seattle at a business-class rate costing £8,278.80.

American “cowboys” blamed for NHS fiasco – The Times

CSC confident on £2bn deal says The Times

CSC confident on £2bn NPfIT deal says The Times

The Times reports today that CSC is confident that the Department of Health will not terminate the supplier’s contracts despite the Government’s pledge to dismantle the national programme.

The paper says that “taxpayers will foot the bill for a further £2bn on a failed NHS IT project even though the Government has already pulled the plug on it”.

It adds that the “American technology company Computer Sciences Corporation (CSC) has boasted to Wall Street that it expects an extension of its contract to provide electronic patient records despite failing to deliver a fully functional version of its software”.

In a series of articles on the NPfIT, The Times suggests that the Government is locked into CSC, at least until 2017.

“The Government’s pledge to dismantle the failed NHS programme to computerise patient records is in tatters because it cannot afford to break its contractual commitments and start a search for alternative suppliers”.

The Times quotes a CSC filing to the US Securities and Exchange Commission in November which says: “Based upon events to date, the Company does not anticipate that the NHS will terminate the contract.”

CSC, the Department of Health and the Cabinet Office are still discussing a memorandum of understanding which may end with the supplier’s cutting £764m from its NPfIT contracts, leaving about £2.1bn in place.

CSC discloses in its SEC filing that the Memorandum of Understanding anticipates that the contract term will be extended one year to June 2017 and that CSC anticipates revenue of £1.5bn to £2bn over the remaining term.

With certain amendments “ the contract remains profitable and the Company would recover its investment,” says CSC in its filing.

But MP Richard Bacon, a member of the Public Accounts Committee, has received Parliamentary replies to his questions on the costs of NPfIT deployments at University Hospitals of Morecambe Bay NHS Foundation Trust and North Bristol NHS Trust which show that the costs of installing and maintaining a system under national programme contracts are more than twice that of systems bought by trusts outside of the NPfIT.

Health Minister Simon Burns said in a reply to Bacon that the costs of a Cerner Millennium deployment at the North Bristol NHS Trust are £15.2m for deployment and an annual service charge of £2m. This brings the total cost of the Cerner system over seven years to about £29m, which is more than three times the £8.2m price of a similar deployment outside of the NPfIT at University Hospitals Bristol Foundation Trust.

At Morecambe Bay, the trust’s costs of being involved with the NPfIT (including the deployment of CSC’s Lorenzo 1.9 system) are £6.2m, according to Burns in his reply to Bacon, whereas the typical internal trust costs of deploying of a non-NPfIT system, excluding the cost of the system itself but including training, project management and additional corporate reporting tools, are about £1m-£2m.

Is the Department of Health locked into CSC?

CSC in its filing to the SEC says that the NHS, when considering its options of maintaining or terminating the contract, will “consider costs and risks that NHS may incur over and above those related to termination fees”.

These include:

– damages and costs that may be payable to CSC

– the cost of initiating and managing a public tender, procedure or procedures to obtain one or more suitable replacement suppliers

– the operational risk of switching suppliers at this stage in the contract with CSC

– the cost of alternative suppliers

– the cost of obtaining exit management services from CSC to ensure an orderly transition to one or more replacement suppliers.

In addition, said CSC in its filing, if the NHS terminated the contract for convenience, possible claims that the Company has against NHS include “claims for compensation due to delays and excess costs caused by NHS or for contractual deployment delay remedies or for costs associated with change.

If the NHS had terminated the entire contract for convenience with immediate effect at September 30, 2011, the termination fee would have been capped at approximately £430m.

CSC would also be entitled by way of termination fee to a sum to compensate for the profit that CSC would have earned over the following 12 months had the contract not been terminated.

CSC recognised in the filing, however, that the signing of a new NPfIT deal was uncertain.

Lorenzo “not right yet”

The Times quotes Dr Simon Eccles, the medical director of Connecting for Health, as saying “Lorenzo has had an extremely painful gestation. Lorenzo may yet be a great success because it is a brilliant bit of software but they haven’t got it right yet.”

In an editorial on its NPfIT investigations, The Times said that government IT failures have in common the fact that “we don’t really know who was to blame”. It says:

“Nobody took responsibility and nobody apologised. It is perhaps too much to hope that there will not be more disasters. But if there are, someone must carry the can.”

NPfIT to be dismantled – brick by brick

Less than third of civil servants on strike says Maude

By Tony Collins

The Cabinet Office says that “significantly less” than a third of civil servants are taking strike action today.

Francis Maude, Cabinet Office minister, said: “I want to thank the majority of dedicated and committed public sector workers who have turned up to work today to deliver essential services.”

He added that early indications indicate that the majority of key public services remain open.