Tag Archives: Cabinet Office

The unavoidable truths about GovIT – by Cabinet Office official

Posted on 31/10/2011 | 14 comments

The vast majority of GovIT is “outrageously expensive” says Chris Chant. “Things have changed and we haven’t.”

By Tony Collins

Chris Chant is one of the most experienced IT officials in central government. He was CIO at Defra where he led IT service improvement programmes with strategic outsourcing partners  including IBM. His reforms helped to change the way people worked.

He was also CIO at the Government Olympic Executive, part of the Department of Culture, Media and Sport. Now he is an Executive Director in the Cabinet Office working as Programme Director for the G-Cloud initiative.

In a cloud computing event hosted by the Institute for Government in London, Chant told it like it is. The points he make indicate that major change is less of a risk to public finances than keeping the machinery of government as it is.

He began his talk by thanking those in government IT who have been“working their socks off”. He had been talking positively to his teams in the last week and now “it is time to recognise some of the less positive aspects about what we do”.

He added: “We need to face some unavoidable truths head on about government IT as it has been done.”

These were his main points:

“The vast majority of government IT in my view is outrageously expensive, is ridiculously slow, or agile-less, is poor quality in the main and, most unforgivably I think, is rarely user-centric in any meaningful way at all.”

He said it is unacceptable:

–  That “80% of Government IT is controlled by five corporations”.

–  That “some organisations outsource their IT strategy in Government”.

–  That “to change one line of code in one application can cost up to £50,000”.

–  To wait 12 weeks to get a server commissioned for use.  He said: “That’s pretty commonplace. When you think in terms of using a service like Amazon the most problematic thing on the critical path is the time it takes you to get your
credit card out of your wallet and enter the details on screen”.

–  That the civil service does not know the true cost of a service and the real exit costs from those services – the costs commercially, technically and from a business de-integration standpoint. “So  how do we untangle our way out of a particular product or service. I cannot tell you how many times I have had the discussion that says: we need to get away from that but we cannot because of the complexity of getting out from where we are: all the things hanging on to that particular service that we cannot disentangle ourself from.”

– To enter into any contracts for more than 12  months. “I cannot see how we can sit in a world of IT and acknowledge the arrival of the iPad in the last two years and yet somehow imagine we can predict what we are going to need to be doing in two or three, or five or seven or ten years time.”

–  Not to know in government “how many staff we have on the client side of IT”. He said: “I have not yet met anybody who knows what that figure is. People know about small areas but overall we don’t know what that figure is.

– Not to know what IT people do. “So we don’t have any idea of the breakdown of that number that we don’t know either, surprisingly. I think that is outrageous in this climate, and in any climate.”

–  Not to know “what systems we own how much they cost; and how much or even if they’re used”. He said: “I know there are organisations that have turned off tens of thousands of desktop services merely to discover if they are used anymore; and when they do that they discover maybe one per cent are still being used. That’s completely unacceptable.”

– Not to know when users give up on an online service; “and it’s unacceptable not to know why they give up”. He said: “Of course it is unacceptable that they have to give up because the service does not fulfil their needs.”

– to have a successful online service that sends out reminders to use that service through the post.

–  Not to be able to communicate with customers securely and electronically when technology clearly allows that to happen.

– Not to be able to “do our work from any device we choose”. He said: “That is possible and has been for some time. It’s outrageous we cannot do that.”

– To pay up to £3,500 per person per year for a desktop service.

–  That “your corporate desktop to take 10 minutes to boot and the same amount of time to close down”. He said: “But that is the truth of what goes on everyday in Government IT and I suspect the public sector too.”

–  For staff to be unable to access Twitter or YouTube, when they use those services for what they do.

– For call centre staff not to be able to access the very service they are supporting at the call centre. “It sounds funny but  when you think of the consequences of that it is truly dreadful.”

–  To ensure people are working by restricting their access to the Internet. “If we cannot measure people by outputs where on  earth are we?”

Above all, said Chant, “it is unacceptable not to engage  directly with the most agile forward-thinking suppliers that are in the SME  market today and are not among the suppliers we have been using”.

Chris Chant’s talk

This is much of what Chris Chant said:

“A bunch of people have worked their socks off [but], through no  fault of their own, on the wrong thing for some time too… And it’s quite tough being in IT because, a bit like  electricity, it’s one of the rare things people seem to use almost all of the time…but we need to face some unavoidable truths head on about government IT as it has been done.

The vast majority of government IT in my view is outrageously expensive, is ridiculously slow, or agile-less, is poor quality in  the main and, most unforgivably I think, is rarely user centric in any  meaningful way at all…

I’ll give you my personal view of the unacceptable. I have spent a lot of time with teams in the last week talking positively about things and I think it is time to recognise some of the less positive aspects of what we do.

I think it is unacceptable at this point in time to not know the true cost of a service and the real exit costs from those services; the costs commercially, technically and from a business de-integration standpoint – so how do we untangle our way out of a particular product or service? I cannot tell you how many times I have had the discussion that says: we need to get away from that but we cannot because of the complexity of getting out from where we are: all the things hanging on to that particular service that we cannot disentangle ourself from.

I think it is completely unacceptable at this point in time to enter into any contracts for more than 12 months. I cannot see how we can sit in a world of IT and acknowledge the arrival of the iPad in the last two years and yet somehow imagine we can predict what we are going to need to be doing in two to three, or five or seven or 10 years time. It is a complete nonsense.

And to those who say ‘what about a supplier upfront infrastructure: surely you have to fund that somehow?’ I would say: ‘why do we have to treat IT and particularly commodity IT any differently from any other commodity
around?’

Marks and Spencer does not come knocking on the door asking me to guarantee to buy three suits and two shirts a year for the next five years and then they will put a store at the bottom of the road… if you look at a small local garage that has to fund its hydraulic ramps and the computer equipment they now need. They do not ask people to fund that upfront. They go into the market confident of their products and confident of their pricing so they will get people back again and arrange for how that gets funding…

I think it is unacceptable not to know in government how many staff we have on the client side of IT. I have not yet met anybody who knows what that figure is. People know about small areas but overall we don’t know what that figure is. It is also unacceptable that we don’t know what those people do. So we don’t have any idea of the breakdown of that number that we don’t know either,  surprisingly. I think that is outrageous in this climate, and in any climate.

It is completely unacceptable we don’t know what systems we own and how much they cost; and how much or even if they’re used. I know there are organisations that have turned off tens of thousands of desktop services merely to discover if they are used anymore; and when they do that they discover maybe one per cent are still being used…

It is unacceptable not to know when users give up on an online service; and it’s unacceptable not to know why they give up. Of course it is unacceptable that they have to give up because the service does not fulfil their needs.

It unacceptable to have a successful online service that sends out reminders to use that service through the post…. Linked to that, it’s completely unacceptable not to be able to communicate with customers securely electronically when technology clearly allows that to happen.

It is unacceptable not to be able to do our work from any device we choose. That is possible and has been for some time.  It’s outrageous we cannot do that.

It is unacceptable to pay – and these figures are Public Accounts Committee figures – up to £3,500 per person per year for a desktop service.

It is unacceptable for your corporate desktop to take 10 minutes to boot and the same amount of time to close down. But that is the truth of what goes on everyday in Government IT and I suspect the public sector too.

It is unacceptable for staff to be unable to access Twitter or YouTube, when they use those services for what they do.

It is unacceptable for call centre staff not to be able to access the very service they are supporting at the call centre. It sounds funny but when you think of the consequences of that it is truly dreadful.

I think it is unacceptable in this day and age to ensure people are working by restricting their access to the Internet. If we cannot measure people by outputs where on earth are we?

It is unacceptable that 80% of Government IT is controlled  by five corporations.

It is unacceptable that some organisations outsource their IT strategy in Government.

It is unacceptable that to change one line of code in one application can cost up to £50,000.

It is unacceptable to wait 12 weeks to get a server commissioned for use. That’s pretty commonplace. When you think in terms of using a service like Amazon the most problematic thing on the critical path is the time it takes you to get your credit card out of your wallet and enter the details on screen.

Above all – and at the heart of a lot of this – it is unacceptable not to engage directly with the most agile forward-thinking suppliers that are in the SME market today and are not among the suppliers we have been using.

So things have changed and we haven’t is what has happened.

A lot of these things could have been explained away five or 10 years ago but I
don’t think they could have been explained away adequately in the last three years, probably at least.

So how does G-cloud help in all of this? I think G-Cloud is about a fundamental change in the way Government and I believe the public sector too does technology. It is not just about cloud computing. It requires a complete change of approach. A cultural change of approach. A change in the way we look at security; a change in the way we look at service management and above all change in the way we procure services we use. So cloud will be cheaper…

Using cloud solutions that have already been secured and accredited
will be cheaper almost always.  We will only pay for what we use. People will only use DR when they use DR.

Over time through the G-Cloud programme, products will be pre-procured and security accredited. They won’t be accredited by the programme itself but by the first users of this, so we don’t have to replicate that work time and time again because that is what a lot of our staff are doing. A lot of the tens of thousands of staff that are working on the client side of government and public sector IT are procuring the same things, accrediting the same things from a security perspective; and it is a complete and utter waste of time and huge money.

You’ll know from the outset the cost of the product and most importantly we will know the cost of exit. Nuclear power looked really cheap all the time somebody chose to ignore de-commissioning of nuclear power stations, and then it became a very different model.

Contracts will be under a year I believe… I don’t believe aggregated demand and long-term contracts bring value for money. Quite the reverse…  why anybody would offer somebody a contract  which meant we could carry on paying them money almost regardless of the service we got, with no meaningful incentive for better performance? That can all change. When we have the ability, through understanding exit and understanding the cost and performance of things, to move out of one product and into another in short order, I guarantee that the price will come down …

… Costs [of streaming] used to be outrageous and the quality was poor until the BBC put together standards on the way it’s done and the BBC can now buy services on daily basis and the cost has dropped by an order of magnitude and the quality is much improved. They know –  the service providers – that tomorrow somebody can go somewhere else. If Marks and Spencer does not provide clothes at the right price and quality people will go down the road and buy somewhere else. It is that, that drives quality and price, not a long-term contract.

[When people see that] products have clear pricing, clear details of what they do, clear details of what exiting that product is going to be like, and it says: ‘Andy Nelson at the Ministry of Justice has used this product over the last year and this is what he says about of it’, that starts to transform what happens on price and quality far and away above anything that any SLA can or ever has given us. So we won’t get ourselves locked in in any way. Not from a commercial or technical perspective. Many products nowadays are designed to get their little feelers locked into every part of your system….

Our staff over time will become skilled system integrators. That’s what will happen in the short term…

We will see people setting up services in minutes instead of years. How?

We have Foundation Delivery Partners – they are departments, local authorities, organisations that come together with others that are looking
to buy cloud products. The FDPs work with a bunch of people from the government procurement service who handle the commercial aspects; they work with staff from CESG to work out security implications and product by product they have begun to break down what it is they need to do, so subsequently that work does not need to be redone.

Over time we will have a model that describes lots of different circumstances of use of products so we will know – the senior risk information officer – will know what has been covered off already and will see the accreditation that has gone on and will know they will only have to fine tune that for the last bit of use in their department. That will dramatically reduce over time the amount of effort that goes into that security.

Large-scale IL3 email is coming soon; and large-scale IL3 collaboration
opportunities…

[The Government Digital Service is off] corporate systems to a solution that is IL0 and IL1 and 2, with IL3 on a few machines to one side. [There are] savings of 82% over adopting the corporate systems. People don’t wait 10 minutes for machines to boot up and shut down.

We don’t have all the answers… Great quality IT centres around an iterative process that gets stuff out and we learn quickly from what users do with it and is improved and improved.  I don’t recall a press release saying Google will update its apps products on 8 May next year. What happens is you notice a little banner saying we have done it differently: do you want to try it? How many times have you seen improvements on eBay and just experienced them as they arrived?

They are intuitive and what people want and they just happen… [Published in last few minutes] is a new cloud framework that is designed specifically to get SMEs across the threshold and working directly with departments, agencies, local authorities, police and health. There is a user guide. It is a key product.

We will watch very carefully how this gets used, and the impact on SMEs. I don’t anticipate any large organisations having difficulty with this. But the target is to get us engaged with SMEs.

We will watch what their problems are and we will correct that as we go. We are already working on the second version of this which will be due out, hopefully, early in the new year. With brilliant support from John Collington in the Government Procurement Service we will be adding new suppliers on a month by month basis which will dramatically change things and really gives us the flexibility we need.

The second manifestation of how serious we are in the cloud is a document to be published tomorrow which will give a very serious indication of intent around the use of cloud…”

Chris Chant’s talk – audio file Government Digital Service

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Jobs on offer – Government in need of “digital” talent

Posted on 25/10/2011 | 1 comment

By Tony Collins

Some parts of government may be shrinking but there’s jobs on offer in the Government Digital Service.

Mike Bracken, the Cabinet Office’s Executive Director for Digital, says the Government is “badly in need of the talent to engineer ourselves out of our torpor”.

“We are hiring”, he says. His team have jobs in development, product management, interaction design, web ops, technology architecture and digital engagement.  Salaries are between £59k and £90k.

Says Bracken: “Over the last 15 years or more, across Government we have engineered digital products and services using risk aversion and long-term programme management as our guiding principles.

“Now that it is clear that rapid, user-led development using open source technologies, agile approaches to delivery and cloud-based infrastructure is the order of the day, we find ourselves badly in need of the talent to engineer ourselves out of our torpor.

“In short, with long-term contracts giving programme managers and departments only one lever to pull in order to change or create digital services, it’s never been more important that there is a choice within Government.

“While there have been a few raised eyebrows at hiring in these straitened times, let me be clear that we need digital talent all across Government. In policy, legal, procurement and service delivery, deep digital experience in Government is scarce.

“So I would recommend that we see this drive not just a one-off recruitment campaign for GDS, but the start of the digital transformation of all Government services. As well as hiring, I spend large amounts of my time looking to help transform existing people and processes.

Bracken was appointed the Government’s new Executive Director for Digital on 5 July 2011.

Government Digital Service

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Government’s new ICT plan – the good, bad and what’s needed

Posted on 24/10/2011 | 3 comments

By Tony Collins

There is much to commend the 102-page Government’s ICT Strategy – Strategic Implementation Plan”.  Its chief assets are the touches of realism.

In the past Cabinet Office documents have referred to the billions that can be cut from the annual government IT spend of £15bn-£20bn. This document is different.

In promising a saving of just £460m – and not until 2014/15 – Cabinet Office officials are not being ambitious, but neither are they making impossibly unrealistic claims. [The press release refers to £1.4bn of savings but there’s no mention of that figure in the document itself.]

The Implementation Plan also points out that the oft-quoted annual government IT spend of £16bn-£17bn is not spending in central government IT alone but includes the wider public sector: local government, devolved administrations and the NHS. The Implementation Plan concedes that there is “no definitive or audited record of ICT spending in central government for 2009/10”, but it adds, “the best estimates suggest this to be around £6.5bn in central government…”

Now at last we have a figure for the cost of central government IT. But we’re also told that the Cabinet Office has no control or strong influence over most of the ICT-related spending in the public sector. The document says:

“Though implementation is not mandatory outside central government, Government will work with the wider public sector to identify and exploit further opportunities for savings through greater innovation, and sharing and re-use of solutions and services.”

That said the document has some laudable objectives for reducing ICT spending in central government. Some examples:

–         50% of central departments’ new ICT spending will be on public cloud computing services – by December 2015. [Note the word “new”. Most departmental IT spending is on old IT: support, maintenance and renewal of existing contracts.]

–         First annual timetable and plans from central government departments detailing how they will shift to public cloud computing services – by December 2011.

–         Cost of data centres reduced by 35% from 2011 baseline – by October 2016. [What is the baseline, how will the objective be measured, audited and reported?]

Drawbacks:

It is a pity the document to a large extent separates IT from the rest of government. If simplification and innovation is to be pervasive and long-lasting senior officials need to look first at ways-of-working and plan new IT in parallel with changes in working practices, or let the IT plans follow planned changes.

Not that this is a black-and-white rule. Universal Credit is an essentially IT-led change in working practices. The technology will cost hundreds of millions to develop – an up-front cost – but the simplification in benefit systems and payment regimes could save billions.

Another problem with the Implementation Plan is that it is in essence a public relations document. It is written for public consumption. It has little in common with a pragmatic set of instructions by a private sector board to line managers. Too much of the Cabinet Office’s Implementation Plan is given over to what has been achieved, such as the boast that “an informal consultation to crowd source feedback on Open Standards has taken place…” [who cares?] and much of the document is given over to what the civil service does best: the arty production of linked geometric shapes that present existing and future plans in an ostensibly professional and difficult-to-digest way.

And many of the targets in the Implementation Plan parody the civil service’s archetypal response to political initiatives; the Plan promises more documents and more targets. These are two of the many documents promised:

“Publication of cross-government information strategy principles – December 2011” …

“First draft of reference architecture published – December 2011.”

Platitudes abound: “Both goals are underpinned by the need to ensure that government maintains and builds the trust of citizens to assure them that the integrity and security of data will be appropriately safeguarded.”

There is also a lack of openness on the progress or otherwise of major projects. There is no mention in the Implementation Plan of the promise made by the Conservatives in opposition to publish “Gateway review” reports.

What’s needed

More is needed on specific measures to be taken by the Cabinet Office when departmental officials resist major reform. The promise below is an example of what is particularly welcome because it amounts to a Cabinet Office threat to withhold funding for non-compliant projects and programmes.

“Projects that have not demonstrated use of the Asset and Services Knowledgebase before proposing new spend will be declined.

“Departments, in order to obtain spend approval, will need to move to adopt mandatory common ICT infrastructure solutions and standards, and spending applications will be assessed for their synergy with the Strategy.”

But these threats stand out as unusually unambiguous. In much of the Implementation Plan the Cabinet Office is in danger of sounding and acting like PITO, the now-disbanded central police IT organisation that had good intentions but could not get autonomous police forces to do its will.

Unless Cabinet Office officials take on more power and control of largely autonomous departments – and overcome the uncertainties over who would take responsibility if all goes wrong – the Implementation Plan could turn out to be another government document that states good intentions and not the means to carry them through.

It’s as if the Cabinet Office has told departmental officials to drive at a maximum speed of 50mph when on official business to cut fuel costs. Will anyone take notice unless the speed limit is monitored? It’s the policing, monitoring and open objective reporting of the Implementation Plan’s intentions that will count.

Otherwise who cares about nameless officials making 100 pages of boasts and promises, even if the proof-reading is impressive and the diagrams look good if you don’t try to follow their meaning?

SMEs and agile to play key role as Government launches ICT plan.

Cabinet Office’s Government ICT Strategy – Strategic Implementation Plan.

Puffbox analysis of Implementation Plan.

Is there a useful job for the Cabinet Office?

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Fiddling savings on shared services? Officialdom in need of reform

Posted on 21/10/2011 | 3 comments

 By TonyCollins

An NAO report today suggests that some officials are fiddling projected savings figures from a shared services deal involving seven research councils.

It all began so well. A Fujitsu press release in 2008 said:

“UK Research Councils to implement shared services with Fujitsu. £40 million project will generate cost and efficiency savings across the organisations.”

An executive who representedFujitsu Services’ was quoted in the press release as saying at the time:

“Fujitsu is consistently proving that it can deliver effective shared services infrastructures and is playing a vital role in driving forward the transformational government agenda through shared services.

“Organisations that adopt a shared services approach can experience genuine economies of scale and reduction in costs which can be essential in their drive for continuous improvement.

Twenty-one months later Fujitsu and Research Councils UK parted company. The 10-year shared services contract began in August 2007. It was terminated by mutual consent in November 2009.

A revealing report, which is published today by the National Audit Office, shows how, despite the best intentions by the Cabinet Office to improve the management of IT-related projects and programmes, and decades of mistakes to learn from, some officials in departments are still making it up as they go along.

The worrying thing in the NAO report is not only what happened in the past – few will be surprised that the NAO report characterises the shared services deal as lacking professionalism. What’s worrying is officialdom’s more recent disregard for the truth when claiming savings for its shared services arrangements.

The NAO’s report”Shared Services in the Research Councils” suggests that officials manipulated – some could say fiddled – projected savings figures.

The NAO also found that officials awarded a £46m shared services contract to Fujitsu which came second in the bid evaluation. Exactly how the contract came to be awarded will be investigated soon by MPs on the Public Accounts Committee.

Origins of shared services contract  

In 2004 a review led by the Government adviser Peter Gershon suggested that the public sector should save money by sharing support services such as IT, HR and finance. In 2006 officials at the Department of Trade and Industry (now the Department for Business, Innovation and Skills) encouraged their colleagues at seven research councils to set up a shared service centre, which they did.

The UK Research Councils is an important organisation. In 2009/10 it spent £3.7bn, mostly on giving research grants to universities, the European Space Agency and other organisations. Its biggest recipient of grants is the Medical Research Council.

Fujitsu contract

Public servants appointed Fujitsu in August 2007 to put in place the ICT systems to underpin the shared service centre in a ten-year contract worth £46m. Fujitsu came second in the initial bid evaluations.

The NAO said that the bidding process produced a shortlist of three companies including Fujitsu. Said the NAO:

“The initial weightings applied by the [bid] panel had placed Fujitsu second: although the bid had scored well on quality, it was 19 per cent more expensive than the cheapest bid.”

An independent review commissioned by the project board backed the evaluations which put Fujitsu second. But the bid panel and the project board had concerns about the evaluation. The supplier chosen in the evaluation – which the NAO refuses to name – did not score well on quality requirements.

It appears that the bid panel and the project board preferred Fujitsu.

Mathematical error

Then officials happened to spot a mathematical error in the bid scoring. The corrected scoring left Fujitsu on top, as the new preferred bidder.

Said the NAO:

“… a mathematical error was identified by a member of the project team that changed the order of the preferred suppliers, leaving Fujitsu as the front runner

“The [bid] panel reconvened to discuss this but, rather than re-performing in full the quantitative and qualitative analysis and submitting this to independent review, it decided to appoint Fujitsu on the basis of a vote.

“In September 2007 the gateway review team concluded that the incident had weakened the value of the overall process and had left the project at risk of challenge.”

User requirements unclear

Full delivery was due in September 2008 but the project team and Fujitsu “quickly encountered difficulties, resulting in contract termination by mutual consent in November 2009”.

The NAO said there was “miscommunication between the parties about expectations and deliverables, primarily because design requirements had not been sufficiently defined before the contract started”.

Fujitsu consequently missed agreed milestones. “Fujitsu and the Centre told us that the fixed-rate contract awarded by the project proved to be unsuitable when the customers’ requirements were still unclear.”

Officials paid Fujitsu a total of £31.9 million, of which £546,000 related to termination costs. Despite the payments to Fujitsu, parts of the system were withdrawn and rebuilt in-house.

Overspend on Fujitsu contract

The NAO found there were “significant overspends on design and build activities and the contract with Fujitsu.”

At least £13m wasted on Fujitsu deal

Said the NAO:

“Had the Fujitsu contract worked as planned, we estimate that the additional £13.2m design and build costs … would not have been needed. In addition the project management overspend of £9.1m would have been lower, as, after termination of the Fujitsu contract, a significant overhead in managing contractors was incurred by the project.”

Fujitsu out – Oracle in

The breakdown in relations with Fujitsu led to the appointment of Oracle as supplier of the grants element of the project. “The contract with Oracle suggested that lessons had been learnt by the project following its experience with Fujitsu, with greater effort given to specifying the design upfront,” said the NAO.

Did officials know what they were doing?

In deciding how to share services the research councils came up with six options including setting up a centre run jointly by the councils or joining with another public sector agency such as one supplying the NHS.

But two of the options including the NHS one were dropped without proper analysis, said the NAO. The remaining four options were each given a score of one to three, against seven criteria. “The scores appear to be purely judgemental with no quantified analysis,” said the NAO.

Even if the six options had been properly appraised, the evaluation would have failed because it did not include a “do-minimum” option as recommended by HM Treasury.

“Overall, the quality of options appraisal was poor,” said the NAO.

Fiddling the figures?

 The NAO found that:

–         Initial estimates were of zero projected procurement savings from shared services. But by the time the first draft of the business case had been written the projected savings had soared to £693.9m.

–         When this project board queried this figure the research councils’ internal audit service scaled down the figure to £403.7m – but this included £159.3m of savings that internal audit had concluded were not soundly based.

–         Since the shared services centre began officials have recorded procurement savings of £35.2m against the business case and while of these are valid savings some are not. The NAO investigated 19 high-value savings that represented 40% of savings recorded to the end of 2010 and found that 35% “should not be claimed against the project investment”.

–         The research councils have been “unable to provide paperwork to substantiate the claimed saving”.

–         Savings claimed were indistinguishable from normal business practice such as disputing costs claimed by a supplier.

–         Clear evidence exists that the budget holder had no intention or need to pay the higher price against which the saving was calculated

–         Last month the research councils claimed that savings were £28m higher than they had reported previously owing to errors in the original numbers. But the NAO found that the councils were unable to reconcile fully the two sets of numbers; had not used a single method for calculating benefits or tracked these effectively; and had not included £7m of spending incurred by the councils. “Overall, this review has highlighted that Councils have not put in place proper processes to track benefits and forecast future operational savings,” said the NAO.

–         Further, investments needed to deliver projected savings have not been included in calculations.

–         Double counting. A revised target for projected procurement savings procurement “includes elements of double counting …”

Other NAO findings:

–        Four Gateway review reports of progress on setting up the shared services centre, including a review which put the project at “red – immediate action needed”, were not fully followed up. 

–         There was no evidence of intervention by the Department for Business, Innovation and Skills when it became clear the shared services project was likely to overspend.

–         The shared services centre has begun to match the pre-shared services payment performance of the research councils but a high number of invoices was on hold at the end of July 2011 because of problems with the end-to-end processes. About 5,900 invoices were on hold, awaiting payment, in July 2011, which was 21 per cent of all invoices due to be paid in that month. The reason for the delay was being investigated.

–         Despite the shared services arrangements, some research council staff were at times running parallel systems, or managing their businesses without adequate data.

–         In July 2011 the shared services centre had 53 key performance targets to meet but was only able to measure activity against 37 of them and of these met only 13..

–         Five of the seven research councils did not file annual accounts on time in 2011 in part because functions in the finance ICT system were not delivered by the project.

Some good news

Said the NAO:

“The grants function and its associated ICT system developed by the project has allowed the Councils to replace older systems that were increasingly at risk of failing. This is of critical importance, given that the processing of research grant applications lies at the heart of what the Councils do. The single grants system has the potential to make it easier for the Councils to collectively modify their processes in the future…”

Comment

The commendably thorough NAO investigation has shown once again how badly departments and their satellites are in need of independent Cabinet Office oversight when it comes to major IT-related projects. In that respect thank goodness for the Cabinet Office’s Major Projects Authority. But how much influence can it really have? How much influence is it having?

This NAO report suggests that some officials are fiddling the figures without a care for professional accounting practices. Double counting, not including full costs in projected savings calculations, not having paperwork to support figures and other such administrative misdemeanours indicates that some officials are making up savings figures as they go along.

What is to be done when some departments and their agencies are not to be trusted in managing major projects?

NAO report on shared services at seven research councils

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Posted in Campaign4Change, change, change management, collaboration, Government IT, improving communications, legal disputes, managing change, openness and transparency, outsourcing, private sector lessons for the public sector, procurement, public sector, public services, reforms, research, Uncategorized

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CSC’s chairman and CEO to retire

Posted on 19/10/2011 | Leave a comment

By Tony Collins

CSC’s chairman and CEO, Mike Laphen, is to retire within a year,  reports ComputerworldUK.com.

His announcement comes at a time when the company faces some of the toughest challenges in its history with a US SEC regulatory investigation, an accounting controversy and a legal challenge over its statements in relation to its work on the NPfIT.

Anthony Miller, chairman of analysts TechMarket View, said CSC has undergone several “meaning of life reviews” as contract margins have been squeezed.

CSC has yet to sign a new agreement with the Department of Health over the future of Lorenzo and its NPfIT work. CSC’s share price today is a little above its five-year low.

ComputerworldUK.com

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Universal Credit internal report – now published

Posted on 10/10/2011 | 10 comments

By Tony Collins

Below is the Universal Credit Starting Gate review report that the Department for Work and Pensions refused to publish under the Freedom of Information Act.

The Treasury defines the Starting Gate review as a report on the “deliverability of major new policy and/or business change initiatives prior to public commitment to a project”.

The Starting Gate report on Universal Credit was obtained from the House of Commons’ library by Conservative MP Richard Bacon. It appears that the Cabinet Office’s Chief Operating Officer Ian Watmore asked the DWP to release the report to the Public Accounts Committee after Bacon’s request.

This is the first time all the sections of the report have been published on a website. The report is dated March 2011. No later assessment of the IT aspects of Universal Credit is available. UC is the government’s biggest IT-based project based on agile principles.

Starting Gate review: Universal Credit
Version number: Final
Date of issue: 8 March 2011
Name of Sponsor
(Senior Responsible Owner)		 Terry Moran, Director-General Universal Credit,DWP
 Department: Department of Work and Pensions (DWP)
Review dates: 28 February 2011–4 March 2011

Introduction

1 The White Paper “Universal Credit: welfare that works”, published on 11 November 2010, sets out the Coalition Government’s plans to introduce legislation to reform the welfare system by creating a new Universal Credit (UC). The main policy intent is a radical simplification of the system to make work pay and to combat worklessness and poverty.

2  On16 February 2011the Welfare Reform Bill was introduced to Parliament. The Bill introduces a wide range of reforms to make the benefits and tax credits system fairer and simpler by:

  • creating the right incentives to get more people into work by ensuring work always pays;
  • protecting the most vulnerable in society;
  • delivering fairness to those claiming benefit and to the tax payer.

The aim is to introduce UC from October 2013.

3  The delivery of Universal Credit has a core dependency on HMRC’s Real Time Information (RTI) programme which will collect Pay-As-You-Earn (PAYE) and other earnings information from employers dynamically as they run their payroll system.  To realise UC objectives, theRTItimetable has been designed to enable a controlled “go-live” from April 2012 and start a phased migration of employers.

Starting Gate review

4  This is a Starting Gate review report.  Starting Gate is an assurance tool of the Major Projects Authority in the Cabinet Office designed for Government Departments, their Agencies and NDPBs. Starting Gate reviews are intended to help Departments working on major high risk policy initiatives before these reach the stage of formal delivery projects or programmes. The aim is to provide an independent, constructive snapshot assessment of key issues and risks, and proposals or recommendations to enhance the prospects of successful implementation.

 Acknowledgements

5  The Review Team (RT) would like to thank the SRO and Programme team for the excellent logistical support and documentation which has helped us in our evaluation.

 Scope of review

6  The scope of this review is to assess the overall deliverablity of the Universal Credit programme with a specific focus on:

  • project structure and governance;
  • the dependency on HMRC’sRTIprogramme, and contingencies if that is delayed;
  • changing customer behaviour (ie increased use of on-line services):
  • testing the risks and benefits of applying the Agile methodology (eg the promise of completed products of lasting value at each stage; the fit with normal business cycle; and the rules on accountability).

SUMMARY OF RECOMMENDATIONS

Recommendation Section Page
The programme, in conjunction with the wider business, develops a roadmap depicting how existing benefits will be managed in the future, specifically but not exclusively, Housing Benefit for Pensioners, Disability Living Allowance. Scope of programme 5
The programme reviews their project governance structures to ensure the optimal board structure is in place, providing a hierarchy of decision making bodies, from the Agile design workshops to the Programme Board.  Ensure each board has clear terms of reference, are aware of their decision making powers and the correct escalation route. Structure and governance 6
The programme should formally assess themselves against the NAO list of common causes of project failure to identify potential ‘danger zones’ that they can plan to mitigate.  Also use the expertise gained by HMRC andASDas a valuable insight to successful delivery and avoiding past mistakes. Communications strategy 6
The programme to establish a comprehensive communications strategy and supporting plan.  Although customers and staff were highlighted above the strategy should include all interested parties, and specifically those with a dependency on or to the programme. Communications strategy 6
The programme to work closely with other government departments to identify where there may be opportunities to link with their activity in order to enhance UC’s chances of success. Dependencies 7
The programme to set up a working group to look at the set of complex cases to see if there are alternative handling options for these cases but with the ultimate payment coming through Universal Credit. Changing customer behaviour 8
DWP, with guidance and assistance from the MPA, produces an Integrated Assurance and Approvals Plan (IAAP) by the end of March 2011. Agile 9

DELIVERABILITY

7  The SRO requested the RT’s overall views.

8  The review team finds that the Programme has got off to an impressively strong start given the demanding timetable and complexity of the design and interdependency with other departments.  This involves liaison with HMRC in particular, but also with CLG and local government in respect of the replacement of Housing Benefit as part of the Universal Credit.  We found that the foundations for a delivery Programme are in place – clear policy objectives, a coherent strategy, Ministerial and top management support, financial and human resources – with no obvious gaps.  The strong working relationship with HMRC and the inclusive approach with other key stakeholders within and outsideDWPhave quickly established a high level of common understanding.  All this gives a high degree of confidence that, notwithstanding the inherent challenges, the programme can deliver Universal Credit.

9  There is a greater degree of uncertainty around the achievability of the intended economic outcomes because of factors which are not within DWP’s control e.g. the general state of the economy and availability of jobs.  There are other risks which derive from trying new approaches: the Agile methodology offers much promise but it is unproven on this scale and scope.  The actual response of different customer groups to UC may pose a risk to its transformational impact if, for example, factors other than net pay turned out to be a greater barrier to take up of work than expected.  The development of a range of approaches to contingency planning (which could be beyond changes to UC) could cover off unintended customer behaviour, whether “no change”, or “change for the worse”.

ASSESSMENT

Scope of programme

10  The Review Team (RT) recognises the challenges that delivering into an organisation already undergoing substantial change through restructuring presents.  In order to have the best chance of determining the most appropriate delivery model and developing credible and effective transition plans to deliver a ‘world class’ service, early decisions on the shape of the organisation would be immensely helpful.

11  There is a very real danger that due to a number of factors, including restructuring, headcount reductions, and uncertainty about the delivery model, the department may lose some of the expertise that it will need in order to deliver Universal Credit successfully.  There is also the challenge of maintaining staff morale during a period of uncertainty, to ensure the quality of service for the existing service is not impacted.  The review team felt that this was sufficiently visible to the Programme and that the risk was being managed at this stage.  Once the delivery model is known and the Programme moves nearer to transition, this risk will need more focus.

12  During the review, a number of interviewees raised the topic of the scope of both the Universal Credit and the Universal Credit IT platform and associated systems.  What was not obvious was whether there was a consensus on whether the Universal Credit platform was being designed as a strategic platform with potential for re-use across a number of other DWP payments, or whether it was solely a platform to pay Universal Credit.

13  Given the Coalition Government’s desire to see re-use built into IT systems from the outset, it would be prudent to consider opportunities for this now.  The review team felt that a roadmap, identifying what was definitely within the Universal Credit boundary, what could be paid by the Universal Credit platform at a future date, and what was definitely out of scope, would be beneficial.  The roadmap should also indicate how the ‘out of scope’ payments are to be handled and assign ownership.  This would be a useful departmental tool to provide clarity to stakeholders both within the Department and those that are impacted outside of DWP.

Recommendation:

The Programme, in conjunction with the wider business, develops a roadmap depicting how existing benefits will be managed in the future, specifically but not exclusively, Housing Benefit for Pensioners, Disability Living Allowance.

Project Structure and Governance

14  The importance of the programme is evidenced by the amount of commitment and support it received during the review.  The appointment of dedicated, experienced and well respected personnel into the key programme roles is seen as very positive and welcome.

15  In terms of structure the proposal to keep the programme’s core team to a minimum whilst commissioning involvement and support from key areas as necessary was generally well supported, However, the impact of any organisational redesign to meet the SR challenges was raised as a key risk to delivery.  As mentioned above, this is an issue the programme is aware of within their risk log.

16  It is recognised in order for the programme to get to their current position is has been necessary to establish a Programme Board which allows all interested parties a voice.  The review team found the time was now right to review the membership and frequency of the Programme Board and supporting structures to allow empowered decisions to be taken at the right level.

17  In reviewing the programme structure it is important that stakeholders retain a voice although not a decision making responsibility.  There was evidence that the programme board had recognised this and consideration was being given to a stakeholder forum.

Recommendation:

The programme reviews their project governance structures to ensure the optimal board structure is in place, providing a hierarchy of decision making bodies, from the Agile design workshops to the Programme Board.  Ensure each board has clear terms of reference, are aware of their decision making powers and the correct escalation route.

 Communications Strategy

18  Communications are key to the successful delivery of the programme on many levels, the review highlighted concerns in three specific areas:

a)      Lessons Learned – The scale and complexity of the programme is recognised as a key risk, however there are many sources of information which could help minimise this risk.  These include the recent NAO review “Assurance of High Risk Projects” which produced a list of the top reasons for project failure; the lessons learned by HMRC with the introduction of Tax Credits and more recently the PAYE modernisation programme; and the very recentASDexperience of using Agile as a development tool.

Recommendation:

The programme should formally assess themselves against the NAO list of common causes of project failure to identify potential ‘danger zones’ that they can plan to mitigate.  Also use the expertise gained by HMRC and ASD as a valuable insight to successful delivery and avoiding past mistakes. 

b)      Customers and Customer Groups – The valuable work already undertaken by the Customer Insights team was greatly applauded and there was a recognition that this should definitely continue and grow.  Concerns were raised about the need to ensure communications with customers and those groups representing customer interests were started early, dispelling myths and unfounded concerns whilst providing the foundations for the cultural and behavioural changes that will be needed.

c)      Internal Staff – The uncertainly of the operational delivery model and the known efficiency challenge highlighted concerns about the need to engage with staff, providing up to date, clear information about what decisions had been taken, what were planned and the timescales.

Recommendation:

The programme to establish a comprehensive communications strategy and supporting plan.  Although customers and staff were highlighted above the strategy should include all interested parties, and specifically those with a dependency on or to the programme.

Dependencies

19  Successful delivery also involves the active management of key relationships and dependencies.  It is recognised by all parties that there is a need for the programme to work with colleagues in DWP, HMRC and Local Authorities. The foundations for these relations are established and embedded in the membership of the key stakeholder and governance boards.

20  Whilst the review highlighted a number of inter-dependencies between Universal Credit and the existing DWP change portfolio, specifically Automated Service Delivery, Transforming Labour Market Services, IB Reassessment and the Work Programme, it is recognised that work has already been commissioned to provide an impact analysis assessment for the Investment Committee.

21 The review did however highlight areas where the programme could potentially utilise (or extend existing engagement with) the expertise and activities of other Government departments:

  • Cabinet Office: continue the engagement on cyber security to ensure security features are built in from the start. The RT noted the involvement of the appropriate agencies.
  • HMT: work to understand the Labour Market forecasts/trends which will provide information on the wider environment.
  • BIS: work to provide information on skills sought by employers.

Recommendation:

The programme to work closely with other government departments to identify where there may be opportunities to link with their activity in order to enhance UC’s chances of success.

HMRC’s Real Time Information (RTI) programme

22  The RT finds that bothDWPand HMRC are clear that timely delivery of RTI is a hard dependency for UC.   The joint framework established between the two departments at strategic, policy and operational levels has worked well to date to achieve rapid progress on areas of shared concern. There is a Universal Credit high level programme delivery plan including RTI;  a common change control mechanism is under discussion; the Welfare Reform Bill team has contact details for key HMRC officials and should be encouraged to engage them wherever needed during the passage of the Bill.  This is a strong foundation for the further detailed work that is needed such as a clear and agreed critical path showing key decision points.

23  The RT notes a strong commitment by Ministers and top management engagement in and support for this framework – a known critical success factor for major programmes in both the public and private sector.  Such support will be ever more important as the challenges of delivery increase in a timetable which, all acknowledge, is tight and poses a significant risk.  A restructured Programme Board (see section on governance), overseen by the Ministerial and top management Group, will be essential to maintaining collaborative management.

24  Detailed work is underway to develop a model for scaling up the non PAYE-RTI solution – a self-reporting system for the self-employed – as a contingency for delay of the required RTI service. (This will need to include the impact of the delivery model for UC, on which a decision is expected before Easter.)  The customer journey work will enable the identification of categories of customer claims which could, in principle, offer early “success stories” from a policy perspective and be processed under a non RTI-dependent system.   These options are work in progress and will need to be costed.

25  Contingency has been provided for in respect of other anticipated risks.  For example, the RTI testing period, envisaged to start in April 2012, has some “stretch” to allow for changes to the RTIBuild specification which could arise from the completion of the RTIDesign phase which runs beyond the letting of the Build contracts in May, or in response to late amendments to the Welfare Reform Bill.

Changing customer behaviour

26  The review team felt that the work that has been undertaken through the Customer Insights Team and the User Centre Design activity was a positive indicator that the customer feedback was being taken seriously from the outset, and was helping to shape both the policy and the system with which to deliver the policy.  It was seen by the review team as essential that this engagement with the customer base continues throughout the process.  The department however, should not underestimate the challenge to its staff in taking on a new customer base (i.e. working customers) and every effort should be made to transfer the learning and experience of those already dealing with these customers into the new delivery model.

27   Although the desire is to encourage customers to change their behaviour and to make the transition into work easier, this cannot be done through the implementation of Universal Credit in isolation.  A sustained programme of education and support through wider welfare reform activities will be needed to achieve this and the Programme should maintain links with those other areas of activity throughout.  One risk with any programme of work designed to change behaviour is that in an attempt to encourage people to make the move one way, there is an unintended consequence and behaviour is driven in the wrong direction.  The Programme should use the Customer Insights Team and the user centre design activity to provide an early warning of the likelihood of this happening.

28  One of the key principles of the new Universal Credit is simplicity and the importance of this was reiterated to the review team on a number of occasions.  One of the biggest challenges for the Programme is to maintain that simplicity but to still make provision within the system to deal with the most difficult and complex cases.  It is not feasible to have a system which does not cater for the customer base in its entirety but the Programme may wish to consider whether there are alternative ways of handling the minority group of customers with the most extreme complex cases in order not to compromise the integrity of the system and the over-arching simplicity of Universal Credits.

Recommendation:

The programme to set up a working group to look at the set of complex cases to see if there are alternative handling options for these cases but with the ultimate payment coming through Universal Credit.

29  Another challenge for the programme is the desire to move the majority of customers to on-line services.  This will present some difficulties and it may be beneficial to engage other organisations that have achieved this to understand the methodologies or tools they have used.

Agile

30  The challenging timetable for delivery of UC meant that DWP elected to use an Agile approach to the delivery. There is no evidence of such a methodology being used on a public sector programme of such scale and during the course of the review it was evident that there had been some initial scepticism to the use of such a methodology with a programme of this scale. However, during the review there was overwhelming evidence of buy-in to the methodology at all levels up to and including the highest levels. DWP have set about thoroughly educating all involved on what can be expected from them and there was clear evidence within the interviews that this is being taken up enthusiastically.

31  There was a view that policy decisions being made later in the programme would pose a problem for delivery. This was countered by the view that the methodology should allow decisions to be made when they need to be made, which is in contrast to fixing requirements early in more traditional (‘waterfall’) methodologies. On balance, the review team found that the use of the chosen methodology here was judged by interviewees to provide greater assurance of delivery in such an environment. The review team agrees with this finding.

32  In terms of the use of Agile within Government,DWPalso have the best current experience via their Automated Service Delivery (ASD) Programme, which used a slightly less ‘lean’ version of the methodology based on an Accenture interpretation. However, there are still valuable lessons that can be transferred from this programme and there exists experience that is being directly deployed on UC. The review team felt that whilst effectively piloting this methodology on a programme such as UC did pose a risk, this was acceptable in view of the risk of delivery out of line with expectations, for example in terms of timing or quality of service to the public.

33  Accenture remain involved in UC, although DWP have brought in consultants (Emergn) to provide an independent methodology not based on any ‘out of the box’ methodologies, but rather one that Emergn have tailored. New contracts supporting this development are due to be awarded in June 2011 and DWP state that their use of this independent methodology will serve to remove any supplier advantage.

34  There was evidence that DWP have understood the need for decision-making delegated to the level at which the expertise exists, with the appropriate empowerment supported within the planned governance re-design. There was also an acknowledgement that the right domain/business knowledge needs to be made available at the workshops that will drive the detailed design processes. It was also accepted that there is a continuing need for this knowledge to be made available and also that it will need to keep pace with the changing policy.

35  One key risk identified by DWP is how an Agile methodology will interact successfully with the various approvals processes that will come into play across the programme – most especially the ICT Spend Approval process (formally known as the ICT Moratorium Exception process). Engagement has begun already with the Major Projects Authority (MPA) on designing the Integrated Assurance and Approval Plan (IAAP) that will ensure the correct internal and external assurance is brought to bear for the identified approval points. The production of this plan is seen by the review team as a key mitigating factor for the risk identified and it is recommended that this is produced, with MPA guidance, by the end of March 2011 at the latest. This may need fine-tuning as approval points are finally agreed.

Recommendation:

DWP, with guidance and assistance from the MPA, produces an Integrated Assurance and Approvals Plan (IAAP) by the end of March 2011.

36  As noted earlier, there are contracts that are relevant to this development that are being re-competed at this time, with a wish to award in June 2011. There was some evidence that the design of contracts to deliver in an Agile environment will require a different design in order to draw out supplier behaviour in line with an accelerated delivery environment.

37  There is a always the risk that any development methodology will fail to deliver and whilst this methodology itself provides early warning of failure, there is recognition that in such a circumstance the prioritisation of customer journeys with high-value returns would be needed.

38  There was much evidence of the reliance of UC on successful delivery of the HMRC PAYE Real-Time Information (RTI) programme. There was also recognition that whilst ‘just-in-time’ decisions as a consequence of policy development could be made within UC, the RTI requirement would need to be more rigidly fixed as the traditional ‘waterfall’ development methodology in use cannot so easily absorb such changes without consequence.

39  There was some concern that fraud would remain a major issue for UC and appropriate Information Assurance should be built into the requirement from the outset – rather than being a ‘bolt-on’. Also, as UC and its interface with PAYERTI will become part of the UK Critical National Infrastructure, appropriate discussions should be maintained. There was evidence that DWP have gripped these requirements.

40  Overall, the use of an Agile methodology remains unproven at this scale and within UK Government; however, the challenging timescale does present DWP with few choices for delivery of such a radical programme. That said, there has been evidence of strong support at all levels and DWP do have some expertise within their own organisation that they can call upon from the outset. The review team not only felt that an Agile development is an appropriate choice given the constraints, they also believe that DWP are well placed with their level of support, knowledge and enthusiasm to act as a pilot for its use at such a scale.

 

Compound failure

41 DWP has made a strong start in identifying risks to delivery.   This could be developed further by thinking through the likelihood and impact of a number of risks being realised simultaneously (eg lack of synchronisation between reduced income and UC top-up, plus wrong employer data plus labour market downturn).and what the responses might be.  The programme could extend its preparedness by drawing on a wider range of experience the elements of recovery and their prioritisation; and test their robustness in advance, including an early warning system for Ministers.

Next independent external assurance

To be identified in the Integrated Assurance and Approvals Plan (IAAP) to be presented to the Programme Board w/b 21 March.

The Programme is scheduled for formal internal DWP “Gate zero” acceptance at an Investment Committee (IC) meeting on 21 April.

**

Thank you to Richard Bacon for obtaining a copy of the Starting Gate review. Bacon had requested a copy from Joe Harley, Government CIO and CIO at the DWP. Ian Watmore, Chief Operating Officer at the Efficiency and Reform Group, Cabinet Office agreed to supply Bacon with a copy as per the following exchange at a hearing of the Public Accounts Committee on 16 May 2011:

Bacon: “You sounded quite confident about universal credit. Will you send us the initial gateway review for universal credit?”

Harley: “The starting gate review?”

Watmore:  “The starting gate review. I don’t have a problem with that.”

After the hearing when the DWP refused our FOI request for a copy of the UC Starting Gate review report, it said that publication was not in the public interest. We can see nothing in the report that justifies the DWP’s claim. That said accountability and transparency are not the DWP’s defining characteristics.

Links:

Open Government? – Up to a point Lord Copper.

DWP FOI team hides already released report.

Agile and Universal Credit

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Posted in Agile, Campaign4Change, change management, Government IT, innovation, Lean, openness and transparency, public sector, public services, reforms, Uncategorized, Universal Credit

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NPfIT – criminal incompetence says The Times

Posted on 05/10/2011 | 2 comments

By Tony Collins

In an editorial not everyone would have seen, The Times said the history of the NPfIT was “one of criminal incompetence and irresponsibility”.

The main leader in The Times on 23 September had the headline “Connecting to Nowhere”.

It said:

“The comically misnamed Connecting for Health will continue to honour its contracts with big companies and to swallow taxpayers’ money for some time to come: up to £11bn on current estimates. The figure demonstrates the truly egregious scale of the previous Government’s incompetence on this issue: this vast sum seems to have been committed irrevocably, even though the project has never achieved its objectives.

“The story is a dismal catalogue of naivity, ambition and spinelessness. NHS managers and officials …were [not] brave enough to question the direction of travel at crucial moments when IBM and Lockheed pulled out of the project early on. Whitehall was sold a grand vision by consultants, software and technology companies charging grandiose fees. It signed contracts that appear to have been impossible to break when the promised land did not appear. Yet no one seems responsible. No one has been sacked. Most of the officials involved have long moved on…

“There have been spectacular failures in the private sector too. But businesses, with tighter controls on spending, tend to halt things earlier if they are going wrong. Many prefer off-the-shelf systems such as SAP or Oracle, which are tried and tested. They know that it is cheaper to adapt their processes, not the software.

“This newspaper is in favour of serious investment in technology, which could play an important part in economic growth. The NHS debacle has done enormous damage to this country’s reputation for expertise in IT systems. The lessons for the future are clear. Governments must hire people who can make informed and responsible procurement decisions. Patients, in every way, are going to end up paying the price.”

A separate article in The Times 0f 23 September included comments by Campaign4Change whose spokesman said that if the Department of Health continues to spend money on NPfIT suppliers it will probably get poor value for money.

Comment:

Compare the remarks in The Times with those of David Nicholson, Chief Executive of the NHS and Senior Responsible Owner of the NPfIT who refused to agree to a request by 23 academics to have an independent review of the scheme. Nicholson could not contain his enthusiasm for the NPfIT when he told the Public Accounts Committee on 23 May 2011:

 “We spent about 20% of that resource [the £11.4bn projected total spend on the NPfIT] on the acute sector. The other 80% is providing services that literally mean life and death to patients today, and have done for the last period.

“So the Spine, and all those things, provides really, really important services for our patients. If you are going to talk about the totality of the [NPfIT] system … you have to accept that 80% of that programme has been delivered.”

It’s difficult to accept Nicholson’s figures. But even if we do, we’d have to say that the 20% that hasn’t been delivered was the main reason for the NPfIT: a national electronic health record which hasn’t materialised and isn’t likely to in the near future.

The contrasting comments of The Times and Nicholson’s are a reminder that the civil service hierarchy at the Department of Health operates in a world of its own, unanswerable to anyone, not even the Cabinet Office or Downing Street.

Can the Department of Health be trusted to oversee health informatics when it has such close relationships with major IT companies and consultants? While Katie Davis is in charge of health informatics there is at least an independent voice at the DH. But as an interim head of IT how long will she last? The DH has a history of not being keen on independent voices.

Nicholson: still positive after all these years.

NPfIT goes PfffT.

Beyond NPfIT.

Surge in tenders for non-NPfIT systems.

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Posted in Campaign4Change, Government IT, legal disputes, NHS, npfit, openness and transparency, outsourcing, procurement, public sector, public services, supplier relationships, Uncategorized

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Agile for Universal Credit – a good choice says report

Posted on 05/10/2011 | 3 comments

By Tony Collins

Universal Credit is one of  the government’s biggest IT-based projects and the biggest test for agile in the public sector. It is due to start rolling out in April 2013.

The choice of agile for the scheme is supported by a “Starting Gate” review which was carried out for the Cabinet Office’s Major Projects Authority, and for Terry Moran, the Director-General, Universal Credit at the Department for Work and Pensions. The review was carried out between 28 February 2011 and 4 March 2011.

This is what the Starting Gate report says on agile aspects of the project.

Agile

The challenging timetable for delivery of UC meant that DWP elected to use an Agile approach to the delivery. There is no evidence of such a methodology being used on a public sector programme of such scale and during the course of the review it was evident that there had been some initial scepticism to the use of such a methodology with a programme of this scale.

However, during the review there was overwhelming evidence of buy-in to the methodology at all levels up to and including the highest levels. DWP have set about thoroughly educating all involved on what can be expected from them and there was clear evidence within the interviews that this is being taken up enthusiastically.

There was a view that policy decisions being made later in the programme would pose a problem for delivery. This was countered by the view that the methodology should allow decisions to be made when they need to be made, which is in contrast to fixing requirements early in more traditional (‘waterfall’) methodologies.

On balance, the review team found that the use of the chosen methodology here was judged by interviewees to provide greater assurance of delivery in such an environment. The review team agrees with this finding.

In terms of the use of Agile within Government, DWP also have the best current experience via their Automated Service Delivery (ASD) Programme, which used a slightly less ‘lean’ version of the methodology based on an Accenture interpretation.

However, there are still valuable lessons that can be transferred from this programme and there exists experience that is being directly deployed on UC. The review team felt that whilst effectively piloting this methodology on a programme such as UC did pose a risk, this was acceptable in view of the risk of delivery out of line with expectations, for example in terms of timing or quality of service to the public.

Accenture remain involved in UC, although DWP have brought in consultants (Emergn) to provide an independent methodology not based on any ‘out of the box’ methodologies, but rather one that Emergn have tailored.

New contracts supporting this development are due to be awarded in June 2011 and DWP state that their use of this independent methodology will serve to remove any supplier advantage.

There was evidence that DWP have understood the need for decision-making delegated to the level at which the expertise exists, with the appropriate empowerment supported within the planned governance re-design.

There was also an acknowledgement that the right domain/business knowledge needs to be made available at the workshops that will drive the detailed design processes. It was also accepted that there is a continuing need for this knowledge to be made available and also that it will need to keep pace with the changing policy.

One key risk identified by DWP is how an Agile methodology will interact successfully with the various approvals processes that will come into play across the programme – most especially the ICT Spend Approval process (formally known as the ICT Moratorium Exception process).

Engagement has begun already with the Major Projects Authority (MPA) on designing the Integrated Assurance and Approval Plan (IAAP) that will ensure the correct internal and external assurance is brought to bear for the identified approval points. The production of this plan is seen by the review team as a key mitigating factor for the risk identified and it is recommended that this is produced, with MPA guidance, by the end of March 2011 at the latest. This may need fine-tuning as approval points are finally agreed.

Recommendation:

DWP, with guidance and assistance from the MPA, produces an Integrated Assurance and Approvals Plan (IAAP) by the end of March 2011.

As noted earlier, there are contracts that are relevant to this development that are being re-competed at this time, with a wish to award in June 2011. There was some evidence that the design of contracts to deliver in an Agile environment will require a different design in order to draw out supplier behaviour in line with an accelerated delivery environment.

There is a always the risk that any development methodology will fail to deliver and whilst this methodology itself provides early warning of failure, there is recognition that in such a circumstance the prioritisation of customer journeys with high-value returns would be needed.

There was much evidence of the reliance of UC on successful delivery of the HMRC PAYE Real-Time Information (RTI) programme. There was also recognition that whilst ‘just-in-time’ decisions as a consequence of policy development could be made within UC, the RTI requirement would need to be more rigidly fixed as the traditional ‘waterfall’ development methodology in use cannot so easily absorb such changes without consequence.

There was some concern that fraud would remain a major issue for UC and appropriate Information Assurance should be built into the requirement from the outset – rather than being a ‘bolt-on’. Also, as UC and its interface with PAYERTI [PAYE RTI] will become part of the UK Critical National Infrastructure, appropriate discussions should be maintained. There was evidence that DWP have gripped these requirements.

Overall, the use of an Agile methodology remains unproven at this scale and within UK Government; however, the challenging timescale does present DWP with few choices for delivery of such a radical programme.

That said, there has been evidence of strong support at all levels and DWP do have some expertise within their own organisation that they can call upon from the outset. The review team not only felt that an Agile development is an appropriate choice given the constraints, they also believe that DWP are well placed with their level of support, knowledge and enthusiasm to act as a pilot for its use at such a scale.

Compound failure

DWP has made a strong start in identifying risks to delivery.   This could be developed further by thinking through the likelihood and impact of a number of risks being realised simultaneously (eg lack of synchronisation between reduced income and UC top-up, plus wrong employer data plus labour market downturn).and what the responses might be.

The programme could extend its preparedness by drawing on a wider range of experience the elements of recovery and their prioritisation; and test their robustness in advance, including an early warning system for Ministers.

Agile and Universal Credit – Secret report.

Agile can fix failed GovIT says lawyer.

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CSC repays £170m to DH after non-signing of MoU

Posted on 03/10/2011 | 1 comment

By Tony Collins

CSC reports today that it has repaid to the Department of Health £170m of a £200m advance it received earlier this year for NHS IT work that was due to be carried out under a memorandum of understanding.

The MoU was not signed as had been expected by 30 September 2011, so CSC has repaid the money.

But the Department of Health has entered into an “extended advance payment agreement” with CSC for £24m.

In a statement dated 3 October 2011 CSC has also disclosed that uncertainty continues over the future of its NPfIT contracts that are worth about £3bn.

It says that it is having a series of meetings with the NHS and Cabinet Office officials over the “next several weeks” and adds that: “there can be no assurance that the MOU [memorandum of understanding] will be approved nor, if it is approved, what final terms will be negotiated and included in the MOU”.

The statement relates to CSC’s negotiations with the Department of Health and the Cabinet Office’s Major Projects Authority over a draft memorandum of understanding that proposes cutting the cost to taxpayers of CSC’s contracts by about £800m but would cut back planned deployments of Lorenzo by nearly two thirds and could nearly double the cost of each remaining deployment. One Cabinet Office official has described the terms of the memorandum of understanding as unacceptable.

CSC says today that “progress is continuing in development and deployment projects under the contract in cooperation with the NHS, although progress has been constrained due to the uncertainty created by the government approval process”.

It adds:

“Humber NHS Foundation Trust has been confirmed as the early adopter for mental health functionality to replace Pennine Care Mental Health Trust, which withdrew as an early adopter in April 2011, and CSC and the NHS are preparing to formally document this replacement under the contract.

“On April 1, 2011, pursuant to the company’s Local Service Provider contract, the NHS made an advance payment to the company of £200m related to the forecasted charges expected by the company during fiscal year 2012.

“The amount of this advance payment contemplated the scope and deployment schedule expected under the MOU and the parties had anticipated that the MOU would be completed and contract amendment negotiations would be underway by September 30, 2011.

“… the advance payment agreement provided the NHS the option to require repayment of the advance payment if the parties were not progressing satisfactorily toward completion of the expected contract amendment by September 30, 2011.

“Because completion of the MOU has been subject to delays in government approvals and, as a result, contract amendment negotiations have not progressed, the NHS required the company to repay approximately £170m of the April 1, 2011 advance payment on September 30, 2011, and the company agreed and made the repayment as requested.

“Also on September 30, 2011, the NHS and the company entered into an extended advance payment agreement providing for an advance payment of approximately £24m to the company in respect of certain forecasted charges for the company’s fiscal year 2012.

“The extended advance payment agreement acknowledges that the company’s Local Service Provider contract, as varied by the parties in 2010, is subject to ongoing discussions between the parties with the intention of entering into a memorandum of understanding setting out the commercial principles for a further set of updated agreements.

“The company intends to discuss the extended advance payment structure and certain fiscal year 2012 deployment charges with the NHS in connection with the MOU negotiations.

“However, there can be no assurance that the parties will enter into the MOU or that the company’s forecasted charges under the contract for the remainder of fiscal year 2012 will not be materially adversely affected as a result of the delay in completing the MOU and the related contract amendment.”

Meanwhile some investors of CSC have taken legal action against the company.

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CSC NPfIT deal is a crucial test of coalition strength

Posted on 28/09/2011 | 1 comment

By Tony Collins

Comment:

The Cabinet Office’s Major Projects Authority has intervened in NHS Connecting for Health’s running of the NPfIT.

In particular the Authority has taken a role in the negotiations between CSC and the Department over the future of about £3bn worth of local service provider contracts.

Had the Authority not intervened a memorandum of understanding between CSC and the DH is likely to have been signed several months ago. Fortunately for taxpayers a deal wasn’t signed.

According to a leaked Cabinet office memo the deal would have been poor value for money. It would have cut £700m or more from the cost of CSC’s contracts but doubled the cost to taxpayers of the remaining deployments.

The Cabinet Office memo said the “offer [from CSC] is unattractive”. It added:

“This is because the unit price of deployment per Trust under offer roughly doubles the cost of each deployment from the original contract”.

It could be said that signing such a deal with CSC would be as naive as a shopkeeper asking a Cadbury wholesaler to change his order from 100 chocolate bars to 30, and thus agreeing to paying Cadbury double the price for each bar.

Now it transpires that the official within the Cabinet Office who wrote the memo expressing concern about CSC’s offer is leaving. This could imply that an “unattractive” deal between the Department of Health over Lorenzo will go through after all.

Indeed the Cabinet Office has published its assessment of the NPfIT – the “Major Projects Authority Programme Assessment Review of the National Programme for IT” – which includes a section on CSC that suggests a new deal with the supplier may be signed, even though critics say the NPfIT contract with CSC should be “parked” with no further action taken on it.

The DH has accused CSC of breach of contract and vice versa. A legal dispute can be avoided by parking the contract with the agreement of both sides. If the DH signs a new deal with CSC it will be a sign that the intervention of the Cabinet Office has come to little or nothing.  It will also be a sign of coalition weakness. If the coalition cannot have an effect on a deal the DH has long wanted to sign with CSC when can it effect in terms of central government reform?

This is the worrying  section in the report – dated June 2010 – of the Major Projects Authority:

“… if the decision is taken to allow the Lorenzo development and deployments to continue there needs to be a considerable strengthening of the renegotiated position first to give CSC the opportunity to step up to its failings and for a clear statement of obligations on all parties and a viable and deliverable plan to be created and adhered to.

“There is no certainty that CSC would deliver fully in the remaining time of the contract, but the terms of the renegotiation could enable them to have a completed Lorenzo product which can compete in the market which replaces Local Service Providers…”

Other parts of the Major Projects Authority report are highly critical of Lorenzo. It says that in the North, Midlands and East of England there have been “major delays in the development of …Lorenzo”. As a result of the delays “interim and legacy systems have been used to maintain operational capability”.

The report also says the “productisation of Lorenzo is not mature” and adds: “This is evidenced by the fact that bespoke code changes are still being used in response to requirements from the early adopter trusts. This issue will be exacerbated if the remaining product development (of the modules referred to as Deployment Units) is not completed before future implementation roll-outs commence.”

The report says there is a need to be “certain about the capacity and capability of CSC to furnish sufficient skilled resources to undertake the level of roll-out needed to satisfy the existing schedule”.

It continues: “During the review it was mentioned that on occasion, people needed to leave the Morecambe Bay activity to go to the Birmingham installation at short notice to resolve problems. At this stage of the programme, CSC skills, schedule and utilisation rate, including leveraged resources, should be available to support a proposed roll-out schedule…”

There is still a “significant degree of uncertainty both about the planning of [Lorenzo] implementations and also the capability of the solution. The four key trusts chosen to implement the Lorenzo solution are in very different situations. University Hospitals Morecombe Bay is close to sign-off whilst Pennines Trust has stated its desire to leave the programme. Birmingham Women’s Hospital Trust is being held back by one issue which views have suggested are about a difference of opinion with the Supplier believing that they have met the Deployment Verification Criteria whilst the Trust is not happy about the level of functionality delivered. Connecting for Health expect to resolve this difference of opinion soon.”

And the MPA report says the latest implementation of Lorenzo 1.9 is “a long way short of the full functionality of the contracted solution which has four stages of functionality and is intended to be rolled currently out to 221 trusts”.

Lorenzo was originally due to have been delivered by the end of 2005.  If, after all the MPA’s criticisms, a new Lorenzo deal is signed what will this say about the ability of the Cabinet Office to influence decisions of civil servants?

In 2006 an internal, confidential report of CSC and Accenture on the state of Lorenzo and its future was positive in parts but listed a multitude of concerns. The summary included these words: “…there is no well-defined scope and therefore no believable plan for releases beyond Lorenzo GP…”

The current outdated NPfIT deal with CSC should be set aside , and no further action taken on it by both sides. CSC will continue to have a strong presence in NHS IT, at least because many trusts that have installed iSoft software will need upgrades.

But if a new NPfIT deal is signed with CSC it will greatly undermine the credibility of the Cabinet Office’s attempts to effect major change on the machinery of departmental administration; and it could help consign the so-called reforms of central government to the dustbin marked  “aspirations”. It will certainly give ammunition to the coalition’s critics. The Government has said it is dismantling the NPfIT. It didn’t say it was prolonging it.

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