Tag Archives: Efficiency and Reform Group

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

Posted on 22/06/2016 | 1 comment

By Tony Collins

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

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

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

Soaring costs?

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

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

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

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

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

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

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

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

A good service

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

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

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

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

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

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

Eight lessons from Aspire

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

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

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

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

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

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

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

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

Dearnley said,

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Meg Hillier

Meg Hillier

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

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

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

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

Hiller said,

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

Richard Bacon added,

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

Thompson said,

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

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

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

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

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

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

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

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

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

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

Comment

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

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

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

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

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

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

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

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

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

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

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

Update:

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

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

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

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

June 2016 memorandum on Aspire – National Audit Office

Dearney’s evidence to the Public Accounts Committee

1 Comment

Posted in Accenture, BT, Campaign4Change, Capgemini, change management, Cloud Computing, cost avoidance, DWP, efficiency savings, Freedom of Information, G-Cloud, Government IT, HMRC, HP, Institute for Government, IT successes, Legacy ICT, managing change, managing outsourced services, National Audit Office, project management, supplier relationships, Universal Credit

Tagged , , , , ,

Hidden for four years – a review of Universal Credit IT

Posted on 19/04/2016 | 4 comments

By Tony Collins

Front page of a report the DWP kept hidden for four years. The DWP's lawyers went through numerous FOI appeals to try and stop the report being published.

Front page of a report the DWP kept hidden for four years. The DWP’s lawyers went through numerous FOI appeals to try and stop the report being published.

This is the independent Universal Credit Project Assessment Review  that lawyers for the Department for Work and Pensions went through numerous FOI tribunal appeals trying to keep hidden.

It  was written for the DWP by the Cabinet Office’s Major Projects Authority. Interviewees included Iain Duncan Smith and Lord Freud who was – and is – a work and pensions minister.

In 2012 Lord Freud signed off the DWP’s recommendation that an FOI request for the report’s release be refused.

Remarkable

The now-released report is remarkable for its professionalism and neutrality. It’s also remarkably ordinary given the number of words that have been crafted by the DWP’s lawyers to FOI tribunals and appeals in an effort to keep the report from being published.

The DWP’s main reason for concealing the report – and others that IT projects professional John Slater had requested under FOI in 2012 – was that publication could discourage civil servants from speaking candidly about project problems and risks, fearing negative publicity for the programme.

In the end the DWP released the report 11 days ago. This was probably because the new work and pensions secretary Stephen Crabb refused to agree the costs of a further appeal. Last month an FOI tribunal ordered that the project assessment review, risk register and issues register be published.

Had the reports been published at the time of the FOI request in 2012 it might have restricted what ministers and the DWP’s press office were able to say publicly about the success so far of the Universal Credit programme.

In the absence of their publication, the DWP issued repeated statements that dismissed criticisms of its programme management. Ministers and DWP officials were able to say to journalists and MPs that the Universal Credit programme was progressing to time and to budget.

In fact the project assessment review questioned a projected increase of £25m of IT spend in the budget.

MPRG is the Major Projects Review Group, part of the Cabinet Office. OBC is the Outline Business Case for Universal Credit. SOBC is the Strategic Outline Business Case.

MPRG is the Major Projects Review Group, part of the Cabinet Office. OBC is the Outline Business Case for Universal Credit. SOBC is the Strategic Outline Business Case.

 

 

 

 

The DWP claimed in the report that the projected of £25m in IT spend was a “profiling”rather than budgetary issue.

By this the DWP meant that it planned to boost significantly the projected savings in later years of the project. Those anticipated savings would have offset the extra IT spend in the early years. Hence the projected overspend was a “profiling” issue.

But the report questioned the credibility of the profiling exercise.

credibility extract

On the question  of whether the whole programme could be afforded the report had mixed views.

affordability extract

The report was largely positive about the DWP’s work on Universal Credit. It also revealed that in some ways not all was progressing as well as had been hoped (which was contrary to DWP statements at the time). The report said,

behind the curve extract

And a further mention of “behind the curve”…

behind the curve excerpt

None of these problems was even hinted at in official DWP statements in 2012. About six months after the project assessment review was conducted, this was a statement by a DWP minister (who uses words that were probably drafted by civil servants).

“The development of Universal Credit is progressing extremely well. By next April we will be ready to test the end to end service and use the feedback we get from claimants to make final improvements before the national launch.

“This will ensure that we have a robust and reliable new service for people to make a claim when Universal Credit goes live nationally in October 2013.”

And the following is a statement by the then DWP secretary  of state Iain Duncan Smith in November 2011, which was around the time the project assessment review was carried out. Doubtless his comments were based on briefings he received from officials.

“The [Universal Credit] programme is on track and on time for implementing from 2013.

“We are already testing out the process on single and couple claimants, with stage one and two now complete. Stage 3 is starting ahead of time – to see how it works for families.

“And today we have set out our migration plans which will see nearly twelve million working age benefit claimants migrate onto the new benefits system by 2017.”

Ironic

It’s ironic that the DWP spent four years concealing a report that could have drawn attention to the need for better communications.

communications extract

The report highlighted the need for three types of communication, internal, external and with stakeholders.

communications extract2

On communications with local authorities ..

communications extract3

Comment

The DWP has denigrated the released documents. A spokesperson described them as “nearly four years old and out of date”.

It’s true the reports are nearly four years old. They are not out of date.

They could hardly be more important if they highlight a fundamental democratic flaw, a flaw that allows Whitehall officials and ministers to make positive public statements about a huge government project while hiding reports that could contradict those statements or could put their comments into an enlightening context.

Stephen Crabb, IDS’s replacement at the DWP, is said by the Sunday Times to want officials to come clean to him and the public about problems on the Universal Credit programme.

To do that his officials will have to set themselves against a culture of secrecy that dates back decades. Though not as far as the early 1940s.

Official proceedings of parliament show how remarkably open were statements made to the House during WW2. It’s odd that Churchill, when the country’s future was in doubt, was far more open with Parliament about problems with the war effort than the DWP has ever been with MPs over the problems on Universal Credit.

I have said it before but it’s time for Whitehall departments, particularly the DWP, to publish routinely and contemporaneously their project assessment reviews, issues registers and risk registers.

Perhaps then the public, media and MPs will be better able to trust official statements on the current state of multi-billion pound IT-based programmes; and a glaring democratic deficit would be eliminated.

Openness may even help to improve the government’s record on managing IT.

Universal Credit Project Assessment Review

Is DWP’s Universal Credit FOI case a scandalous waste of money?

4 Comments

Posted in Campaign4Change, DWP, excessive secrecy, FOI, Freedom of Information, Gateway reviews, Major Projects Authority, National Audit Office, Real-Time Information, Universal Credit

Tagged , , ,

Judge orders FOI release of Universal Credit IT reports

Posted on 16/03/2016 | 12 comments

By Tony Collins

universal creditA judge has ordered the Department for Work and Pensions to release three Universal Credit IT reports that ministers and their officials have spent public money trying to keep out of the public domain.

Judge Chris Ryan and his FOI tribunal panel went further: they concluded that had the reports in question been disclosed at the time they might have corrected misleading government statements about the robust state of the Universal Credit programme.

In their ruling this week the tribunal said that disclosure of the documents,

“might have corrected a false impression, derived from official government statements by revealing the very considerable difficulties that were beginning to develop around the time when the information requests were submitted.”

Two director-level officials at the Department for Work and Pensions had argued that civil servants needed a “safe space” in the reports in question to be candid in their assessments of risks and problems.

But the FOI tribunal, whose members have project management experience, concluded that it’s in the self interest of officials to be candid and professional about problems and risks rather than be associated with a failed project.

In addition, officials would not wish to be held partly responsible in a later review, such as one carried out by the National Audit Office, for having “failed to draw colleagues’ attention to problems with sufficient clarity to ensure that they were addressed effectively and in good time”.

Civil servants had an “awareness of the importance of candour in support of good decision-making and their professional obligation to assist that process”.

The tribunal said the three reports in question should have been  disclosed at the time they were requested in 2012. It directed the DWP to disclose them.

If the DWP’s barrister can identify good reasons why the tribunal might have made an error, or errors, in law, he can appeal within 28 days, though a tribunal could reject his appeal . The DWP could then appeal this decision.

This cycle of appeals that has already happened once – or the DWP could now decide that it has spent enough public money on fighting the case and release the reports.

dwpDid the DWP mislead?

The reports are expected to throw light on the problems and risks of Universal Credit IT at  a time when DWP’s officials, secretary of state Iain Duncan Smith and his ministers, were giving assurances that all was well with the programme.

An FOI tribunal ordered the reports to be released in 2014 but various DWP appeals led to a re-hearing of the case last month (22 February 2016) at Leicester Magistrates Court.

Now Judge Ryan and two other FOI tribunal panel members have ordered that the DWP release a risk register, issues register and Major Projects Authority project assessment review.

The risk register described risks, the possible impact should they occur, the probability of their occurring, a risk score, a traffic light status, a summary of the planned response if a risk materialised, and a summary of the risk mitigation.

The issues register included a list of problems, the dates they were identified, the mitigating steps required and the dates for review and resolution.

The project assessment review gave a high-level strategic view of the state of UC, its problems, risks and how well or badly it was being managed.

The DWP argued that routine disclosure of such reports could lead to sensationalist headlines that would have a “chilling effect”.  Not wanting to give food to a hostile media, officials writing or contributing to such reports could make them anodyne.

dwpDWP fears “over-stated”

But Judge Ryan said the DWP had “over-stated” its fears. The tribunal suggested that the DWP had not been entirely truthful about the Universal Credit programme.

“We do not accept the Department’s submission that the management of the Universal Credit Programme is already exposed to sufficient public scrutiny and that this dilutes the strength of the arguments in favour of disclosure. On the particular facts of this case it is clear that the true story about the troubles which the Programme team faced only came to light a long time after the event and then showed a markedly different picture than had been portrayed by government statements issued at the time.”

This difference between reality on the UC programme and government statements was a good reason in favour of the disclosure of the reports, said the judge.

Closed session

The DWP’s witness Cath Hamp, a senior DWP official, went into closed session at the latest hearing to argue that her concerns about civil servant behaviour would be more clearly shown by reference to specific items in the withheld documents.

Her closed-session arguments related to the risk of fraud and hacking into the system, relations with commercial organisations, and relations with local government. The tribunal was not convinced by her arguments.

Neither was the panel convinced by the “chilling effect” arguments.

“The evidence on the likelihood of civil servants altering their behaviour in future with regard to their contributions to the preparation of a risk or issues register or to the conduct of a project review was, as Ms Hamp fairly conceded, speculative…”

FOI a benefit more than a “burden”?

The DWP argued that disclosures of the reports would have placed a burden on DWP’s Universal Credit programme executives. They would have been forced to divert their energies and time into correcting media reports about the seriousness of problems and risks. But the tribunal concluded,

“Nor do we accept that resources would be wasted in providing explanations. It is clear from the press releases that we have been shown that the Department has been adept at presenting its case to the public and that it clearly has the specialist staff to carry out that function.”

The tribunal suggested that FOI obligations, rather than cause harm as the DWP had suggested, would be a benefit. The FOI Act had “brought with it an obligation on government to explain itself to a greater extent than had previously been found necessary”.

The tribunal rejected the DWP’s argument that it faced a hostile media which made officials defensive.

“… the evidence before us suggests that, on this issue, the media has adopted a relatively balanced approach to information about the Programme that has come into its possession.”

The judge said that in any event it is a

“perfectly appropriate performance of the media’s role in a modern democracy for it to investigate and comment on the implementation of a major reform involving large sums of public money and a potentially crucial impact on the lives of some of the least fortunate members of society”.

He added: “We do not therefore accept the Department’s submissions on the likelihood of the public misunderstanding the disputed information, or being misled as to its significance by the media”

In its final paragraph the tribunal said,

“… we have concluded that the public interest in maintaining the exemption in respect of each of the withheld documents does not outweigh the public interest in disclosure and that they should therefore have been disclosed when requested. Our decision is unanimous.”

Comment

My thanks to IT projects professional John Slater who has been the main force behind the case in favour of disclosure of the reports.

He made the original request in 2012 for the reports to be published. I requested one of them. He went to the original First Tier Tribunal and to Leicester Magistrates Court last month to cross examine the DWP’s witness. The points he made were quoted by the tribunal in its submission.

It’s campaigners like John Slater (and Dave Orr) who have helped to make FOI legislation more effective than it would otherwise have been.

If the DWP continues to pour money into fighting the disclosure of the reports in question, it will confirm to some of us that, when it comes to its own interest, that is its interest as a bureaucracy,  it may not be a fit authority to manage the spending of public money.

I hope it will release the reports now. It is time it started distinguishing between the public interest and its own.

Universal Credit FOI tribunal ruling – March 2016:  077 110316 Final Open Decision

12 Comments

Posted in Campaign4Change, DWP, excessive secrecy, FOI, Freedom of Information, Gateway reviews, governance, Government IT, Institute for Government, Major Projects Authority, National Audit Office, procurement, project management, public sector, public services, Universal Credit

Tagged , ,

Why keep risk registers secret?

Posted on 02/03/2016 | Leave a comment

By Tony Collins

FOI Commission front coverThe Freedom of Information Commission reported comprehensively yesterday on the workings of the FOI Act. It raised the question of whether risk registers and Major Project Authority project assessment reviews should be published.

The Commission’s members, who included former Tory leader Michael Howard and Labour’s Jack Straw, received over 30,000 responses to their call for evidence. They met numerous stakeholders, heard ten hours of oral evidence and  produced an impressive report that opposed the idea of charging for FOI requests.

Two of the seven Cabinet vetoes have been on FOI requests related to risk assessments. Indeed the Department for Work and Pensions is fighting a protracted legal battle (three years so far) to stop three reports on the Universal Credit IT programme being published, including a risk register and project assessment review.

Is there any good reason not to publish a risk register, or a project assessment review? Aren’t the public entitled to know the extent to which their money is at risk on a project or programme?

No, argue civil servants, whose views on confidentiality are almost always supported by their ministers. Civil servants contend that they need a “safe space” to be imaginatively negative, to think the unthinkable, without the media and opposition MPs seizing on a risk register as evidence that an innovative scheme should not get off the ground.

Civil servants and ministers argue that disclosing risk registers (and project assessment reviews) would mean that those who contribute to them would tone down or sanitise their comments. Civil servants would not be completely honest or candid when setting out the scale or magnitude of the risks.

This is what the FOI Commission concluded:

Risk assessments

“In our call for evidence we described risk assessments as a particularly relevant example of the tension between the public’s right to know, and the need for public bodies to have an internal deliberative space.

Many documents will contain mention of risks, but here we are concerned principally with documents that are explicitly devoted to setting out a candid risk assessment. We drew particular attention to risk assessments because two of the seven Cabinet vetoes have been in respect of risk assessments.

The most obvious example of a candid risk assessment is the ‘risk register’. Project management processes typically utilise risk registers as part of their methodology. Risks are normally given a rating on a scale of 1 to 5 of the likelihood of the risk occurring (where 5 is the highest likelihood of the risk occurring) and the scale of the impact if that risk occurred. Using the scores for likelihood and impact, a “Red / Amber / Green” (RAG) rating is created denoting how serious a risk is.

Risk registers do not generally provide detailed explanations of the risks involved, but only the headline risk and potential mitigation.

The Office of Government Commerce (OGC) Gateway Review is another example of a risk assessment. Gateway Reviews examine programmes and projects at key decision points using a peer review process in which independent practitioners examine progress and likelihood of successful delivery. These reviews can apply to e.g. IT or procurement processes, but can also apply to policy development.

Policy impact assessments are formal evidence based procedures that assess the economic, social and environmental costs and risks and benefits of a policy. These are published for example: at the same time as a consultation, response to consultation or at introduction of a Bill or as part of any change during the passage of the Bill.

Major Project Authority Project Assessment Reviews (PARs) are detailed assessments of large projects. They are more tailored to specific projects than Gateway Reviews. Following frank interviews with staff they culminate in a report for the Senior Risk Owner for the project setting out recommendations and assessment of risks.

In its response to the call for evidence Kent County Council highlighted the difficulties that could arise if candid risk assessments were made routinely available:

‘…it could mean that people do not feel confident enough to put risks they have identified onto the registers, or that risk registers themselves are not compiled in the first place for fear of repercussions. This could lead to potential “nasty surprises” and poor decision-making if people choose to keep risks ‘in their heads’ (paragraph 3.3)

By contrast, in their evidence the Open Government Network said:

‘The public acknowledgement of the existence of certain risks will enhance the public debate about major projects and their implementation. It is when risks can be silently ignored that the consequences are dramatic, often then requiring the complete publication of a flawed risk register when it is too late to prevent the overlooked problems.’

The Commission agrees with the evidence of the IC [Information Commissioner] in which he says that the impact of disclosing candid risk assessments can vary depending on the sensitivity of the topic and what is already in the public domain.

There will be risk assessments where it is so keenly in the public interest that the risks identified be disclosed (for example, where these concern serious risks to public health or life) that, notwithstanding the need for these assessments to be part of an internal deliberative process, they should be disclosed.

In other cases the nature and candour of the risks may mean that they should not be published. The Commission has reached that the conclusion that the public interest test provides the best way to assess whether specific risk assessments should be published, and that no additional or specific protection is required for risk assessments.”

Comment

There are times when civil servants and ministers take themselves and what they do too seriously. The continuing confidentiality of risk registers is an example.

NHS trusts routinely publish risk registers in their board papers and nobody notices, not even the local press, because risk registers highlight things that haven’t happened, but may happen.

Even a high-risk score is an esoteric and speculative concept that is unlikely to interest the general public. So risk registers in the NHS go unreported.

Central government, on the other hand, generally protects risk registers as if they are new-born babies.

Civil servants fear the media would have a field day if risk registers were routinely disclosed.

In fact they would go largely unreported. Journalism tends to be about things that are happening, and have happened, rather than risks that may materialise if certain circumstances come together.

Few journalists will convince their news editor of a potential story about a project or programme that has a high risk assessment score.

Instinct will tell civil servants and bureaucracies to prefer confidentiality to openness.  Secrecy reduces the pressure for accountability. It minimises the risk of dissent.

I have the impression that some civil servants – perhaps mainly in the Department for Work and Pensions – would lie down in front of a bulldozer rather than allow it to break down the barriers of confidentiality over risk assessments.

But there is no sound reason for keeping risk registers and project assessment reviews confidential.  The public is entitled to know when tax money is at risk.

Civil servants and ministers often forget when are locking away risk assessment reports that they are locking out the public that pays their salaries, and is paying for the projects and programmes where the risks are being kept secret.

Government secrecy is an inevitable part of life in North Korea and China.  Should it be inevitable in Whitehall?

Thank you to Government Computing for drawing my attention to the risk registers section of the FOI Commission’s report.

Thanks also to FOI campaigner Dave Orr who pointed out that the FOI Commission’s report quotes Maurice Frankel of the Campaign for Freedom of Information who says: “We now need to ensure that the Act is extended to contractors providing public services…”

FOI Commission report

Why FOI Commission has surprised observers – BBC

Government Computing

Commission members:

Lord Burns, Chair, Lord Carlile, Dame Patricia Hodgson, Michael Howard (former Tory leader) and Jack Straw.

 

Leave a comment

Posted in Campaign4Change, DWP, excessive secrecy, FOI, Freedom of Information, Gateway reviews, Major Projects Authority, Universal Credit

Tagged , ,

Is DWP’s Universal Credit FOI case a scandalous waste of public money?

Posted on 19/02/2016 | 2 comments

By Tony Collins

It’s extraordinary that some of the Department for Work and Pensions’ main arguments against publishing three reports on the Universal Credit programme resemble, in part, those given by the Walpole government of 1738 when the House of Commons passed a  resolution against the publishing of Parliamentary debates.

The DWP argues that the media could misinterpret the three Universal Credit reports or take negative comments in them out of context, which would have a “chilling effect” on the officials who contribute to or write the reports.

In the 17th and 18th centuries, members of the House of Commons and House of Lords were concerned that parliament could be brought into disrepute by the irresponsible reporting of its proceedings, and that MPs could be influenced in what they said in debates by the knowledge that their speeches could be reported .

Sir Robert Walpole, the then prime minister, in winding up an 1738 debate on banning newspaper reporting of Parliament, said press coverage of parliamentary proceedings was a “forgery of the worst kind”.

Neither officials nor ministers had at that time invented the phrase “chilling effect” but they held to its meaning: they expressed concern that if debates were in the public domain members would shape what they said in debates to win influence, or avoid criticism by, newspapers.

Eventually Parliament decided in the 19th century that it was in its own interests to have debates in the public domain partly because important speeches were going unreported.

Today the DWP is a long way from reaching the stage of openness of Parliament in the 18th century.

universal creditAfter hearing the DWP’s evidence in the case of the three Universal Credit reports, an FOI tribunal judge sympathised with the department. He (Judge Edward Jacobs) said, “It is not difficult, looking at the Risk Register (one of the three Universal Credit reports in question), to see how a journalist or blogger with an agenda could select and present parts of the material in a way that would generate attention and attract criticism of the Department (DWP).”

Still referring to the media, he said, “There is no limit to the ways in which seemingly innocuous details can be used as a means of causing trouble.”

The judge’s apparent sympathy for the DWP’s case surprised me, given that Parliament decided centuries ago that the risk of MPs being influenced by the media when making speeches was a minor consideration when weighed against the importance of reporting the proceedings of parliament.

Democracy is far from perfect but it is surely not served by departments such as the DWP keeping secret for as long as they can reports on their performance on high-cost, risky and innovative programmes such as Universal Credit.

The National Audit Office will usually report on programmes as big as Universal Credit, and will usually do so with skill, insight and professionalism.  But it didn’t report on the UC programme until September 2013.

Disclosure of the risk and issues registers and project assessment review  when they were requested under FOI would have given MPs, the public and stakeholders the chance to hold ministers and officials to account in 2012 – at a time when Iain Duncan Smith and senior officials at the DWP were confidently claiming that the UC programme was on time and to budget. IDS said nothing in 2012 about the problems the programme was facing.

“High indignity”

It’s fascinating to look back at debates of the House of Commons in the 17th and 18th centuries to see how closely some of the speeches resemble the arguments the DWP is making in its submissions to next week’s FOI tribunal.

In April 1738 the Commons passed a resolution declaring that it was a “high indignity and a notorious breach of privilege” to report what was said in the Chamber, even when it was in recess.

This was the 1738 resolution:

“That it is an high indignity to, and a notorious breach of privilege of, this House, for any News writer, in letters, or other papers (as Minutes or under any other denomination) or for any printer or publisher of any printed newspaper, of any denomination, to presume to infer in the said letters or papers, or to give therein, any account of the debates, or other proceedings of this House, or any Committee thereof, as well during the recess, as the sitting of Parliament; and that this House will proceed with the utmost severity against such offenders.”

Part of the DWP’s case to the FOI tribunal next week in Leicester is that, if the reports in question are published, they could be misinterpreted by the public, which would involve ministers and civil servants being diverted from the Universal Credit programme to correct the media.

It may be worth noting some of the actions taken by the House of Commons in 1771 against newspaper proprietors who published proceedings of the Commons – and allegedly got it wrong.

The Gazetteer and New Daily Advertiser on Friday 8 February 8 1771, which was printed for R. Thomson, and also the Middlesex Journal on Tuesday 5 February 5 to Thursday 7 February 1771, which was printed for J Weeble, were accused of “misrepresenting the speeches, and reflecting on several of the members of this House, in contempt of the order, and in breach of the privilege of this House”.

The House issued a proclamation for the apprehension of John Weeble and R Thompson.

Today the DWP seems not to accept that being held to account by journalists, even incompetent and hostile ones, is a price to be paid for democracy.

Accountability

Parliament banned newspaper reports of its debates in the 17th and 18th centuries in part because publication would have meant contemporaneous accountability.

That, it seems to me, is the main reason the DWP opposes disclosure of any independent and authoritative reports on its performance on the UC programme.

Senior officials are understandably concerned about personal and contemporaneous accountability on a big, risky, high-cost IT-enabled programme. Not the IT professionals who, incidentally, are largely in favour of openness.

Middle-ranking managers on the UC programme have a tough time of it.  They rarely get any credit for what they achieve. But there is a notable divide between the cultures of middle and senior management.

Now that the House of Commons allows reporting of its proceedings, and even allows TV cameras, the DWP’s ministers and senior officials look as if they are stuck in a bygone era. They believe that the public can wait for accountability until the National Audit Office decides to publish its reports.

But how well can the public hold the DWP to account if people doesn’t know how hundreds of millions of pounds are being spent – at the time it is spent – on the Universal Credit IT programme?

The high turnover of senior management on big programmes all but ensures that the most senior officials will probably have moved on by the time the National Audit Office reports on their programmes.

No bureaucracy will embrace openness until it is forced to. Nobody should be surprised that the DWP is fighting the publication of the disputed UC reports.

Kicking and screaming

What’s needed, therefore, is a campaigning minister, to bring today’s top officials at the DWP kicking and screaming into the modern world.

There is a serious consequence to the DWP’s antiquated approach to openness: the mounting legal costs of the FOI case it keeps appealing.

Officials and ministers at the DWP are launching FOI appeals as if money were no object. Bundles of documents have been produced by barristers and other lawyers who have been working on behalf of the DWP.

I don’t believe senior officials care particularly what is in the reports.

They are really fighting, perhaps subconsciously, to continue their control of official information on the UC programme.

For that privilege they will continue to dig deeply into the public purse for the legal costs of this case. That’s a scandalous waste of money, especially in a supposed era of open government.

 

2 Comments

Posted in Campaign4Change, DWP, excessive secrecy, Freedom of Information, Government digital Service, Institute for Government, Major Projects Authority, National Audit Office, Universal Credit

Tagged , , ,

DWP “evasive” and “selective” with information on Universal Credit programme

Posted on 03/02/2016 | 2 comments

By Tony Collins

Has the Department for Work and Pensions put itself, to some extent, beyond the scrutiny  of Parliament on the Universal Credit IT programme?

Today’s report of the Public Accounts Committee Universal Credit progress update was drafted by the National Audit Office. All of the committee’s reports are effectively more strongly-worded NAO reports.

If the Department for Work and Pensions cannot be open with its own auditors – the National Audit Office audits the department’s annual accounts – are the DWP’s most senior officials in the happy position of being accountable to nobody on the Universal Credit IT programme?

The National Audit Office and the committee found the Department for Work and Pensions “selective or even inaccurate” when giving some information to the committee.

In answering some questions, the committee found officials “evasive”.

Today’s PAC report says:

“We remain disappointed by the persistent lack of clarity and evasive responses by the Department to our inquiries, particularly about the extent and impact of delays. The Department’s response to the previous Committee’s recommendations in the February 2015 report Universal Credit: progress update do not convince us that it is committed to improving transparency about the programme’s progress.”

On the basis of the limited information supplied by the DWP to Parliament the committee’s MPs believe that the Universal Credit has stabilised and made progress since the committee first reported on the programme in 2013, but there “remains a long way to go”.

So far the roll-out has largely involved the simplest of cases, and the ineligibility list for potential UC claimants is long.  By 10 December 2015, fewer than 200,000 people were on the DWP’s UC “caseload” list.

The actual number could be far fewer because the exact number recorded by the DWP by 10 December 2015 (175, 505)  does not include people whose claims have terminated because they have become ineligible by for example having capital more than £16,000 or earning more so that their benefits are reduced to zero.

The plan is to have more than seven million on the benefit, and the timetable for completion of the roll-out has stretched from 2017 originally to 2021,  although some independent experts believe the roll-out will not complete before 2023.

Meanwhile the DWP appears to be controlling carefully the information it gives to Parliament on progress. The committee accuses the DWP in today’s report of making it difficult for Parliament and taxpayers to hold the department to account. Says the report,

“The programme’s lack of clear and specific milestones creates uncertainty for claimants, advisers, and local authorities, and makes it difficult for Parliament and taxpayers to hold the Department to account.”

These are more excerpts from the report:

“In February 2015 the previous Committee of Public Accounts published Universal Credit: progress update … The Department accepted the Committee’s recommendations.

“However, we felt that the Department’s responses were rather weak and lacked specifics, and we were not convinced that it is committed to ensuring there is real clarity on this important programme’s progress.

“As a result, we recalled both the Department and HM Treasury to discuss a number of issues that concerned us, particularly around the business case, the continuing risks of delay, and the lack of transparency and clear milestones.

“Recommendation: The Department should set out clearly how it is tracking the costs of continuing delays, and who is responsible for ensuring benefits are maximised.

“The Department does not publish accessible information about plans and milestones and we are concerned by the lack of detail in the public domain about its expected progress.

“For proper accountability, this information should be published so that the Committee, the National Audit Office and the general public can be clear about progress…

“… the Department did not acknowledge that the slower roll-out affects two other milestones, because it delays the date when existing claimants start to be moved onto Universal Credit and reduces the number of Universal Credit claimants at the end of 2019.

“The flexible adaptation of milestones to circumstances is sensible, but the Department should be open about when this occurs and what the effects are. Instead, the Department’s continued lack of transparency makes it very difficult for us and the public to understand precisely how its plans are shifting.

“Claimants need to know more than just their benefits will change ‘soon’; local authorities need time to prepare additional support; and advisers need to be able to help people that come to them with concerns…

“Recommendation: By May 2016, the Department should set out and report publicly against a wider set of clearly stated milestones, based on ones it currently uses as internal measures, including plans for different claimant groups, local authority areas and for the development and use of new systems. We have set out the areas we expect these milestones to cover in an appendix to this report…

“The Department was selective or even inaccurate when highlighting the findings of its evaluation to us.”

The DWP has two IT projects to deliver UC, one based on its existing major suppliers delivering systems that integrate the simplest of new claims with legacy IT.

The other and more promising solution is a far cheaper “digital service” that is based on agile principles and is, in effect, entirely new IT that could eventually replace legacy systems. It is on trial in a small number of jobcentres.

The DWP’s slowly slowly approach to roll-out means it is reluctant to publish milestones, and it has reached only an early stage of the business case. The final business case is not expected before 2017 and could be later.

The committee has asked the DWP to be more transparent over the business case. It wants detail on:

  • Projected spending, including both investment and running costs for:
  • Live service (split between ‘staff and non staff costs’ and ‘external supplier costs’)
  • Digital service (split between ‘staff and non staff costs’ and ‘external supplier costs’)
  • Rest of programme (split between ‘staff and non staff costs’ and ‘External supplier costs’)
  • Net benefits realised versus forecasts.

Meanwhile the DWP’s response to those who criticise the slow roll-out is to give impressive statistics on the number of jobcentres now processing UC claims, without acknowledging that nearly all of them are processing only the simplest of claims.

Comment

To whom is the DWP accountable on the Universal Credit IT programme? To judge from today’s report it is not the all-party Public Accounts Committee or its own auditors the National Audit Office.

No government has been willing to force Whitehall departments to be properly accountable for their major IT-enabled projects or programmes. Sir Humphrey remains in control.

The last government with Francis Maude at the helm at the Cabinet Office came close to introducing real reforms (his campaign began too forcefully but settled into a good strategy of pragmatic compromise) but his departure has meant that open government and greater accountability for central departments have drifted into the shadows.

The DWP is not only beyond the ability of Parliament to hold it accountable it is spending undisclosed of public money sums on an FOI case to stop three ageing reports on the Universal Credit IT programme being published. The reports are nearly four years old.

Would that senior officials at the DWP could begin to understand a connection between openness and Lincoln’s famous phrase “government of the people, by the people, for the people”.

Public Accounts Committee report Universal Credit, progress update

DWP gives out “selective” information on welfare reform even to its auditors (a similar story in 2015)

Department for Work and Pensions “evasive” – Civil Service World (This article is aimed at its readers who are mostly civil servants. It is likely it will find favour with senior DWP IT staff who will probably mostly agree with the Public Accounts Committee’s view that the DWP hierarchy is, perhaps because of culture, evasive and selective with the information it gives to Parliament and the public.)

 

2 Comments

Posted in Accenture, Agile, Campaign4Change, consultants, contractors, DWP, excessive secrecy, FOI, Freedom of Information, Fujitsu, Gateway reviews, Government digital Service, Government IT, HP, IBM, Institute for Government, IT projects, Legacy ICT, Major Projects Authority, National Audit Office, Universal Credit

Tagged , , ,

MPs criticise DWP’s refusal to publish Universal Credit reports

Posted on 25/02/2015 | 9 comments

By Tony Collins

As the Department for Work and Pensions continues its long and costly legal battle to stop four Universal Credit reports being published, the all-party Public Accounts Committee says a lack of openness “remains within the Department”.

The PAC says in a report published today “Universal Credit: progress update”

“… a lack of openness remains within the Department, as does an unwillingness to face up to past failings.

“The Department refused to accept the extent of previous failings, despite the overwhelming evidence we heard last year that the programme’s management had been extraordinarily poor prior to the reset, and the small numbers claiming Universal Credit.

“Furthermore, since early 2012, the Department has been fighting a protracted legal case to prevent the publication of documents relating to the management of Universal Credit…”

The DWP is refusing to release  four Universal Credit reports requested under FOI.

Three of the reports from 2012 – the risks register, issues register and milestone schedule – were requested by programme and project management professional John Slater. I requested a project assessment review of the Universal Credit programme, as carried out by the Cabinet Office’s Major Projects Authority.

When questioned by Margaret Hodge, chair of the PAC, Robert Devereux, the DWP’s Permanent Secretary, suggested that his officials did not publish the reports because similar reports in other departments were also unpublished.

Meanwhile the DWP is pouring public money into various legal appeals related to its refusal to publish the reports. The DWP’s lawyers argue that publishing the four reports would have a “chilling effect”. They say officials need continued confidentiality to be candid about risks and problems.

A counter argument – though not yet one made in any of the legal hearings so far – is that civil servants and consultants writing the reports are writing them for other civil servants and consultants and are more deferential in their findings than they would be if the reports were open to public and Parliamentary scrutiny.

The PAC’s latest report on Universal Credit highlights the many uncertainties that surround the programme’s delivery.

After a total spend of about £700m on the Universal Credit programme so far the Committee questions what has really been gained. It says:

“The Department must set out clearly what it has really gained from its spending so far, including from the piloting of the programme, and from the investment in live service IT systems.”

Fewer than one per cent of the potential claimants are currently claiming Universal Credit although the programme has been in live operation since April 2013.

The DWP says it is going slowly and cautiously but the PAC’s report raises questions about whether the programme, as it is being delivered by the DWP’s major suppliers, will ever be affordable or technically feasible given the amount of manual intervention required.

A separate, far cheaper “digital” solution, which is being built on agile principles,  is being trialled in Sutton, South London. It may offer more hope of successful, affordable delivery than the existing “live service” currently being rolled out. The live service from the DWP’s major suppliers mixes new coding, legacy systems and manual calculations. It has cost £344m so far. The digital solution has cost less than £5m so far.

Comment

Who has the final say on whether the four Universal Credit reports are published – the Department for Work and Pensions or the all-party Public Accounts Committee? Clearly it’s the DWP’s civil servants.

MPs are powerless to force publication of the reports.

What does this say about the ability of MPs to make the most senior civil servants more open than they want to be?

Universal Credit: progress update report

Very little progress on Universal Credit say MPs

DWP wastes money on another Universal Credit FOI appeal

9 Comments

Posted in Accenture, Campaign4Change, DWP, excessive secrecy, FOI, Freedom of Information, Government IT, HP, IBM, Major Projects Authority, Universal Credit

Tagged

Number of successful Universal Credit claims remains low – will IT be properly tested?

Posted on 19/02/2015 | 4 comments

By Tony Collins

Figures published yesterday on gov.uk show that the number of successful Universal Credit claims remains low.

It means the IT that is being designed to handle millions of claims has had only a relatively small number of actual claims to test it. The small number is because eligibility to claim is being kept narrow. Most successful claimants are single people with no children, are not on other benefits, and have straightforward claims.

Yesterday’s figures show that 35,620 of the people who have made a claim have, up to 8th January 2015, attended an initial interview and gone on to start Universal Credit.

This compares with 30,850 the previous month.

The figures were collected at a time Universal Credit was available within 96 Jobcentre Plus offices – about one in eight.

Universal Credit was rolled out to the whole of the North West of England on 15th December 2014. It is being rolled out to all Jobcentre Plus offices and local authorities across the country from 16th February 2015.

Robust?

The signs are that the IT being used to roll out Universal Credit is not as robust as claimed by the DWP.

One claimant who featured in a Government film about Universal Credit said later it is riddled with computer problems. In the DWP film, Daniel Pacey said Universal Credit helped him find work and was far better than jobseeker’s allowance.

Now Pacey, aged 24,  says his jobcentre struggled with failing computer systems, according to BBC Inside Out North West. A DWP spokesman told the BBC:

“The IT system adapts smoothly to claims as they become more complex, which we have already seen across the North West.

“Computer problems in offices are separate issues and are resolved quickly but these do not impact the operating system, or have an impact on claims.”

Comment

The DWP is right to be going slowly and cautiously with the Universal Credit roll out, especially as the IT seems to be less than robust.

What’s less understandable is that the DWP and IDS have trumpeted this week the start of a national roll out of Universal Credit – including more complex cases – as if this will prove that the system works.

How can anyone know whether the system works when so few people are being allowed to claim?

The DWP is refusing to publish its internal reports on the progress or otherwise of the Universal Credit IT programme.

Can IDS really expect his announcements on Universal Credit’s success to be credible when his department is keeping one side of the story hidden from public view?

Universal Credit’s latest statistics – gov.uk

Beyond the Universal Credit headlines: what IDS isn’t saying

4 Comments

Posted in Accenture, BT, Campaign4Change, DWP, excessive secrecy, Government IT, HP, IBM, Major Projects Authority, Universal Credit

Tagged ,

Beyond the Universal Credit headlines: what IDS doesn’t say

Posted on 16/02/2015 | 4 comments

By Tony Collins

The “good news” headlines over the weekend suggest that Universal Credit is finally rolling out nationally, the implementation problems having been ironed out.

But do senior officials at the Department for Work and Pensions know themselves whether the IT will ever work at scale, handling millions of UC claims?

The national roll out begins today (16 February 2015) says a brochure on the success of the programme “Universal Credit at Work – Spring 2015“.  It’s issued by the Department for Work and Pensions and has a foreword signed by Iain Duncan Smith and his welfare minister Lord Freud.

“Throughout the report, robust evidence shows that Universal Credit is working,” says the brochure, which adds:

“Over the last four months, the roll-out of Universal Credit has continued and from 16 February, it will be available to:
• single claimants in 112 jobcentres
• couples without children in 96 jobcentres
• families in 32 jobcentres
• all claimant types in a limited postcode area in London (Sutton) to test the enhanced Digital Service.”

Ahead of national roll out, DWP officials have been briefing the media on the success of the UC programme. Hence the headlines yesterday.

BBC Online’s headline: Universal Credit roll-out £600m under budget”

Even the Guardian was positive. The reinvention of Iain Duncan Smith – is he the man to save the Tories?

The Sunday Times declared that Universal Credit “will be operating in every jobcentre across the country by this time next year if the Conservatives remain in power, Iain Duncan Smith, the work and pensions secretary, has vowed”.

The Telegraph’s headline was supportive of IDS: Coalition’s welfare shake-up is working

When Andrew Marr asked IDS about Universal Credit’s IT, IDS suggested that the computer systems to handle complicated claims are already in place.

Marr: “This roll-out across the country is only for single claimants, not for families, so it’s nothing like universal at this point.  Do you think you have a computer system able to cope with much more complicated claims?

IDS:  “Yes we have. In fact we rolled it out first in the North West where we rolled it out to singles, to couples and to families so it is now complete pretty much across the North West …

“What we are doing now is exactly what we did in the North West – roll it out stage-by-stage, so singles first, to every jobcentre by early Spring next year,  and then you’ll do couples and then you’ll do families.

“And then you’ll do the final development which is digital which will allow much more things like apps on your phone.”

The reality

Is the UC programme really on track for a national roll-out? Are the concerns of the National Audit Office and the Public Accounts Committee about the slow and troubled UC programme unfounded?

The reality can be gleaned from the DWP’s plans for the roll-out, as inspected by the National Audit Office, and by documents on the gov.uk website on who is entitled – or rather who is not entitled – to claim UC during the roll-out.

It’s true that UC is being gradually extended from single claimants to couples and families, but the DWP has issued such a long list of exemptions on eligibility that numbers of claimants will continue to be tiny at least until the middle of this year (election time).

The small number of claimants will allow the DWP to continue handling more complicated claims using, in part, manual processes. This means that a fully-automated UC system to calculate benefits need not be in place for the time being.

The small number of claimants also means that the risk of implementation problems coming to public attention in the next few months is minimal.

In two days time – Wednesday 18 February 2015 – gov.uk is due to reveal the latest figures on UC take-up. As of today, the latest figures available show the total number of successful UC claimants at 30, 850 on 11 December 2014 – whereas the system needs to be able to cope with around 7-8 million claimants.

Comment

It’s good news that UC is rolling out nationally and that it’s being gradually extended to couples and families as well as single people. But the IT has not been tested properly because the numbers of eligible claimants is so small. The DWP has narrowed the band of eligibility for UC by a long list of exemptions.

You cannot claim, as a single person or a couple, if, say, you receive Jobseeker’s Allowance, Employment and Support Allowance, Income Support, Incapacity Benefit, Severe Disablement Allowance, Disability Living Allowance or Personal Independence Payment. You cannot claim if you own, or partly own, your home, or are homeless, or in supported or temporary accommodation.  Many other exclusions apply.

The result is that nobody knows yet whether the main UC IT systems, and its dependent business processes and systems, will work at scale. Shouldn’t the DWP come clean on the technical and business change challenges it still faces?

UC will not be an economic proposition on the basis of the partly automated processes that exist at present. It’s possible, though, that the cheap-to-build digital systems – which are on trial in Sutton, South London – will work and will eventually take over from the mixture of legacy, new and manual systems and processes that are now in place.   Nobody knows whether they will work at scale.

The reality is that the UC programme, despite years of IT coding and a spend of hundreds of millions of pounds, is still at an early stage of development. It could be at an early stage of development for several more years, even though the positive headlines at the weekend give a different impression.

It may also be worth mentioning that the UC programme has yet to gain Treasury approval for the full business case – or indeed the outline business case. There is therefore no Treasury approval for the scheme long-term funding. There are still questions to be answered over its economic feasibility.

None of this has been said by the DWP or IDS. We’ll have to wait for another National Audit Office update to know the facts.

Thank you to Dave Orr for his emails to me on Universal Credit

4 Comments

Posted in Accenture, BT, Campaign4Change, Government IT, HP, IBM, Universal Credit

Tagged , , ,

HMRC seeks smaller IT contracts – a big risk, but worth taking?

Posted on 27/01/2015 | 3 comments

By Tony Collins

Public Accounts Committee MPs today criticise HM Revenue and Customs for not preparing well or quickly enough for a planned switch from one main long-term IT contract to a new model of many short-duration contracts with multiple suppliers.

It’s a big and risky change in IT strategy for HMRC that could put the safe collection of the nation’s taxes at risk, say the MPs in a report “Managing and replacing the Aspire contract”.

But the Committee doesn’t much consider the benefits of switching from one large contract to smaller ones, potentially with SMEs.

Is the risk of breaking up the huge “Aspire” contract with Capgemini, and its subcontractors Fujitsu and Accenture, worth taking?

Suppliers “outmanoeuvre” HMRC

The PAC’s report makes some important points. It says that HMRC has been “outmanoeuvred by suppliers at key moments in the Aspire contract, hindering its ability to get long term value for money”.

The costs of the Aspire deal have soared, in part because of extra work. Before it merged with Customs and Excise, Inland Revenue spent about £200m a year on its IT outsourcing contract with EDS, now HP.  Customs and Excise’s contract with Fujitsu cost about £100m a year.

After the Revenue and Customs merged, and a new deal was signed with Capgemini, the money spent on IT services soared to about £800m a year – arguably out of control.

HM Revenue and Customs spent £7.9bn on the Aspire contract from July 2004 to March 2014, giving a combined profit to Capgemini and Fujitsu of £1.2bn, equal to 16% of the contract value paid to these suppliers.

HMRC considers the contract to have been expensive,  and pressure to find cost savings in the short-term led it to trade away important value for money controls, says the PAC report.

“For example, in a series of disastrous concessions, HMRC  conceded its rights to withdraw activities from Aspire, to benchmark the contract prices against the market to determine whether they were reasonable,” says the report.

“It also gave up  its right to share in any excess profits. In 2007, HMRC negotiated a three-year  extension to the Aspire contract just three years after the contract was let, extending the end of the contract from 2014 to 2017.

“The Department has still not renegotiated the terms of the contract in line with a memorandum of agreement it signed in 2012 designed to separate Capgemini’s role in service provision from its role as service integrator and introduce more competition.”

Big or small IT suppliers?

The Aspire contract between HMRC and Capgemini is the government’s largest
technology contract.  It accounts for for 84% of HMRC’s total spend on ICT.

Today’s report says that Aspire has delivered certainty and continuity over the past decade but HMRC now plans a change in IT strategy in line with the Cabinet Office’s plan to break up monopolistic contracts.

In 2010, the Cabinet Office announced that long-term contracts with one main supplier do not deliver optimal levels of innovation, value for money or pace of change.

In 2014, it announced new rules to limit the value, length and structure of ICT contracts. No contract should exceed £100m and no single supplier should provide both services and systems integration to the same area of government. Existing contracts should not be extended without a compelling case.

The Cabinet Office says that smaller contracts should allow many more companies to bid, including SMEs, and provide an increase in competition.

HMRC agrees. So it doesn’t plan to appoint a single main supplier when Aspire expires in 2017.  But PAC members are worried that the switch to smaller contracts could jeopardize the collection of taxes. Says the PAC report:

“HMRC has made little progress in defining its needs and has still not presented a business case to government. Once funding is agreed, it will have only two years to recruit the skills and procure the services it will need.

“Moreover, HMRC’s record in managing the Aspire contract and other IT contractors gives us little confidence that HMRC can successfully achieve this transition or that it can manage the proposed model effectively to maximise value for money.

“HMRC also demonstrates little appreciation of the scale of the challenge it faces or the substantial risks to tax collection if the transition fails. Failure to collect taxes efficiently would create havoc with the public finances.”

The PAC recommends that HMRC “move quickly to develop a coherent business case, setting out the commercial and operational model it intends to put in place to replace the Aspire contract. This should include a robust transition plan and budget”.

Richard Bacon, a long-standing member of the PAC, said HMRC has yet to produce a detailed business case for the change in IT strategy.

“HMRC faces an enormous challenge in moving to a new contracting model by 2017, with many short-duration contracts with multiple suppliers, and appears complacent given the scale of the transformation required.

“Moreover, HMRC’s record in managing IT contractors gives us little confidence that HMRC can successfully achieve this transition or that it can manage the proposed model effectively to maximise value for money.”

Comment

The PAC has a duty to express its concerns. HMRC needs stable and proven systems to do its main job of collecting taxes. A switch from a single, safe contract with a big supplier to multiple, smaller contracts could be destablizing.

But it needn’t be. The Department for Work and Pensions is making huge IT – and organisational – changes in bringing in Universal Credit. That is a high-risk programme. And at one time it was badly managed, according to the National Audit Office. But the gradual introduction of new systems hasn’t hit the stability of payments to existing DWP claimants.

This is, perhaps,  because the DWP is doing 4 things at once: running existing benefit systems, building something entirely new (the so-called digital service), introducing hybrid legacy/new systems to pay some new claimants Universal Credit, and is asking its staff to do some things manually to calculate UC payments. Expensive – but safe.

The DWP’s mostly vulnerable claimants should continue to be paid whatever happens with the new IT. So the risks of major change within the department are financial. The DWP has written off tens of millions of pounds on the UC programme so far, says the NAO. Many more tens of millions may yet be wasted.

But many regard the risks as worth taking to simplify the benefits system. It could work out a lot cheaper in the end.

At HMRC the potential benefits of a major change in IT strategy are enormous too. Billions more than expected has already been spent on having one main supplier tied into the long-term Aspire contract (13 years).  Isn’t it worth spending a few tens of millions extra running parallel processes and systems during the transition from Aspire to smaller multiple contracts?

It could end up costing much less in the end. And running parallel new and existing systems and processes should ensure the safe collection of taxes.

If government departments are not prepared to take risks they’ll never change – and monolithic contracts and out-of-control costs will continue. Is there anything more risky than for HMRC to stay as it is, locked into Aspire, or a similar long-term commitment?

HMRC not ready to replace £10bn Aspire contract, MPs warn – Computerworld

Taxpayers face havoc from HMRC computer changes – Telegraph

3 Comments

Posted in Accenture, Campaign4Change, Capgemini, change management, consultants, cost reduction, DWP, Fujitsu, Government IT, HMRC, HP, IT projects, Legacy ICT, Major Projects Authority, National Audit Office, risk, Universal Credit

Tagged , , , , ,