Tag Archives: Francis Maude

What the FireControl disaster and NPfIT have in common

Posted on 01/07/2011 | 1 comment

By Tony Collins

From today’s National Audit Office report on FireControl project which wasted at least £469m:

“FiReControl was flawed from the outset because it did not have the support of the majority of those essential to its success – its users”

Were the Fire and Rescue Service’s FireControl project and the National Programme for IT in the NHS launched to discover all that can go wrong with a large IT-based project?

One could be forgiven for thinking so. The two projects were conceived in the early part of the new millennium as national, centralised schemes which, in the main, did not have any support from the people who would be using them.

The schemes were launched by civil servants and ministers with good intentions and little or no experience in the many IT-related project disasters that went before.

The projects that had failed since the late 1970s and early 1980s went wrong for similar reasons. As early as 1984 the Public Accounts Committee met to question civil servants on the common factors in a succession of “administrative computing” failures.

Since then every department has come to its IT-based projects and programmes with little understanding – and very little interest – in the lessons from history; and it’s said that those who don’t learn from history are destined to repeat past mistakes.

The FireControl system, which is the subject of an NAO report today, and the NPfIT, had something striking in common: the fact that the system users were the ones with the control of money and decisions on how they spent it – and they did not want technology imposed on them by civil servants in London. That was clear from the start. But it did not stop either the NPfIT or FireControl going ahead.

Indeed a Gateway Review by the Office of Government Commerce in April 2004, after the FireControl project had been approved, found that the “extraordinarily fast pace” of the project was introducing new risks to its delivery, and was escalating the risks already identified. The review concluded that the project was in poor condition overall and at significant risk of failing to deliver.

That review was, at the time, as with similar reviews on the NPfIT, kept secret, so those outside the project, including MPs and the media, were unable to challenge the projects with a credibility that could have influenced decisions on the future of the schemes.

New gateway reviews are still kept secret today, despite the coalition’s promise of openness and transparency.

The good thing about the FireControl project and the NPfIT is that the Cabinet Office has taken control. A Cabinet Office Major Projects Review Group in in July 2010 concluded that negotiations should begin to terminate the FireControl contract – and indeed a settlement with the supplier EADS was reached successfully and amicably in December 2010. The Cabinet Office’s Major Projects Authority is now  reviewing the future of CSC’s £2.9bn worth of NPfIT contracts.

The bad thing is that the FireControl scheme has wasted at least £469m, according to today’s report of the National Audit Office. The NPfIT may have lost a great deal more.

NAO’s conclusion on FireControl

This was the NAO’s conclusion on the FireControl project. Much the same could be said of the NPfIT:

“This is an example of bad value for money. FiReControl will have wasted a minimum of £469m, through its failure to provide any enhancement to the capacity of the control centres of Fire and Rescue Services after seven years.

“At root, this outcome has been reached because the Department, without sufficient mandatory powers, decided to try to centrally impose a national control system on unwilling locally accountable bodies, which prize their distinctiveness from each other and their freedom to choose their own equipment.

“At the same time, it tried to rush through key elements of project initiation and ended up with an inadequate IT contract, under-appreciating its complexity and risk, and then mismanaged problems with the IT contractor’s performance and delivery.”

 Links:

FireControl project a comprehensive failure.

The failure of the FireControl project – NAO report.

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Could a new mutuals model work for trading standards?

Posted on 30/06/2011 | Leave a comment

By David Bicknell

A mutuals-like model for trading standards has been proposed by Consumer Focus, the statutory consumer champion, which in a paper, discusses the future of trading standards in light of spending cuts, the Government’s new empowerment strategy and changing consumer power.

The paper, ‘Hard times or our mutual friend’, by Paul Connolly,  is an excellent read and argues that the Trading Standards community should engage with another Government agenda:  mutualisation.

It says:

“Cabinet Office Minister Francis Maude wants to see mutuals widely adopted. He suggests within 10 years they will become ‘one of the major types of organisation providing excellent public services’ in a redistribution of power and ownership comparable with 1980s reforms.

“His reasoning is clear. First, he wants to continue the process of public service reform by ensuring direct ‘in-house’ delivery continues to be ‘contested’. In the past this primarily meant outsourcing. Plainly under this administration private providers will continue to feature in service delivery. However, the Government has indicated it wants a more diversified range of providers, including more small and medium enterprises (SMEs).

“Further, creating mutual structures can contest services, while empowering staff and short circuiting the public/private antagonism.

“Indeed, workforce empowerment is key. Mutualisation and outsourcing to SMEs, cooperatives and charities, are both connected with Big Society thinking. Government wishes to divest itself of direct responsibility for state delivery, but to do so in ways which spread associated commercial opportunities to those who have not benefited previously.

“This includes giving opportunities to existing public sector staff. Indeed, enthusiasts for mutuals believe workforce energies can be harnessed to support reform. Frontline staff understand their services, but are often inhibited from innovating by constraining bureaucracy.

“Decoupling mutuals from bureaucracies and giving staff stakes that link productivity to personal rewards encourage entrepreneurship and improve standards.

“Mutuals are not a ‘fluffy’ option. They are run as businesses. But the staff engagement model of mutuals, where rewards are linked to innovation, service improvement and productivity gains, means there is a real prospect of harmonising the interests of service producers and the individuals and communities they serve.

“There are many challenges associated with mutualisation. Is the largest public sector retrenchment in history the ideal moment to encourage people to risk a semi-commercialised model of delivery? Should staff downsizing precede or follow mutual incorporation? And how on current trends will the numbers mutualising substantiate Maude’s claims of an importance comparable with privatisation?

“The 12 pilots on the Cabinet Office website are pretty small, niche services, mostly in the health and social care arenas. Small and mutualisation might be perceived as a natural match, but there’s nothing to stop a whole agency, hospital, or local authority mutualising, John Lewis-style, or a series of small thematically-linked mutuals being incorporated under a franchising umbrella, like the Co-Op. Whatever, a substantial increase in adopters will be needed to match Maude’s ambitions. That will mean lots of services taking a risk. The danger for this intriguing agenda – which has attracted interest across the political spectrum – is that it doesn’t fly because volunteers are few.

“Nevertheless, Government continues to signal its intent in this area. Mutualisation is being strongly encouraged in areas of health, such as community care. The Public Services (Social Enterprise and Social Value) Bill is intended to put wind in the sails of mutualisation, while the Localism Bill calls for staff-managed approaches to be among the options considered in re engineering local services.

“The Trading Standards profession could do Francis Maude and themselves a favour by ‘going mutual’. Under the leadership of the Trading Standards Institute (TSI) – itself already in effect a social enterprise – and the Trading Standards Policy Forum, with possible input from Local Better Regulation Office (LBRO), one of two approaches could be adopted: a national super-mutual, covering England initially, but evolving to the devolved contexts following suitable negotiations, could be formed.

“It would be a single incorporated body. It would have a national head office. It would co-ordinate the use of any resources it received from central Government (the implied new BIS monies for instance) to address complex, nationwide and international threats. It would oversee and co-ordinate the delivery activities of suitably located regional, sub-regional and local offices.

“The mutual’s services would be purchased by local and central Government to meet statutory Trading Standards obligations.

“A second option, perhaps more realistic given that some Local Authority Trading Standards Services (LATSS) partnerships have already incorporated as businesses, would be for TSI and the other players to create a mutuals confederation. This would be a franchise support hub for a national network of local mutuals, each created as and when individual LATSS departments chose to incorporate. The hub would again attract funding for national projects and but would also co-ordinate the activities of the network, providing mechanisms for collaboration between local mutuals, and new sub-regional and regional structures, where appropriate.”

It is intriguing to see the mutual model being considered in this way. I hope for those considering creating mutuals, that the Consumer Focus trading standards paper might offer some useful ideas. It’s certainly worth a read – and we’d be interested in your comments.

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Cabinet Office takes on open-source specialist

Posted on 28/06/2011 | 1 comment

By Tony Collins

“Let’s not waste this great opportunity to make British government IT the most effective and least expensive service per head in Western Europe.”

 An open source advocate and critic of the high costs of government IT, Liam Maxwell, is joining the Cabinet Office for 11 months  to provide expertise on how civil servants can use innovative new technology to deliver better, cheaper solutions.

His secondment from Eton College where he is ICT head underlines the determination of Francis Maude, the Cabinet Office minister, to continue bringing in strong people to oversee major changes in the way government works.

What remains unclear, however, is how much influence the Cabinet Office will have on autonomous government departments and their permanent secretaries.

Although David Cameron has given his personal backing to the changes being sought by the Cabinet Office, the PM has  little or no direct control over what departments do or don’t do.

Simon Dickson at Puffbox points out that Liam Maxwell has said all the right things in the past. Maxwell co-wrote a 2008 paper for the Tories on ‘Open Source, Open Standards: Reforming IT procurement in Government’, and also a 2010 paper Better for Less‘ for the Network for the Post-Bureaucratic Age, which said:

“British Government IT is too expensive. Worse, it has been designed badly and built to last. IT must work together across government and deliver a meaningful return on investment. Government must stop believing it is special and use commodity IT services much more widely.

“As we saw with the Open Source policy, the wish is there. However, the one common thread of successive technology leadership in government is a failure to execute policy.

“There is at last a ministerial team in place that “gets it”. The austerity measures that all have to face should act as a powerful dynamic for change. Let’s not waste this great opportunity to make British government IT the most effective and least expensive service per head in Western Europe.” 

In a statement, the Cabinet office said that Maxwell will help to develop ideas for how technology can:

– increase the drive towards open standards and open source software

– help SMEs to enter the government marketplace

– maintain a horizon scan of future technologies and methods

– develop new, more flexible ways of delivery in government

Ian Watmore, the Government’s Chief Operating Officer said: “Liam’s insight and knowledge will make him a valuable source to the team over the coming year. He has a strong track record of delivering success in government ICT and he also brings significant experience of turning the theory into practice.”

Dickson said that Maxwell was a Windsor and Maidenhead councillor who drove the debate a year or so ago on councils switching to Open Document Format, part of OpenOffice.

The Guardian said Maxwell has been an adviser to the  Conservative party on government ICT.  At the Cabinet Office he will advise the Efficiency and Reform Group and Ian Watmore. He will begin the job in September and is taking a sabbatical from Eton.

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Who’ll support the NPfIT now?

Posted on 23/06/2011 | 5 comments

By Tony Collins

The departure of Christine Connelly as health CIO at the end of this month will leave the NPfIT’s main civil service supporter, Sir David Nicholson, Chief Executive of the NHS and Senior Responsible Owner of the NHS IT scheme,  more isolated.

That Nicholson is a supporter of the continuance of the NPfIT is not in doubt. He spoke about the NHS IT scheme last month in terms of life and death. At a hearing of the public accounts committee on 23 May 2011, Nicholson said:

“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.”

But without Christine Connelly, who put detailed arguments in favour of continuing with iSoft’s Lorenzo, and who was solidly behind the costly implementations of Cerner by BT, Nicholson may not have the civil service backup he needs to promote the continuance of the NPfIT.

The Cabinet Office’s Major Projects Authority, under the directorship of the independently-minded David Pitchford,  is now reviewing CSC’s £2.9bn worth of NPfIT contracts. It is known that the Authority regards the new proposals worked out between CSC and the Department of Health as poor value for money, even with CSC’s willingness to reduce the value of its contracts by £764m, to about £2.1bn.

That promised reduction comes at a cost. A leaked Cabinet office memo said that the CSC’s proposals would double the cost of each Lorenzo deployment.

The easiest thing for Nicholson and the Department of Health would be for the Major Projects Authority to approve the deal worked out between CSC and the Department of Health, and simply sign a new Memorandum of Understanding which would be, in part, legally binding.

Strong grounds for ending CSC’s NPfIT contracts

The more difficult but more practical alternative is for the Cabinet Office to require the Department of Health to end CSC’s NPfIT contracts, which would leave the NHS more able to decide its own IT-based future.

Indeed the signs are in some trusts that officials are not unhappy about Connelly’s departure in that they perceive it may weaken the centre’s control over NHS IT.

Legally it appears that an end to CSC’s contract would be feasible. The Department of Health has accused CSC of a breach of contract because of its failure to achieve a key milestone; the Department has also notified CSC of “various alleged events of default under the contract” which are “related to  delays and other alleged operational issues”. The Department is considering its position on termination of all or parts of the contract.

But the Department has not taken its claims to arbitration; its allegations are only a formal legal manoeuvre at the moment.

CSC accuses NHS of failures and breaches of contract

CSC has reacted by accusing the NHS of a breach of contract. The company’s formal legal position is that it has cured or is preparing to cure the faults that led to the alleged breach; it says that failures and breaches of contract on the part of NHS have caused delays and issues.

The DH could end CSC’s contract for reasons of convenience which could trigger a request from CSC for a large sum in compensation. But the Department could give strong legal reasons for not paying. Although CSC could pursue its claim for compensation, it may be on soft ground because of its failures. Also, CSC, if it pursues any legal action, could jeopardise its other work for government: some of its other major contracts with the UK government are with the Identity and Passport Service, which is part of the Home Office.

The Coalition is now supervising its major suppliers, including CSC, in the round, which is reason enough for CSC to do all it can to maintain a good relationship with the Cabinet Office.

CSC would support NHS trusts even if its contracts ended

The  Department of Health is concerned that if it ends the NPfIT contracts with CSC, the supplier may leave unsupported many trusts that have CSC’s iSoft software installed. That is highly unlikely, however, because CSC has a $1.03bn investment in the NPfIT contracts according to the regulatory reports to US authorities.

In the NHS CSC has a large customer base. Through its acquisition of iSoft, CSC will want to capitalise on its investment in iSoft’s Lorenzo software by selling it across the globe. That’s its stated plan. So CSC’s continued support for NHS trusts that have installed iSoft software is not in doubt.

What NHS Trusts want

The best outcome of the negotiations with CSC, for NHS trusts that have installed iSoft software, is that they have the:

-choice to continue with CSC if the price is right

– buy support elsewhere, or

– choose a different product.

Will CSC’s NPfIT contracts end by mutual agreement? – it’s possible

The question is: does the Cabinet Office have the courage to end CSC’s contract, freeing up billions of pounds that would otherwise have been spent on the NPfIT without a commensurate return for taxpayers, the NHS or patients?

It seems  so, even if it means paying a relatively painless sum to CSC as compensation for termination.

Leaked memo reveals CSC’s plans.

A sign that coalition reforms will change behaviour of major suppliers.

Health CIO resigns – Cabinet Office executive steps in.

Example of a trust that’s succeeding without the NPfIT – Trafford General Hospital.

Connelly at odds with PM over NPfIT value for money?

NHS CIO in dramatic resignation.

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Cabinet Office publishes SME action plans today – a good start.

Posted on 03/06/2011 | 1 comment

By Tony Collins

The Cabinet Office has today published SME “action plans” for each department.

It says the  reforms are “designed” – which is not the same as a commitment – to   “significantly open-up the public sector marketplace to small businesses”.

The new  plans support what the Cabinet Office calls an “aspiration” for the Government to spend  25% of its budgets on SMEs.

The actions range from:

  • breaking large contracts into smaller lots
  • working with major suppliers to increase SME access to sub-contracting opportunities
  • increasing the amount of information that is available to SMEs about contract opportunities
  • holding “product surgeries” for SMEs to pitch innovative ideas
  • piloting new procurement methods that are more open to SMEs.

Some of the documents published today could be more aptly  described as goodwill gestures to SMEs rather than  action plans.  Indeed, when read carefully, some of the action plans appear to be a civil service response to an unwanted ministerial decree.

HM Revenue and Customs, which is tied into an £8bn IT outsourcing deal with Capgemini, uses phrases in its SME action plan that are vague and non-committal, such as “build on the work done …”

These are some of the promises HMRC is making to SMEs:

– From June 2011, HMRC will develop and maintain information on its website relevant for SMEs. The information will include, but will not be limited to, signposting for SMEs to access relevant procurement details and how they can work with the Department. The Department will provide clear contact points for additional information and queries.

– Work with the 12 largest prime HMRC suppliers (representing c80% of 3rd party spend) to ensure they identify and engage with their own SME supply chains, including 3/4th level suppliers and agree actions (such as advertising suitable sub-contracting opportunities on Contracts Finder) with them to increase value of spend.

– Build on the work done on the recent open procedure procurement for Debt Collection Services …

– HMRC to consider appropriate procurements that are suitable for SME competition.

The Home office’s action plan is better, though.  It says it will:

– review forthcoming procurements and develop standardised processes and procedures to remove barriers to SMEs. “This will ensure the method used is as SME friendly as possible for the contract on offer.”  By June 2011.

Alongside publishing the action plans the Cabinet Office is creating a central team, Government Procurement, which will contract for widely-used goods and services for the whole of Government at a single, better price.

This, says the Cabinet Office, will end the “signing of expensive deals by individual departments” and “end poor value contracts such as those where government departments and agencies paid between £350 and £2,000 for the same laptop and between £85 and £240 for the same printer cartridge from the same supplier”.

Central procurement of common items is expected to save more than £3bn a year by 2015 – 25% of the Government’s current annual spending on these items.

Francis Maude says the Government is on track to have saved more than £1bn from tighter spending on discretionary goods and services including consultants and agency staff in the last year.

“Changes to make Government contracts more accessible to SMEs have already led to one not-for-profit SME successfully undercutting larger competitors and winning a £1.6m contract to provide office support services to HM Revenue and Customs,” says the Cabinet Office.

Maude said:

It is bonkers for different parts of Government to be paying vastly different prices for exactly the same goods. We are putting a stop to this madness which has been presided over for too long. Until recently, there wasn’t even any proper central data on procurement spending.

“So, as Sir Philip Green found, major efficiencies are to be found in Government buying. The establishment of Government Procurement means that the days when there was no strategy and no coherence to the way the Government bought goods and services are well and truly at an end…

“We are also determined to press ahead with measures to create a more level playing field so that small organisations and businesses can compete fairly with bigger companies for Government contracts. SMEs can provide better value and more innovative solutions for Government and the actions set out today will support their growth as the economy starts to recover.”

The Cabinet Office says that greater use of the ‘open’ procurement procedure  has increased by 12% across the public sector between March and April alone, helping to ensure that all suitable suppliers have their tender proposals considered.

And following the Innovation Launch Pad, five further Dragons’ Den style ‘product surgeries’ are planned so that innovative SMEs can pitch their proposals directly to Government.

The Government bought £66bn  of goods and services in 2009/10. An Efficiency Review by Sir Philip Green, which was published in October 2010, found that the Government had not made the most of its size, buying power or credit rating.

Green wanted the mandation of “centralised procurement for common categories”.

Are officials undermining ministerial plans to boost SME work?

There is some evidence emerging, however, that the civil service is misinterpreting ministerial will and standardising contracts by taking work away from SMEs and putting it with a few large companies. Campaign4Change will be looking at this in coming weeks.

We also hope this will be investigated by the new Government Procurement team which will be headed byGovernment Chief Procurement Officer, John Collington.

Link:

Home Office SME Action Plan.

HMRC SME Action Plan

All departmental action plans.

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Alpha.gov.uk shows how agile can work in government

Posted on 02/06/2011 | 2 comments

By Tony Collins

Harry Metcalfe, managing director of Dextrous Web, has written an excellent article on Alpha.gov.uk.

Alpha.gov.uk is a prototype, built in response to some of the challenges laid down in a report by Martha Lane Fox last year. The two main objectives of Alphagov are to:

– test, in public, a prototype of a new, single UK Government website

– design and build a UK Government website using open, agile, multi-disciplinary product development techniques and technologies, shaped by a preoccupation with user needs.

It’s clear from Metcalfe’s post that he  understands the unbending ways of government. He sees the opportunities too. He says:

“As a technical solution, this [Alphagov] is brilliant. If you’re going to have a single [web] platform, this is the right kind of platform to have, because it embraces change.

“If you want some new functionality, add an app for it. If you need a new department, add a new instance of the department app, add your content, and you’ll have 90% of what you need.

“If you want to run a consultation using someone’s third-party tool, just have them brand it appropriately and write an app that gives you as much integration as you want, or as the tool can support. But this kind of flexibility is powerful. In many respects it’s anathema to the way government works.

“For a start, it requires something government unwisely gave up on long ago: an in-house development team…”

Campaign4Change comment:

Alphagov is not yet handling transactions. Indeed there are no agile-developed systems that handle passport applications or tax self-assessment.

As Metcalfe says: “…transactions are complicated, messy beasts, unavoidably bound up with business processes and legislation; empires, politics and entrenched positions; long contracts and vast sums of money.. it’s not primarily a technological problem. It’s a process problem, and those are much harder to fix.”

It may be a matter of time, though, before agile becomes far more prevalent in public sector IT. Universal Credit is based on agile, in a programme run in part by the redoubtable Joe Harley, the UK Government’s CIO.

Harley told the Public Accounts Committee last month:

“In the waterfall it takes quite a while to do a design – maybe a year or two … By the time we come to execute, things have moved on.

“In the agile world, it is a way of providing rapid solutions very quickly. Normally, and in Universal Credit it is monthly, one designs, develops, implements and produces a product very early on in the cycle. It is particularly useful and appropriate when the users themselves – in the universal credit, citizens themselves – can participate in the creation of it. It is about user-centric, rapid deployment solutions. That is what we hope to achieve.”

Ian Watmore, Chief Operating Officer at the Cabinet Office, told the same committee that the government objective is for the first claims under Universal Credit to be paid by October 2013. He said: “I would have thought that if we achieve that, it will become the precedent and benchmark for Government projects.”

We hope Universal Credit is a timely success and that it becomes a benchmark for government projects. It’s easy to talk down the chances of agile in government on the basis that it ill suits the way government works. But Francis Maude, officials in the Cabinet Office, and Alphagov’s developers want to change the way government works.

To say that agile won’t work in government is like telling someone who’s obese that they need not eat less because history shows they won’t be able to.

Government must spend less. And agile is one way to cut spending. Alphagov is showing the way.

How Alpha.gov.uk came about:

Last year Martha Lane Fox published suggestions on reforming UK Government’s online. At the launch of her report (subtitled “revolution, not evolution”) she recommended:

“…Putting the needs of citizens ahead of those of departments”

She made a strong case for the UK Government to adopt a single web domain, analogous to the BBC’s use of BBC.co.uk, and recommended a radical change in how gov.uk sites are produced:

“Government should take advantage of the more open, agile and cheaper digital technologies to deliver simpler and more effective digital services to users.”

Links:

How Alphagov might change UK government for the better.

Institute for Government: what’s wrong with government IT?

Agile in government IT – don’t knock it.

10 things Alphagov gets right.

10 things Alphagov gets wrong.

Alpha.gov.uk

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Cabinet Office Minister Francis Maude tells private sector: ‘Come and knock on our door’

Posted on 27/05/2011 | Leave a comment

By David Bicknell

Cabinet Office Minister Francis Maude has insisted that large private sector service providers are still a part of the Coalition’s pluralist vision for the delivery of public services.  Although the volume of conventional outsourcing will decline,Maude challenged the private sector to engage with the Government and to pioneer new ways of working.
 
Talking to members of the Business Services Association, Maude laid out his vision of a new chapter in public/private sector collaboration. Giving the Association’s Annual Lecture,  Maude urged private sector contractors to work with him to realise the opportunities to reform the delivery of public services.
 
As the public sector represents some 40% of the revenue of business services companies, there was ‘standing room only’ to hear Maude’s vision of the future. He referred to this interdependence to justify his call for a shared effort in looking for efficiencies. Whilst the inherited budget deficit lends an edge to the Government’s reforming drive, Maude was keen to look beyond mere cost savings to facilitate new approaches to accountability and stakeholder involvement. Referring to staff consultation over reform, he sees there is potential to energise and challenge Government from within and set out his mission to “set this passion for the public service ethos free” from the shackles of outmoded workplace practices. But he also realises that this objective cannot be realised solely from within and he is looking to establish relationships with the big service providers to help the Government on its way. And in particular, he sees the need for the large players to work with mutuals, SMEs and charities to find new models for the delivery of services.
 
Commenting on the address,  Michael Ryley, Head of Support Services at Pinsent Mason, the Annual Lecture’s sponsor said: “The Government is clearly conscious of the difficulty of driving change from within a public sector workforce which is steeped in a tradition of delivering services in a certain way.  Given that modern procurement creates the potential for workforces to move seamlessly between private and public sector employers, the Government is clearly attracted by encouraging flexibility and using private sector expertise to energise the public service ethos.” 

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Leaked memo confirms Fujitsu “keen” to settle NHS IT dispute

Posted on 25/05/2011 | Leave a comment

By Tony Collins

On 5 May I wrote on Campaign4Change that there are signs that a long-running £700m dispute between Fujitsu and the Department of Health over the NHS IT programme will reach a settlement without a court hearing.

Now a leaked Cabinet Office memo confirms that the Cabinet Office minister Francis Maude has met a representative of Fujitsu who is “keen to find a way through this issue [a dispute over its NHS IT contract] outside the legal/arbitration route currently being pursued”.

The memo says the when the Cabinet Office agreed a pan-Government memorandum of understanding with major suppliers including Fujitsu “it became apparent that the [NHS IT] dispute is material to:

– the quality of the relationship between central government, now acting as a single customer, and the company; and

– the financial and operational health of Fujitsu UK, which affects its ability to fulfil a number of business-critical contracts across central government.

The memo says that a Fujitsu representative had indicated to the Cabinet Office that the company wanted to improve its overall relationship with government.

To see whether a resolution to the NHS dispute could be reached, Fujitsu executives were willing to meet a group of officials.

The memo makes the point that relationships between suppliers and the government have changed. Coalition reforms of central government mean that the Cabinet Office is managing the Crown relationships with 19 strategic suppliers including CSC and Fujitsu. So a dispute with one department may affect a supplier’s relationship with the government in general.

HM Treasury has issued “delegated authority” letters that  give the Cabinet Office the ability to be involved and, if appropriate, lead the resolution of legal disputes within departments. The aim of this, says the memo, is to “provide objectivity and seek an optimum outcome for Government”.

The memo is also revelatory in suggesting that the Department of Health is not cooperating with the Cabinet Office over dispute resolution.

When a contract for Fujitsu to supply desktops at the Department for Work and Pensions ran into trouble, the DWP “actively” sought support from the Cabinet Office, given the Crown initiative to see contracts in the round.  In contrast, says the memo, the Department of Health has not involved the Cabinet Office.

The memo also refers to the dispute between the DH and CSC.

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A sign that Cabinet Office reforms will alter behaviour of major IT suppliers

Posted on 05/05/2011 | Leave a comment

 

By Tony Collins

There are signs that a long-running £700m dispute between Fujitsu and the Department of Health over the NHS IT programme will reach a settlement without a court hearing.

 A settlement, it should be said, will be due largely to reforms of central government initiated by the coalition and Francis Maude, Cabinet Office minister.

Maude’s reforms mean that major suppliers to the government are now managed centrally, at “Crown” level, not contract by contract. So a dispute with one department can affect a supplier’s relationship with government as a whole.

That didn’t happen before, when each department managed separately its relationships with major suppliers.

It’s likely now that Fujitsu will want to improve its relationships with government, particularly since the:

– Tsunami in Japan which has weakened the company’s operations.

– premature ending of Fujitsu’s £330m desktop contract with the Department for Work and Pensions.

The wish for improved relations with government makes it more likely it will reach a settlement over its withdrawal from the National Programme for IT in the NHS – NPfIT – in 2008. Fujitsu was said to have been seeking £700m after its departure. It’s now thought to be seeking a settlement without any formal proceedings.

Comment

It has long been obvious that government should be a “single customer” to its major IT suppliers. Only now is that happening, thanks to the coalition’s reforms. It means that, for the first time in living memory, it’s the government – the customer – that is in control of its major IT suppliers, and not the other way round. 

Few of the top 20 IT and services suppliers to government will now be willing to carry on a dispute with a department when it could cost lost contracts with other departments.

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Six entrepreneurs to coach SMEs for Government “Dragons’ Den” panel

Posted on 14/04/2011 | Leave a comment

 

By Tony Collins

Six entrepreneurs will coach SME representatives before they present their ideas to a Government “Dragon’s Den” panel of officials.

The coaching will help chosen SME representatives improve their  proposals for reforming parts of central government.

Francis Maude, Minister for the Cabinet Office, said the entrepreneurs will coach representatives from SMEs that have submitted successful ideas for innovative and cost-saving Government goods and services to the online Innovation Launch Pad.

The Innovation Launch Pad  opened on the Cabinet Office website in March and closes on 22 April.  SMEs are invited to submit proposals – up to 500 words – on how their goods and services could help save the Government money or deliver better outcomes.

Civil servants will vote for ideas with the greatest potential. The chosen SME representatives will then present their ideas to the Dragon’s Den-style panel of senior government business officials, following coaching by the entrepreneurs.

The entrepreneurs are:

– Jon Moulton, founder and managing director of private equity firm Better Capital and member of the British Venture Capital Hall of Fame

– Mike Lynch OBE, co-founder of a software start-up that is said by the Cabinet Office to be the UK’s largest software company Autonomy. He is also a trustee at NESTA

– Hermann Hauser, CBE, founder of over 20 technology companies including Acorn Computers, who has an honorary CBE for ‘innovative service to the UK enterprise sector’

– Sherry Coutu, founder of two successful businesses in the financial services industry and investor in 35 businesses, and rated as the ‘top CEO mentor in Europe’

– David Cleevely, co-founder of Abcam and founder of Analysys and Chairman of Cambridge Angels

– Stephen Kelly, former CEO of Micro Focus and the Government Crown Representative for mutuals.

The chosen businesses will be invited to a reception at 10 Downing Street.

Stephen Allott, one of nine Crown Representatives appointed by the Cabinet Office to drive procurement savings across Whitehall, told The Telegraph that the initiative would raise the profile of the businesses within Whitehall, although there were no guarantees of contracts at the end of the process,

He said departments were taking the Government’s pledge to acquire more goods and services from small firms seriously.

Francis Maude said: “This Government does not believe there is a one size fits all approach to delivering services.  That is why we want to make it easy for small businesses to tell us their ideas, as they will have a vital role to play in helping us to find new, innovative and more cost effective ways to improve services to the public.  

“We also believe that supporting small business will help to kick-start growth in the economy.  As part of this, we are doing everything we can to open up business to SMEs.

“We have committed to publishing all contracts online for business to see, got rid of the bureaucracy to allow new companies to supply government and appointed Stephen Allott to represent SME interests in Government.

“Our Innovation Launch Pad means that all SMEs now have the opportunity to present their business solutions to us. I am delighted that such senior business figures have volunteered to help us to get the very best out of small business for Government.”

Stephen Allott said: “I am certain that there is substantial opportunity for Government to save money and deliver a better service through much greater use of SMEs.  If you’re an SME with a product or service that could save money, use the Innovation Launch Pad to tell us about it.”

Entrepeneur  Sherry Coutu said:

“The Government buying more goods and services from SMEs is key. One pound of a customer’s money is worth ten times the amount of investment money to a small business.

“Given that 54 percent of jobs are created by six percent of small, fast-growth companies, this is excellent for everyone as small fast growing businesses will continue to drive the economy.”

Jon Moulton said:

“Small businesses in the UK have a fantastic reputation for innovation. The Innovation Launch Pad is a real opportunity for SMEs to showcase their proposals to Government.”

The Innovation Launchpad is here.

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