Tag Archives: Francis Maude

Another Universal Credit leader stands down

Posted on 11/03/2013 | 1 comment

By Tony Collins

Universal Credit’s Programme Director, Hilary Reynolds, has stood down after only four months in post. The Department for Work and Pensions says she has been replaced by the interim head of Universal Credit David Pitchford.

Last month the DWP said Pitchford was temporarily leading Universal Credit following the death of Philip Langsdale at Christmas. In November 2012 the DWP confirmed that the then Programme Director for UC, Malcolm Whitehouse, was stepping down – to be replaced by Hilary Reynolds. Steve Dover,  the DWP’s Corporate Director, Universal Credit Programme Business, has also been replaced.

A DWP spokesman said today (11 March 2013),

“David Pitchford’s role as Chief Executive for Universal Credit effectively combines the Senior Responsible Officer and Programme Director roles.  As a result, Hilary Reynolds will now move onto other work.” She will no longer work on UC but will stay at the DWP, said the spokesman.

Raised in New Zealand, Reynolds is straight-talking. When she wrote to local authority chief executives in December 2012, introducing herself as the new Director for the Universal Credit Programme, her letter was free of the sort of jargon and vague management-speak that often characterises civil service communications.  It is a pity she is standing down.

Some believe that Universal Credit will be launched in such a small way it could be managed manually. The bulk of the roll-out will be after the next general election, which means the plan would be subject to change. Each limited phase will have to prove itself before the next roll-out starts.

Reynolds’ letter to local authorities suggests that the roll-out of UC will, initially, be limited.  She said in her letter,

“For the majority of local authorities, the impact of UC during the financial year 2013/14 will be limited. .. Initially, UC will replace new claims from single jobseekers of working age in certain defined postcode areas.

“From October 2013 we plan to extend the service to include jobseekers with children, couples and owner-occupiers, gradually expanding the service to locations across Great Britain and making it available to the full range of eligible working age claimants …by the end of 2017.”

Some IT work halted? 

Accenture, Atos Origin, Oracle, Red Hat, CACI and IBM UK have all been asked to stop work on UC, according to shadow minister Liam Byrne MP, as reported on consultant Brian Wernham’s blog.

Wernham says that Minister Mark Hoban did not rebut Byrne’s statement but said that HP was committed to carrying on with the project. HP is responsible for deployment of a solution, not development, says Wernham’s agile government blog.

Comment

The DWP says that Pitchford has taken over from Reynolds – but separately the DWP had confirmed that Pitchford was leading UC temporarily and that Reynolds had a permanent job on the programme. Pitchford’s usual job is running the Major Projects Authority in the Cabinet Office.

All the changes at the DWP, and the reported halting of work by IT contractors, imply that the UC project is proving more involved, and moving more slowly,  than initially thought. It’s also a reason for the DWP to continue to refuse FOI requests for internal reports that assess the project’s progress.

Perhaps the DWP doesn’t want people to know that the project is on track for such a limited roll-out in October that it could be managed, in the main, by hand. With the bulk of the roll-out planned for after the next general election Labour may be denied the use of UC as an effective electoral weapon against the Conservatives. In other words, the riskiest stage of UC is being put off until 2016/17.

 Francis Maude, who is worried that UC will prove an IT and electoral disaster, has his own man, David Pitchford, leading the project, if only temporarily. Meanwhile UC project leaders from the DWP continue to last an extraordinarily short time. Reynolds had been UC programme director for only four months when she stood down. Pitchford is in a temporary role as the programme’s head, and Andy Nelson has recently become the DWP’s Chief Information Officer.

So much for UC’s continuity of leadership.

The truth about the project hasn’t been told. Isn’t it time someone told Iain Duncan Smith what’s really happening – Francis Maude perhaps?

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Posted in Accenture, Agile, Atos, DWP, FOI, Government IT, IBM, local government, openness and transparency, Oracle, outsourcing, Politics, Universal Credit

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Cabinet Office’s procurement reforms start to pay off

Posted on 27/02/2013 | Leave a comment

By Tony Collins

Attempts by the Cabinet Office to reform the way central government buys goods and services are beginning to pay off says a report of the National Audit Office today. SMEs are also winning a larger share of government business, says the report.

“The current procurement strategy is the most coherent approach to reform to date,” says the NAO in its report Improving government procurement. “The creation of a Chief Procurement Officer and associated positions has formed clearer lines of responsibility at the centre, and there is now a mandate for departments to use central contracts.

“The Government Procurement Service has improved capability and functionality as the delivery body for centralised procurement, having undergone positive changes from its legacy organisation, Buying Solutions.

“There will be significant benefits to government if this approach is implemented successfully. The strategy outlines potential savings for government through better-negotiated central deals, aggregation of demand and standardisation of requirements. Centralisation should also enable procurement resource savings in departments.”

SMEs

Some SMEs are benefitting from the Cabinet Office reforms. Says the NAO, “The government aspiration to achieve 25 per cent of spending with SMEs by 2015 has opened up opportunities; the proportion of expenditure with SMEs has increased from 6.8 per cent in 2010-11 to 10 per cent in 2011-12. However, the poor quality data on SMEs means that these figures are difficult to verify…”

Savings

Central government, excluding the NHS, spent around £45bn buying goods and services from third parties in 2011-12. This has fallen from £54bn in 2009-10, adjusting for inflation. The NAO also says, “We have confidence in GPS’s reported £426m savings for central government in 2011-12 through reduced prices.”

Cabinet Office doesn’t enforce its will

The report highlights a fundamental problem that limits all attempts by the Cabinet Office to cut the costs of spending on IT and other goods and services: it does not enforce its will, and departments still have accountability to Parliament for their spending.

“Current mechanisms do not address the inherent tension between the mandate for government departments to use central contracts, and departmental accountability for expenditure and operational risk,” says the NAO. “The mandate is not enforced, and there are no sanctions in place if departments do not comply.

“The Cabinet Office does not hold departments to account for transferring expenditure to the central contracts, and for reducing their own procurement resources. As service users, departments are largely unable to hold the Government Procurement Service to account for performance. Governance structures have grown organically, resulting in duplication between groups and boards, and their purpose and remit are unclear.”

The NAO concludes that “either the Cabinet Office will need to create more potent levers, or it will have to win ‘hearts and minds’, and demonstrate that it has the capability and capacity to deliver a high‑quality central procurement function.”

Comment:

If winning hearts and minds is the Cabinet Office’s preferred route – instead of sanctions – reforming central government will be a long and slow process, and the will to reform may in any case evaporate after the next general election. A hint that changing central government is like pulling teeth comes in a blog post on the Government Digital Service which mentions efforts to persuade officials in central departments to move their websites to a single central website, GOV.UK.

Kathy Settle, Deputy Director at GDS, refers in her post to “exemptions bids”, in which government organisations make a bid to keep their own websites and not move onto GOV.UK. She hints that the negotiations with some departments and agencies have been long and difficult.

Settle says, “We have looked at this a number of times now over the last few months. Wednesday was the final day where we actually made the decision about who is on and who is off. We have now got a big list of organisations that need to move by April 2014.”

If it is proving impossible to move all government websites to GOV.UK – which is not a ground-shaking change –  what hope is there for a major simplification and reform of central government IT-based administration?

That said Francis Maude and his colleagues at the Cabinet Office should be congratulated for the reforms that are starting to work, evidence for which is in today’s NAO report. To make a big difference though, the Cabinet Office will need to enforce its mandates.

As MP Richard Bacon puts it,

“The Cabinet Office is now making some real progress in improving government procurement. Lines of responsibility are now clearer than in the past and it is welcome that more small and medium-sized enterprises are winning government business.  Big names do not necessarily mean best value.

“There is much the Cabinet Office still needs to do to get the most out of these reforms …[it]  needs to decide whether it is ultimately more likely to get results from obstinate departments through persuasion or compulsion”.

NAO report: Improving government procurement.

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Posted in Campaign4Change, change management, Government digital Service, Government IT, procurement, public services

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Universal Credit and Pitchford – good move or a potential conflict of interest?

Posted on 21/02/2013 | 1 comment

By Tony Collins

The Department for Work and Pensions has confirmed that the executive director of the Major Projects Authority, David Pitchford, is to take interim charge of the delivery of Universal Credit, starting this week, says Government Computing.

Pitchford will stay initially for a three-month stint until a permanent replacement is appointed. He joins DWP’s CIO Andy Nelson, who was previously at the Ministry of Justice,  in helping to oversee the Universal Credit project.

Pitchford and Nelson are jointly taking the place of Philip Langsdale, DWP’s highly respected CIO, who passed away just before Christmas last year.

The Daily Telegraph and Independent have portrayed Pitchford’s appointment as a sign that Universal Credit is in trouble. The Telegraph’s headline on Monday was

Welfare reforms in doubt as troubleshooter takes over

And the Independent reported that:

“Ministers have been forced to draft in one of the Government’s most experienced trouble-shooters to take charge of the troubled Universal Credit programme – amid fears the complex new system could backfire.”

But DWP officials say Pitchford’s appointment is not a sign Universal Credit is behind schedule.

A DWP spokesperson said, “David Pitchford will be temporarily leading Universal Credit following the death of Philip Langsdale at Christmas. This move will help ensure the continued smooth preparation for the early rollout of Universal Credit in Manchester and Cheshire in April. A recruitment exercise for a permanent replacement will be starting shortly.”

In Pitchford’s absence, the day-to-day running of the Major Projects Authority will be handled by Juliet Mountford and Stephen Mitchell, with oversight from government chief operating officer Stephen Kelly. Pitchford will retain overall responsibility for the MPA’s activities, says Government Computing.

Comment

On the face of it Pitchford’s appointment is a clever move: the Cabinet Office now has a senior insider at the DWP who can report back on the state of the Universal Credit project.

Francis Maude, who is the Cabinet Office minister in change of efficiency and is trying to distance the government from from Labour’s IT disasters, is almost openly worried about the smell that could come from a failure of the Universal Credit project.

DWP secretary of state Iain Duncan Smith keeps reassuring his ministerial colleagues that critics are ill-formed and all is well with the project. But it is not clear whether he has an overly positive interpretation of the facts or understands the complexities of the project and all that could go wrong.

Even officials at HMRC are having difficulty understanding some of the detailed technical lessons from the work so far on RTI – Real-time information. Although RTI does not need Universal Credit to succeed, Universal Credit is dependent on  RTI.

With  much conflicting information within government over the state of the Universal Credit project – which is compounded by DWP’s refusal under FOI to publish several consultancy reports it has commissioned on the scheme – it is useful for the Cabinet Office to have the highly experienced and much respected Australian David Pitchford run Universal Credit. 

Pitchford is a much-valued civil servant in part because he is straight-talking. He said in  2011 that government projects failed because of:

– Political pressure

– No business case

– No agreed budget
– 80% of projects launched before 1,2 & 3 have been resolved
– Sole solution approach (options not considered)
– Lack of Commercial capability  – (contract / administration)
– No plan
– No timescale
– No defined benefits

Since he made this speech, and it was reported, Pitchford has become a little more guarded about what he says in public. The longer he stays in the innately secretive UK civil service, the more guarded he seems to become but he is still one the best assets the Cabinet Office has. His main advantage is his independence from government departments.

Potential for a conflict of interest?

The Major Projects Authority exists to provide independent oversight of big projects that could otherwise fail. Regularly it is  in polite conflict with departments over the future direction of questionable projects and indeed whether they should come under the scrutiny of the MPA at all.

Pitchford’s taking over of Universal Credit, even on an interim basis, raises questions about whether he can ever  be seen in future as an independent scrutineer of the project. According to The Independent, Pitchford will report directly to Iain Duncan Smith – bypassing the DWP’s permanent secretary Robert Devereux.

Once his secondment to the DWP ends Pitchford may wish to criticise aspects of the project. Can he do so with the armour of independence having run the project? Would he have the authority to delay Universal Credit’s introduction?

Pitchford is now an integral part of Universal Credit. He is in the position of the local government ombudsman who is seconded to a local authority, or an auditor at the National Audit Office who sits on the board of a government department.  If a big project at the department goes wrong, the permanent secretary can say to the NAO:  “Well you had a representative on our board. Are you in a position to criticise us?”

The MPA does a good job largely because it is independent of departments. There are signs that it is intervening to stop failing projects or put them on a more secure footing. Can the MPA remain independent of departments if its head has been seconded to a department?

On the other hand Francis Maude is likely to receive an account of how Universal Credit is going. And the Universal Credit project will have the benefit of an external, independent scrutineer as its head.

But if the MPA and Universal Credit are inextricably linked how can the MPA do its job of being an independent regulator of big IT projects including Universal Credit?

Pitchford takes on Universal Credit role

Government brings in troubleshooter to get Universal Credit on track.

Welfare reforms in doubt after troubleshooter takes over

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Posted in Agile, Campaign4Change, change management, DWP, excessive secrecy, Freedom of Information, Government IT, HMRC, IT-related failures, Major Projects Authority, Real-Time Information, Universal Credit

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Universal Credit – the ace up Duncan Smith’s sleeve?

Posted on 24/01/2013 | 3 comments

By Tony Collins

Some people, including those in the know, suspect  Universal Credit will be a failed IT-based project, among them Francis Maude. As Cabinet Office minister Maude is ultimately responsible for the Major Projects Authority which has the job, among other things, of averting major project failures.

But Iain Duncan Smith, the DWP secretary of state, has an ace up his sleeve: the initial go-live of Universal Credit is so limited in scope that claims could be managed by hand, at least in part.

The DWP’s FAQs suggest that Universal Credit will handle, in its first phase due to start in October 2013, only new claims  – and only those from the unemployed.  Under such a light load the system is unlikely to fail, as any particularly complicated claims could managed clerically. 

The second phase of Universal Credit, which is due to begin in April 2014, is the important one, in terms of number of claimants. But this phase may be delayed with a general election approaching, according to Government Computing, which quotes the FT.

This is from the DWP’s website:

“Universal Credit will start to take new claims from unemployed people in October 2013.”

It continues:

“For people in work this process will begin in April 2014. The remainder of current claims will be moved to Universal Credit from 2014, with the process being complete by 2017.”

Comment: 

The projected costs of real-time information, an HMRC project on which the success of Universal Credit depends, have increased by tens of millions from an initial estimate of £108m, according to Ruth Owen, Director General, Personal Tax, HMRC.  At least HMRC is being open about RTI – relative to the DWP which continues to deny FOI requests for the risk register or independent assessments of the progress or otherwise of the Universal Credit IT project.

Auditors at the National Audit Office found that the Rural Payment Agency’s Single Payment Scheme for farmers dealt with so few claims that it could have been handled manually for a fraction of the cost of an IT system that went awry. Perhaps Iain Duncan Smith has learnt from that episode.

As Universal Credit phase one will handle only new claims from the unemployed, there may be no need initially for complicated monthly interactions with HMRC’s Real-time information [PAYE] systems. 

There may be further restrictions on go-live UC candidates. The DWP may insist that unemployed new claimants are single, childless, between certain ages and not receiving certain benefits or tax credits. They may have to have a valid bank account.

So the numbers of claimants and simplified processing will maximise the chances of a go-live success.

This may explain why the Major Projects Authority has not intervened (yet) to delay the October 2013 go-live date.   

It makes sense to minimise complications when going live. But the Passport Agency found that although the go-live of new systems in 1999 went well, extra IT-related security checks slowed down the issuing of passports, such that backlogs built up, people lost their holidays and queues built up at passport offices. It was a project disaster. 

The real test of the agile-based Universal Credit project will be when existing benefit claimants move onto the new systems in large numbers. This will not happen before the next general election. The plan is for the roll-out to be completed by the end of 2017.

Meanwhile does Iain Duncan Smith plan to claim a victory for the go-live of Universal Credit when the initial transactions are so simple, and the numbers involved  so insignificant, they could be managed clerically if necessary?

 As long as Universal Credit does not reduce payments to the genuinely disabled and the most needy, it is generally regarded as a good idea. It should cut fraud and administrative costs. 

It’s a pity though that no central department can be open about the progress of its major  IT-related projects; and on forcing these progress reports out of dark departmental corners the coalition has made no difference at all.

Will GDS delay Universal Credit by a year? – David Moss’s blog

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Posted in Campaign4Change, change management, DWP, excessive secrecy, Freedom of Information, Government IT, managing change, public services, Real-Time Information, Universal Credit

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Frustrated with the system – Govt CIOs, executive directors, change agents

Posted on 14/01/2013 | 3 comments

By Tony Collins

Today The Times reports, in a series of articles, of tensions in Whitehall between ministers and an “unwilling civil service” over the pace of change.

It says a “permanent cold war” is being conducted with the utmost courtesy. It refers to Downing Street’s lack of control.

In one of the Times articles, Sir Antony Jay, co-creator of the “Yes Minister” TV series, writes that the civil service is more prepared to cut corners than in the 1970s  but hasn’t really changed. “If a civil servant from the 1970s came back today they would probably slot in pretty easily,” says Jay.

Politicians want “eye-catching” change while civil servants “don’t want to be blamed for cock-ups”, he says.

Separately, Mike Bracken, Executive Director of Digital in the Cabinet Office, has suggested that a frustration with the system extends to CIOs, executive directors to corporate change agents.

Bracken created the Government Digital Service which is an exemplar of digital services.  His philosophy is it’s cheaper and better to build, rent or pull together a new product, or at least a minimum feasible product, than go through the “twin horrors of an elongated policy process followed by a long procurement”.

Bracken has the eye of an outsider looking in. Before joining the Cabinet Office in July 2011 he was Director of Digital Development at the Guardian.

Bracken’s blog gives an account of his 18 months in office and why it is so hard to effect change within departments. I’ve summarised his blog in the following bullet points, at the risk of oversimplifying his messages:

Collective frustration

–  After joining the Cabinet Office in 2011 Bracken made a point of meeting senior officials who’d had exalted job titles, from CIOs and executive directors to corporate change agents. “While many of them banked some high-profile achievements, the collective reflection was frustration with and at the system,” says Bracken.

Civil service versus citizen’s needs

–  “I’ve lost count of the times when, in attempting to explain a poorly performing transaction or service, an explanation comes back along the lines of ‘Well, the department needs are different…’ How the needs of a department or an agency can so often trump the needs of the users of public services is beyond me,” says Bracken.

– Policy-making takes priority over delivery, which makes the civil service proficient at making policy and poor at delivery. “Delivery is too often the poor relation to policy,” says Bracken. Nearly 20,000 civil servants were employed in ‘policy delivery’ in 2009. Each government department produces around 171 policy or strategy documents on average each year. Bracken quotes one civil servant as saying: “The strategy was flawless but I couldn’t get anything done.”

Are citizen needs poisonous to existing suppliers?

– Departmental needs take priority over what the public wants. Bracken suggests that user needs – the needs of the citizen – are poison to the interests of policymakers and existing suppliers. “Delivery based on user need is like kryptonite to policy makers and existing suppliers, as it creates rapid feedback loops and mitigates against vendor lock-in,” says Bracken.

– “When it comes to digital, the voices of security and the voices of procurement dominate policy recommendations. The voice of the user [citizen] barely gets a look-in. ( Which also explains much of the poor internal IT, but that really is another story.)”

A vicious circle

Bracken says that new IT often mirrors clunky paper-based processes. [It should usually reflect new, simplified and standardised processes.] “For digital services, we usually start with a detailed policy. Often far too detailed, based not just on Ministerial input, but on substantial input from our existing suppliers of non-digital services. We then look to embed that in current process, or put simply, look for a digital version of how services are delivered in different channels. This is why so many of our digital services look like clunky, hard-to-use versions of our paper forms: because the process behind the paper version dictates the digital thinking.”

Then things take a turn for the worse, says Bracken. “The policy and process are put out to tender, and the search for the elusive ‘system’ starts. Due to a combination of European procurement law and a reliance on existing large IT contracts, a ‘system’ is usually procured, at great time and expense.

“After a long number of months, sometimes years, the service is unveiled. Years after ‘requirements’ were gathered, and paying little attention to the lightning-quick changes in user expectation and the digital marketplace, the service is unveiled to all users as the finished product.

“We then get the user feedback we should have had at the start. Sadly it’s too late to react. Because these services have been hard-wired, like the IT contract which supplied them, our services simply can’t react to the most valuable input: what users think and how they behave.

“As we have found in extreme examples, to change six words the web site of one of these services can take months and cost a huge amount, as, like IT contracts, they are seen as examples of ‘change control’ rather than a response to user need.

“If this 5-step process looks all too familiar that’s because you will have seen it with much of how Government approaches IT. It’s a process which is defined by having most delivery outsourced, and re-inforced by having a small number of large suppliers adept at long-term procurement cycles.

“It is, in short, the opposite of how leading digital services are created, from Amazon to British Airways, from Apple to Zipcar, there is a relentless focus on, and reaction to, user need…”

GOV.UK the civil service exemplar?

Bracken says: “In the first 10 days after we released the full version of GOV.UK in October 2012, we made over 100 changes to the service based on user feedback, at negligible cost. And the final result of this of this approach is a living system, which is reactive to all user needs, including that of policy colleagues with whom we work closely to design each release.”

Bracken says long procurements can be avoided.  “When we created GOV.UK, we created an alpha of the service in 12 weeks … We made it quickly, based on the user needs we knew about… As we move towards a Beta version, where the service is becoming more comprehensive, we capture thousands of pieces of feedback, from user surveys, A/B testing and summative tests and social media input.

“This goes a long way to inform our systems thinking, allowing us to use the appropriate tools for the job, and then replace them as the market provides better products or as our needs change. This of course precludes lengthy procurements and accelerates the time taken for feedback to result in changes to live services.”

Comment:

More big government projects could follow GOV.UK’s example, though some officials in their change-resistant departments would say their systems are too complex for easy-to-reach solutions. But a love of complexity is the hiding place of the dull-minded.

The Times describes the conflicts between the civil servants and ministers as a “crisis”. But conflicts between civil servants and ministers are a good thing. The best outcomes flow from a state of noble tension.

It’s natural for some senior civil servants to oppose change because it can disrupt the smooth running of government, leading potentially to the wrong, or no payments, to the most vulnerable.  It’s up to ministers like Francis Maude to oppose this argument on the basis that the existing systems of administration are inefficient, partly broken and much too costly.

A lazy dependence on the way things are will continue to enfeeble the civil service. Ministers who push for simplicity will always come into conflict with civil servants who quietly believe that simplicity demeans the important work they do. To effect change some sensible risks are worth taking.

The reports of a covert and courteous war between parts of the civil service and ministers are good news. They are signs that change is afoot. Consensus is far too expensive.

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Posted in Campaign4Change, change, change management, cost reduction, efficiency savings, EU procurement, G-Cloud, Government digital Service, Government IT, Politics, public sector, public services

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Are HMRC’s IT costs under firm control?

Posted on 20/11/2012 | 1 comment

By Tony Collins

 The costs of IT outsourcing at HMRC have soared despite a well-written contract that promised large savings. When, as Inland Revenue, the department first outsourced IT in 1994, annual IT costs were around £100m.  Now it has emerged that HMRC’s  annual IT spending was running at more than  £1bn between April 2011 and March 2012.  Only some of the 10-fold increase is explained by new work.

Are there lessons for Barnet, Cornwall and other public authorities as they ponder large-scale outsourcing, given that HMRC did almost everything right and still faces a costly contractual lock-in to major IT suppliers until 2017 – a 13-year outsourcing contract?

HMRC has made some extraordinary payments to its outsourcing suppliers since 2011  – more than mid-way through a 13-year contract.

HMRC figures collated by former Inland Revenue IT employee and now payroll specialist Matt Boyle of Research4paye show that HMRC paid its “Aspire” IT partners £964.2m in a single year, between April 2011 and March 2012.

HMRC paid a further £42.6m of invoices from Serco for one year of website development and support. These figures do not include all of HMRC’s IT costs between April 2011 and March 2012, such as invoices from Accenture for maintenance fees and for work relating to Customs.

IT costs soar

1994. £100 annual IT costs. Inland Revenue first outsources its 2,000-strong IT department to EDS. The annual cost of the 10-year contract is about £100m a year according to the National Audit Office.

2004.  £250m annual IT costs. The end of the EDS contract. HMRC’s annual IT costs have risen to about £250m a year (National Audit Office figure).

2004. £280m annual IT costs. Capgemini wins from EDS a new 10-year HMRC outsourcing deal called Aspire (Acquiring Strategic Partners for the Inland Revenue). Capgemini’s main subcontractors are Fujitsu and Accenture. Capgemini’s bid is for £2.8bn, an average of £280m a year.

2005. £539m annual IT cost.  Inland Revenue merges with Customs and Excise to form HMRC which takes on £1bn Fujitsu IT contract from Customs. The first year of the Aspire contract costs £539m, nearly double the expected amount. The NAO blames most of the increase on new work.

2007. In return for promised savings of £70m a year from 2010/11, HMRC extends Capgemini’s contract by three years to 2017. There’s an option to extend for a further five years.

2010. £700m annual IT costs. Under FOI, HMRC releases a statement saying that the Aspire annual contract costs are running at about £700m.

2011/12. £964.2m annual IT cost. HMRC’s list of invoices from its Aspire suppliers for one year between April 2011 and March 2012 add up to £964.2m. A further £42.6m is invoiced by Serco for website development and support.  This puts HMRC’s IT annual outsourcing costs at 10 times higher than they were when Inland Revenue let its first outsourcing deal in 1994. Some of today’s HMRC systems pre-date 1994 [BROCS/CODA].

Aspire – a good contract?

It appears that HMRC did everything right in its Aspire contract. Indeed the National Audit Office has found little to criticise. Aspire is committed to “open book”, so Capgemini, Fujitsu and Accenture must account for their costs and profit margins.

The contract has some innovations. The suppliers’ margin is retained by HMRC until trials are successfully passed. Even then 50% of the margin is retained until the final Post Implementation Trial about six months after implementation.

Charges under Aspire are split into two categories: “S” and “P”.  The former is mainly a commodity pricing arrangement with unit prices being charged for all service elements at a commodity level (e.g. per Workstation, volumes of printed output etc). The charge to HMRC will vary by volume of demand for each service line.

The ‘’P’’ series charge lines are charged on a man-day basis. Application development and delivery is charged mainly on what HMRC calls an “output basis utilising function points“.

Where IT spending goes

There are more than 800 invoices from Aspire covering the year from April 2011 to March 2012. Some of the invoices are, individually, for tens of millions of pounds and cover a single month’s work.

The invoices cover services such as data centre output, data centre operations, systems software maintenance, software coding changes, licences, IT hardware and data storage.

For some of the Aspire invoices HMRC gives a brief explanation such as £57.6m – “June monthly payment for development and support”. But some of the biggest invoices have little explanation:

May 2011:  invoice for £24.7m – IT Software. A further invoice of £61.7m – “data output prod”.

June 2011: invoice for £55.8m – “data output prod”. A further invoice £56.8m – “data output prod”.

On top of these payments HMRC paid about 24 invoices of management fees in the year. Typical monthly invoice amounts for Aspire management fees ranged from about £390,000 to £2.9m.

There are dozens of Aspire invoices in the year for IT software changes to support day-to-day HMRC’s business. Quite a few of those invoices for software changes are each for tens of thousands of pounds but more than 30 invoices for IT changes in the year 2011/12 each bill more than £100,000. The biggest single invoice in the same year for software changes to support day-to-day HMRC business is  £469, 964 in December 2011.

Transparency

Matt Boyle collated the figures on HMRC’s IT spending from spreadsheets published by HMRC . All credit to Francis Maude, the Cabinet Office minister, for making government departments publish details of their invoices over £25,000.

And credit is due to Matt Boyle for collating and totalling HMRC’s IT-related invoices. Boyle says he is surprised at the high costs of Aspire. He is also surprised that the contract excludes web development and support.

Comment:

HMRC appears to have done nearly everything right and still its IT outsourcing costs are soaring, apparently uncontrollably.

It is hard to avoid the conclusion that the department and taxpayers would have been much better off if Inland Revenue had not outsourced and instead spent the millions it pays annually on, say,  management fees, to building up an in-house IT force and expertise.

Central government seems now to shun big outsourcing deals but local authorities including Barnet and Cornwall are at the stage Inland Revenue was in 1994: they are considering saving money by outsourcing major IT and other services to one main supplier.

If they learn from HMRC’s experiences – and the sums it has had to pay to outsourcing partners – it may take a little of the sting out of HMRC’s enforced prodigality.

[It may also be worth mentioning that some including Boyle ask how it is possible to credibly justify a spend of £46m in one year on a website.]

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Posted in Campaign4Change, Fujitsu, governance, Government IT, HMRC, managing change, outsourcing, Real-Time Information, Universal Credit

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We spend more on IT per capita than any other government – Maude

Posted on 08/11/2012 | 3 comments

By Tony Collins

Cabinet Office minister Francis Maude, in a speech at the FT Innovate Conference on 6 November 2012, said:

“In the last decade our IT costs have gone up – while our services remained patchy. According to some estimates, we spend more on IT per capita than any other government.” Estimated annual IT spend in the public sector is between £14bn and £20bn.

And is the spend worthwhile?

“The same people who do their shopping, banking and social networking online are still interacting with Government on the phone, in person or on paper at less convenience to them and more cost to us…

“Government provides more than 650 transactional services, used about 1 billion times every year – but presently there are only a handful where a large majority of people who could use the online option do so.

“Half don’t offer a digital option at all – and apart from a handful of services, if there is a digital option few people use it because it’s not a sufficiently fast or convenient option.

Car tax online – under-used

“In some cases users try online and then have to revert back to other channels – in 2011 around 150 million calls coming into government were self-reported as avoidable.

This leaves us with a situation where, for example, three-quarters of people use the internet for car insurance, but only half buy car tax online.

“This is simply not good enough …”

GOV.UK

He praised the agile-based GOV.UK government website as easier to use and faster than Directgov and Businesslink which it replaces.

Mosquitoes

The Cabinet Office is also reducing the “incomprehensibly large number of Government websites”  – down from 424 to 350 in the last year.

“We closed a site dedicated to British mosquitoes – no doubt mosquitoes is a serious issue. We just didn’t feel it warranted a whole website.”

£15,000 to change a line of web code

“Departments can be asked to pay £15,000 to change a single word on a website because they are locked into legacy contracts negotiated at a time when the digital capacity lay almost entirely outside government.

“This is changing. We are moving away from legacy IT and our reliance on a few large System integrators. And introducing smaller contracts; shorter terms; a more diverse supplier community that is welcoming to SMEs; open standards; open source; more use of commodity. These are the new parameters.”

Francis Maude’s speech in full.

 

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Posted in change, change management, cost reduction, Government IT, managing change, private sector lessons for the public sector

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Fujitsu on blacklist? Cabinet Office issues statement

Posted on 14/09/2012 | Leave a comment

By Tony Collins

The Cabinet Office has denied it is operating a blacklist of poorly-performing suppliers – but says that suppliers deemed high risk may find it “more difficult to secure new work with HMG”.

In its statements to Kable’s Government Computing, the Cabinet Office also made it clear that suppliers deemed high risk can redeem themselves.

“Mechanisms exist to remove suppliers from the High Risk classification when performance improves dramatically.”

This suggests that Fujitsu would no longer be deemed high risk if it settled its dispute with the government over the NPfIT. Fujitsu has been seeking £700m after the failure of its NPfIT contract. A settlement has proved elusive and the case may go to court.

The FT said on Tuesday that Fujitsu has “in essence” been blacklisted. Neither Fujitsu nor the Cabinet Office are denying that Fujitsu has been put in the high-risk classification.

A Cabinet Office spokesman told Government Computing:

“We cannot comment on the status of individual suppliers, but we are absolutely clear that this Government will not tolerate poor supplier performance.

“We want to strengthen our contract management by reporting on suppliers’ performance against criteria and sharing the information across Government. This means that information on a supplier’s performance will be available and taken into consideration at the start of and during the procurement process (pre-contract). Suppliers with poor performance may therefore find it more difficult to secure new work with HMG.

“This policy will include the identification of any high-risk suppliers so that performance issues are properly taken into account before any new contracts are given.

“High-risk classification is based on material performance concerns. Suppliers deemed high risk will be subject to particularly close scrutiny when awarding new work.

“Overall, this is simply good commercial practice and in line with how we are improving the way government does business and emulating the best of the private sector.”

The spokesman said that contract extensions are within scope of the poor-performance policy but will be tackled in a proportional way – depending on the overall cost of the contract, the relative cost of extending it, and how critical the extension is.

The high-risk classification “applies to strategic suppliers who do business across Government, and is not limited to any specific sector”. Frameworks are also included.

“Our performance policy will apply to central government departments, where we have direct control of spending,” said the spokesman. But it is still unclear what direct control the Cabinet Office has of departmental spending.

That said, the Cabinet Office announced in June spending controls on central government that “allow government to act strategically in a way it never could before”. It added that there were “strict controls on ICT expenditure”.

That means that large ICT contracts to be awarded by departments must go to the Cabinet Office for approval; and the Cabinet Office has introduced a single point of contact for major suppliers, which means that the performance of strategic suppliers will be viewed in the round.

In the past suppliers have been able to tell departments that were about to award contracts that rumours of alleged poor performance in other departments were incorrect.

Comment

While not a blacklist the high-risk classification seems a good idea. Francis Maude, the Cabinet Office minister, is sending a message to suppliers that if they take legal action against a department it could stop them getting business across Whitehall.

But he’s also saying in effect: settle and we’ll remove you from the high-risk list.

Is there a danger that the power could swing too much in the government’s favour, allowing departments to poorly manage contracts with impunity? Probably not. Suppliers will have to take the high-risk list into account when signing deals.

They know that, in the insurance industry for example, if they mess up one contract word will soon get around.

Poorly-performing suppliers risk being frozen out of Government business – Government Computing

Fujitsu banned from goovernment contracts?

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Posted in Campaign4Change, cost reduction, Fujitsu, Government IT, innovation, legal disputes, Major Projects Authority, operational issues, private sector lessons for the public sector, procurement, supplier relationships

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Fujitsu banned from Whitehall contracts?

Posted on 11/09/2012 | 6 comments

By Tony Collins

The FT reports today that Fujitsu has been deemed for the time being too high risk to take on new public sector deals, along with another unnamed IT services contractor.

The newspaper quotes “people close to the situation”.

It’s likely the article is correct in naming Fujitsu as a supplier that is deemed by the Cabinet Office to be high risk. It is unclear, though, whether being categorised as “high risk” by the Cabinet Office amounts to a ban for the time being on future government contracts.

The FT says that Fujitsu has “in essence” been blacklisted.  “The Cabinet Office refused to confirm the identities of either of the companies that have in effect been blacklisted,” says the FT.

It is also unclear whether the Cabinet Office could exclude a supplier from shortlists even if it wanted to. The Cabinet Office awards few large IT contracts of its own; contracts are awarded by departments, and the Cabinet Office has no unambiguous power to exclude particular suppliers from shortlists drawn up by autonomous departments that take their own decisions on which companies to award contracts to.

Mega-contracts to be awarded by central departments must, however, must go to the Cabinet Office’s Major Projects Authority for approval.  The Authority could in theory require that Fujitsu be excluded from a shortlist before it gives approval.  This blacklisting would require Francis Maude, the Cabinet Office minister, and the minister signing the mega-contract to be in agreement.

If a departmental minister refused to exclude  a supplier from a bid or shortlist because of its past performance what could the Cabinet Office do, especially if the minister argued that the supplier’s continued work , in the form of a renewed contract, was not just desirable but essential?

The FT says that the latest initiative to ban companies with troubled histories in government from new contracts is being spearheaded by Bill Crothers, formerly of Accenture.

He was appointed as chief procurement officer two months ago to inject private sector rigour into Whitehall’s contracting system. He is quoted in the FT as saying that his new approach would allow past performance to be taken into account for the first time when a company is bidding for a fresh tender.

Comment

The idea of a blacklist is a good one; indeed it would be the most important innovation in government IT since the general election. For decades MPs and others have said that under-performing suppliers should not be awarded new contracts. Now at last that may be happening.

After Fujitsu sued the Department for Health for about £700m over the NPfIT a settlement has been elusive, despite the intervention of the Cabinet Office. It is likely that Fujitsu UK’s hands will have been controlled by its parent in Japan.

Fujitsu’s performance on the “Libra” contract for IT in magistrates’ courts was strongly criticised by MPs and the National Audit Office which exposed repeated threats by the supplier to withdraw from the contract unless its terms were met.

Fujitsu could circumvent any blacklisting by becoming a subcontractor on a mega-contract, as it is at HMRC on the “ASPIRE” contract and at the DWP where its hardware runs benefit systems. Or a department could ignore the Cabinet Office and award non mega-contracts to Fujitsu.

We hope the Cabinet Office finds a way to make its blacklist – if that is what it is – stick. A  private sector company would not award a new contract to a supplier that had bitten in the past. Why would the public sector?

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Posted in EU procurement, Fujitsu, Government IT, IT-related failures, legal disputes, Major Projects Authority, private sector lessons for the public sector, procurement, project management, public sector, supplier relationships

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Ex Govt CIO speaks – having left the public sector

Posted on 22/08/2012 | 3 comments

By Tony Collins

In November last year we asked “Where is the Government CIO?”

We said that the then Government CIO Joe Harley – amiable, straight-talking and influential – could be the civil service’s ambassador for change.

Like his predecessor John Suffolk he could have used conferences and public events to talk inspirationally about the dystopian costs of government IT and what to do about them.  Why hasn’t he, we asked.

“If the Government CIO has much to say, it is not for the public ear. While there has been talk in recent weeks of how five corporations control GovIT, and how it can cost up to £50,000 to change a line of code, Harley has been silent.

“Where does the Government CIO stand on the need for major reform of the machinery of government, on the sensible risks that could save billions? Is the top man in Government IT inspiring his colleagues and officials in other departments to do things differently?”

Now it’s good to hear Joe Harley has speaking publicly about government IT, and what needs to be done. He has left the public sector though.

He suggested to Computing that there needs to be less strategising and more action.

“The whole emphasis now needs to be on implementation and delivery. There has been enough strategising and there really needs to be execution… [The government must] deliver on the implementation plan that we created and grow the talent with capability for the future.

“When it starts to deliver, we’ll start to see government ICT getting a [better] reputation,” he said.

Comment

Who will do less strategising and focus more on delivery?

As Harley now says, there needs to be individual accountability for decisions rather than a generalised blaming of committees.

“I think we need to be more light-footed and make people more accountable for their decisions and actions rather than [blaming] committees and programme boards,” he said.

No individual in government is going to make the changes that Harley recommends. Any real changes will be effected by committees and programme boards. Which is probably why material change in government administration and IT will happen in geologic periods. Unless an individual with charisma and leadership abilities – and who doesn’t mind talking in public while still in the public sector – is prepared to make the difference.

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Posted in Campaign4Change, CIO, excessive secrecy, Government IT, improving communications

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