Tag Archives: Francis Maude

Tri-borough mutual plans to save £1m in costs for London councils

Posted on 23/03/2012 | 1 comment

By David Bicknell

Council staff across three London boroughs who are setting up their own employee-led mutual to take over school support services expect to save a million pounds over four years.

The three councils – Hammersmith & Fulham, Westminster and Kensington & Chelsea – already share several services, which they say is enabling them to reduce back office costs to help protect frontline services from the public spending squeeze.

Now, a statement issued by Hammersmith & Fulham for the three councils says the staff involved in supplying support services for schools across the boroughs are “putting the finishing touches to plans to set themselves up as an employee-led mutual.”

Andy Rennison, assistant director in Hammersmith & Fulham children’s services, who has been leading the mutual project, said, “Staff in these areas have experience of trading with schools and are excited about the new challenge. We feel that having more control, flexibility and being able to develop a more commercial approach will benefit schools, the mutual staff and the three councils.

“If the venture is successful, and we have every reason to think so, the councils will receive 50% of the mutual’s net profit to reuse in providing educational opportunities.”

The mutual will pilot the new arrangements for four years, with support from a joint venture independent sector partner, currently being selected through European procurement processes.

Hammersmith & Fulham says an open day for potential bidders held on January 24 attracted around 60 delegates.

The project is being supported by the Cabinet Office which picked Hammersmith & Fulham to be a Pathfinder  to explore new ways of delivering public services more efficiently. The services include financial management support and budget planning, IT and building development projects, as well as strategic advice to councils.

Francis Maude, Minister for the Cabinet Office, said: “Front line staff know what local people want from public services. The mutual model being pioneered in Hammersmith & Fulham will give staff the power to do things the way they know works best. The evidence is clear, when staff have a real stake in their business productivity rises and customer satisfaction grows.

“This Pathfinder mutual is particularly groundbreaking as staff are forming a ‘joint venture’ with a partner organisation that will help to develop the business further. I commend the staff leading this exciting project for their achievements and hope many more will follow their lead.”

“We are very pleased that staff across the Tri-borough area are excited about this opportunity and taking the lead in this Pathfinder. After the initial four years, the service will be retendered on the open market to ensure that taxpayers continue to get the best possible value for money in the longer term,” said Hammersmith & Fulham cabinet member, Cllr Helen Binmore.

Independent adviser OPM was asked by the Cabinet Office to provide expert support to Rennison and his team as part of the Pathfinder programme.

OPM chief Executive Hilary Thompson said; “Elected members, managers and staff at Hammersmith and Fulham have shown real commitment and energy throughout the process of developing the staff mutual. This is an innovative example of a council recognising and seeking to realise the potential of employee ownership and new ways of working.”

It has emerged that academies and free schools will provide a future opportunity for the mutual to extend its services. There are currently two free schools and two academies in Hammersmith, with more in the pipeline.

Further background information on the mutual is being made available in a Hammersmith & Fulham Cabinet report.

(Thanks to Ian Makgill of government contracting specialist Govmark for his help with this story)

Related Links

Hammersmith & Fulham Pathfinder tender hints at September start for schools mutual

SMEs – when to choose them and when not

Public services can be delivered by knights and knaves mutually

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Posted in Campaign4Change, local government, mutualisation, mutuals, procurement, public sector, public services

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Is Francis Maude starting to spin – without realising it?

Posted on 16/03/2012 | 6 comments

By Tony Collins

Francis Maude is, perhaps, the most effective Cabinet Office minister in decades.

If the business world divides into two main types of character, black and white, and grey – neither being better or worse than the other –  Maude is black and white.

He wants clarity. He shuns subtlety and complexity. He has no time for civil service sophistry and equivocation, or the coded language of some supplier representatives. He wants cuts in the cost of contracts and doesn’t want to hear long arguments on why things are not that simple. He had deep reservations over doing a new deal with CSC over the NPfIT.

A strength of Maude and his colleagues at the Cabinet Office has been the absence, or at least scarcity, of exaggerated and unsubstantiated statements of efficiency savings, of the sort made repeatedly during Labour’s tenure.

Is that beginning to change?

In the past fortnight Maude has made two major claims that are not based on published evidence.

• Maude said spending on SMEs has risen from 6.5% to 13.7%.  It’s not clear how that figure is calculated. There’s a good analysis of the tenuousness of the claim by Peter Smith of Spend Matters. How much of the increase in SME work is down to unaudited claims by large companies that they are giving their SMEs more work?

• He said that £200m has been cut from Capgemini’s Aspire contract with HMRC. [Aspire also involves Fujitsu and Accenture.] He has received much good publicity for the claim. Said the Telegraph yesterday:

“He [Maude]  announced that ministers had successfully renegotiated one deal on computers and tax systems for HM Revenue and Customs.

He said the new contract, with Capgemini, would save £200 million on the deal previously agreed.”

Last year Mark Hall, deputy CIO at HMRC was reported as saying that the Aspire contract was on course to save more than £1bn. Is the £200m quoted by Maude in many news articles this week new?

And none of the articles mention the total cost of the Aspire contract – so from what is £200m being cut?

At one point, according to Mark Hall, the estimated cost of Aspire rose to £10bn from its original estimate of £2.83bn over 10 years. This means that cost increases on the Aspire contract are measured in billions – which puts the £200m savings figure mentioned by Maude into context.

And have Maude and his team offered Capgemini anything in return for a price cut, such as an improved profit margin? [The contract is on an open-book accounting basis]. This week’s Cabinet Office statement on the £200m cut gives no help here. An HMRC FOI response in 2010 and an NAO report in 2006 show that costs of Aspire are fluid. They change according to internal demand; and pricing arrangements are complex. HMRC has refused FOI requests to publish the contract so how can anyone put the claimed £200m savings into a contractual content?

In 2007 negotiations between HMRC and Capgemini extended the 10-year contract by three years, to June 2017; and there’s an option to extend Aspire  for a further five years to 2022. In return for the contract extension Capgemini has already guaranteed savings of £70m a year and a further £110m a year from 2012. Are these savings in addition to the £200m a year Maude has announced? Or the £1bn savings mentioned by Mark Hall?

The good news is that HMRC’s CIO is Phil Pavitt who is a natural sceptic of big outsourcing deals. If anyone is going to achieve genuine savings on Aspire it is Pavitt. Indeed he has given some details of his negotiations. But the contractual context remains abstruse.

Comment

Doubtless Maude believes the figures he has announced on SMEs and Aspire are correct but without substantiation they will mean little to anyone except the media. Maude, perhaps, needs to trust his own cautious instincts than listen too much to his advisers. Otherwise he’ll begin to sound more like Labour ministers who repeatedly made claims the NAO found difficult to substantiate.

The important and impressive work Maude is doing to cut the costs of running government should not be trivialised and debased by spin. Announcements on what he is doing to cut costs and make government more open are usually helpful. But Maude should the first to differentiate the real – in other words the factually corroborated – from aggrandising and flimsy political claims.

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Posted in Campaign4Change, compliance with spending review, cost avoidance, efficiency savings, Freedom of Information, Government IT, managing change, managing outsourced services, outsourcing, Politics, procurement, public sector, public services, reducing cost strategically, supplier relationships

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From The Sun: “Run fire service like John Lewis”

Posted on 06/03/2012 | Leave a comment

By David Bicknell

It’s not often that the prospects for mutuals – or John Lewis, for that matter – make it into The Sun. But this story takes the mutuals bandwagon into areas it hasn’t been previously.

The Sun’s story – ‘Run fire service like John Lewis – refers to the Cleveland Fire Brigade, which reportedly ‘plans to turn itself into a mutual — just like John Lewis stores where staff share profits.’

The story quotes Cleveland’s chief fire officer Ian Hayton saying: “Combining a public service ethos with an entrepreneurial drive for growth will empower our staff.”

It also quotes Cabinet Office Minister Francis Maude saying, “We are opening up public services to get more bang for the taxpayers’ buck.

“Frontline workers know best how to do their job. That’s why mutuals can be the best way to run things.”

However, an article on Public Finance makes the point that the ‘mutual option’ was always a non-starter for public audit.

It argues that the Audit Commission’s abandonment of the ‘mutual option’ for audit follows a weekend disclosure that police forces are being pressured by the Home Office ‘to outsource great swathes of front as well as back-office work.’

Audit Commission: the feeling’s not mutual

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Posted in Campaign4Change, change management, mutualisation, mutuals, public sector, public services, social economy, social enterprise

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New child support system has 90,000 requirements – in phase one

Posted on 29/02/2012 | 3 comments

                               A new old-style government IT disaster?

By Tony Collins

While officials in the Cabinet Office offcials try to simplify and cut costs of Government IT, a part of the Department for Work and Pensions has commissioned a system with 90,000 requirements in phase one.

The projected costs of the child maintenance system have risen by 85% and the delivery date has slipped by more than two years.

Even with 90,000 requirements, phase one, which is due to go live in October, excludes 70 requirements that are “deemed critical” says a report published today by the National Audit Office.

The NAO report indicates that the Child Maintenance and Enforcement Commission has commissioned an old-style large IT system using traditional developing techniques and relying on large companies.

G-Cloud and SMEs have not featured in the Commission’s IT strategy – and it abandoned agile techniques last year on its child maintenance project.

The Commission put the cost of its new child maintenance system at £149m in January 2011. Ten months later it put the cost at £275m, an 85% increase. The Commission was unable to give the NAO a full explanation for the difference.

Lessons from past failures not learned?

Today’s NAO report says there is a risk the Commission will repeat mistakes by the Child Support Agency whose IT system and business processes were criticised in several Parliamentary reports. The Commission takes in the work of the Child Support Agency – and indeed runs its own systems and the Child Support Agency’s in parallel.

Officials at the Commission told the NAO they have a good track record of holding back IT releases until they are satisfied they will work.  “Nevertheless, we found that the Commission is at risk of repeating many of the mistakes of 2003,” said the NAO. Those mistakes include over-optimism and a lack of internal expertise to handle suppliers.

Mixing “agile” and “waterfall” doesn’t work

Initially civil servants at the Commission tried to “mix and match” agile and traditional developing techniques – which Agile advocates say should not be attempted.

In 2011 the Commission gave up on agile and “reverted to a more traditional approach to system development” says the NAO report.

The mix and match approach meant there were two distinct routes for specifying requirements and “resulted in duplicated, conflicting and ambiguous specifications”.  The Commission did not have previous experience of using the agile approach.

The Commission’s child maintenance system was due to go live in April 2010 but the delivery date has slipped three times. Phase one is now due to go live in October 2012 and phase two in July next year but the NAO report raises questions about whether the go-lives will happen successfully. The Commission has not planned in its financial estimates for the failure of the system.

The NAO finds that the Commission has struggled to make its requirements for the new system clear. The Commission’s main developer Tata Consulting Services has had protracted discussions over the meaning and implementation of requirements.

The NAO also hints that IT costs may be out of control. It says the Commission may not secure value for money without properly considering alternative options for restructuring and “adequately controlling its IT development …”

These are some of the NAO’s findings:

IT costs could increase further

“The new system is based on ‘commercial off-the-shelf’ products. However, a recent audit by Oracle identified that the performance, maintainability and adaptability of the new system would be key risks. This could increase the cost of supporting the system. The scheme does not yet include plans for the integration with HM Revenue & Customs’ Real Time Information system due to be implemented in 2013, or introducing Universal Credit because of the differing timescales,” says the NAO which adds:

“Achieving the Commission’s plans without further cost increases or delays appears unlikely. The Commission reported to the audit committee in October 2011 on the high risk that the change programme may not deliver phase two functionality within agreed timescales … The Commission did not develop a benefits realisation plan until November 2011.”

103,000 of Commission’s 1.1m cases are handled manually

“Ongoing technical problems have resulted in a large number of cases being removed from the IT system and managed manually. These are known as clerical cases … The Commission has had to operate the ‘old’ and ‘current’ schemes in parallel.  Due to flaws in the IT systems for each scheme, some 100,000 cases have had to be processe:d separately by clerical staff at a cost of £48 million,” says the NAO. It takes 900 contractors to manage the clerical cases.

Comment

Despite numerous NAO reports on failures of Government IT-based projects over the past 30 years the disasters are still happening, with the same mistakes repeated: over-optimism in every aspect of the project including timetables and financial estimates; excessive complexity and over-specification, no sign of cost-consciousness and, worst of all, an apparent indifference to being held accountable for a major failure.

A glance at the monthly outgoings of the Commission (well done to the coalition for requiring departments and agencies to publish contracts over £25,000) show sizeable and regular payments to familiar names among the large suppliers: HP Enterprise Services (formerly EDS), Capgemini, Tata Consultancy Services, BT Global Services and Capita. There is hardly an SME in sight and no sign of imaginative thinking.

Meanwhile some senior officials at the Commission put in monthly expenses for thousands of pounds in travel, accomodation and subsistence for “Commission meetings”. One wonders: to what useful effect?

Officials at the Cabinet Office are trying to change the culture of departments and agencies. They are encouraging departmental heads to do things differently. They advocate the use of  SMEs to show how new ways of working can trounce traditional approaches to projects.

But the Cabinet Office has little influence on the Department of Work and Pensions. Indeed the DWP has lost its impressive chief innovator James Gardner.

We praise the NAO for noting that the Commission risks repeating the IT-related and project management mistakes of the Child Support Agency. But we note with concern that the NAO still puts up with Whitehall’s non-publication of  Gateway reviews, which are independent reports on the progress or otherwise of big and risky IT-based projects.

Would the Commission have been so apparently careless of the risks if it had known that regular Gateway reports on its shortcomings would be published?

How many more government IT-based projects are late, over budget and at risk of failing, their weaknesses hidden by an unwritten agreement between the coalition and civil servants to keep Gateway reviews secret?

NAO report – Child Maintenance and Enforcement Commission: cost reduction

Government repeating child support mistakes – ComputerworldUK

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Posted in Agile, capacity building, change, change management, CIO, Gateway reviews, Government IT, India, IT projects, managing change, managing outsourced services, openness and transparency, operational issues, outsourcing, private sector lessons for the public sector, project management, public sector, public services

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Part equity models for mutuals could revive outsourcing sector

Posted on 06/02/2012 | 1 comment

By Robert Morgan

Few can be in any doubt of the coalition government commitment to worker inclusive mutuals and the potential for not only smaller government as a result but a revival of the outsourcing services industry.  This model acts as a template to appease European workers councils who have long held back the greater use of outsourcing in country like France and Germany.

Headline grabbers like ““Ministers are poised to launch one of the biggest experiments in public sector reform … a John Lewis-style mutual – the first to be created in central government”, and “… three or four more Mutuals THIS year …” and “…1,000,000 public sector workers in Mutuals by 2015” in the Financial Times this week has not been picked by the bulk of the popular press. But they and the continental press soon will.

Francis Maude, Mutualisation’s marketing guru has said of the MyCSP mutual ““I don’t … view this as the ultimate model … we have learnt … The next one should be easier to do”. The award of the MyCSP contract, rumoured to be ten years with a break clause at year seven, will administer 1.5m government pensions, transfer 500 DWP staff into the SPV, see CEO compensation capped at 8% above average employee salary, net profits shared with the supplier but only after 1% going to charity and 1% going to apprenticeships, and employees interests will be represented by an externally advertised director. So part of the model are clear – a new form of privatisation with Jon Lewis style employee participation and share ownership and a “caring” social charter.

But has government learnt from Labour’s disasters in PFI / PPP – you know the £120 to change a light bulb stories. Key questions need answers:

  • To what extent will the mutual be given freedom to operate?
  • At least in the short-term, a mutual remains tied to its public sector background and delivery and is therefore subject to the rigours and constraints of regulation, OJEU and accountability to the Auditor General. Will these restrictions be “officially loosened” any time soon?
  • Everyone agrees that the public sector will continue to shrink and by definition therefore, so will a dependent mutual’s service revenues, this throws up questions on it’s ability to survive – and to attract external revenues, and so …
  • … will the choice of partner be heavily dependent on their demonstrated ability or commitment to develop such services?
  • What penalties are there for NOT securing external business?
  • How might the Mutual formula vary and evolve between different circumstances?

More importantly for the outsourcing industry is, are more commercial models going to spring up and be accepted. The consensus of clients I have spoken to is “yes”, but this needs to be balanced with the fact that there was not a single tier one outsourcer (IBM, CSC, HP) in the short-list for MyCSP.  Demand says “yes” and Supply says “yawn”. 

Robert Morgan, formerly the founder of Morgan Chambers and now director of outsourcing advisory Burnt Oak Partners, is delivering a speech on Part Equity models for commerce on Wednesday 8th February 2012 at Berwin Leighton Paisner – the event is free and tickets can be coordinated via  shan,murad@blplaw.com  – yes it is a comma!

Robert also writes the influential Outsourcing Lex column at

http://www.burntoak-partners.com/viewpoint/outsourcings-lex-column/

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Posted in Campaign4Change, mutualisation, mutuals, outsourcing, procurement

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Some success in cutting Whitehall costs

Posted on 02/02/2012 | Leave a comment

By Tony Collins

The coalition government, Cabinet Office, Treasury, departments and agencies have succeeded in cutting central government costs, according to a National Audit Office report published today.

The NAO found that “in particular, large reductions have been made in spending on consultants, temporary staff, property and information technology” in 2010-11.

Departments cut their spend on consultants by £645m in – a real-terms reduction of 37%, said the NAO which also identified “£537m reduced capital spending on IT-related items”.

Unlike some previous reports of the NAO that have questioned the credibility of officialdom’s claims of savings, the NAO’s latest report “Cost reduction in central government: summary of progress” found that the savings claimed by the Cabinet Office, Treasury and government were usually genuine.

Where departments have cut costs by cancelling IT projects or having contracts renegotiated – as opposed to simplifying and streamlining the way they work – the NAO was unsure whether the savings could be sustained.

Said the NAO

“Central government departments took effective action in 2010-11 to reduce costs and successfully managed within the reduced spending limits announced following the 2010 election.

“This resulted in a 2.3% real-terms reduction in spending within departments’ control, compared with 2009-10. Some £3.75bn or around half the reduction was in areas targeted by the Efficiency and Reform Group for cuts in back‑office and avoidable costs.”

Are IT cuts sustainable without a change in working practices?

The NAO said:

 “The fall of 35 per cent in IT capital spend is partly the result of decisions to permanently halt or reduce spending on specific projects, and partly the result of action to reduce the costs of IT products and services including through contract renegotiation.

“However, it is unlikely that IT capital spending will remain at this lower level in total, given the key role of IT and online services in increasing productivity.”

The NAO mentioned the actions of some departments by name.

–          The Home Office cut costs in part by “significant reductions in IT, estates and consultancy spending”.

– HM Revenue & Customs, the Department for Work and Pensions and the Ministry of Defence aimed to secure the bulk of cost reductions from within their organisations. HM Revenue & Customs has established comprehensive governance arrangements to reduce costs, with a central team and programme management infrastructure. The Department for Work and Pensions put in place a transformation programme board in May 2011 to oversee the redesign of its corporate centre and broader cultural change. “However, it cannot finalise plans beyond 2011-12 as they depend on the future business model after the introduction of Universal Credit,” said the NAO. The DWP’s finance team has provided ‘What the Future Holds’ updates and interactive briefings for staff.

– The NAO said it “identified strong leadership as a key factor in the success of the Foreign and Commonwealth Office’s cost reduction efforts”.

– The Centre for Environment, Fisheries and Aquaculture Services within the Department for Environment, Food and Rural Affairs “held sufficiently detailed information to be able to challenge its project managers to reduce costs without affecting services”. The NAO said the “resulting savings identified from some 200 projects made up 30 per cent of the Agency’s efforts to meet their efficiency savings target”.

In July 2011, the Cabinet Office’s Efficiency and Reform Group reported to the Public Accounts Committee that it had helped save some £3.75bn through various initiatives. “Our analysis of the audited accounts of the 17 main departments confirms that spending in the areas targeted was reduced on this scale”, said the NAO.

Comment

The NAO report shows that within some departments officials are cutting costs by simply reducing grants but some parts of central government are making an effort to do things differently.

We hope the coalition and Cabinet Office keep up the pressure for cost-cutting because, in IT alone, the potential savings are in the billions. The NAO report shows there has been a good start. We hope that the officials who are achieving lasting success will pass on their learning experiences to those who are struggling to make cuts sustainable.

NAO report Cost reduction in central government – a summary of progress

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Posted in Campaign4Change, capacity building, change, change management, Government IT, IT projects, managing change, managing outsourced services, operational issues, recruitment freeze, reducing cost strategically, reforms, Universal Credit

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

Posted on 26/01/2012 | 1 comment

By Tony Collins

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

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

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

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

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

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

Who cares? Certainly not the Public Administration Committee.

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

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

Whitehall refuses to probe cartel claims, say MPs

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Posted in Campaign4Change, change management, Gateway reviews, Government IT, managing change, procurement, public sector, public services, supplier relationships, Universal Credit

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CSC to change hands in 2012?

Posted on 03/01/2012 | 1 comment

By Tony Collins

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

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

Maude gets tough 

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

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

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

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

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

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

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

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

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

Why the Cabinet Office has left draft MoU unsigned?

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

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

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

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

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

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

David Cameron’s view?

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

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

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

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

What does CSC’s plight mean for the NHS?

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

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

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

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

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Posted in Campaign4Change, change, change management, Government IT, health, IT projects, managing change, managing outsourced services, NHS, npfit, outsourcing, procurement, project management, public sector, public services, reducing cost strategically, supplier relationships

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School report on Govt ICT Strategy – a good start

Posted on 21/12/2011 | Leave a comment

By Tony Collins

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

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

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

– reducing waste and project failure

– building a common ICT infrastructure

– using ICT to enable and deliver change

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Some problems identified in the NAO report:

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

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

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

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

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

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

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

**

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

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

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

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Posted in Campaign4Change, capacity building, change, change management, Cloud, Cloud Computing, collaboration, compliance with spending review, EU procurement, G-Cloud, government, Government IT, Green IT, improving communications, innovation, Lean, managing change, managing outsourced services, open source, operational issues, outsourcing, procurement, project management, public sector, public services, recruitment freeze, reducing cost strategically, reforms, SME, supplier relationships

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Mutuals Briefing updated

Posted on 13/12/2011 | 2 comments

By David Bicknell

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

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

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Posted in Campaign4Change, mutualisation, mutuals, public sector, public services

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