Tag Archives: government procurement

Health CIO resigns – Cabinet Office executive steps in

Posted on 22/06/2011 | Leave a comment

By Tony Collins

The Health CIO Christine Connelly has resigned. I understand it’s for personal reasons and that she has no new job lined up.

She is being replaced on an interim basis by an executive at the Cabinet Office Katie Davis. It’s likely that Davis will remain Director, Operational Excellence at the Cabinet Office until she replaces Connelly on 1 July 2011.

Connelly says in her statement that the Department of Health faces a major reorganisation of its top structures that will result in fewer Director General posts. “I have been reflecting on whether I would wish to go for one of those roles and decided that I will not.”

The Cabinet Office has indicated in recent months that it wishes to have more control over negotiations of a £3bn contract with CSC under the National Programme for IT, NPfIT.

This was the Department’s statement this morning, in full:

“Christine Connelly, Chief Information Officer for Health, has announced that she will be leaving the Department of Health at the end of the month.

“Christine said: “The Department of Health faces a major reorganisation of its top structures that will result in fewer Director General posts. I have been reflecting on whether I would wish to go for one of those roles and decided that I will not.

“I have had a fascinating and challenging time in this role and I have decided that this is the right time to step back and think about what I might do next.

“I believe that information and technology have the potential to dramatically change the way health services are delivered to patients, and we are already seeing this happen in many parts of the service. I am confident that informatics will have a major role to play in delivering both the quality and efficiency challenge that the NHS faces.”

NHS Chief Executive, Sir David Nicholson, said:

“Christine has made a major contribution to the NHS, in promoting both the sharing and management of information, and as a professional with considerable experience of leading change.

“She has tackled a very difficult set of issues around the National Programme for IT, and moved them forward. I wish her well in her future career.”
Health Secretary Andrew Lansley said:
“Christine has brought a huge amount of experience, talent and technical knowledge to the National Programme for IT. For almost three years, Christine, as the first Chief Information Officer for Health, has worked to deliver the Department’s information strategy. I wish Christine the best of luck with whatever she chooses to do next.”
“Christine will be replaced on an interim basis by Katie Davis. Katie joins us on loan from the Cabinet Office where she has been Executive Director, Operational Excellence, in the Efficiency and Reform Group (ERG) since 2010. Before that, she was Executive Director of Strategy, Identity and Passport Service in the Home Office and Director of the Government IT Profession in the Cabinet Office. Katie will be joining us on 1 July 2011.”
**
Comment: One of Connelly’s strengths is her lack of artifice. She answers the most difficult questions about the NPfIT with openness and honesty. Not everyone will agree with her strong support for the continance of the NHS IT scheme but her arguments are made with a genuine conviction, clarity of thought and explanation, and without distortion of the truth. I wish her well.

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BT doubles the value of its NHS IT business, to £4.1bn, in eight years

Posted on 08/06/2011 | 1 comment

By Tony Collins

BT’s NPfIT business today is worth £4.1bn – nearly double the cost of the original NHS IT contracts, according to a calculation by Campaign4Change.

In December 2003 the Department of Health awarded BT three contracts under the NHS IT programme:

– a ten-year deal, worth £620m to design, deliver and manage the Spine, a national patient record database and transactional messaging service that was essential to the NHS Care Records Service.

– a ten-year deal, worth £996m to become the main IT supplier – local service provider – to all London trusts. The contract was to design, deliver and operate integrated local patient record applications and systems for the NHS in London.

– a seven-year “N3” broadband network deal, worth £530m, to replace the NHS communications network NHSnet.

The three contracts were worth a total of £2.15bn in 2003.

Now BT has confirmed that the total value of its NHS contracts is £4.1bn. This is after change control notices and further NPfIT work, including taking over from Fujitsu at seven NHS sites in the south.  Of this £4.1bn, BT has so far received £2.8bn – about £700m more than the cost of its original contracts; and BT has confirmed it is bidding for further NPfIT work, under NHS Connecting for Health’s Additional Supply Capability and Capacity (ASCC).

On the basis of what they have said in the past, the NPfIT senior responsible owner Sir David Nicholson and officials at the Department of Health and NHS Connecting for Health, will defend all payments to BT as value for money.

Indeed, when Nicholson, the NHS Chief Executive, was asked last month by the chair of the Public Accounts Committee Margaret Hodge whether he was claiming that money spent to date on the NPfIT  had not been wasted and will potentially deliver value for money Nicholson confirmed that he did say this.

“Yes, yes,” replied Nicholson.

However the original NPfIT contracts set down plans for fully-integrated London-wide care Records systems by 2010, which has not happened.

The scale of the increases raises questions of whether officials at the Department of Health are too close to the NPfIT suppliers to be regarded as independent arbiters on contract negotiations and change control notices.

There’s a strong argument for the DH to transfer control of the NPfIT contracts to the Cabinet Office. Nicholson, the DH and CfH will not give up their hold on the NPfIT or the LSP contracts, or disputes. Perhaps David Cameron, who has taken a personal interest in the NPfIT, should order that the Cabinet Office minister Francis Maude take control.

Improvements in the NHS in ways of working, such as the standardising of medical forms for data collection,  and IT-based innovation, are much needed. But not at any cost.

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

Posted on 03/06/2011 | 1 comment

By Tony Collins

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

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

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

The actions range from:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Maude said:

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

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

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

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

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

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

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

Are officials undermining ministerial plans to boost SME work?

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

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

Link:

Home Office SME Action Plan.

HMRC SME Action Plan

All departmental action plans.

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CSC’s future in NHS IT – an analysis

Posted on 02/06/2011 | Leave a comment

By Tony Collins

              We trust the Cabinet Office more than the Department of Health to terminate or re-negotiate CSC’s £3.1bn NPfIT contracts.

  •  CSC’s strong position in NHS IT
  • Could CSC claim hundreds of millions from DH?
  • We’d be over a barrel, warns Connelly
  • More expense to cancel CSC’s contract than complete it, says Connelly
  • Are Connelly’s arguments flawed?
  • What happened to the concept of cutting your losses?
  • Remove life support for CSC’s contracts says Techmarketview 
  • CSC sees NHS IT as global reference site
  • CSC MoU is “ready to go”
  • Coalition reviews of CSC contracts a “stamp in the passport”
  • CSC will split Lorenzo into smaller chunks
  • No one NHS trust will dominate requirements

The share price of CSC, one of the biggest NHS IT suppliers, fell by 11% in New York trading this week, after its financial year-end forecast fell short of analysts’ estimates, according to Bloomberg.

Computer Sciences’ share price fell $4.76, or 11 percent, to $39.33 and although today [2 June 2011] the price is up slightly it is far below the 52-week high of $56.61. Bloomberg says that CSC has been hurt by delays in federal contract decisions and is also working to revise its NHS contract in the U.K. CSC has £3.1bn worth of NPfIT contracts.

CSC’s strong position in NHS IT

Despite the temporary knock in confidence for CSC over its share price, in part because of the NHS uncertainties, CSC remains in a strong negotiating position over the future of its work for the UK health service.  

Could CSC claim hundreds of millions from DH?

Christine Connelly, the Department of Health’s CIO, told the Public Accounts Committee on 23 May 2011 that if the DH terminated its contract with CSC for convenience [rather than terminate for breach of contract] CSC could claim hundreds of millions in compensation.

Connelly also said there is the “potential that the supplier may then come to us and seek damages based on the work in progress that they have on their balance sheet today, with a view—not that I am saying at this point that we would share it—that we have impacted their ability to get return on that asset that we were holding.

“So they may come to us and seek damages as a proportion of that balance sheet value. Again, that may be several hundred million pounds”.

Further, by terminating CSC’s contract, the Department of Health would have to support NHS trusts that had bought CSC systems under the NPfIT.

Connelly said:

“I am not talking about what it costs in terms of running those other systems, but there would be a cost if we decided no longer to have Lorenzo or [iSoft’s] IPM or whatever. We would have to take the people who are currently using those systems and move them to something else; that would be a transition cost.

“There then is likely to be a period where we would still be running the systems that we had now terminated. If you look at what happened to us in the South with Fujitsu, Fujitsu increased the cost of supporting the systems. They almost doubled the cost compared to the contract that we had.

We’d be over a barrel, warns Connelly

“So for the period before we had transitioned the systems across, we would expect to pay some premium on that support and obviously we would seek not to do that, but given that we would then be over a barrel, because we are running systems that one supplier has provided and we have now terminated, if we do not manage that well that could be a very difficult position.

More expense to cancel CSC’s contract than complete it, says Connelly

“So potentially, if you ask me about the absolute maximum [the DH is exposed to on its CSC contracts] we could be exposed to a higher cost than the cost to complete the contract as it stands today.”

Are Connelly’s arguments flawed?

But Connelly’s comments appear to make several assumptions namely that:

a) the DH hasn’t a strong legal case against CSC for breach of contract. In fact the DH should be able to credibly contest any claim by CSC for hundreds of millions of pounds in compensation.

b) CSC could withstand a long legal case against the UK government. In fact Fujitsu wants to settle its legal dispute with the Department because the row could damage its relationship with the coalition.  The policies of the coalition mean that suppliers no longer have isolated relationships with departments. Damage to a relationship in one department could affect a supplier’s relationship with government as a whole.

CSC is one of the top 10 suppliers to the UK Government. It will wish to avoid any dispute with the DH that could affect its relationship with the Cabinet Office’s new Crown representatives.

c) it would cost a fortune supporting NHS trusts that had bought NPfIT systems from CSC. In fact there are several healthcare suppliers – other than CSC and BT – that have been supporting and enhancing NHS trust systems outside of, and within, the NPfIT. They could support former CSC trusts at a fraction of the cost of BT [or CSC].

What happened to the concept of cutting your losses?

Anthony Miller, managing partner at market analyst Techmarketview, says it is “utter rubbish” to suggest that cancelling CSC’s contract will cost more than seeing it through to the bitter end. “Has the Government no idea about the concept of ‘cutting your losses’?” asks Miller.

Remove life support for CSC’s contracts says Techmarketview 

He adds:

“It should be clear to everyone involved that CSC’s NHS IT programme has deteriorated from ‘walking wounded’ to ‘do not resuscitate’. The sooner life support is removed, the better for all concerned.”

CSC sees NHS IT as global reference site

CSC, however, continues to see the NPfIT and its NHS IT work as a global reference site for healthcare IT.

Guy Hains, CSC’s President, Global Healthcare, told analysts last month that the NHS component of its business “is still the largest programme globally [and] is the reference point for most of our conversations with other national governments”.

He added: “It’s that experience, the learning points, the good and the bad, that carry forward into most of our development work we are doing elsewhere…”

CSC MoU is “ready to go”

Hains appeared confident that a new memorandum of understanding on its NPfIT work would be signed imminently. “We’ve got government reviews to complete. That’s imminent. We’ve done a lot of work regarding alignment with the NHS, and the MoU in that sense is ready to go”.

Coalition reviews of CSC contracts a “stamp in the passport”

He referred to the reviews of CSC’s NHS contracts as a “stamp in the passport before we go forward”. He said that creating Lorenzo code is “80% done”, adding: “We’ve got some important work to do and it relates to the clinician use and the very much frontline use of the system, and we’ve been learning with the NHS about the better way that we can deliver that”.

CSC will split Lorenzo into smaller chunks

CSC is to release Lorenzo in smaller chunks. “We’re doing it in ten smaller delivery units rather than two major releases. And we’ll be able to deploy those in a separable, incremented way. There’s no question that that will help digestion as it goes into the NHS”. As for working with early adopters, CSC is going through a “radical change in development”.

Hains said that rather than develop the software and then go through extended testing, “we are bringing the engagement of those lead clinicians and lead trusts upstream right into the requirements, refinement and capture stage, so that will allow us to shorten the time to market for the whole programme”.

No one NHS trust will dominate requirements

CSC is putting “governance into the programme” that means that one single trust doesn’t dominate in its requirements. “We’re getting a more common requirement through an expert user group.”

**

Comment:

The Department of Health gives the impression that it is over a barrel, that it cannot afford to fall out with CSC. But it’s clear to others that it is the Department’s commercial lawyers that are cringing before CSC, asking to be forgiven for being a nuisance. In essence the Department is saying to CSC’s lawyers: “Do with us what you will.”

Can public funds be entrusted to the Department of Health in such circumstances?

Richard Bacon, a Conservative MP on the Public Accounts Committee who has followed the NPfIT for many years, told ComputerworldUK that CSC’s contract should be abandoned. He said that the company “should not be rewarded for failure”. He reacted with disbelief to the suggestion that it would cost more to cancel the contract than complete it.

“I find that idea incredible, staggering,” he said. The Department’s comments could be a negotiating ploy to strengthen its arguments around the continuation of the programme, he added.

He said:

“If it’s actually true that it would cost more to cancel, then it’s a scandal. It would be an enormous indictment of [NHS chief executive] David Nicholson as the project’s Senior Responsible Owner, and of Connecting for Health, which allowed such a deal to be signed. “If it’s the truth, then those officials should be dismissed.”

It’s hard to argue with Bacon’s logic. Indeed we are not sure the Department should be taking a lead in any negotiations with CSC or BT. The NPfIT contracts should be in the hands of the Coalition government, via the Cabinet Office, not the Department of Health’s.

The Cabinet Office represents the taxpayer. The Department of Health’s informatics directorate represents a variety of interests including its own. Those interests seem tied to the continuance of the NPfIT.

*Thanks to David Moss for drawing my attention to the Bloomberg article on CSC’s share price.

Links:

Richard Bacon’s views on NHS IT.

NHS urged to turn off life support for £3bn CSC contract.

NPfIT – Our view on what should happen now.

Why did the NPfIT fail?

Health CIO Christine Connelly hits back at National Audit Office.

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

Posted on 02/06/2011 | 2 comments

By Tony Collins

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

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

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

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

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

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

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

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

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

Campaign4Change comment:

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

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

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

Harley told the Public Accounts Committee last month:

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

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

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

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

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

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

How Alpha.gov.uk came about:

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

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

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

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

Links:

How Alphagov might change UK government for the better.

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

Agile in government IT – don’t knock it.

10 things Alphagov gets right.

10 things Alphagov gets wrong.

Alpha.gov.uk

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NPfIT – our view on what should happen now.

Posted on 25/05/2011 | Leave a comment

By Tony Collins

Far from being dead, the National Programme for IT is on the point of being re-invigorated.

That, at any rate, was the impression given on Monday by senior executives at the two main NPfIT suppliers, BT and CSC,  and by two senior officials at the Department of Health, Sir David Nicholson and Christine Connelly.

MPs on the Public Accounts Committee were questioning Nicholson, who is the NHS Chief Executive also the NPfIT’s Senior Responsible Owner, and Connelly, the Department of Health’s CIO, on a report published last week by the National Audit Office on the NPfIT detailed care records systems.

Nicholson and Connelly are among the most highly paid in Whitehall, earning between them nearly £500,000 a year; and the security and seniority of their positions might help to explain their confident replies.

Their allies at the PAC hearing were Patrick O’Connell, President, BT Health, and Sheri Thureen, President UK Healthcare, CSC. All four – Nicholson, Connelly, O’Connell and Thureen – argued for the continuance of the NPfIT. They gave the impression to MPs that the remaining years of the NPfIT, with a total of £4.3bn left to spend, are safe in their hands.

On the other side of the irreconcilable divide were the MPs on the Public Accounts Committee who comprise eight Tory MPs, five Labour and one Liberal Democrat. Labour’s Margaret Hodge chairs the committee. They were allied to the National Audit Office whose auditors say the £2.7bn spent so far on the national programme’s care records systems “so far does not represent value for money and we do not find ground for confidence that the remaining planned spend of £4.3bn will be different”.

At times the animosity between the two sides at the Public Accounts Committee was not concealed; and at one point even the NAO found itself under attack. There were few smiles or obvious signs that each side respected the other despite their disagreements.

To the board of a large private company that was confronting a contract on which a supplier had not delivered, the exchanges at the Public Accounts Committee might have looked odd.

This is because the suppliers and customer – CSC, BT and the Department of Health – were as one. On the whole they were defending the NPfIT against auditors and MPs who were representing taxpayers.

But the board of a private company, facing a contractual disagreement, could ask:  shouldn’t this NPfIT dispute be a matter of customer versus supplier?

This could never be because the customer, in this case, has messed up at least as much as the suppliers. Which may explain why suppliers and customer are on the same side, against the people who want to hold them accountable: the MPs and auditors.

Something similar happened after the fatal crash of a Chinook helicopter on the Mull of Kintyre in June 1994, which killed all 29 on board including 25 VIPs. Poor software was a suspected factor in the accident but the Department – the MoD – sided with the helicopter’s supplier in arguing that the equipment and software were sound.

So the MoD and the Chinook’s suppliers were on one side of the divide. On the other side were MPs, families of the dead pilots who were blamed for the crash, and other campaigners who discovered evidence that the Chinook was not airworthy at the time of the accident.

All this shows is that it can be difficult and even impossible to get to the truth after something has gone seriously wrong.

At the end of Monday’s Public Accounts Committee – which lasted about two and a half hours – neither side would have been satisfied. And it’s against this background that £4.3bn has yet to be spent on the NPfIT.

Margaret Hodge made the point that £4.3bn would enable the NHS to employ 200,000 more nurses.

The NPfIT represents change  – but some would say it’s for the worse. At Campaign4Change we welcome the independent review of the NPfIT CSC contracts by the Major Projects Authority of the Cabinet Office. The review has already begun.

We recognise there is much pressure on the Authority to approve the contracts and allow the Department of Health to sign a memorandum of understanding with CSC. Indeed the NPfIT minister Simon Burns has indicated that he’d like the NPfIT to continue.

This is the sort of pressure that can make a nonsense of an “independent” Cabinet Office review.

It’s clear to us that the national programme, as structured, pits the Department of Health and its suppliers against anyone who criticises them. In the ring, in one corner, are the Department of Health, Sir David Nicholson, Christine Connelly, CSC and BT, together with consultancies and other organisations and institutions that have a financial interest in the continuance of the NPfIT.

In the other corner are the organisations that represent the taxpayers: the National Audit Office, MPs and potentially the Cabinet Office. Many of these representatives regard the arguments used to keep the NPfIT alive as learned gibberish.

That’s not a recipe for successful change.  In the view of Campaign4Change, BT, CSC, NHS Connecting for Health, David Nicholson and Christine Connelly should discuss in a non-legalistic way how to wind down the national programme in a way that minimises the costs to taxpayers and the suppliers. Those at the centre should be setting standards, rather than specifying systems and negotiating contracts that NHS trusts don’t want.

Once a wind-down discussion reaches a conclusion, that can be put within a legal framework. That’s change the NHS can live with. Otherwise the NHS will be locked more securely into suppliers and contracts they hadn’t endorsed in the first place – and the £4.3bn that has yet to be spent may be more good money going into a congenitally bad programme.

Leaked memo reveals CSC’s plans for new NHS IT deal.

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Agile in Government IT – don’t knock it

Posted on 20/05/2011 | 1 comment

By Tony Collins

Alistair Maughan, a lawyer who specialises in large ICT projects, argues that agile won’t work in government ICT.

“The Government ICT strategy had some good ideas. Agile project management isn’t one of them,” says Maughan in a cogent and informed blog post for Computer Weekly.

I asked the Institute for Government to respond to Maughan’s comments. The Institute advocates agile in its report System Error: Fixing the flaws in government IT.

My thanks to Jerrett Myers, a senior researcher at the Institute, who has written the piece below, in response to Maughan’s comments.

Agile government ICT – a question of innovation

Like any management innovation, there are plenty of challenges in adopting an agile approach, but fortunately none are insurmountable.  The innovation guru Everett Rogers outlines a series of factors that influence the rate of adoption of an innovation – in effect setting out a test for how likely it is for an innovation to be implemented.

The first is test is the relative advantage of the innovation – the degree to which a new way of working is perceived as superior. Government departments and agencies have reported extremely positive results from agile projects. Indeed, the Department for Work and Pensions, the Ordnance Survey and the Ministry of Defence have all used agile methods for delivering ICT projects.

Regularly changing priorities, advances in technology and the desire for more cost-effective and user-led solutions require a far more responsive approach to running ICT projects.  Of the thousands of people who have downloaded our recent report, we have had an overwhelmingly positive response to the idea for government.

So how can government make it work? The second innovation success factor is ‘trialability’ – can departments test out this approach on a limited basis.  Again, the good news is that at relatively low cost, departments can use an agile approach for running ICT projects – and indeed they are committed to doing so.

The third characteristic is ‘observability’ – are the results of the innovation visible to others.  Whitehall has committed to creating a centre of excellence across government and the private sector which can enable fast start-up and mobilisation for agile projects.  It will also establish a cross government approach and capabilities for agile.  This should serve to raise the profile and ‘observability’ of agile projects.

The fourth factor is complexity – how difficult is an innovation to use and understand.  Here, the government faces a greater challenge.  New skills will be required which are ‘in-house’ rather than bought in through contractors.  This includes making difficult trade-offs and prioritising effectively. Regular testing, planning and demonstration will need to take place to handle risks. And by taking part in agile projects, it can serve to internalise agile values, build skills and help to foster support, understanding and momentum for change.

The final factor is perhaps the greatest barrier to overcome – compatibility – the degree to which an innovation is consistent with existing values, norms and operating procedures.  Maughan underscores how different the agile approach is for running ICT projects. The project approval processes and legal arrangements governing contracts need to be adapted to be far more responsive and receptive to agile delivery.

Equally important is the culture of empowerment that needs to surround projects.  Fortunately, the experience in other large organisations in the public and private sector suggest this transition is possible.

At a large government agency, budgeting and governance processes have changed to accommodate and encourage more agile projects.  Its new investment approval process involves obtaining early permission to fund development immediately without a fully specified business case being approved (although a robust justification must still be provided). The projects are given permission to spend at a particular rate over a period of time and return to the investment board at specified intervals for further approvals and to update on progress.

On each of these points, it appears that agile can succeed with the right leadership and determination for change. Ultimately, however, this isn’t just about adopting a new approach to government ICT, reforming the procurement process or taking a more sophisticated approach to managing risk.  Instead, it is a test of Whitehall’s capacity for innovation.

**

Jerrett Myers is a Senior Researcher at the Institute for Government. The Institute for Government’s report, System Error: Fixing the flaws in government IT can be downloaded here.

Alistair Maughan’s blog post for Computer Weekly is here.

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

Posted on 05/05/2011 | Leave a comment

 

By Tony Collins

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

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

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

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

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

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

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

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

Comment

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

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

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

Posted on 14/04/2011 | Leave a comment

 

By Tony Collins

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

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

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

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

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

The entrepreneurs are:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Entrepeneur  Sherry Coutu said:

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

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

Jon Moulton said:

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

The Innovation Launchpad is here.

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Can you outsource to cut costs and boost service levels?

Posted on 14/04/2011 | Leave a comment

By Tony Collins

At an outsourcing conference on 7 July at the Barbican, London, two of the main discussion points will be around these questions:

– What is the role for outsourcing in cutting the public sector deficit?

– Can outsourcing cut costs and improve service levels?

Organisers of the “Delivering cost-effective public services” conference are hoping to have as a speaker  Katharine Davidson, Director, Efficiency and Reform Group, Cabinet Office, who is a linchpin in the Government’s plans for a radical reform of the machinery of central government.  

Davidson has been invited to give a keynote talk on private sector involvement in the way public services are delivered.

Confirmed speakers include:

– Veronica Mansilla, Project Director, Office of Fair Trading

–  Derrick Anderson, Chief Executive, Lambeth Council 

– Sue Gregory, National Director, Inspection Delivery, Ofsted 

Further details are here.

 

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