Tag Archives: public sector

Time for truth on Universal Credit IT

Posted on 03/04/2012 | 5 comments

By Tony Collins

A normally-reliable contact says that the IT project for Universal Credit is in trouble.

A deadline this month to lock-down features in the scheme will not be met, says the contact. This failure will jeopardise the go-live date of October next year for the start of Universal Credit.

The contact also says that the Government will make an announcement on the scheme in September which may refer to a write-off of at least £150m on the IT project. The suggestion is that although the scheme is in trouble officials may be reluctant to impart the whole truth to ministers.

We wonder about the difficulties of agreeing system features when there are so many parties involved in the IT project: HMRC, DWP, local authorities, banks and private sector employers. The contact also says Oracle is having trouble handling functionality.

Officially all is well. The Secretary of State for Work and Pensions, Iain Duncan-Smith, spoke with confidence about the future of the scheme in the House of Commons last week.

That said, he told Parliament on 5 March about the “issues and problems” related to HMRC’s Real-Time Information project which is an essential part of the Universal Credit IT project. He said: 

“HMRC, which is now responsible for this measure, meets me and others in the Department regularly. We have embedded some DWP employees in the HMRC programme; they are locked together. They are, as I understand it, on time, and they are having constant discussions with large and small employers about the issues and the problems, and assessing what needs to be done to make this happen and to make all the changes.

“We must remember that all those firms collect those data anyway; the only question is how they report it back within the monthly cycle. We are on top of that but, obviously, we want to keep our eye on the matter.”

Problems with the IT for Universal Credit – the Government’s leading “agile” software project – may bring a smirk to the faces of those who believe that departments cannot manage agile-based schemes. But agile proponents have long said that Universal Credit is only partially agile – and they have argued that agile should not be mixed with traditional software-writing approaches.

Suppliers on Universal Credit, which include HP, Accenture, IBM,Capgemini and Oracle, are not particularly well known for their love of agile on Government IT projects.

Time for the truth  

The Department for Work and Pensions is refusing to publish any of its reports and assessments on the IT for Universal Credit. The secret reports include:

–   A Project Assessment Review in November 2011

– Universal Credit Delivery Model Assessment Two (McKinsey and Partners)

– Universal Credit end-to-end Technical Review (IBM).

Comment

Officials and ministers speak publicly about the solid progress on Universal Credit IT while refusing to publish their internal reports on progress or otherwise of the scheme.

Past NAO reports have shown that ministers and sometimes senior officials are sometimes kept in the dark when major IT-related projects go wrong. Project steering groups are told what they want to hear. The Programme Board on the NPfIT discussed successes with enthusiasm and hardly mentioned serious problems, judging by minutes of its meetings.

We hope that all is well with Universal Credit IT. The project is, after all,  an advert for innovation in the public sector. If it’s in trouble the truth should come out. Keeping it quiet until September means that suppliers will continue to be paid for several months unnecessarily – perhaps to keep them supportive?

Labour was overly defensive and secretive about its many IT-related failures whereas “openness” is the coalition’s much-favoured word. It’s a pity it has yet to be applied to the Universal Credit IT project.

Secret DWP reports.

Who’ll be responsible if Universal Credit goes wrong?

Banks “unlikely to deliver” Universal Credit

Universal Credit IT plans too optimistic warn MPs.

Universal Credit latest

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Posted in excessive secrecy, Freedom of Information, Government IT, innovation, managing change, managing outsourced services, npfit, openness and transparency, operational issues, Real-Time Information, software development, Universal Credit

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Millions of pounds of secret DWP reports

Posted on 29/03/2012 | 10 comments

By Tony Collins

The Department for Work and Pensions is keeping secret – as a matter of course – millions of pounds worth of reports it has commissioned on a wide range of IT and other projects including Universal Credit.

A DWP spokesperson, confirming that all the reports (below) are not published, told Campaign4Change that the reports have limited distribution after commitments and assurances were given to their “authors”.

These authors include Deloitte, PricewaterhouseCoopers, Capgemini, KPMG, Gartner, McKinsey, Atkins, Tribal, Compass and IBM.

In the past, when the DWP has told the Information Commissioner that reports needed to be kept confidential because of commitments to suppliers, the Commissioner has found that the suppliers were content to have the reports published.

A spokesman for the DWP told us: “Consultants’ reports provide additional, often expert, information for the DWP to consider and have a limited distribution following commitments and assurances on disclosure with the authors.”

Lack of accountability

While the reports remain hidden the companies producing them will remain unaccountable for their contents. In our view the excessive and automatic secrecy brings a risk that taxpayers will end up paying millions of pounds for consultancy reports that tell the DWP what it wants to hear.

Would a consultancy be re-hired if its reports were sharply critical of the DWP and its projects?

And is the DWP’s instinctive secrecy appropriate in an era of so-called open government? The reports are not about Britain’s nuclear secrets. In the case of Universal Credit, reports on the progress or otherwise of the programme could be of interest to thousands of people whose benefits will be affected by the scheme.

We believe the DWP should be open by default, but will that ever happen? Epsom MP Chris Grayling is the current DWP minister responsible for the secret reports.

The reports

Below is a list of some of the unpublished consultancy reports produced for the DWP in 2010 and 2011:

Contract title Supplier Value (£)
Resource Management IT Healthcheck NSG 90,000
Jobcentre Plus Financial Information System Capability Review Capgemini 25,000
Olympic and Paralympic Legacy Plan Atkins 25,000
Undertake a Review of Data Centre Migration Approach PricewaterhouseCoopers 20,000
Organisational Design Project Deloitte 543,000
Developing a Business Intelligence Operating Model Deloitte 185,672
CIT Software Project Discovery Phase Deloitte 195,528
Support to CIT Improvement Programmes Tribal 760,000
Information Security Assurance Project Atkins 49,950
Assistance with Resource Management System Improvement Plan   Programme Phase 2 Atkins 72,690
Office for Disability Issues TrailBlazer Support—Housing Sitra 51,300
Office for Disability Issues—Trailblazer Resource Allocation for   Work Choice In-Control 11,750
Call Off Framework Agreement for Right to Control TrailBlazers PricewaterhouseCoopers 97,902
Commercial Assurance—Automated Delivery Service—Jobseekers   Allowance Atkins 47,300
Corporate Services Division Cost Optimisation Programme Network   and Telephony Xantus 94,370
National Registration Authority Audit (tScheme Audit) KPMG 10,727
Shingo Prize Pilot The Manufacturing   Institute—TMI Pract. Services 11,000
Business Control Strategic Improvements PricewaterhouseCoopers 750,000
A review of DWP Vendor Management Activities Procurement   Excellence 52,250
Assistance with Resource Management System Improvement Plan   Programme Phase 3 Atkins 94,050
Pension Reform Delivery Programme Closure Activity PricewaterhouseCoopers 100,000
Benchmarking Hosting Services Gartner 23,456
Application Delivery Centre (ADC) Validation Services Requests Atkins 97,500
Additional Modelling Support for Dynamic Benefits Oliver Wyman 19,500
Strategic Financial Consultancy Support to Help deliver Work   Programme KPMG 362,000
Shared Services Resource   Management Contract (RMOC) Benchmarking Compass 15,000
Final   assurance of DWP IT Strategy Capgemini 20,000
Research   into the Capacity of the Health Care Professional Market Deloitte 48,678
Commercial   support to the Work Programme Richard   Aitken-Davies 45,000
Support   to DWP Finance and Commercial Function (Organisation Design Review) PricewaterhouseCoopers 20,000
Support   to DWP CJT Cost Reduction Programme Bramble 1,065,000
DWP   Shared Services Delivery Model Options appraisal Deloitte 225,000
Benchmarking   of DWP Shared Services PricewaterhouseCoopers 19,000
Universal   Credit Delivery Model Assessment Phase 2 McKinsey and Partners 350,000
Universal   Credit Strategic Support Capgemini 505,000
Review   of Transforming Letters Project Deloitte 19,550
Application   Delivery Project Independent Market Assessment Compass 19,000
Universal   Credit End to End Technical Review IBM 49,240
Digital   Customer Total Experience Design Requirement Deloitte 16,667
Universal   Credit Supplier Workshop-Facilitation Xantus 11,399
Consultancy   Support to develop Flexible New Deal Exit Strategy KPMG 12,000
Support   of CIT Improvement Initiatives KPMG 250,000
Risk   Assurance Division Strategic Partner PricewaterhouseCoopers 1,000,000
Benchmarking   of the HPES Hosting Contract Compass 172,105
Compensating   People with Occupational Mesothelioma Deloitte 25,616
Specialist   tScheme Annual Audit of DWPs National Registration Authority KPMG 33,000

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Posted in Campaign4Change, Deloitte, DWP, excessive secrecy, Government IT, IBM, openness and transparency, Politics, Universal Credit

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CIO behind FBI’s Agile-developed Sentinel IT project to leave his post

Posted on 28/03/2012 | Leave a comment

By David Bicknell

The US CIO behind one of the world’s highest profile public sector Agile IT projects is to leave his post and return to the private sector.

Chad Fulgham, CIO at the FBI will leave next month having overseen the creation of the FBI’s Sentinel case management system. Sentinel replaces the FBI’s outdated Automated Case Support system, with the hope that it will transform the way the FBI does business by moving it from a primarily paper-based case management system to an electronic work flow-based management system of record with enhanced data sharing capabilities.

“When I was hired as the CIO, it was understood Sentinel was going to be one of my top priorities,” said Fulgham. “Today, I can tell you the software coding is done, the new hardware is in place, and it has been quite impressive during initial performance testing. We have trained hundreds of FBI special agents and employees, and it will have a lasting impact on this organisation.”

In a press release announcing Fulgham’s departure, the FBI said that “using a progressive Agile software development methodology, partnering with industry, and employing an aggressive deployment schedule, Sentinel is scheduled to be implemented in summer of 2012.”

The US Inspector General recently issued a report into the use of Agile in the Sentinel project. You can read the report here

The US magazine Information Week has also covered the story

Lifting the lid on Agile within a public sector IT project

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Posted in Agile, Campaign4Change, CIO, Gateway reviews, Government IT, IT projects

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Universal Credit: who’ll be responsible if it goes wrong?

Posted on 27/03/2012 | 1 comment

By Tony Collins

When asked whether Universal Credit will work, be on budget and on time, Ian Watmore, Permanent Secretary, Cabinet Office, gave a deft reply. He told Conservative MP Charlie Elphicke on 13 March 2012:

“From where I sit today, I think all the signs are very positive. I am never going to predict that something is going to be on time and on budget until it is.”

If the plans do not fall into place who, if anyone, will be responsible? In theory it’ll be Iain Duncan Smith, the Secretary of State for Work and Pensions. But as Watmore told the Public Administration Committee, there are several other organisations involved. Although the DWP and HMRC are building the IT systems, the success of Universal Credit also relies on local authorities, which are overseen by the Department for Communities and Local Government.

There are also the Cabinet Office and the Treasury whose officials seek to “ensure that what is going on is appropriate” said Watmore.

If Univeral Credit goes awry all the departments may be able to blame the private sector: the employers that must pass PAYE information to HMRC so that the Revenue’s Real-Time Information element of Universal Credit can work.

David Gauke is the minister responsible for HMRC so would he take some of the blame if Real-Time Information didn’t work, or was not on budget, or was delayed?

Or would the main IT suppliers Accenture and IBM take any of the blame? Highly unlikely, whatever the circumstances.

There is also a dependency on the banks.

But nothing is wrong … is it?

All those putatively responsible for Universal Credit continue to say that all is going well.

Duncan Smith told the House of Commons on 5 March 2012:

“We are making good progress towards the delivery of universal credit in 2013, and I have fortnightly progress meetings with officials and weekly reports from my office. I also chair the universal credit senior sponsorship group, which brings together all Government Departments and agencies that are relevant to the delivery of universal credit.

“Design work is well under way and is being continually tested with staff and claimants, and the development of the necessary IT systems will continue in parallel.”

He said that universal credit will reduce complexity by putting together all the benefits that are relevant to people going back to work – though benefit systems that are not relevant to the coalition’s “Work programme” will not be included in the DWP’s Universal Credit IT consolidation.

To reduce risks Universal Credit will be phased in over four years from October 2013, each stage bringing in a different group of claimants.

But …

Campaign4Change has asked the DWP to publish its various reports on the progress of Universal Credit and it has refused, even under the Freedom of Information Act. It seems the DWP’s secretiveness is partly because all of the risks related to Universal Credit have not been mitigated. We will report more on this in the next few days.

Meanwhile to try and answer the question in our headline: who’ll be responsible if Universal Credit goes wrong? The answer is: the private sector probably. Or rather nobody in the public sector.

Can hundreds of millions be spent on Universal Credit in an agile way?

Universal Credit suppliers Accenture and IBM look to India for skills.

Is Universal Credit a brilliant idea that’s bound to fail?

Universal Credit latest

Universal Credit and the banks.

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Posted in Agile, Campaign4Change, capacity building, change, change management, Freedom of Information, Government IT, IBM, India, IT projects, local government, managing change, managing outsourced services, openness and transparency, outsourcing, oversight, Politics, procurement, project management, public sector, Real-Time Information, reducing cost strategically, risk, Universal Credit

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Osborne’s Budget speech may provide update on Coalition’s mutuals plans

Posted on 19/03/2012 | 1 comment

By David Bicknell

Will Wednesday’s Budget bring further news on the Coalition’s plans and prospects for public sector mutuals?

Yesterday’s Independent believes it might. An article by Business Editor James Ashton suggests that Chancellor George Osborne  is likely to “talk up the progress made in Whitehall reforms” in his Budget statement.

It argues that “thousands of civil servants will be transferred into the private sector under a blueprint to shake up Whitehall that will be unveiled next month.”

Ashton suggests that new recommendations on spin-outs are due to be outlined  in a report by Stephen Kelly, the Cabinet Office’s Crown Commercial Representative.

The report is expected to say that “there are numerous government operations that could be potentially commercialised, either through forging partnerships with outside firms or seeking capital injections.”

Related Link

Stephen Kelly – the man at the coal face of the Big Society

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Posted in Campaign4Change, mutualisation, mutuals, private sector, private sector lessons for the public sector, public sector, public services

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Lessons from “stupid” NHS IT scheme – Logica boss

Posted on 13/03/2012 | 1 comment

Some wise words from Andy Green, CE of Logica, on lessons from the NPfIT and other failures

By Tony Collins

Andy Green, CE, Logica

Andy Green, chief executive of Logica, speaking to the BBC’s Evan Davis about the NHS National Programme for IT, NPfIT, said:

“It is a stupid thing for the supply chain to have answered, and it’s a stupid thing for the customer to have asked for.”

Green was speaking on Radio 4’s The Bottom Line about corporate “cock-ups and conspiracies”. Other guests were Phil Smith, chief executive of Cisco UK and Ireland, and entrepreneur Luke Johnson.

Green, who joined Logica as CEO in January 2008, said he was in one of the bidders for the NPfIT when he was at BT.

The plan, he said, had been to put the same system into every hospital but later foundation hospitals were able to opt out of the NPfIT.

“Half way through [the NHS IT programme] foundation hospitals were invented,  and suddenly foundation hospitals did not have to go with what the NHS said at all”.

He added: “There were fundamental errors in the whole procurement process, and then real difficulty in delivering what had been promised.”

Evan Davis said the NHS IT scheme had cost billions, achieved little and had been running for years. He asked Green: “What’s the story?”

Green said some things went well including the supply of a network that connects pharmacies and doctors. But …

“What  had been promised by the supply chain was fantastic software that had not been designed yet that was going to completely revolutionise hospitals and delivering that proved to be horrendous… in the end it is foolish to set out on a programme that is going to take seven years with a fixed procurement up front, which says we all know everything about it …”

Lessons

Green spoke of the need for the supplier to understand exactly what the customer wants and whether it is deliverable before the parties agree to draw up a project specification.

“I think the world is beginning to learn about incrementalism. Let’s do something that we can all see and understand.

“Some of our clients we now work with in common teams – we call it co-management – and only when we have worked out exactly what is going to work in the client, and we can deliver, do we specify it as a project.

“Those things tend to go a lot better. We have got used to the fact that we don’t know everything.”

Luke Johnson

Luke Johnson, who is a former chairman of Channel 4, criticised IT suppliers for not getting it right often enough.  “I have bought quite a lot of projects and been involved as a customer many times… As a customer it is a very scary thing because clearly you are not an expert. Your providers are experts and yet they do not seem to be able to get it right often enough it seems to me, given how much they charge.”

Green said there is a high failure rate in the IT industry. “The client sets out one view at the beginning and then they have to change. The sensible defence to this is the partitioning into smaller items and relationships.

“We bluntly always think of our clients over the long run. You need to know people so that you can sit down and have a decent conversation. Too often when these things start to go wrong everybody runs for the contract. Experienced buyers and sellers do not do that: they run for each other and they talk it through, and they work it out, and they put it back on track.

“It’s value that matters. It’s doing something that really changes Patisserie Valerie’s business. [Luke Johnson is chairman of Patisserie Valerie.] What can you do that would transform that. If you can get that done, then if it over-runs by 20% it probably does not matter.”

Luke Johnson: “It depends how much money you’ve got.”

Lowest-price bids

Phil Smith, Cisco

Phil Smith of Cisco said government often has the biggest problems because “they squeeze so much in procurement there is little good value and goodwill left”.He said that on good projects problems are tackled by cooperation but “if every piece of value has been squeezed out before you procure it, your only option is to get something back from it”.

Beware procurement experts

Johnson said if procurement experts take control, and their mantra is to save money, it can often lead to trouble. “I fear that in many aspects of business, it gets down exclusively to price rather than value.

“Quality is out the window. They [procurement experts] can show a saving so they have justified their bonus but the supplier may be rubbish.”

Green said government is in a difficult position when a project starts to go wrong. “You are stuck in a procurement and the poor individual responsible is almost certainly facing a union or a consumer group or a doctor who doesn’t want the thing to happen anyway.”

Evan Davis made the valid point that the costs of projects in the public sector have to be underestimated to get approved. Realistic estimates would be rejected as too costly.

“… The person who is championing this project has to demonstrate to superiors that it is not too expensive. It is only by taking the cheapest bid and starting the thing off that you can sell the project higher up and of course down the line it costs a heck of a lot more.”

Luke Johnson: “We all know in many sectors there are providers that will take things at cost or even less with a view that they will somehow bulk it out and make a margin on the way. They know the client will need variations.

Innovation means taking risks

Luke Johnson: “If you want an innovative society, if you want one that is willing to take risks, to generate new technologies, new jobs, new businesses, then it involves failures and cock-ups.

“I think the British have got vastly better in recent years in accepting that as part of the journey and that is incredibly healthy.”

BBC R4’s The Bottom Line – Cock-ups and conspiracies.

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Posted in Campaign4Change, change management, Government IT, health records, IT projects, IT-related failures, managing change, managing outsourced services, NHS, npfit, operational issues, private sector lessons for the public sector, procurement, project management, supplier relationships

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Good news: IBM-led shared services company is recognised as “failing”

Posted on 17/02/2012 | Leave a comment

By Tony Collins

After years of depicting problems at an IBM-led shared services company, Southwest One, as teething, Somerset County Council has conceded that the venture is failing.

The Conservative leader of Somerset County Council Councillor Ken Maddock used the word “failing” nine times in a speech on Wednesday about Southwest One, a company run by IBM on behalf Somerset County Council, Taunton Deane Borough Council and Avon and Somerset Police.

Southwest One’s contract, which was signed in the early hours of a Saturday morning in 2007, was doomed from the start, in part because of the complexity of the arrangements and in part because of pervasive secrecy that antagonised hundreds of Somerset council staff who were already opposed to the joint venture; and they were the very staff who were seconded to Southwest One to make the venture work. [It’s a truism that staff, if they are motivated, will often make their way around difficulties but may be overwhelmed by them if not motivated.]

Last month Campaign4Change set out in detail some of the most disruptive and continuing problems at Southwest One; and we said the difficulties could not be tackled in earnest while Somerset council and its partners were portraying the venture as a success. On 31 January 2012, our post was mentioned on the website of the local Conservative MP Ian Liddell-Grainger.

The good news now is that the council has, this week, for the first time, spoken of Southwest One in unequivocally negative terms. No longer is every council criticism of the company qualified by a positive comment, such that one cancels out the other.

Whether our post last month has made any difference is not important. What’s pleasing is that IBM and Southwest One’s partners are free to make progress, now that Somerset has told it like it is. Much of the credit for the council’s emergence from its long, self-administered anaesthesia lies with Dave Orr who has campaigned for years to highlight the failings of Southwest One, as has Liddell-Grainger.

Maddock’s speech on Southwest One

Maddock’s speech to a full council meeting is reported at length by the Somerset County Gazette and by Liddell-Grainger.

Maddock said

“As an administration we inherited a partnership that promised a huge amount, but it was not delivering. Southwest One’s accounts year on year show losses, staggering losses just published of £31m, and failures to hit modest savings targets.

“We have bent over backwards to try to make this partnership work. But we have to state clearly that our primary duty in looking after the public’s hard earned money is to make sure we get the best possible deals, that we get the best possible value for the public’s money.

“I have to say that Southwest One is failing this test.

“We are currently looking at all our services and all our contracts to see whether we are doing the best we can for our customers,  whether we are providing the best possible services for our customers and at the best possible prices for our customers.

“I have to say that Southwest One is failing this test.

“We need a Council that can cope with future government cuts and rising demand. We will need to be efficient and flexible.

“I have to say that Southwest One is failing this test.

“Sadly, Southwest One is failing. It is failing to deliver promised savings; failing to cope with a changing financial landscape; failing to be flexible enough to adapt in challenging times and provide the best possible value for money.

“To make up for this failure, we will now accelerate our extensive review of everything that the council does: Almost half our most vital services are carried out by private sector or not for profit organisations – we will look to increase this where appropriate.

“We will encourage social enterprises, partnerships, communities and voluntary groups to get more involved in what we do and what we run. We will look to put the customer at the heart of what we do.

“And we will do this whilst we continue to do all we can to make Southwest One work. But I have to be clear; it is failing; it is inflexible; and it is intransigent. We are therefore looking at all the options available to us.

“I do have one final message for Southwest One – and that is to the staff and our Somerset County Council colleagues and secondees working there.  The message is this: This continuing failure is not about you. It is about the contract, the complications, the failed technology, the missed opportunities, the lack of promised savings.  It is about Southwest One itself, not about the people working for it.”

Comments on Maddock’s speech

Some of the comments on the Somerset County Gazette website were apt. One said “Somerset County Council has finally come to accept what we, the minions, have known for years: South West One is a failure and a pretty expensive one…”

Another said

“At last SCC admits to what everyone in the real world knew from day one …”

Comment:

One of the lessons from IT disasters in the private and public sectors is that things often start to improve once the main parties own up to the seriousness of the problems. The good news, perhaps, is that Southwest One may now be at its lowest point. It has at long last purged its bowels, so to speak.

Ian Liddell-Grainger’s website.

Southwest One gets £10m IBM amid “staggering” losses.

IBM struggles with SAP two years on – a shared services warning?

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Posted in Campaign4Change, capacity building, change management, IBM, IT projects, public services, reducing cost strategically, SAP, shared services, supplier relationships

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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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Understanding the politics of ‘stepping out’ to create a public sector mutual

Posted on 02/02/2012 | Leave a comment

By David Bicknell

I just read an excellent piece by Craig Dearden-Philips in the Guardian today about the politics involved in the spinning out of a public sector mutual.

He argues that if you, as a public manager, want to ‘step out’, you’ve not only got to do the numbers, you’ve also got to do the politics.

He suggests that politicians, or very senior executives, need three things. Firstly, they need to know if this fits in with the general tenor of where they see things going more widely in the organisation. Secondly, they want to know that the numbers add up.

And finally, and perhaps the most interesting, “politicians and senior managers need to know that they can influence the new body. For councillors and top executives, who are used to directly managing services, a spin-out can present a big operational and financial threat. They can no longer just recover a deficit elsewhere by plundering your budget. Nor, if they are no longer in charge, can they, in the event of a bad headline, tell voters they are putting a rocket under you! Again, the answer here lies in giving them a place at the table and moving the relationship from one governed by command and control to one where influence is exercised through a contract.”

Guardian Public Services Summit

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Posted in Campaign4Change, managing change, mutualisation, mutuals, Politics, private sector, public sector, public services

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DWP defends £316m HP contract

Posted on 27/01/2012 | 1 comment

By Tony Collins

The Department for Work and Pensions could lead the public sector in technical innovations. It has had some success in cutting its IT-related costs. It has also had some success so far with Universal Credit, which is based on agile principles.

It has further launched an imaginative welfare-to-work scheme , the so-called Work Programme, which seeks to get benefit claimants into jobs they keep.

Despite media criticism of the way the scheme has been set up – especially in the FT – a report by the NAO this week made it clear that the DWP has, for the most part, taken on risks that officials understand.

Some central government departments have updated business cases as they went through a major business-change programme and not submitted the final case until years into the scheme, as in parts of the NPfIT.

But the DWP has implemented the Work Programme unusually quickly, in a little more than a year, by taking sensible risks.  The NAO report on the scheme said the business case and essential justification for the Work Programme were drawn up after key decisions had already been made. But the NAO also picked out some innovations:

– some of the Work Programme is being done manually rather than rush the IT

– suppliers get paid by results, when they secure jobs that would not have occurred without their intervention. And suppliers get more money if the former claimant stays in the job.

– the scheme is cost-justified in part on the wider non-DWP societal benefits of getting the long-term unemployed into jobs such as reduced crime and improved health.

So the DWP is not frightened of innovation. But while Universal Credit and welfare-to-work scheme are centre stage, the DWP is, behind the safety curtain, awarding big old-style contracts to the same suppliers that have monopolised government IT for decades.

Rather than lead by example and change internal ways of working – and thus take Bunyan’s steep and cragged paths – the DWP is taking the easy road.

It is making sure that HP, Accenture, IBM and CapGemini are safe in its hands. Indeed the DWP this week announced a £316m desktop deal with HP.  EDS, which HP acquired in 2008, has been a main DWP supplier for decades.

DWP responds to questions on £316m HP deal 

I put it to the DWP that the £316m HP deal was olde worlde, a big contract from a former era. These were its responses. Thank you to DWP press officer Sandra Roach who obtained the following responses from officials. A DWP spokesperson said:

“This new contract will deliver considerable financial savings and a range of modern technologies to support DWP’s strategic objectives and major initiatives such as Universal Credit.

“The DWP has nearly 100,000 staff, processing benefits and pensions, delivering services to 22 million people.

“DWP is on schedule to make savings of over £100m in this financial year for it’s Baseline IT operational costs, including the main IT contracts with BT and HPES [Hewlett Packard Enterprise Services].

“All contracts have benchmarking clauses to ensure best value for money in the marketplace.

“The five year contract was awarded through the Government Procurement framework and has been scrutinised to ensure value for money.”

My questions and the DWP’s answers:

Why has the DWP awarded HP a £316m contract when the coalition has a presumption against awarding contracts larger than £100m?

DWP spokesperson: “The Government IT Strategy says (page 10) ‘Where possible the Government will move away from large and expensive ICT projects, with a presumption that no project will be greater than £100m. Moving to smaller and more manageable projects will improve project delivery timelines and reduce the risk of project failure’.

“HM Treasury, Cabinet Office and DWP’s commercial and finance teams have scrutinised the DWP Desktop Service contract to ensure that it represents the most economically advantageous proposition.”

What is the role, if any for SMEs ?

DWP: “There are a number of SMEs whose products or services will form part of or contribute to the DWP Desktop Service being delivered by HP, for example ActivIdentity, Anixter, AppSense, Azlan, Click Stream, Cortado, Juniper Networks, Quest Software, Repliweb Inc, Scientific Computers Limited (SCL), Westcon etc.”

Why is there no mention of G-Cloud?

DWP: “Both the new contract and the new technical solution are constructed in such a way as to support full or partial moves to cloud services at DWP’s discretion.”

Comment:

For the bulk of its IT the DWP is trapped by a legacy of complexity. It is arguably too welcoming of the safety and emollients offered by its big suppliers.

The department is not frightened by risk – hence the innovative Work Programme which the NAO is to be commended on for monitoring at an early stage of the scheme. So if the DWP is willing to take on sensible risks, why does it continue to bathe its major IT suppliers in soothingly-large payments, a tradition that dates back decades? What about G-Cloud?

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Posted in Agile, Campaign4Change, capacity building, change, change management, Cloud, Cloud Computing, G-Cloud, Government IT, IT projects, managing change, managing outsourced services, outsourcing, private sector lessons for the public sector, procurement, project management, public sector, public services, Real-Time Information, reducing cost strategically, reforms, supplier relationships, Universal Credit

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