Select Committee on Social Security Minutes of Evidence


Memorandum submitted by the Information Technology Services Agency (ITSA 1)

CONTENTS

EXECUTIVE SUMMARY

The DSS, Information Systems and Information Technology—ITSA's role

1. THE INFORMATION TECHNOLOGY SERVICES AGENCY (ITSA)

 1.1 About ITSA

 1.8 ITSA's Corporate role

1.10 IS/IT Provision

1.14 ITSA's performance

1.15 People

2. THE DSS CORPORATE IS/IT STRATEGY

 2.1 Background

 2.7 Benefits of the Corporate IS/IT Strategy

 2.9 Timescales

2.10 The role of the private sector

3. THE ACCORD PROCUREMENT

 3.1 Background

 3.7 Contractual approach

4. PROTOTYPES AND PILOTS

5. EXISTING SYSTEMS

6. YEAR 2000 AND BUSINESS CONTINUITY

 6.1 Background

 6.4 Progress

 6.6 Costs

 6.7 Business Continuity Planning

7. EUROPEAN MONETARY UNION

 7.1 Background

 7.2 Impact on DSS

 7.4 Progress

EXECUTIVE SUMMARY

The DSS, Information Systems and Information Technology

  Along with most large organisations, the Department of Social Security (DSS) is dependent on secure and integrated Information Systems (IS) and Information Technology (IT) for the effective delivery of its business.

  The Department demands high quality IT services because people who use our services are dependent on IT for the timely and accurate calculation and payment of their benefit entitlements, whether by girocheque, order book, Automated Credit Transfer (ACT) or card payment. Similarly, staff depend on IT to carry out their work, whether that involves paying benefits or collecting monies that are due to the Department.

  The DSS is one of the largest IT users in Europe and ITSA makes full use of private sector suppliers and their expertise to ensure effective and economical supply and support for the:

    —  calculation and payment of pensions, benefits and allowances by the Benefits Agency (BA), the War Pensions Agency (WPA) and the Northern Ireland Social Security Agency (NISSA);

    —  pursuit and collection of monies, e.g. maintenance from absent parents by the Child Support Agency (CSA) and collection of National Insurance Contributions by the Contributions Agency (which transferred to Inland Revenue on 1.4.99).

  The existing computer systems were mainly developed in the 1980s and were built to support the operations that existed at that time. However, the Department's business approach and general trends in technology have moved on, and these systems are now becoming old and in need of replacement. This requires a long term modernisation programme to improve social security delivery and provide a modern, effective and efficient social security system, underpinned by a new generation of IS/IT.

  IS/IT has a crucial role in helping the Department achieve modernised, integrated systems which are geared towards the needs of the people that actually use it—be they the general public, or our staff. Modernised IS/IT can support better ways of working and allow DSS staff to carry out their work in a more efficient and helpful way. IS/IT will help achieve flexible, easy to use and efficient services, based on common information which will help us work with other organisations and welfare providers such as Local Authorities and Citizens Advice Bureaux in effective partnership arrangements to deliver better services to members of the public.

ITSA's Role

  ITSA has a responsibility to provide support to Ministers on all aspects of the Department's involvement with IS/IT and in the use of IS/IT to support the DSS's business. The Agency Business Plan for 1999-2000, which forms the Annex to this document,[1] sets out our strategy, aims and targets for the next financial year. It also details our priorities and describes the part ITSA has to play with the rest of the Department to support the modernisation programme.

GEORGE MCCORKELL

Chief Executive

SECTION 1 THE INFORMATION TECHNOLOGY SERVICES AGENCY (ITSA)

About ITSA

  1.1 ITSA was established as an Executive Agency of the DSS in 1990 as part of the "Next Steps" initiative.

  1.2 The Agency is at the forefront of securing cost effective delivery of the IT systems needed to support the day to day operations of the Department and its agencies, managing the very substantial workload in maintaining existing systems and adapting them to support current policy requirements, and playing a leading role in developing and implementing a corporate IS/IT strategy.

  1.3 ITSA provides, either internally, or through partnership with the private sector, the full range of IT products and services required to support the processing and payment of social security services. It manages the supply of IT to all of the DSS Agencies, the Northern Ireland Social Security Agency (NISSA) and DSS Headquarters, and works to support the modernisation of the social security system.

  1.4 In recent years there has been a dramatic growth and change in the availability, impact and use of IS/IT which has placed IT at the centre of business strategy for all large organisations. ITSA has a substantial design and development work programme which reflects the level of change required by the current policy agenda and by the maintenance requirements of systems which have the technical and design limitations of their generation of IT systems development.

  1.5 ITSA's IS/IT leadership and strategic vision will be crucial in ensuring that the Department gets the best value from IS/IT investments in the near and the long term. ITSA is the focus for IS/IT specialist management and leadership in the Department, having the key project management, business analysis and technical design and development skills needed to shape and deliver the DSS-wide changes envisaged. ITSA enables new government policies and helps modernise social security operations by maximising IS/IT effectiveness.

  1.6 ITSA provides IS and IT expertise and experience and actively advises on the improvements afforded by technology in the operation of a more efficient, effective and flexible operation for the social security system. As part of a wider role within the DSS the Agency is also responsible for ensuring that appropriate supply routes for IS/IT products and services are available to support the changing business needs as we move through the process of modernisation.

  1.7 In doing this ITSA fulfils two roles for the Department:

    —  overseeing the setting of the IS/IT direction and standards; and

    —  ensuring the effective and economic supply of IS/IT services.

ITSA's Corporate Role

  1.8 ITSA performs a corporate role for the Department by looking after the Department's technical architecture and standards, and safeguards the Department's interests by ensuring that sound IS/IT standards and practices are applied across DSS.

  1.9 ITSA plays the pivotal role in developing the Department's IS/IT Strategy. Our expertise and experience of developing and implementing large-scale technology enables us to suggest ways in which IS/IT can be best used to support or enhance Ministerial policy objectives to achieve efficiencies and cost reductions.

IS/IT Provision

  1.10 The DSS requires services on a massive scale, and a significant programme of support. In delivering this, ITSA employs a "mixed economy" workforce of IT staff drawn from both the public and private sectors. The work is based at two main locations in the North West and North East of England. Staff at these locations deliver the following products and services:

    —  the development and maintenance of the software that is used to run the computer systems;

    —  enhancing systems to improve their operating efficiency and effectiveness;

    —  amending systems to take account of changes in benefit rules and operational requirements; and

    —  improving efficiency of office tasks through Office Information systems, electronic messaging (E-Mail) and provision of Intranet services for DSS.

  1.11 Day to day operational support for the Department's IS/IT systems was outsourced in 1995. However, ITSA remains responsible for overall service levels to customers and the management of the contracts with the private sector suppliers.

  1.12 Through its Service Help Desk and its management of contracts, ITSA ensures support 24 hours of the day, 365 days a year. ITSA consistently delivers in excess of Service Agreement (SA) targets agreed with our customer agencies, and routinely provides additional service hours over and above those covered by the target figure.

  1.13 ITSA also manages a further range of IS/IT contracts covering:

    —  provision of a range of telecommunications links between offices, including nationwide telephone networks, E-Mail and video conferencing;

    —  specialist software development and support; and

    —  frameworks for the involvement of external personnel with specialist skills.

ITSA's performance

  1.14 ITSA has a multi-skilled, committed workforce who are well versed in managing change, and working in partnership with external suppliers to deliver large scale computer systems. ITSA has:

    —  made year-on-year improvements in business efficiency, with savings passed onto the rest of the Department and the taxpayer;

    —  adopted industry standards to help maintain high quality computer systems, achieving accreditation under the international quality standard ISO9000 in 1993;

    —  developed and improved the abilities and skills of our people resulting in accreditation as Investors in People (IiP)—the national standard for training and development—in 1996; and

    —  committed to a continuous programme of improvement under the UK and European Business Excellence Model (BEM)—a common standard of business efficiency being adopted by both public and private sector organisations.

People

  1.15 The Agency's success is built upon team work, underpinned by the skills and commitment of our people. ITSA is committed to giving our people the support they need and deserve, valuing their expertise, recognising their achievements and equipping them with the skills that will take ITSA, and the Department, into the 21st century. We recognise that the experience and commitment of our staff is essential to delivering a modern active service for the Department.

SECTION 2 THE DSS CORPORATE IS/IT STRATEGY

Background

  2.1 The business of the Department has changed significantly over the last ten years. The current organisation of the Department's IT systems reflects the limitations of the IS/IT available at the time they were designed and the historical benefit by benefit approach to delivering service.

  2.2 Today's technologies provide opportunities to design people-centred services, and to offer new types of services direct to claimants, which were simply not available to the architects of our existing systems. They offer new opportunities for introducing new ways of working and improving the delivery of welfare services to the public.

  2.3 ITSA has led the development of the corporate IS/IT strategy for the DSS. The strategy provides a framework within which IS/IT requirements are planned and delivered. A key objective is to bring together the information on a person currently being stored in separate systems into one single account. This, coupled with a standard approach to collecting information across welfare services, will maximise its usability, accessibility and accuracy.

  2.4 At the heart of the strategy is a different approach to information management which will identify common processes and common data, and move the Department towards fully integrated systems and more efficient sharing of data and functions. This will:

    —  improve the accuracy and consistency of information;

    —  reduce vulnerability to fraud;

    —  improve the quality of management information; and

    —  enable efficiency improvements in the business units.

  2.5 We are moving towards a new structure of Information Systems based on two key components:

    —  a Shared Systems Infrastructure (SSI) bringing together all the common information held about a claimant into a single and more widely accessible source, for use right across the range of services—and service providers. The end product will be a major improvement on the current situation where information may be collected several times for individual benefits or other transactions by Agencies and is stored separately; and

    —  Business Process Support Systems (BPSS) providing the links between the SSI and its data (subject to Data Protection Act safeguards) and the people and organisations who will draw on it (that is the claimants themselves, the service deliverers in DSS, other Government Departments, Local Authorities and others). For example, a particular BPSS could support front-line staff in providing help to particular groups of people with different needs, such as pensioners or lone parents.

  2.6 These systems will be geared to the needs of the people who use social security, and the staff who operate the systems. They will use proven and tested modern technologies and tools which are flexible enough to be upgraded to cater for future developments to enhance effectiveness and productivity. Thus the staff who actually deliver services, those who manage them, other organisations we work with and claimants themselves will all get better IS/IT support.

Benefits of the Corporate IS/IT Strategy

  2.7 The SSI will reduce the complexity which has arisen from the diverse automated support we have today. It will improve control and consistency of data and efficiency of operation, and above all, improve customer service.

  2.8 Future services will:

    —  provide wider, more integrated services covering welfare advice and information, collection of information, completion of claim forms and handling changes of circumstances. This will also allow positive improvements in the services we deliver to those people who receive benefits;

    —  enable better working with other Government Departments and other relevant organisations such as Local Authorities;

    —  minimise delays and reduce the frustration levels of claimants and staff in having to report and input changes more than once;

    —  improve the quality of information available to ministers, policy makers, managers, staff and claimants and introduce a greater degree of operational flexibility and responsiveness to change;

    —  reduce duplication and improve the accuracy of the decisions we make, by using more consistent information;

    —  increase the level of fraud prevention and detection and allow fraud and security measures to be fully integrated into the systems as they are built. It will provide an infrastructure to underpin the successes of individual anti-fraud strategies like data matching; and

    —  improve the visibility and accessibility of welfare services and enable staff to establish entitlement to benefits more readily.

Timescales

  2.9 The move to IS/IT strategy services is large and complex and will be delivered in several stages over a number of years. The pace of change will be determined by the rate at which the business can safely migrate rather than being driven by the technological change. The first tranche "Modern Service One (MS1)" is currently scheduled to be delivered in 2001.

The role of the private sector

  2.10 Modernising IT systems of the size and complexity used in DSS is a lengthy and expensive process requiring significant investment. So, the IS/IT strategy will involve working with the private sector wherever it makes sense for customers, taxpayers and staff.

  2.11 ITSA has a history of working in close partnership with private sector suppliers. (74 per cent of ITSA's expenditure is currently spent externally on products and services). ITSA operates in a mixed economy, using external suppliers where that offers the best means to secure value for money.

  2.12 Partnership will enable private sector investment, skills and innovation to be combined with our own expertise and experience of welfare delivery. It will enable modernisation of the welfare state, whilst allowing DSS to retain control. The Access to Corporate Data (ACCORD) procurement programme was created to put in place the supply arrangements that are needed to deliver the aims of the IS/IT Strategy.

SECTION 3 THE ACCORD PROCUREMENT

Background

  3.1 The ACCORD procurement was conducted in accordance with Government and EC procurement regulations and was led by ITSA on behalf of the Department. It set out to establish Private Finance Initiative/Public Private Partnership (PFI/PPP) arrangements with suitable private sector service providers.

  3.2 In November 1998 the Department announced that it had selected three private sector consortia with the potential to deliver a wide range of IS/IT services;

    —  AFFINITY—led by EDS with IBM UK, Cable & Wireless Communications and Pricewaterhouse Coopers;

    —  ARCWAY—led by British Telecommunications plc with Sema Group UK and Bull Information Systems;

    —  ACCORD—led by ICL with Andersen Consulting, Experian, Microsoft, Racal Information Systems, Ferret Information Systems, Select Software Tools plc and De la Rue Identity Systems.

  3.3 All of these consortia contain major organisations well versed in large scale IS/IT and organisational change.

  3.4 The procurement approach adopted by the Department through the ACCORD arrangements has two elements:

    —  the first is to establish a number of framework or "overarching" IS/IT Service Agreements. These establish commercial relationships between the Department and the selected service providers from which we can readily select IS/IT supply. Having these arrangements in place means we are able to select service providers quickly and enter into contracts for specific elements of IS/IT work with leading industry players. The award of the overarching contracts to all three service providers also ensures we retain choice when awarding contracts, which we see as essential to ensure value for money on an ongoing basis;

    —  the second is to select one of the consortia as the Department's 'preferred' service provider. This provides the Department with access to private sector innovation and experience and will give one service provider specific responsibility for working with the Department on developing and defining a comprehensive and cohesive view of the IS/IT services the DSS will need in the future. The AFFINITY consortium was selected for this role and they started working with the Department immediately to establish the requirements for overall transformation.

  3.5 As further supply needs arise contracts for specific IS/IT services will be awarded through these service providers. For each award of business there will be an additional document containing any additional and specific terms and conditions. This allows for individual contractual arrangements to be made when it is safe and sensible to do so.

  3.6 The ACCORD approach is based on a long term strategy of phased introduction of new IS/IT alongside new business processes. The contractual approach reflects this, as requirements will be developed and business allocated incrementally to provide an ongoing assurance. There will be no "Big Bang" approach and trials and pilots will be rigorously used in conjunction with sound project controls and management arrangements.

Contractual approach

  3.7 ACCORD focuses sharply on the development of commercial relationships with its suppliers which are more than simply contractual ones—partnerships in which both sides are properly involved in the definition, control and delivery of the right systems. The approach recognises the lessons from past public and private sector experience and the need for joint working between the Department, ITSA and the selected service providers.

  3.8 A collaborative and open relationship with suppliers will help resolve the complex issues associated with the delivery of large scale IS/IT systems. Problems will arise, as they inevitably will in any complex IT project, but ACCORD's emphasis on transparency in the contractual relationships should enable them to be dealt with constructively and timeously.

SECTION 4 PROTOTYPES AND PILOTS

  4.1 The DSS Corporate IS/IT strategy is the long term aim for the DSS. However, we have also explored what can be done in the short and medium term to inform and modernise social security delivery by thinking laterally across our current services and systems and exploring the possibilities of modern technology. Prototypes are designed to explore new ways of working in social security and to test new concepts, processes and new technology in the real world environment.

  4.2 The Department already uses IT to provide limited benefit and advice services to staff elsewhere, including Employment Service offices and Local Authorities. However, various prototypes and pilots are demonstrating future possibilities in several areas:

    —  Camden is offering lone parents a single point of contact for electronic claims for Income Support, Child Support and Housing Benefit;

    —  the DSS Pensions Direct initiatives are helping older people in the London area to claim their pension by telephone, and a telephone enquiry service exists for pensioners paid by ACT;

    —  in Lewisham we are demonstrating the possibilities of closer working across government, where both DSS and Local Authority staff can access and electronically complete a combined Income Support and Housing Benefit form, bringing about a more efficient and people-centred service;

    —  providing benefit information direct to the public via kiosks. These are touch-screen computers, similar to a bank's "hole in the wall" and travel information screens. They have been piloted in several areas and operate by prompting the user to touch the area on the screen that links to the information they want. The purpose of kiosks is to improve the level of service to the customer by making information more readily available outside of DSS offices; and

    —  making forms and leaflets available electronically via the Internet. An example is the Pensions Overseas Directorate Electronic Claim Form, which helps with the process for claiming Retirement Pensions.

  4.3 The response to date, from both the people using and operating these services, has been very positive. Some of the prototypes have been developed very quickly in response to Ministers' objectives for social security.[2] They give us the opportunity to identify and resolve potential problems, and then consider the longer term potential of the initiative. They are examples of how IT can offer real and tangible improvements in service to people.

  4.4 During 1999-2000 ITSA will continue to build on this work, investigating and demonstrating the full capabilities of new technologies available to the IT market. For example, we will be involved in:

    —  carrying out feasibility studies and testing new concepts to provide better services and support for disabled people;

    —  working on the development of the Welfare Information System (WIS). This will allow Information Services to be created and hosted on the Internet. In future possibilities of making this service available on digital TV, office PCs, and from kiosks are being considered; and

    —  using Internet Technology—helping to take forward the Government Secure Intranet, and working in partnership with other government departments and the voluntary sector to establish a national network of Childcare Information Services linked to an internet website.

  4.5 The prototypes, which have been running since April 1998, form an important part of the Department's modernisation programme, since they test and prove concepts and show how we can work across boundaries to deliver improved services. The Lone Parent prototype, for instance, provides a service which cuts across the administrative boundaries of the Benefits Agency, Child Support Agency and the participating Local Authority.

  4.6 Prototypes are a good example of how the Department is involving both staff and claimants in helping to shape the way in which a new, modern service will work in practice.

SECTION 5 EXISTING SYSTEMS

  5.1 Whilst a good deal of ITSA's innovative effort is directed towards strategic planning and helping to streamline the Department's business, supporting the Department's many existing systems represents the major proportion of ITSA's work.

  5.2 ITSA continues to safeguard and improve existing IS/IT supply, maintaining and developing current systems which are at the heart of the Department's business, e.g. delivering Income Support, Retirement Pension and Jobseeker's Allowance, and also ensuring the installation and support of computing equipment (eg PCs, printers) in the Department's offices nationwide.

  5.3 During 1999-2000 ITSA will continue to meet its commitment to the Department to deliver a comprehensive work programme for upgrades and enhancements to the existing computer systems. At the same time, we will continue to work in partnership with a number of private sector service providers and suppliers—who have responsibility for IT service delivery—through a range of contracts, to ensure that the services we deliver to the Department meet expected standards.

SECTION 6 YEAR 2000 AND BUSINESS CONTINUITY

Background

  6.1 The Department has been actively working on the IT and business issues which arise as a result of the Year 2000 problem since 1995, when a scoping study was undertaken by ITSA. A formal DSS-wide project, led by ITSA, was initiated in 1996.

  6.2 The DSS Year 2000 Programme plans, monitors and co-ordinates the work required across HQ, the Agencies, Independent Statutory Bodies (ISBs) and Non-Departmental Public Bodies (NDPBs). The programme follows the approach recommended by the Government's Central Communications and Telecommunications Agency (CCTA) and works closely with other Government Departments.

  6.3 Our key systems are designed to hold dates in a format which is largely unaffected by the Year 2000 problem. However, these key systems must all be tested to provide positive assurance that they will continue to process dates correctly before and after the year 2000 when operating with other systems.

Progress

  6.4 The DSS plans and actions to address Year 2000 are well advanced:

    —  On business critical mainframe systems compliance work was completed on the Job Seekers Allowance system on 19-10-98. Compliance of the National Insurance Recording System (NIRS2) is currently being tested and is scheduled for completion at the end of June 1999. Work on all other main benefit paying systems was completed on 31-8-98;

    —  On non-critical systems the target date for completing work is 31-8-99 and work is on schedule;

  6.5 The Programme has been independently reviewed by the National Audit Office (NAO), KPMG and Parity consultancy companies, and by the Departmental IS/IT Audit Group. All have endorsed the approach taken and provided favourable reports on progress. In addition, Taskforce 2000 published a report on 11 November 1998 on the Year 2000 projects of central government. About the DSS it said ". . . some large programmes, such as at DSS . . . appear to be in very good shape." Other comments about DSS included ". . . this programme inspires more confidence than any other." and "We would recommend this programme as an exemplar to others."

Costs

  6.6 The total costs in the corporate business case approved by HM Treasury and reviewed quarterly have remained stable over the life of the project and are currently estimated at £45.7 million.

Business Continuity Planning

  6.7 We also recognise that contingency planning at local, national, and governmental level, is of the utmost importance. We are actively working to ensure the continuity of our business through the Year 2000 and beyond. Additionally, we are reviewing existing DSS contingency plans to ensure that the potential impacts of a Year 2000 failure are taken into account.

  6.8 In addition, a "Millennium Operating Regime" (MOR) is being established to manage the potential risks facing the Department around the Year 2000 date change and the subsequent leap year. The DSS MOR will run from 1 September 1999 to 31 March 2000. It will:

    —  review normal operational tasks happening during the MOR period to confirm capacity to deliver and options to reduce risk;

    —  review work programmes to assess the risk posed by change Initiatives; and

    —  develop the "Millennium Control Centre" which will create a management and co-ordination focus across the Department.

  6.9 Work is also being taken forward on staffing and rewards policies to ensure that the Department has the required level of skilled staff available to perform critical business activities during the days before and immediately after the date change, carry out contingency actions in the event that disruption occurs, and to deal with any unexpected pattern of business resulting from external factors (e.g. abnormally high level of Social Fund crisis loans).

SECTION 7 EUROPEAN MONETARY UNION CHANGEOVER

Background

  7.1 ITSA has a dual role in preparing the DSS for possible UK entry into the EMU, as a primary supplier of IT services to the Department, and as a business unit in its own right. As a supplier, ITSA is responsible for ensuring that all aspects of the DSS IT be made euro compliant. As a business unit ITSA has established a project to prepare for the introduction of the euro and possible entry to the EMU as part of a corporate DSS Programme.

Impact on DSS

  7.2 We anticipate that there will be minimal impact on the DSS during the first phase. If the UK decides to join the EMU then major changes will be required to current computer systems to enable them to deal with euros. This will also have a large impact on the finance industry, retail trade, and business operations.

  7.3 Subject to the policy that is adopted for the UK, there could be a major programme of work to revise computer systems within both the public and private sector. The Department's business processes, IT systems, forms, leaflets, and accounting arrangements would have to be amended. Staff would have to be trained on the conversion rules and claimants informed of the changeover to the euro.

Progress

  7.4 DSS is participating, with other Departments, and with HM Treasury on a number of working groups organised by the Euro Preparations Unit which was established in October 1997. The most recent focus has been on an Outline National Changeover Plan which was published in February 1999

  7.5 DSS has established a programme to address the EMU and this is progressing on schedule. ITSA has launched a project leading activity for the Department. This project has also been subject to an independent audit conducted by SEMA, which commended the Programme as being "well planned".


1   Not printed. Back

2   The telephone service for pensioners took just 10 weeks to develop. Back


 
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