Examination of Witnesses (Questions 1
- 19)
WEDNESDAY 21 APRIL 1999
MR GEORGE
MCCORKELL,
MR PETE
SHARKEY and MR
BRIAN BARNES
Chairman
1. Welcome, ladies and gentlemen. Can I
declare the public session of evidence on the Information Technology
Services Agency open, welcome George McCorkell and his team, Brian
Barnes and Pete Sharkey, and maybe just start by asking, George,
if you could set the scene perhaps by describing a wee bit about
what Brian and Peter particularly do, and anything else you might
want to do to set the scene, and then we can maybe go into some
dialogue about some of the questions that we have in our minds
to ask, please?
(Mr McCorkell) Yes, thank you. George McCorkell.
I am the Chief Executive of ITSA. I should point out that I am
the Chief Executive of all of seven weeks' standing, so I am very
much the new boy in the organisation. I have overall responsibility
for the management of IS/IT supplied to the Department, and, as
such, I sit on the Departmental Board, to give general advice
to the Department on the use of IS/IT, as well as being responsible
for the provision. On my left is Peter Sharkey. Peter is my Deputy
Chief Executive; Deputy Chief Executive, Service Provision. Basically,
that means all of the day-to-day operation, in terms of ongoing
development of existing systems, on managing the day-to-day supply
through our external suppliers of the overall service, Peter has
direct responsibility for that. On my right is Brian Barnes. Brian
is my Director of Commercial Strategy. You will probably understand,
from the information we have given you, we make very heavy use
of the external market-place in the supply of IS/IT services,
therefore we have a specific directorate which looks after the
regulation of that supply, the running of the procurement contracts
and the monitoring of the overall supplier performance, at the
highest level, and Brian has direct responsibility for that. That
is the team we have here today.
2. Thank you. I start by a full-frontal
attack. I found this memorandum, which you have obviously spent
a lot of time putting together, and it is very helpful in some
ways, but I found it very dense, in terms of, I guess it is inevitable,
some of the jargon and the corporate language that you are collectively
living with day to day. It is very difficult for ordinary lay
people to understand a lot of this stuff, so you will forgive
us if we have to stop you and ask you to explain some of these
things to us. But I was particularly interested, I am just trying
to understand exactly what the fundamental meaning of some of
the memorandum meant to convey, if I can ask you to turn to section
2 under the heading "The DSS Corporate IS/IT Strategy",
at paragraph 2.1 there is a preliminary sentence which says: "The
business of the Department has changed significantly over the
last ten years." And then it says: "The current organisation
of the Department's IT systems reflects the limitations of the
IS/IT available at the time they were designed", that sounds
to me as if it was ten years ago, "and the historical benefit
by benefit approach to delivering service." Now I will tell
you what I think that means, your machinery is all ten years old
and the change has been piecemeal; is that right?
(Mr McCorkell) I think your general understanding
is basically correct. It is true to say that the IT systems which
currently process our benefits were designed in the 1980s, and,
in fact, the first implementations were in the late eighties and
rolling forward into the early nineties, so they were designed
on the technology at that time; you will be surprised to learn
that at that time they were state of the art.
3. And where are you now; if you were state
of the art then, where are you now?
(Mr McCorkell) Clearly, with the very rapid movement,
development, in IT technology, we are now significantly behind
state of the art; and, as I hope you will have found, from elsewhere
in the memorandum and in our business plans, we clearly have plans
to tackle that situation and bring us up to date, both with a
radical, total replacement of the entire infrastructure, through
our Modern Service programme, and, equally, we are looking at
intercept strategies, where we can bring some of the newer technologies
to bear even on our existing systems. So it is true to say that
these systems were designed in the eighties, there were implemented
in the late eighties and early nineties, they have been rolled
out nationally across the country, they are now in need of a total
revamp and updating. In terms of the design for the benefits systems
at the time, if we go back to the eighties, the organisation that
processed the benefits very much processed benefits in chimneys,
individual benefits were looked at on an individual basis, and
hence the systems were designed to cater for that particular aspect
at that time. Clearly, now, there is a requirement to look across
systems and look at individuals as people and look at how the
benefits system is interacting with individuals as people; and,
you are quite right, our current systems were not designed for
that process and now need updating.
4. You see, the rest of your memorandum
does go on, and I was lucky, I was able to, you very kindly, at
short notice, arranged a visit for us, a week or so ago, and I
found that very useful, and I am quite satisfied that the technical
expertise you have is state of the art; but I have to put it to
you that, over the last ten years, although you know what can
be done, you have not been able to influence in a way that is
as positive as perhaps one could perhaps have hoped to expect.
So it does raise the question of to what extent you are able to
get the message across to Ministers, or the policy-makers at Adelphi
House, or whatever. How effective has the Agency been in trying
to keep the systems that you are using state of the art, because
it seems to me that there is evidence that you have lost ground,
over the last ten years; where have you been during that time?
And if you had been arguing the case to get things done the way
that you know they can be done, who is it that is not listening,
and why are you not more effective?
(Mr McCorkell) I think the first thing I should
say, in answer to that, is that if you look at the forward programme
we have now, and the commitment we have, through the Department
and through to ministerial level, to totally update all of the
systems and all of the technology, then perhaps I could say we
have finally got the message through and there is now a major
programme under way to do exactly what is required. As to why
that has not happened earlier, it is clearly a combination of
priorities and funding, there is always a limited amount of money
available, there is always a huge demand, and that is not just
a huge demand for new things but a huge demand for changing existing
systems and changing existing policy, which we have to react to.
We do, I believe, attempt to inform the Department and Ministers
of what technology is coming along, what is available, what we
should be trying to intercept, what we should be trying to take
advantage of, but we have to recognise that our input is just
one input into the overall changes, both in terms of policy and
in operation, that take place across the Department, and our input
has to be balanced against all of the other requirements.
5. So you are saying to me that things are
going to get better?
(Mr McCorkell) I am certainly saying things are
going to get better. We have a major programme to make things
better, which will take some time, because the Modern Service
Programme is a total replacement of the entire infrastructure,
but equally through the work that we have been doing to inform
that programme. You will have heard about some of the prototype
working that we are doing, which its first objective was (a) to
help the prototypes but to inform the future programme, so that
this time round we make sure we get it right and we build in the
flexibility so that we do not fall behind in the future. That
work has also shown opportunities where, without the full replacement,
there are a number of things which we can do which will aid the
current systems while we are waiting for the new systems to come
along.
6. Because, I put it to you that, if things
do not get better, if you do not, and I am not for a moment suggesting
that you do not know what you are doing, because I am convinced
that you do know what you are doing, but I have said that I think
that the effectiveness of getting the message across is certainly
questionable, if things do not improve, the question has to arise
as to whether you need the Agency at all? Looking at the Prior
Options Review and the Framework for the future, and you have
talked about outsourcing and the importance of that, if they are
not listening to you, or they are not giving you the money, why
bother?
(Mr McCorkell) You are absolutely right. If we
cannot successfully help the Department to maximise the use of
information systems and information technology then we will have
failed in our remit. It is a very clear remit for the Agency,
it is a very clear and personal responsibility for me, as the
Chief Executive, sitting on the Departmental Board. If we do not
achieve that then, obviously, we will not be fulfilling our remit.
I believe, today, we have achieved that, with the announcement
of the Modern Service programme and the work that we will be doing
to update the current systems. My job now is to ensure that the
Agency is structured and presents the information and presents
its ideas in the way that will continue to keep the Department
at the forefront of technology, rather than, once again, going
to a situation where we lag behind. You are absolutely right;
if, in ten years' time, someone was to be sitting here saying
"We're ten years behind", we will have totally failed.
I intend not to allow that to happen.
7. That has now been written down, so it
may come back to you. Did the Agency have anything directly to
do with the National Insurance Recording System, or the HORIZON
programme, and where are we with both these projects, which are
perhaps less successful than perhaps some of us may have hoped;
did you have any direct involvement in either of these two things?
(Mr McCorkell) If I start with the National Insurance
Recording System and then ask Brian to come in here and give some
more detail; in terms of the development of the National Insurance
Recording System, we had no direct responsibility.
8. None at all?
(Mr McCorkell) In terms of the development, no;
that was a Contributions Agency project, which was contracted
to Andersen Consulting to develop. Our responsibility, as the
IT providers to the Department at that time, was to advise Contributions
Agency, mainly on the procurement aspects of that contract; that
contract has now moved with Contributions Agency to the Inland
Revenue and they are now directly responsible. We maintain two
people advising on the contract to allow the Inland Revenue to
continue with their work on that contract, so we are still supporting,
even though it is no longer a departmental responsibility. We
also, clearly, have interfaces to that system, because our systems
interface with it, and we have responsibility for the systems
on our side which do the interfaces; hence you will find that
we have responsibility for working with the Contributions Agency,
and now the Inland Revenue, on the programme for our Year 2000
compliance, because we have to make sure those interfaces are
compliant. But, in terms of direct responsibility for the development,
we did not have that. Is there anything you would like to add
to that, Brian?
(Mr Barnes) I think, just to expand on it, I personally
worked with Contributions Agency and I managed the procurement
activity for them, and the subsequent contract management. George
has rightly stressed the level of interfaces that the Department
has, and the number of our own systems which interface, and certainly
we have had a strong involvement in the testing and ensuring that
that is undertaken. I think, the other area, I would stress, of
ITSA's involvement, the equipment in the local offices and on
the clerks' desks are provided by ITSA, so in that aspect we provide
an element of that, but the application that supports the processing
was the one developed by Andersen Consulting.
9. What about HORIZON?
(Mr McCorkell) HORIZON is slightly different again,
in that it is Benefits Agency who have the direct responsibility
for the HORIZON project and for the contracts with both Post Office
and ICL Pathway for the overall project. We work directly with
Benefits Agency in the development of the DSS systems which interface
with ICL Pathway systems, so we work jointly in a project with
the Benefits Agency where we do the IT development on the DSS
side. For the HORIZON project, we have had to develop a system
called CAPS, a Customer Accounting and Payments System, in order
to pass data to ICL, a personal details system, which is a system
which standardises a subset of the personal details across all
benefits. We said earlier, one of the problems with our systems
is they were built as individual systems; in order to make the
HORIZON project work, it was necessary to standardise and use
a common set of personal details. We have developed that system;
that system, of course, is useful for the HORIZON project, but
it is also useful for our forward future strategy and is very
compatible with that and, in fact, could be said to be the first
step forward in the long-term strategy. We have developed that
system. And, equally, each of our current benefits systems, which
pay by order book and giro, we have to make amends to those systems
in order to make them compatible with paying through the Pathway
system. We are responsible, in a project jointly with the Benefits
Agency, for all of that development and all of that implementation,
and that is a part of the overall programme, which has gone extremely
well. The Personal Details Computer System is now up and running,
over 70,000 staff in both BA and Employment Service last year
were trained to use it, it is now used on all benefits for new
and repeat claims, Income Support, Child Benefit and JSA have
been fully converted to it, the pensions system is now undergoing
its conversion. So that end of the project has been extremely
successful and is already bringing significant benefits to the
Department and, as I say, could be looked at as perhaps the first
tranche of the modernisation programme.
Mr Leigh
10. For years, I have been hearing excuses
from Ministers and civil servants in the DSS about the computer
systems. It seems to me that this has been a staggering failure
of public policy-making that your computer systems have been allowed
to become so antiquated, and every time we raise this we are told
"Well, this is the most complicated organisation in the world,
we have more clients than anybody else in the world, and it is
all terribly difficult, and we couldn't cope, and we're doing
our best", and all the rest of it. Frankly, you have only
to look at any company in the private sector and in the last 15
years they have lived and died to the extent that they have managed
to upgrade their IT systems. Why has there been this chronic failure
deep within DSS policy-making? Is there some technical reason,
is there some policy reason, what has gone wrong? I am not a computer
expert, but I cannot believe it was not possible to upgrade your
computers sensibly as you went along.
(Mr McCorkell) I think there is, obviously, a
mixture of both technical issues and policy and operational issues.
I said earlier that one of the reasons things may not have been
done in the past is the overall priority in terms of policy implementation,
operational issues and where the funding goes and how much funding
you can put into upgrading your information technology. So there
is no doubt that that was a major influence in the reasons that
we have not kept totally up to date.
11. So what does that mean; it was not considered
important? What were the arguments going on inside; were people
going right up to Permanent Secretary level and saying "You've
got to do this"? What was actually going on inside the Department?
(Mr McCorkell) I think, inside the Department,
although I was not directly involved, there is obviously always
a debate about what the priority is for this year, or for today,
or for next year, and how the funding that the Department is given
is allocated and which projects that goes to.
12. But this is the most important part.
You are delivering a service to many millions of people, which
is fundamentally reliant on your computer systems; there is no
point repeating this mantra about how in the public sector there
is always this problem of resources. What was going on; why was
not this at the top of the agenda all these years?
(Mr McCorkell) There are also some technical reasons,
which mean that it is difficult to upgrade this system in a piecemeal
fashion. One of those reasons, for example, is the data network;
we have a data network which has to span the entire country and
has to go into every single local office. At the time that that
network was purchased, which was in the middle eighties, I believe,
it was purchased as part of the Government data network, and,
again, at that time, it was state of the art. Replacing that network
is a major task, it is a major task technically, but also you
have to recognise that it is a major task operationally, because
while we replace it we still have to keep producing benefits,
we still have to keep the ongoing operation going; so it is a
major undertaking. And it is not just a technical undertaking
but you have to look at the operational implications of doing
that, because you are going into an office which, while it is
getting something entirely new, has to keep processing the benefits,
because we have to keep paying people. So there is a combination
of technical reasons, operational reasons and policy imperatives
which make it difficult to do this. We have now got to the stage
where we have agreement that this is going to be done, and we
have plans to do it, and we are working on plans to take this
forward.
13. When is it going to be done?
(Mr McCorkell) The first tranche of this, what
is called the Modern Service One programme, is due to be implemented
during the year 2001, and, in terms of what that will achieve,
one of the things it will achieve, for example, is the replacement
of this data network so that we have a modern information systems
network that will give us much more flexibility to do many more
things, and it will also replace the Income Support and the Child
Support computer systems. There will then be a staged process
where we replace the other systems, over the further years.
Ms Buck
14. Just a quick question on HORIZON. I
heard what you said, and it is not your direct responsibility,
but when we were briefed a little bit earlier in this Committee
about HORIZON I think there was some concern, from the technology
point of view, that again—again—we may well be pursuing
a project that is out of date before it even starts, with a card,
for example, which is based on a magnetic strip rather than chip
technology; so already you are building in obsolescence to the
system. And I just wondered, from the point of view of your IT
expertise, if you could comment on that?
(Mr McCorkell) Again, at the time when that project
was originally designed, they looked at the possibility of having
a smart card, as opposed to a magnetic stripe card, and I believe
the design was probably started back in 1994, or certainly 1995.
At that time, the balance of the requirement for smart card technology
and the cost of smart card technology weighed in favour of "This
can be done with a magnetic stripe card, and hence we do not need
smart card technology." However, I understand the overall
design on the Pathway side allows it to be upgraded to smart card
technology without any interruption to the service. So, although
it was originally designed as a magnetic stripe card, it is capable
of being upgraded to smart card technology, and, in fact, I believe
ICL claim that the equivalent that is already on trial in 200
offices can read smart cards, and, in fact, Post Office requirements
on that project require it to read smart cards.
15. So we are not making the same mistake
again, we are not building in obsolescence to this, you can confidently
state?
(Mr McCorkell) No. I think that, in fact, is an
example where, although we were not using the latest, leading-edge
technology, which was smart cards then, the possibility of them
coming along was recognised and the design took account of that,
so there is an opportunity to intercept smart cards when that
becomes a necessary and cost-effective solution.
Chairman
16. Does the Agency support the HORIZON
programme, on a smart card basis?
(Mr McCorkell) The Information Technology Services
Agency are supporting the overall programme; we are supporting
the overall programme.
17. So you are in favour of it?
(Mr McCorkell) It depends what you mean by in
favour of the overall programme. It is not our responsibility
to pay benefits by any particular means. We are certainly in favour
and we are advising for everything that can be done to have the
most efficient method of paying benefits to customers and the
most secure method of paying benefits to customers, and we are
supporting all the programmes that attempt to put that in place.
18. I was impressed, when I visited you,
that so many of your senior management were actually old benefit
hands, if I can put it that way. I think, all three of you, I
am right in thinking, have been through the Agency and the DSS
mill, and I was reassured by that. So you will all have been,
in your time, like me, because I have visited dungeons in area
offices where there are millions of manilla envelopes with dog-eared,
yellowing sheets of paper, with National Insurance details; will
the Personal Details Computer System deal with that? There are
troglodytes who work in there, and they get thrown food, from
time to time, and let out, and it is mediaeval. What are you doing
about that, if anything?
(Mr McCorkell) The first thing, the Personal Details
Computer System, which I described, will not remove that problem,
it is just the start of the overall replacement and it deals specifically
with a small subset of personal details, and it deals specifically
with the objective of no matter what benefit you are claiming
we use the same set of personal details; but it is a small subset,
it is name, address, date of birth, and a few other things, and
we could obviously let you have details of that if you wished.
However, the longer-term programme, the Modern Service programme,
which is looking to replace the entire infrastructure, will, indeed,
be looking at the paper mountains that have been created and have
been stored, and it is part of the design objectives of that programme
to get rid of those paper mountains, and that will be taken forward
as part of that programme.
Chairman: And will
be put together by your scanner.
Ms Shipley
19. What does "looking at" mean?
(Mr McCorkell) It is a design requirement of the
programme. The first design requirement is that we will stop producing
these mountains of paper that we have to store, and in the forward
programme that is the easy bit, because you can design your systems
so that they do not need this amount of paper, and where they
do need it, as the Chairman says, it can be stored electronically
now and there is technology there to do that. The second thing
we will then be looking at is that, fine, when we implement those
systems, we have lots of historical data that are still stored
in these brown paper envelopes; to what degree is it necessary
and cost-effective to perhaps, as an answer, start scanning that
information, to make that available electronically.
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