Select Committee on Social Security Minutes of Evidence

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

1. Q41. Details of the 1998 pay strategy for ITSA—impact on staff retention

  1.1 In response to a question on how ITSA has tried to stop staff with valuable IT skills leaving the Agency to join the private sector, our pay strategy was mentioned as an example of how ITSA has acted to reduce attrition rates.

  1.2 Evidence from exit interviews with staff who were leaving the Agency and a recent pay review indicated dissatisfaction with inflexibilities in the existing pay system. There was a clear business need to target the vulnerable IS/IT specialist jobs.

  1.3 The objectives were:

    —  In view of current IS/IT labour market trends, to retain the key skills and the intellectual input required to enable ITSA and the Department to deliver the Work Programme over the next 5 years;

    —  To slow down the attrition rates of IS/IT Specialists which were running at around 20 per cent; and

    —  To ensure that the proposals were containable within existing running costs and consistent with our longer-term remuneration strategy.

  1.4 The strategy included several components:

    —  The introduction of a performance-related progression path within existing pay ranges based on levels of competence;

    —  Enhanced progression for specialist IS/IT staff to enable them to move to the highest competence point within their pay range within four years—subject to performance; and

    —  The highest pay point for staff with specific IS/IT skills is comparable with equivalent scales in the marketplace.

  1.5 The structure of the system for progression through the pay scales ensured that the gap between specialist staff and other key staff would not grow disproportionately. The progression system was underpinned by the development of Job Title definitions and associated competencies.

  1.6 In addition, the strategy also included a minimum increase for all staff in line with the cost of living, and non-consolidated performance bonuses for high achievers, rewards for individual staff based on their performance, skills and competencies and their contribution to the organisation.

  1.7 The strategy was implemented entirely within Treasury guidelines on pay. Staff and TU feedback clearly indicates that there is recognition across the organisation for the positive steps taken to address staff concerns about pay and rewards and the threat to the stability of the organisation. The strategy has resulted in resignation rates for IS/IT specialists reducing to predict levels, currently down to 6.4 per cent.

2. Q62. How many Personal Computers are there in the Department?

  2.1 There are currently over 70,000 Personal Computers of varying age, type and specification in the Department in addition to 55,000 thousand "dumb" terminals (a monochrome device with no local processing capability).

3. Q63. What security measures are in place to make sure that computers and chips are not stolen and do you have any records about how many are stolen from ITSA itself and the DSS generally?

  3.1 In DSS between April 1998 and March 1999 there have been a total of 61 PC and chip thefts reported across the Department. This figure comprises;

    15 PCs

    17 laptops

    3 Central Processing Units

    1 monitor

    1 keyboard

    14 chips

    10 hard drives

    1 external tape and disc drive

  3.2 The figures for ITSA from April 1998 to date show that there have been 12 PC and chip thefts;

    5 PCs

    3 laptops

    1 Central Processing Unit

    2 hard drives

    1 external tape and disc drive

  3.3 The Department employs a range of protective measures, based upon localised risk assessment, to deter thefts of assets, both IT and non-IT, from its premises. A conscious decision has been taken not to adopt a standard approach for all buildings and wide ranged intruder detection devices are employed. The following examples illustrate the type of measures that are taken, in accordance with DSS IT security standards;

    —  Asset registers and regular asset checks;

    —  Control logs to audit removal of equipment on and off site;

    —  Continued use of CCTV on major sites;

    —  Controls over the issue of passes are reviewed regularly and strengthened;

    —  Swipe card systems on major sites, and random stop and search of vehicles;

    —  New procedures designed to tighten controls surrounding the access of contract staff to sites and to ensure that they only have access to areas necessary for them to carry out their duties;

    —  Security assurance reviews which are designed to confirm adherence to IT security standards as well as identifying any other potential areas of weakness. This programme of work is risk based to ensure high-risk areas are reviewed more frequently. All areas are reviewed once every eighteen months;

    —  Enhanced security training and awareness workshops to raise awareness and encourage a standard approach to security, and production of a video for staff on various aspects of security; and

    —  Further emphasis on the importance of securely storing IT equipment prior to installation.

4. Q71. The number of business transactions being carried out electronically at present and an indication of what may be able to be carried out electronically in the future

  4.1 Last year the DSS dealt with 15 million benefit claims, 33 million changes of circumstances, made nearly a billion payments and handled upwards of 160 million telephone enquiries. The Department paid £90 billion of benefits to 30 million claimants, maintained 60 million NI records, and collected £40 billion NI Contributions and £300 million in Child Maintenance. This includes the issuing of 57 million order books, 85 million girocheques, 75 million Automated Credit Transfer (ACT) records, and 150 million forms and notifications.

  4.2 In October 1997 the Prime Minister set a target that, within 5 years (by 2002), 25 per cent of all government dealings with the public should be capable of being done electronically. Current figures show that DSS is already exceeding the target for 2002 (standing at 35 per cent) and by 2002 we expect to be conducting around 37 per cent of transactions electronically. Further targets of 50 per cent electronic capability by 2005 and 100 per cent in 2008 were published in March in the "Modernising Government" White paper.

  4.3 In terms of potential future capabilities, the following additional observations may be helpful. Within the next five to eight years, most applications and changes of circumstances could be based on telephone or other electronic media, but the take up of any such option is difficult to quantify at this stage.

  4.4 DSS has agreed with CITU to continue to investigate four main areas or "dealing definitions" for electronic transactions. These are applications, verifications, changes of circumstances, and number of benefit recipients.

  4.5 DSS currently has the capability to make almost all payments electronically (via ACT). However, this is not the preferred payment method for the majority of citizens who receive Social Security payments. The policy remains that DSS will continue to offer options on payment methods according to the wishes of the individual.

  4.6 Market research also shows that, in claim taking it is the balance of personal advice, supported by IT, which provides the best results both for the citizen and the Department. For example, the pilot for claiming pensions via telephone with DSS staff using electronic claim forms on the desktop resulted in seven out of 10 pensioners giving this system a rating of ten out of ten.

  4.7 Even within the four separate dealing definitions now being used, there are opportunities to tackle elements, or phases, of each of these more electronically than others. For example, for those citizens who are comfortable completing a claim form on their own, the option of doing this on the Internet and e-mailing it to a DSS Gateway may be an attractive possibility. From then on, an existing DSS process would be used to handle the claim.

  4.8 In addition, DSS is currently identifying processes that for operational or policy reasons are incapable of delivery electronically, or for which there is unlikely to be demand, and examining the likely impact of payments cards, and the issues surrounding the introduction of electronic signatures and other aspects of verification.

5. Q74. Memorandum on Year 2000 submitted to SSSC in February 1997 suggested costs of £30 million. The cost shown in this memorandum is £45.7 million. Why the difference?

  5.1 The original estimate of £30 million derived from the initial study carried out in 1997 which looked at the IT implications of Year 2000. The original estimate was for indicative purposes and was arrived at before the outline work programme had been fully completed. In November 1997 we reported to CCTA that a more accurate figure including projected spend to the end of the programme (March 2000—but some Post Implementation Review work may go into the following financial year) was in the region of £45 million. This figure was used in the first corporate Business Case, which went to HM Treasury in January 1998 and was approved by them the same month. Since then there has been little fluctuation.

  5.2 The current estimate of £45.7 million is based on actual spend from 1996 to date, and takes into account estimated costs in respect of Business Assurance Testing, the Year 2000 specific element of business continuity planning and the Millennium Operating Regime. This figure thus provides a much more accurate estimate based on actual experience and actual work.

6. Q81. What costs have been incurred so far on Euro compliance, and what do you expect the costs to be?

  6.1 To date the cost of work on considering the impact of EMU from 1st January 1999 on DSS services and on considering potential impacts if the UK decides to join is approximately £0.5 million.

  6.2 The DSS EMU Programme, which is led by DSS HQ, is currently working to establish a better view of potential impacts and cost of compliance. It will take some time to gather this information, and the Programme hopes to produce an early business case in June/the summer which will largely address business impacts at this stage.

  6.3 A more detailed business case including estimates on the IS/IT impacts will be produced by the end of the year. A pilot is planned for the second half of this year to give better indications of implementation options and resource requirements, and the associated costs. The DSS will have a better indication of impacts by the end of the year, and until then it is not possible to give any indications of likely costs.

Mr George McCorkell

Chief Executive

4 May 1999

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