Annex 3
2. THE PFI SPIRIT
CONTRACT
The PFI partnership with IBM for the provision
of the Agency's IT infrastructure and managed services (the SPIRIT
project) was negotiated in 1997 to run for seven years. It began
in August 1998. It created a strategic partnership for the delivery
of IS/IT facilities and services and covered the replacement and
upgrade of the then Countryside Commission's IT infrastructure.
The business case submitted to the Department
(then the DETR) in 1997 considered a range of options. It noted
that the outsourcing option would be slightly less than 7 per
cent more expensive than the base case (using a mixture of in-house
and contracted suppliers), but that the partnership approach would
more than justify the modest additional cost, in terms of transfer
of risk, business continuity, flexibility and responsiveness to
future IS/IT delivery.
Savings of around £201,000 per annum were
anticipated on IS/IT staffing costs, as four posts would be removed
from the Commission's complement and on other IS/IT running costs
(such as hardware and software maintenance contracts). These savings
were realised—the existing delivery team of four staff was
disbanded and other IT contracts terminated or transferred to
IBM as appropriate.
Since 1997, as our business needs have changed
and the Agency has grown, IT costs have risen commensurately (with
Departmental approval). IT developments delivered by IBM have
included one-off tasks to facilitate the merger between Countryside
Commission and RDC, preparation for the Year 2000, an increase
in network capacity to cover increasing levels of electronic communication
and an increase in service provision to meet the needs of more
staff (the original contract provided for only 270 users and we
now have around 680 users, including part-timers, job-shares and
temporary staff).
We are planning further improvements in services
to meet Modernising Government targets over the coming years—including
electronic records management, electronic service delivery and
other e-business initiatives, a further upgrade to the network
capacity, upgrades to our hardware to run up-to-date software
and a switch to industry-standard Microsoft Office to enable us
to communicate more easily with partners.
We remain very conscious of the need to ensure
value for money in the procurement of IT and work closely with
the Office of Government Commerce, which provides us with specialist
contractual advice and an "intelligent customer" function,
giving us further quality assurance when we need it. We are well
aware of the findings of the McCartney report on "Successful
IT Projects" and are following the recommended Gateway procedures
for new developments.
Although day to day service provision has been
satisfactory, we believe the PFI partnership has not always delivered
the strategic and proactive guidance we had anticipated. Four
years into the contract, we believe it is time to review our needs
and intend to renegotiate with IBM to ensure we are getting the
best service possible for the funds we commit.
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