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Mr. Richard Bacon (South Norfolk) (Con): It is a great pleasure to follow the right hon. Member for Swansea, West (Mr. Williams)—a doughty member of the Committee from whom I have learned a great deal in my three years on it. He mentioned the royal family, and the evidence shows that the Committee's scrutiny of the royal family has been very useful. I remember the report on royal travel by air and rail, which had the wonderful performance indicator, "cost per royal mile". Costs fell from £17 million to £5 million, and the amount of travel stayed the same by rail and doubled, I seem to remember, by air.       

As ever, I pay tribute to the National Audit Office and to the team led by Sir John Bourn, and also to our Committee staff, led by Nick Wright and the Committee assistants Leslie Young, Ronnie Jefferson and Chris Randall, for all their hard work in keeping the Committee running so smoothly.

I want to concentrate on an issue that of enduring interest to the Committee—the planning, procurement and management of Government information technology
 
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projects. I was interested to hear what the hon. Member for Sheffield, Hallam (Mr. Allan) said earlier. I shall not duplicate any of his remarks, but he made some valuable points about IT, although I think we approach the topic from different angles.

It is a commonplace that mankind learns from its mistakes. We can think of many areas of human activity, from the building of bridges to the manufacture of aircraft, in which the consequences of failure led to improvements. The philosopher Karl Popper once said that all human knowledge was, in one way or another, the result of human beings' learning from their mistakes, and that is broadly true. The great and obvious exception to that principle is the planning, procurement and management of Government information technology projects. The Government appear to be condemned, or perhaps have condemned themselves, to repeat the mistakes of the past in an endless cycle.

I was looking forward to a reply from the Economic Secretary to the Treasury—not because I am not pleased to see the Financial Secretary, for it is always a great pleasure to see her, but because during our February debate I suggested that the Economic Secretary that should start to publish the gateways reviews of the Office of Government Commerce. He said he would reflect on that suggestion, and I was looking forward to hearing the results of his reflection this afternoon, but I feel confident that the Economic Secretary has briefed the Financial Secretary on the result of his reflections on the benefits of publishing gateway reviews. I shall be interested to hear her conclusions—or his conclusions, on the basis of that briefing.

Just in case the Financial Secretary has not devoted as much time to the subject as I might have hoped, let me offer her one or two hints.

"There are still far too many projects and programmes reviewed by Gateway teams where, frankly, project planning is little better than something on the back of a  cigarette packet."

Those are not my words; I found them on the OGC website. They are, in fact, the words of Sir Peter Gershon, the former OGC chief executive, uttered when he spoke at the project and programme management, or PPM, awards ceremony on 23 October last year.

I firmly believe that if we are to improve things we need more scrutiny, more openness and more accountability in the system. Last week's issue of Computer Weekly—always a good read for those who want to know what IT disasters are in the pipeline—set out what was described as the life cycle of a public sector IT failure. It goes something like this.

First, there is the project design. The design accords with the best-practice project principles, but there is an expansion of the objectives and the costs as interested parties give their views on what the new systems could do. In the second stage, an invitation to tender is issued. Civil servants faithfully reproduce the often unreasonable and, in some cases, simply ignorant demands of Ministers that the project be delivered at superhuman speed, when to anyone who knows anything about the subject the timetable looks completely unrealistic. However, the commitment to the time scales and to the project design is too great for heed to be paid to warnings from prospective end users, from trade unions, or indeed from any of the reputable prospective suppliers who are considering bidding for the project that the timetable is too tight or the scope unrealistically ambitious.
 
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The third stage is when contracts are awarded. After that, fuller consultation with potential end users begins, but it is usually inadequate or self-selective. In the fourth stage, the supplier begins to realise that it has overestimated its ability to understand the customer's business, and to convert that into IT systems, and the customer realises that it has overestimated the capability of the supplier. More often than not, the supplier also realises that it has not asked enough questions before signing the contract, and that the customer has not understood its own business sufficiently well to explain its work practices, the complexities of the project, the risks of failure and the real costs to the supplier.

Now we reach the fifth stage, and the timetable begins to lengthen. The projected costs start to increase, but commitment to the project is now far too great for any indecision or U-turn to be allowed, so the Department ploughs on.

The project starts to founder in the sixth stage, which is characterised by the beginnings of the cover up. In this stage, failure is depicted as success, and Members of Parliament do not get well-rounded answers to questions. In the seventh stage, the failure becomes apparent anyway. It is impossible to hide it because the public or the departmental end users are affected by the fact that the contract is being abandoned, changed, rewritten or even reawarded to another supplier. In the eighth stage, often years later, there are sometimes reports from the National Audit Office and the Public Accounts Committee. In the penultimate stage of the cycle, the Department says that it has learned the mistakes from the past, and those who give the assurances that lessons have been learned move on to other jobs, often in different Departments. Finally, those people are replaced by new personnel who embark on other projects that repeat the mistakes of the past, and the cycle begins anew.

That summary is all too realistic. Over the years, the PAC has examined scores of projects that exhibit those characteristics. The Inland Revenue tax credit system, which has already been referred to, was a classic example of a supplier being pushed into adopting a wholly unrealistic timetable and of a system being launched even though the contractors knew that it did not work properly. It became impossible to hide that failure when hundreds of thousands of citizens started to complain to their Members of Parliament that they were suddenly not receiving payments that hitherto, under the old working families tax credit, they had been receiving quite smoothly. Another classic example was the passport office fiasco, where after the expenditure of many millions of pounds on a new computer system, people suddenly could not get their passports on time—something that one tends to notice if one is just about to go on holiday, no matter what smooth reassurances one gets from a Minister or computer contractor.

Sometimes the failure is not quite so obvious to the pubic at large, but it usually comes out in the end. In Operation Telic, the UK's military operation in Iraq, when containers arrived with equipment for our armed forces in Kuwait and platoons of soldiers started to break into the containers to see what was in them and to obtain the kit that they needed—breaking in was the only way to find out what was in them—it became clear that the Ministry of Defence did not have proper asset-tracking or consignment-tracking software. It could not
 
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track its equipment as it was delivered around the world and into theatres of operation for our armed forces. Notoriously, that meant that there was not enough body armour available for our soldiers in the right places in the recent Iraq war. Let no one say that that was a cost issue: the body armour cost £169.70 per set and the MOD spent a mere £2.9 million on body armour for the recent conflict. The issue was one not of cost but of basic logistics.

In our hearing on Operation Telic, the MOD mentioned, almost en passant, that it had spent £120 million on a bespoke tracking system before it was scrapped four years ago—incidentally, 41 times more than it spent on the body armour for the recent deployment. There was the usual story about how the money had not been wasted because it was being rolled into the next project, but the fact is that 13 years after the lack of decent consignment-tracking software was first identified in 1991, after the first Gulf war, that problem has still not been fixed, even though there are all kinds of commercially available off-the-shelf systems that tell users all that they need to know about exactly where their supplies are. For example, the American firm Caterpillar can deliver a spare part for one of its customers anywhere on the planet in 48 hours. We are familiar with firms such as Federal Express and DHL, which can routinely tell customers exactly where in the system their deliveries are at any one moment in time.

With Government IT projects, it is endemic that there are problems that do not get solved and mistakes from which lessons are not learned—it is the same story wherever one looks. There is a fundamental inability to learn from mistakes. Apart from the cases that I have already mentioned, we had the infamous Wessex regional authority case, and the London ambulance system case in which the suppliers warned about potential problems and were ignored. We had the mess over Inland Revenue self-assessment and the mess over the Central Veterinary Laboratory database for tracking BSE. In the case of the national insurance recording system, the contract extension was double the price of the original contract, and with the caseworking system for the immigration and nationality directorate the supplier was paid for not writing software.

In the Libra project for magistrates courts in England and Wales, which has already been briefly mentioned, costs quadrupled. The old Lord Chancellor's Department, before it was scrapped, paid some £232 million merely for 11,000 PCs, the printers and the "associated support"—whatever that means. I know that it does not include software, because that was clearly set out in the NAO report. That works out at about £20,000 per PC, or £10,000 even if we include the replacements, when it would have been perfectly possible to go down to PC World and buy the required kit for a few hundred pounds per desk.

There was the implementation of the national probation service's information systems strategy, which had seven project managers in seven years, five of whom knew nothing about project management. The result was a system so poor that no one wanted to use it. There was the recent Criminal Records Bureau fiasco, whereby the prices quoted by potential suppliers to do the same job varied so wildly—from £250 million to £380 million—that the CRB got in another consultant to
 
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assess the relative merits of the bids, and to see where the discrepancy had arisen from. It still managed to end up paying significantly more than the highest bid.

We have already heard about the moving of the GCHQ computer, the cost of which, according to the management's own assessment, was £40 million. However, they told the board that the cost would be £20 million—do not ask me why because I do not know—and, of course, the actual cost was £400 million. Despite the fact that the National Air Traffic Services system at Swanwick cost £337 million and supposedly offers a superior service and an immediate 40 per cent. increase in capacity, it plainly is not up to the job, as became painfully clear when all the nation's aircraft ground to a halt the other day because of problems with the West Drayton system—a system that the new Swanwick system was supposed to replace.

Very topically, Sir Michael Bichard says in paragraph 35 of his recent inquiry that

"although national Information Technology (IT) systems for recording intelligence were part of the original National Strategy for Police Information Systems (NSPIS) as long ago as 1994, no such system exists even now. It was, in fact, formally abandoned in 2000 at the same time as the launch of the National Police Intelligence Model (NIM), which sought to place intelligence at the heart of policing. There are still no firm plans for a national IT system in England and Wales, although, in contrast, such a system will be fully operational in Scotland by the end of this year."

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