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Mr. Allan: Does the hon. Gentleman share my fear that, in looking at all the IT failures, we might develop a very risk-averse culture whereby public authorities that do need new IT systems—the police are the classic example—do not invest in them because they are scared of what will happen down the line? That, too, would be very retrograde.

Mr. Bacon: I agree that that would be retrograde. I do not think for one moment that anyone can say that the public sector is risk-averse when it comes to IT projects. The public sector takes huge risks in respect of such projects, and in the main it does not know the size of the risks that it is running.

I want to mention two more examples. The first is the joint probation service and Prison Service offender assessment system—OAS—which is still in the pipeline. The report on that system, on which we were supposed to have taken evidence, was due in July but was postponed until 15 September. We learned as of yesterday that it has been postponed still further. Secondly, there is the national programme for IT in the health service. Key aspects of what are multi-billion pound contracts—the initial assessment was £2.3 billion, but the latest Financial Times report suggests a figure closer to £6 billion—had to be reviewed within mere months of their being signed.

The project has seen Professor Peter Hutton, the chief clinical adviser, resign as chairman of the clinical advisory board, and until extremely recently the views of GPs had been largely ignored. Indeed, in respect of many of the other projects that we have considered, the advice of the National Audit Office concerning the need to consult early was also totally ignored. The NHS has contracted to buy far more systems in phase 1 than there
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is demand from hospital trusts, and in phase 2 the contractors will almost certainly be unable to meet the likely demand. Finally, GP magazine described the programme as

Mr. Jenkins: I listen with interest, as always, to the hon. Gentleman. He provides a list—too long a list—of near-disasters, but such contracts have been taken out with some of the best private sector companies in this country. Can he suggest a solution? Where are we to look if not to the best private sector companies in the country?

Mr. Bacon: I thank the hon. Gentleman for his extremely timely intervention, because at the top of my next page it says, "What can be done?" He is right: we are talking about some of the finest and biggest computer contractors in the world. The Financial Secretary must therefore consider the possibility that something systemic is going on. It simply is not the case that everyone wants to get things wrong or to have as many disasters as possible. Something deeper is going on, and two areas deserve immediate attention, including from the Financial Secretary. To do so would not cost any money—she should be interested in that—and there would be an immediate benefit and a significant chance of improving the situation.

The first, which I briefly mentioned in our last debate on the subject, is the publication of gateway reviews. With a record as appalling as the one that I have just cited—the hon. Member for Tamworth (Mr. Jenkins) is right that the list of mistakes is far too long—the burden is not on me to show why the Government should publish gateway reviews, but on the Government and the Financial Secretary to say why they should not publish them. What possible justification could there be for not publishing them?

Departments often bleat about commercial confidentiality as a reason for not publishing reviews. They say that they have an agreement with a supplier and that the commercial interests of that supplier would be threatened by greater openness, but that is not necessarily what suppliers themselves say when given the chance. It was interesting to see that in the public evidence given to the Work and Pensions Committee in its ongoing inquiry into IT systems, the supplier stated that it did not have any problems with the publication of gateway reviews. On the contrary, the supplier said that it would welcome them. At the moment, it is not necessarily the case that suppliers are even aware that a gateway review is being undertaken. Amazingly, it is not a given that they know that a gateway review is happening.

Mr. Allan: On that point, does the hon. Gentleman agree that it would be helpful to see the early gateway reviews—those on feasibility and all the technical issues that do not necessarily involve suppliers—when we are debating legislation? For example, when we debate the draft identity cards Bill in this place, it would be helpful to have the early gateway reviews before us, to help us think about the feasibility of implementation.

Mr. Bacon: I entirely agree with the hon. Gentleman. While we are on the subject of ID cards, I read in
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Computer Weekly just recently that senior figures in the industry—including, I am delighted to say, the Government's new chief information officer—have poured scorn on the feasibility of the ID card scheme. Before the Financial Secretary goes off with her Treasury colleagues and spends thousands of millions of pounds on an ID card system, she should listen to the people in the industry who are saying that the Government's business case for ID cards is vapid. A great deal of money could be saved and spent on something that people want their taxpayers' money to be spent on. I utterly agree that the answer is to have more transparency at as early a stage as possible.

It would be worth comparing the position that I have described with some of the well managed projects. It was noticeable that some common themes for successful projects emerged at the recent corporate IT forum—Tif—awards presentation for excellence in IT projects. I quote:

Yet far too often with Government projects, far from having such close collaboration on the project that the business customer/IT supplier approach was all but absent, the suppliers do not even know that a gateway review is under way.

It is not the case that suppliers are wary of such openness. It is Departments and their officials who are so wary. They are far more protective of the so-called need for commercial confidentiality, because it helps protect them from future criticism.

Mr. Jenkins: I want to be clear about this in my own mind. The hon. Gentleman is intimating that the difficulty lies not with the suppliers, but with the customers, and that the customers do not want the transaction to be transparent because it may be difficult to specify the exact requirements of the project from the outset. That may result from a lack of technical ability or understanding of how the system will work. Is the hon. Gentleman saying that we do not have the necessary expertise to undertake the projects in the light of the rigour of transparency to follow?

Mr. Bacon: I think that the hon. Gentleman makes a good point. The lack of procurement skill in government is quite widespread. However, I would not want to pretend for one minute that some suppliers do not also get things horribly wrong. In the case of the Libra project, for example, it was not only the Department that was responsible for the scandal, it was also the supplier—ICL/Fujitsu. To return to my earlier point, in successful projects there is close collaboration between the supplier and the Government, such that it works like a seamless collaborative integrated team.

The hon. Member for Tamworth brings me to my next point. The Chairman mentioned Mr. John Oughton, the new chief executive of the Office of Government Commerce. Ten years ago, he was in charge of the Cabinet Office efficiency unit. He led a
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scrutiny study that led to the publication in August 1994 of a report called "The Government's Use of External Consultants". The frontispiece of the report carried a quotation directly relevant to what the hon. Gentleman said. It stated:

That is true, but suppliers and Government need to be in an informed loop where they can learn from each other. Too often, suppliers are not trusted in the adult way that makes close collaboration and success more likely. Part of the answer is to publish gateway reviews, so that everyone can see where they stand—or, in some cases, simply what is going on.

My second suggestion is more wide ranging, and it draws on experience in the US. When that country was faced with similar problems, Congress passed the Clinger-Cohen Act 1996, which provides a statutory framework of accountability. The US Government recognised that the lack of accountability, particularly in IT projects, and a culture of secrecy and cover-up had contributed to major failures in IT projects. The Clinger-Cohen Act, in essence, requires Departments to report contemporaneously to Congress on the progress, or otherwise, of projects, and to disclose any deviations from standing orders.

If we had a similar system here, following a gateway review that revealed a red light on a project, it would—as a matter of course and at an early stage—become public knowledge that the Department concerned was facing a red light. In particular, it would automatically become public knowledge if a Department went through a red light.

Last week, the Committee published a report on Customs and Excise and its use of electronic delivery to transform its services to customers. The report refers to the fact that Customs faces an OGC gateway review, as many Departments do. It also notes that Customs should have had a sensitivity analysis, but that it plainly did not. It says that there should be proper management of consultants, and that there should be an overall, senior responsible owner.

It is extraordinary that, even now, we must tell Departments that they should have proper management of consultants and that they should have overall senior responsible owners for their projects. However, we still do not know for certain whether a red light was flagged up by the gateway review process that Customs and Excise then went through. That is how it appears, but we do not know for certain, because the OGC's gateway reviews are not routinely published. I think that they should be.

Legislation that provides a clear framework for accountability would be an important step in forcing the searchlight into some of the darker corners of IT projects, where the natural tendency is to cover up mistakes. There is an important contrast with what happens in the private sector. People often say that mistakes are made in the private sector too, and they are right: there are many such mistakes, but there is an important difference.

I spoke at a conference for IT suppliers a few months ago. The Committee's Chairman gets many invitations and is very kind in refusing them and palming them off to other members of the Committee. It is a matter of
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duty, I suppose. Before the conference, I was talking to a supplier who worked in both the public and private sectors. I asked her what was the main difference between the two sectors, and she said there were two differences—speed and commitment.

In the private sector, greater speed applies to decisions, and to the rapidity with which the plug is pulled if it becomes clear that circumstances have changed, that the market has moved or that the project has been rendered irrelevant by other changes. The supplier said that commitment is what top management in the private sector devotes to a project. That commitment is far too often lacking in Government projects.

I repeat my two proposals for the Financial Secretary's consideration—that gateway reviews should be published as a matter of course, and that a statutory framework for openness and accountability should be introduced, building on the lessons of the Clinger-Cohen Act.

The Financial Secretary may say no to my proposals, and she may assert that they are not necessary. However, given the public sector's catastrophic record in procuring IT projects under Governments of all political complexions, the Treasury has to do more. It must say whose side it is on. Is it on the side of taxpayers and citizens, who expect good value and service for the taxes that they pay, or not?

Unless the Treasury is prepared to change, the IT disasters will continue to happen—not because anyone wants them to, but largely because there are no real obstacles in the path of failure.

5.44 pm

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