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Mr. Richard Allan (Sheffield, Hallam) (LD): I have a great deal of sympathy with what was said by the hon. Members for East Londonderry (Mr. Campbell) and for Warwick and Leamington (Mr. Plaskitt) about consumer protection in the context of financial services. However—unsurprisingly, perhaps—I want to talk about the role of information technology in the UK economy, a subject on which Cicero and Demosthenes did not regularly speak.

For a number of reasons, IT is now centre stage in the political debate. It is no longer an issue on the fringes for the anoraks to talk about; it is something that we all need to consider. The Chancellor emphasised its centrality when he told us that he had already factored into his public spending plans the Gershon review savings, many of which depend on the success or otherwise of IT projects.

Government affects the sector as a whole because about half all IT spending in the UK is now made by the public sector. As Government spending plans depend increasingly on efficiency gains that themselves depend on IT, the expenditure is being ramped up. Sadly, the track record of Governments of all colours in procuring and implementing systems has been characterised by problems that we regularly examine on the Public Accounts Committee.

Many of the mistakes that we see continue to be repeated, and this year's programme contains a huge amount of new IT risk. Both the identity card system and the Inland Revenue and Customs and Excise
 
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merger will be very IT-intensive. Major contracts from earlier years will also be of interest this year, notably the national health service's national IT programme, the large-scale outsourcing for the Department for Environment, Food and Rural Affairs, which has already been awarded, and the £4 billion infrastructure project for the Ministry of Defence, which is due to be awarded early in the new year.

The record of problems that should form a background to our consideration has come to the fore in recent weeks with the failure to implement the Child Support Agency system effectively, and the desktop system crash at the Department for Work and Pensions, which was truly spectacular in technical terms. It takes real skill to bring down 60,000 work stations. Normally, servers are the problem; one machine is killed, and no one else can gain access. These people managed to kill 60,000 machines simultaneously, which deserves respect from a technical if not an operational point of view.

Stories of IT failures have been well rehearsed both in Committees and here, and I would rather spend my time suggesting solutions that I believe would produce a credible Government IT strategy on which we could pin spending plans with a degree of expectation of actually being able to meet them. I characterise them as "people, practices and purposes". IT problems often lie not in the detail of the technology, but in the "people, practices and purposes" that surround it. Let us begin with "purposes", sometimes described as "requirements" or specifications. We should view it in a broader context, and start by asking what any system is for. Far too often we do not look at the context of what we are trying to achieve in the wider world, but simply mechanise existing systems.

One example of our losing track of the wider world is the tax credit system. Like me, other Members doubtless get regular visits from constituents who complain that they have been overpaid tax credits and are now being asked to pay them back. The system works; it correctly calculates that such people have been overpaid, informs them—in a way that is completely unintelligible to me, and certainly to them—and then seeks to reclaim the money. In doing so, it loses track of the wider point that we are giving these people money in the first place because they are on low incomes, so our ability to reclaim it is bound to be limited. The purpose of delivering money to people on low incomes has been lost in the process of creating a system that works well at a technical level—it does not lose the Treasury's money—but which does not deliver what the customer actually needs.

Sir Robert Smith: My hon. Friend is making a valuable point about the impact on people with low incomes. Just today, a constituent got in touch with my office to explain how their problem was dealt with. They phoned the helpline, but the system is so chaotic that it told my constituent to write to their MP because there is nothing that it can do.

Mr. Allan: I have had precisely the same experience; people have come to my surgery to point out that they have been given exactly the same advice. Such incidents show that, in the broader context, the system is not
 
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working, irrespective of whether the technology is doing what it is supposed to do. These are the issues that we need to debate. Another example is the huge electronic medical records programme that the national health service is introducing.

Mr. David Willetts (Havant) (Con): I am listening to the hon. Gentleman with great interest. Before he leaves the subject of tax credits, may I ask whether he will join me in congratulating the Secretary of State for Work and Pensions on insisting that claims made by people in receipt of income support will not be handed over to the child tax credit system? The decision has been delayed yet again, and it is clear that the Department for Work and Pensions is not confident that those on the lowest incomes would get the money that they need if they were handed over to that system. Long may the Secretary of State carry on battling in favour of long-established benefits and against this scheme, which is still so unreliable.

Mr. Allan: The hon. Gentleman makes the point very effectively. I agree entirely that if there were clear evidence that a particular programme would cause distress, we should not proceed with it simply because it had been started and a target date set. I am at one with the hon. Gentleman on the decision that has been taken.

Mr. Paul Tyler (North Cornwall) (LD) rose—

Mr. Allan: The subject of tax credits appears to be a minefield. I give way to my hon. Friend.

Mr. Tyler: I am grateful and I shall be brief. Does my hon. Friend agree that this issue is very relevant in the light of the Chancellor's intention to remove many people from the various Departments, and of the recent strike action taken by professional civil servants affected?

Mr. Allan: I have an enormous amount of sympathy with my hon. Friend's observation. As our surgery experience shows, many such changes are based on a business plan that involves getting rid of lots of people, but which does not recognise that, in the early months of its implementation—but hopefully not in the long term—more people are needed to deal with teething troubles. Otherwise, a huge backlog develops. Existing queries cannot be answered and more queries arise, leading to a cycle of difficulty. Sadly, that is what is happening with certain aspects of the tax credit system.

The NHS IT programme will be another major issue for debate in this House. To my mind, the purpose of that electronic medical records system is to improve patient health by ensuring that information is available to support clinical decisions. Its purpose is not to create electronic records per se, which would have no value except where they lead, directly or indirectly, to patient benefit. Again, we should think about such systems in terms of what they are trying to achieve for the public, rather than as the simple creation of electronic records. We frequently fail to debate such issues in that way.

The shifting of purposes should always be a clear warning of potential problems, and in my view—it will not be shared throughout the House—identity cards are a case in point. Whatever the merits of ID cards and the
 
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associated politics, they are certainly an example of shifting purposes. Initially, they were wanted for their own sake, but since then we have gathered up an ill-defined set of functions—preventing illegal working, national security, access to NHS services—and tacked them on. To me, that rings very loud bells as regards whether the system will work. I cannot see it as having a clearly defined purpose. We could have a separate debate about whether it would meet those requirements, which seem to be hazy.

Michael Fabricant (Lichfield) (Con): I am grateful to the hon. Gentleman for giving way. If I may say so, it is one anorak giving way to another. Does he agree that the gateway system introduced by the Government is another problem? The whole point of having a gateway review is that a project should not go ahead until gateway zero has been initiated, yet quite often—the hon. Gentleman mentioned the NHS as an example—we enter gateway three a long time after gateways one and two have been ignored.

Mr. Allan: In the case of ID cards, we know that the scheme has been through the first gateway, as the general feasibility has been looked at. One of the problems that the House will face is that, after public money has been spent and the best Treasury brains in the Office of Government Commerce have been applied to the project, we will not be able to see the outcome. We will have to debate ID cards in the knowledge that a report into feasibility has been drawn up, but is unavailable to us. I know that the hon. Member for South Norfolk (Mr. Bacon) is working on the task of gaining access to the gateway reviews. After all, we are taking decisions about spending public money, so the information should be made available to us.

Gateway reviews are one of the practices that should be followed. Many have been dealt with in National Audit Office and Public Accounts Committee reports and, to be fair to the Government, there are some signs of hope in the work of the Office of Government Commerce and, indeed, of some Departments improving their game. I believe that we should compliment Departments when they start to get things right, but there are still clouds on the horizon, especially in the apparent lack of competition in the market, which leads to companies that have failed in one area still picking up lucrative contracts from other Departments.

It is an easy target, but Electronic Data Systems is often singled out for its problems with tax credit systems, Child Support Agency systems and high-profile incidents such as what happened last week at the Department for Work and Pensions, a story that writes itself. Yet EDS remains a major partner and one of only two consortiums remaining for the £4 billion defence information infrastructure project that will be awarded next year. Understandably, people ask how we can end up with failure being rewarded by the award of another contract.

Only in very few cases have contractors been written out altogether; Accenture, in its old guise of Andersen, was prevented from bidding for Government contracts for a while after a national insurance record system cock-up. Generally, we see the same faces coming back. The problem is not with individual companies. The problem is systemic, because contracts are geared in
 
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such a way that smaller innovative companies simply cannot get in. They can find no way in and tell us daily of their difficulties in obtaining Government work. The contracts, tender documents and costs of bidding prevent those companies from bidding for that work, even though they could demonstrate better value for money.

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