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Andrew Selous (South-West Bedfordshire) (Con): Our debate highlights one of our prime duties as Members of Parliament. We must hold the Government of the day to account on the expenditure of public money, which, we must remember, is precious. We have learned this afternoon that a total of £12 billion has been invested across government in recent IT projects. The
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sums involved are huge, and the Department for Work and Pensions, the highest spending Government Department, is at the top of the list on IT spending. Parliamentary scrutiny is essential, and we must ensure that the Office of Government Commerce enforces best practice.

Computer Weekly, which has been referred to several times, has suggested that project gateway reviews should be published in the public domain. In the United States of America, they have gone further by passing the Clinger-Cohen Act, which requires departments to report to Congress during the life of a project and highlight any deviations from that project specification. That is an American law, but I understand that the Minister for the Cabinet Office, who is a former Treasury Minister, indicated that she would look favourably at such a law in this country. Will the Secretary of State for Work and Pensions update the House on whether the Government intend to go down that path? All Governments of whatever persuasion will provide a better service to taxpayers and the public if they are subject to full and proper parliamentary scrutiny. That is true of future Labour Governments, Conservative Governments and Governments of any other persuasion. I hope that the Secretary of State will reply positively.

As part of its recent inquiry into the CSA, the Work and Pensions Committee went to Australia to examine the child support system. On that visit, we learned that the Australian Government have experienced similar problems to this Government regarding the computers that run their child support agency. The Australian Government got rid of their external commercial supplier during the life of the project, took the project in hand and made it work successfully. We must examine that example on a case-by-case basis, but it raises a number of questions.

I suspect that our Departments of State contain people who have expertise and who are capable of seriously examining commercial projects. They should be given the power to terminate a contract with an external supplier if the project looks like it will not come off and they should, like the Australians, have the courage to terminate such projects. If Departments do not have such expertise, they should scour the world to buy in the finest talent to oversee such projects. I cannot think of a better use of taxpayers' money than having people who understand such matters and who have the top technical expertise in the industry to make sure that projects deliver on time. Given the £12 billion sum that was mentioned earlier, expenditure on those people's salaries is money well spent.

Rob Marris : As a member of the Committee, does the hon. Gentleman recall that we got the impression that the DWP did not have the expertise to negotiate the contract and set up the agreement with EDS? However, we took evidence that the DWP has—not a moment too soon—beefed up its in-house technical, computer expertise, if not its legal expertise.

Andrew Selous: The hon. Gentleman is right, and he has made the same point as me. It is excellent that the DWP has increased its expertise, but we must ensure that top-level expertise exists in all Departments, and particularly in the DWP, to keep track of commercial suppliers hired by the Government.
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When we were in Australia, we saw the benefits of a computer system that works, when we sat with Australian staff and listened to phone calls from the Australian public. It is was a joy to hear a phone call come in, to see the correct information, including the previous details of the case, coming up on the screen and to observe the member of staff giving efficient answers straight away and taking the case forward. We want that service for all CSA clients and CSA staff—the CSA employs about 12,000 staff—in this country.

The CSA has operated an appalling telephone system. Earlier this year, clients who rang the CSA had their calls routed to any member of CSA staff in the country who was not using their phone. The calls were answered by members of CSA staff in different offices in different parts of country, who were often unable to access the client's details. That was frustrating for both the member of the public who had rung in to try to get a service from the CSA and, indeed, the poor CSA staff. That level of service was appalling and unacceptable. The issue concerns not only computers, but a decent telephony system that serves the public.

In Australia, the computers and telephones work and proper information retrieval is possible. I asked Committee staff to analyse the case load levels of Australian staff and UK CSA staff. Where the computers work, it is no surprise that each Australian member of staff can handle a much greater case load than UK CSA staff.

In a few years' time, when the computers work—the objective for which we are all aiming—the CSA can employ fewer staff, whom we can pay more because there will be fewer of them. CSA staff are not particularly well paid—the average salary of a CSA member of staff in this country is about £14,000. I should like to see a situation in which we can employ fewer CSA staff who are better paid and who operate computers that work. That vision is achievable, because, as in many areas of social policy, Australia has led the way and shown us that it can be done. I hope that we all look forward to that vision.

Finally, I shall discuss the complexity of welfare benefits generally—the Select Committee Chairman, the hon. Member for Roxburgh and Berwickshire (Sir Archy Kirkwood) commented on that matter in his opening remarks. When we went to Australia, we met someone who said, "The price of the equity is complexity," which is no doubt true in many cases concerning social security. If one is going to be completely fair to people in different circumstances—different incomes, savings, ages and family situations—one will be faced by a complicated welfare and benefits system.

Equity also concerns a robust, dependable system that works and that delivers the money that clients need on time, week in, week out, without failure. A system that works is a matter of equity and social justice. The welfare system is complex. The new CSA system is simpler and concerns percentages of income, but when it was converted into a computer programme, it took 60 million lines of software code to deliver the project. We must examine a simpler welfare and benefits system that is robust and that delivers—the new, simpler CSA system still requires a highly complex computer system.
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2.49 pm

Mr. Steve Webb (Northavon) (LD): I join other hon. Members in congratulating the Chair of the Work and Pensions Committee, my hon. Friend the Member for Roxburgh and Berwickshire (Sir Archy Kirkwood), and his colleagues on a very important report. If I may say so, my hon. Friend is an anorak's anorak. He was willing to go boldly where no one else was willing to go, and he has done the House, and all our constituents, an important service. Scarcely a person in the land is not affected by one or other computer system, whether for child support, tax credits or national insurance. They all affect our constituents to varying degrees, and they have to be got right. My hon. Friend and his Committee have done an important service in bringing this before the House.

The motion on which the House will be asked to express its view at 6 o'clock allocates £26.3 billion to the Department for Work and Pensions, on account, for 2005–06. It is probably out of order to ask too many questions about that £26.3 billion, because we are supposed to talk only about the bits of it that refer to the management of IT projects. Will the Secretary of State tell us how much of it refers to IT projects, to the nearest billion?

I have a feeling that we are not quite as rigorous in scrutinising public spending as we might be. I looked through HC 1235, a document referred to in the motion, to see whether I could find out what the £26.3 billion was spent on. There are six very vague headings. Apparently, ensuring the best start for children and ending child poverty in 20 years will be a snip at £113 million, whereas promoting work as the best form of welfare will cost £15 billion and improving rights for disabled people will cost £6 billion.

If I understand it correctly, this £26.3 billion is 45 per cent. of the expected figure for 2005–06, which takes us up to about £50 billion—about half the Department's whole budget. Will the Secretary of State clarify why we are talking about only just over half the budget—is national insurance excluded, for example? I am slightly befuddled. Given the vast sums that the Department deals with, some indication of what on earth we are talking about would be helpful.

On IT, we heard informed contributions from the hon. Members for South Derbyshire (Mr. Todd) and for South-West Bedfordshire (Andrew Selous). This has not been a partisan occasion, and I shall not seek to make it so—or not too much. The issue of in-house expertise is vital. I was shocked, when I read my hon. Friend's report, to find that ITSA—as in "it's a" shambles, or rather the Information Technology Services Agency of the Department for Work and Pensions—had been contracted out: handed over to one of the poachers, as it were. That is extraordinary. There is a concept in economic regulation called regulatory capture, whereby the regulator wants a quiet life and the best way to get it is to get on well with the people he is regulating. It is regulatory capture gone mad to hand over the people who know about managing IT projects to the people whose projects they are supposed to be managing.
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I am reassured that the Department is now starting to build up its in-house IT expertise. However, I do not believe—this is no disrespect to the people the Department has taken on, because I do not know them—that one will get the quantity and quality of people while things are not done in-house, because surely anybody who could work for the DWP managing entire IT projects on this scale could earn three times as much working for EDS. If everything is outsourced, there will never be the quality and calibre of people being taken on. Will the sort of person who is up to the challenge take a job with the Department for a third of the money?

It was fascinating to hear about the Australian experience, whereby when the system went wrong it was brought in-house and then worked. I am worried that Departments of all sorts have lost the expertise. Initially, such IT projects were done on a public-private partnership basis. We are now reaping the rewards of that, and the Treasury has accepted that it is a mistake. However, projects are still being outsourced to a very small band of competitors. That is worrying. If the Department could choose from dozens of potential suppliers of these services, then when one of them makes a complete pig's ear of it, as it is known in technical circles, the Department could really give it a hard time by enforcing the penalty clauses and withdrawing contracts. But when it is only one of two or three, the Department dare not upset it and has to get on with it. It all seems to have got terribly cosy. The Department cannot get really tough because if that supplier goes away, it is down to two. I gather that EDS is one of only two potential suppliers for the Ministry of Defence's computer system. That terrifies me.

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