Examination of Witnesses (Questions 20-39)
OFFICE OF
GOVERNMENT COMMERCE,
DEPARTMENT FOR
WORK AND
PENSIONS, HOME
OFFICE, HM PRISON
SERVICE, AND
DRIVER AND
VEHICLE LICENSING
AGENCY
WEDNESDAY 17 NOVEMBER 2004
Q20 Mr Williams: Having
observed that, it seems very appropriate that our Treasury colleague
has joined us today because IT along with the Ministry of Defence
represent the two biggest bottomless pits in public expenditure,
and in a way the area you are trying to address is more important
because of the number of social programmes that its failures have
disrupted as well as wasting money. I recognise you have got a
difficult task, and I am glad you are trying to address it, but,
like the Chairman, it seems to me that you are not getting the
co-operation you should because looking at page 7, paragraph 15,
at the foot of the page, the point is made there that the first
Gateway Review that a project undergoes may not in fact be the
first Gateway in the cycle, although this is what you recommend.
Is that being addressed? I do not need a long answer, but are
you taking steps to address it?
Mr Oughton: You are absolutely
right, that the ideal position is for every project right from
day one to go through every stage of the Gateway process. That
has not been happening. The most recent evidence from the last
quarter, from June through to the end of August, shows that our
strike rate of projects entering the Gateway process, at either
Gate 0 or Gate 1, a programme at Gate 0, a project at Gate 1,
is now higher than it was—it is over 70%, so I think the
trend is in the right direction. More projects are coming forward
earlier in the process than was previously the case.
Q21 Mr Williams: That
is at least encouraging news. In the final sentence in that paragraph,
it says, "A major risk, however, is that projects are entering
the process too late—that is at Gates 2 and 3 (crucially,
after the business case has been prepared), and exiting the process
too early—that is before Gate 5", without their value-for-money
assessments and management arrangements, so that really is a double-whammy
in the process, is it not?
Mr Oughton: Well, you are absolutely
right, that it has been the case, as the Gateway Review process
has developed, that the projects that were already in existence
were finding that the way of entering the Gateway process was
not at Gate 0, because they had already started before the Gateway
process was invented, but they had to enter at a later stage.
Now, we have done two things. We, first of all, made absolutely
clear that no project may enter the Gateway process after Gate
3, so that puts an immediate signal to a department that they
must enter this process earlier. The second thing we have done
in March of this year was to agree that all centres of excellence
in departments will now chase projects so that if 12 months have
passed since Gate 4 has taken place, then they will challenge
the projects to come forward to Gate 5, so in a sense we are saying
there is no hiding place now and projects have to come forward
and have a Gate 5. Since March of this year seven projects have
conducted a Gate 5 and I can see the momentum building there as
well.
The Committee was suspended from 4.00
pm to 4.08 pm for a division in the House
Q22 Mr Williams: Mr Oughton,
it seems to me that, as the Chairman previously said, you are
not getting the co-operation you should receive, nor the priority
that your programme should receive and I am wondering if there
might not be some way in which this Committee could actually help
you in the process of focusing the minds of your colleagues. For
this, I would like to switch for a moment to Sir John, so excuse
us for ignoring you for a second. Sir John, after the Pergau Dam
débâcle, we introduced a system where you would be
notified of all Permanent Secretaries' letters, where the Permanent
Secretaries said they needed an instruction to carry out a letter
from a Minister before they carry out expenditure, and it has
been very useful for monitoring departments. Is there anything
analogous to that which we might be able to use which could bring
you in at an appropriate stage and, if necessary, bring us in
at an appropriate stage to hope to make recalcitrant departments
face their responsibilities?
Sir John Bourn: Well, of course,
Mr Williams, we do have access to all the papers relating to the
projects, so it is available to us to report on their progress,
but I suppose more focus could be given to that if it became part
of the procedure that specific reference was made to me in relation
to a project which got the starkest red light, if I put it that
way, and that would then give me a particular opportunity of considering
whether there was further work that I could usefully do. It would
of course also mean for the OGC and for departments that there
was a straightforward piece of procedure that people saw, that
if you reached the position of greatest worry and danger, specific
reference would be made to the C&AG.
Q23 Mr Williams: It is
good that you are getting there, but obviously this Committee
also wants to keep an eye on it because we are absolutely fed
up, absolutely fed up, with issuing warning after warning after
warning for the same errors time and again. Obviously we do not
expect you, since there are so many cases, to report to us on
every one, but would it be a practicable or effective possibility,
do you think, if, first of all, you set up, ensuring you had the
appropriate notification and structure in relation to a department,
the OGC and if quarterly you produced a report for us on any major
failures to conform to the Gateway procedure? Would that be (a)
practicable for you and (b) do you think it might be effective?
Then I will ask the same question of Mr Oughton.
Sir John Bourn: I think it certainly
would be practicable because there would not be an enormous number
of projects which had that degree of danger attached to them,
and if it was agreed among all parties that it would be useful
to do this, it is something that the National Audit Office could
do, I think, effectively in a simple and straightforward way.
Q24 Mr Williams: Mr Oughton,
how would this be perceived from your end? I can imagine there
would be shudders of horror throughout some of the departments,
which may not be a bad thing, but how would you perceive it? Would
you see it as trying to help you or would you see it as a hindrance?
Mr Oughton: I am certainly in
the business, Mr Williams, of anything that can help improve performance.
That is why we are in business and that is why we want to deliver
better value for the taxpayer. I would like to reflect obviously
on what the Comptroller and Auditor General has said, but there
might be two ways of looking at this perhaps. As you know and
as the Report makes clear, there is a number of projects which
score double reds and they will, I think, qualify, as Sir John
Bourn has said, those that are flashing deepest red in the system.
There is quite a good story to tell on what has happened to those
double reds subsequently, but I am sure that we could look at
that as the first category of the most difficult cases which have
emerged from the Gateway Review process and it might be that we
could find a mechanism there.
Q25 Mr Williams: Well,
Chairman, I am happy with the answer I have received which has
seemed positive, so would the two of you, therefore, undertake
to get heads together fairly quickly and could you give an idea
of what timescale you might feel would be appropriate for you
to come and tell us what formula you have decided upon?
Sir John Bourn: I would think
we could certainly do that.
Mr Oughton: We can certainly get
together very quickly. Of course I would want to reserve our right
to comment on whatever report you produced following this decision
in the normal formal way, Mr Williams. Might I make one other
point about how we get into this process? You talked about identifying
failure of procedure and I think that is an issue that I would
want to discuss in some depth with Sir John. The Gateway Review
process has a structure to it, but it also has a degree of flexibility
because not every project would expect to go through every Gate.
For example, at Gate 2, the procurement Gate, if a procurement
strategy is being undertaken on a framework contract where essentially
the procurement decision has already been taken, you will not
go through a Gate 2. Now, I would not regard that as a failure
of process even though on the face of the page it would look as
if a Gate had been missed out, so I think there is a bit of discussion
which we would need to have to narrow down precisely what constituted
failure of procedure and what did not, but we could certainly
do that.
Mr Williams: That is helpful and I suspect
Mr Bacon might well be tempted down the same route, thinking along
parallel lines.
Chairman: Well, speak of the devil, let's
now hear from Mr Bacon.
Q26 Mr Bacon: Mr Oughton,
2.9 is the paragraph where it talks about double reds and I am
right, am I not, that if there is a double red, then you have
to send a letter to the Permanent Secretary?[1]
Mr Oughton: That
is correct. The procedure is that the Chief Executive of OGC will
send a letter to the Permanent Secretary, copied to the Cabinet
Secretary.
Q27 Mr Bacon: Well, would
it not be the simplest way to extend what Mr Williams has been
talking about, that as you copy it to the Cabinet Secretary, you
also copy it to the C&AG?
Mr Oughton: Well, I think that
is the discussion I must have with the C&AG and we will find
the simplest procedure that we can.
Q28 Mr Bacon: It refers
to eight projects which had double reds. Which are they?
Mr Oughton: Well, I am very happy
to indicate one of those because I own it, but I should just make
clear that—
Q29 Mr Bacon: You said
there was a good story to tell on them. If there is a good story
to tell on them, you are surely not reluctant to tell a good story?
Mr Oughton: No, I am not reluctant
to tell a good story, but I know you will appreciate that the
ownership of a Gateway report resides with the department that
has commissioned the Gateway Review, so the senior responsible
owner in each of the departments has ownership of that document.
I could not possibly answer for each of those individuals. I am
very happy to answer in the case of the project for which I am
responsible and I am also extremely happy to give you an indication
of how the projects which have received a double red have proceeded
beyond that point.
Q30 Mr Bacon: Could you
send us a note on that for us?
Mr Oughton: I could send you a
note, but, as I say, the ownership of those reviews rests with
the departments in the end.
Q31 Mr Bacon: And with
the senior responsible owner?
Mr Oughton: And with the senior
responsible owner.
Q32 Mr Bacon: Send us
a note with as much information as you feel like giving us and
we will see whether we like it or not.
Mr Oughton: Yes, of course.[2]
Q33 Mr Bacon: Of course
you are referring to those projects where there is a senior responsible
owner.
Mr Oughton: Yes.
Q34 Mr Bacon: And I am
looking at the PAC Report we did on Customs & Excise where
it appears Customs just sort of sailed through or by or round
the side of the Gateway process and we ended up commenting that
Customs has not always followed good practice as recommended by
the Treasury. There was a recommendation which we included that
there should be proper management of consultants. Do you not find
it extraordinary ten years after you did the scrutiny study where
we had, I think it was, critical success factor 7 which said,
"We need to manage the consultants effectively". That
was in 1994 and you were deeply familiar with that study because
you did it.
Mr Oughton: Indeed.
Q35 Mr Bacon: And also
critical success factor 9, reviewing the assignment, which sounds
like "to assess the value for money and to ensure that lessons
are being learnt". It sounds remarkably like Gate 5 and yet
here we are, this was published in June 2004, ten years later
almost to the "t", and we are having to say that there
should be proper management of consultants. It is enough to make
you want to turn to drink, is it not, and the question really
I have for you is: what makes you think that the process is working
sufficiently well and is getting better at a sufficiently rapid
rate that you do not need rather more than incremental change?
You say that you like the idea of this, what you call, "safe
space" for conducting Gateway Reviews. Let me ask a very
specific question: what do you think is the defining characteristic
of a successful IT project?
Mr Oughton: The defining characteristic,
I think it is about being absolutely clear at the outset what
the objectives of the change are and absolutely clear at the outset
whether you are engaged in a business change, a process change
which is IT-enabled or whether you are procuring a piece of IT
for operational use and delivery, so it is extremely important
to be clear at the outset what you are trying to achieve. I think
it is fair to say that not every project has been clear about
that at the outset and that is the whole point of introducing
the Gateway process, which we did. It is about getting into the
process earlier and being absolutely clear what the strategic
intent is before starting on the process of procurement.
Q36 Mr Bacon: I found
an article in Computer Weekly, in fact I wrote it.
Mr Oughton: I thought I recognised
the style!
Q37 Mr Bacon: So I obviously
think it is a very good article and it says, "The defining
characteristic of a successful IT project is the close link between
customer and supplier". I did not make that up, I got it
from an award citation, an IT industry project award, where they
were citing very, very good practice. If it is true that a very,
very close link between customer and supplier is the defining
characteristic, which I think you would agree with, how can the
Gateway process be delivering that to the extent that it could
when suppliers do not even know the Gateway Reviews are taking
place? This safe space that you talked about does not actually
give the supplier a chance to voice their concerns, yet in your
report from ten years ago, the Cabinet Office made it very clear
that one of the problems is insufficient engagement at the top
of the office, the constant complaint from consultants that they
could not get heard, things were palmed off to the G7 or somebody
lower down the chain, they could not get engagement with the top
of the tree and, therefore, problems were not recognised.
Mr Oughton: Well, as I said right
at the outset, Mr Bacon, one of the strengths of the Gateway Review
process is that it allows us to identify problems earlier and
it allows us to identify the problems more frankly than perhaps
would be the case otherwise. As you will have heard some of the
witnesses say already, and this is clear in the Report, once a
Gateway Review report is produced, responsibility is then with
the senior responsible owner and the project to take action on
the recommendations. I think you will find that in many cases
those actions are undertaken in partnership with, and in co-operation
with, the supplier and will involve the supplier in working out
what the solution should be.
Q38 Mr Bacon: It is true,
is it not, that the Criminal Records Bureau project went through
the Gateways and came out with green lights?
Mr Oughton: Yes, and that does
not surprise me in the least—
Q39 Mr Bacon: It is true,
is it not, that a tax credits project went through the Gateway
process and came out with green lights?
Mr Oughton: Well, if you would
like me to answer—
1 Ev 14 Back
2
Ev 14 Back
|
