Examination of Witnesses (Questions 1-19)
CABINET OFFICE
AND OFFICE
OF GOVERNMENT
COMMERCE
27 NOVEMBER 2006
Q1 Chairman: Good afternoon. Welcome
to the Public Accounts Committee. Today we will be looking at
the Comptroller and Auditor General's Report, Delivering successful
IT-enabled business change. We welcome Mr. Ian Watmore, who
is head of the Prime Minister's Delivery Unit, and Mr. John Oughton,
who is Chief Executive of the Office of Government Commerce.
Mr. Watmore, first let us ask you about the
Pension Credit success. It is dealt with from page 19 onwards
in Volume II of the Report that deals with case studies. What
lessons can be applied across the rest of government? What lessons
can we learn from this successful IT project and how can we apply
them across the rest of government?
Mr. Watmore: Thank you, Chairman.
The Pension Credit example is one that is brought out throughout
the Report as a good example of getting the right political and
business leadership into the programme before it is started and
then really sampling the views of the customers of the particular
system—in this case, the elderly who will be in receipt
of it. In order to do that, it researched very carefully how best
to deal with pensioners and, as a result, ended up designing a
solution that was fit for its purpose.
Q2 Chairman: Yes, but we have had
a lot of trouble with that Department in the past, particularly
the Child Support Agency. Why do you think that it could successfully
deliver Pension Credit, but perhaps not successfully deliver IT
in the Child Support Agency, or was that just because child support
is a much more complex area?
Mr. Oughton: Child support certainly
is a complex area. This is about the passage of time and our developing
learning and improvement in capability. The Child Support Agency
change programme went through a gateway review process, but it
started that process very late because, of course, the initiative
started many years ago. The pension transformation programme is
more recent. It has benefited from our learning and experience
across government as a whole but, as Mr. Watmore said, it has
also been very focused and disciplined in how it planned the changes
that have been implemented.
Q3 Chairman: So you emphasise the
importance of gateway reviews, Mr. Oughton?
Mr. Oughton: I think that they
are an important ingredient both in learning about the success
factors in projects and sharing that good practice with other
programmes and projects in turn.
Q4 Chairman: So you would be happy
if they were more widely published.
Mr. Oughton: I would be happy
if their learnings were more widely available, which I think that
they are.
Q5 Chairman: Available to who?
Mr. Oughton: They are available
to all other programmes and projects through the work that we
do to identify common causes of failure and common success factors,
and then share them across other programmes and projects in turn.
Q6 Chairman: Would you like to look
at paragraph 2.19 on page 32? Why are nearly half of audit committees
not briefed on the outcome of gateway reviews? Do you regret that?
Are you going to do something about it?
Mr. Oughton: I think that an audit
committee has an important role in assurance. My personal view
is that it would be appropriate for audit committees to see the
progress on major programmes and projects in the Departments in
question. But the question of how an audit committee plays its
assurance role is one ultimately for that audit committee. I could
not—and would not wish to—mandate a particular approach.
My personal view is that it is helpful for audit committees to
have that information available.
Q7 Chairman: Given your responsibilities,
I think that your personal view is very influential. I am sure
that the Committee would wish to support you in that personal
view.
There is some confusion about your joint roles.
Would you both like to look at paragraph 5 on page 17? I would
like to ask this question of both of you. One of you is obviously
responsible for the IT profession and the other for the programme
and project management, so who ensures that a Department has the
ability to deliver successful IT change? Could both of you answer?
Who is ultimately responsible? Is there any confusion in your
roles?
Mr. Oughton: Ultimately, of course,
the Department itself is responsible and accountable for the delivery
of all programmes and projects within its area. Our roles—our
different, but connected roles—are about supporting and
helping that delivery. However, we do not have the ultimate accountability
for that delivery—that is with the Department.
Q8 Chairman: You do not have the
ultimate accountability? Would you like to look then, Mr. Oughton,
at appendix two, paragraph 5? It describes a situation in which
we have a failing project. What means do you have personally to
stop a failing project? At the margins of efficiency seminar that
we did last week, my colleague, Richard Bacon, mentioned somebody
in Italy who is in your sort of position and who has the power
to step in and stop a project. Would you like such a power? What
powers do you have?
Mr. Oughton: We have the powers
of engagement with a Department—
Chairman: But engaging with a Department
is influence, rather than power.
Mr. Oughton: If I can just explain
how we operate that, I think that you will understand the point,
Mr. Chairman. By that, I mean that, for all the key programmes—the
top 20, if you like—and for all the mission critical programmes,
we expect and demand that gateway reviews are undertaken at specified
points. For the top 20 programmes, we have now laid down a plan
with milestones so that gateway reviews are done at particular
points. As you know, Mr. Chairman, if a gateway review produces
a red rating, that rating says to the Department, "On this
project or programme, there is some urgent action that you must
take straight away." If red ratings occur twice in a row,
I will intervene with the Accounting Officer in the Department—with
the Permanent Secretary—to draw that to their attention,
and I would expect action to be taken. So, the gateway review
process is not a soft process at all; it is actually quite a hard
and intrusive process, which identifies issues that need to be
tackled straight away and, in the case of red recommendations,
obliges that Department to lodge with us an action plan in response
to the red rating.
Q9 Chairman: Okay. I apologise, Mr.
Watmore, because I asked a supplementary of Mr. Oughton and did
not give you an opportunity to reply to the initial question.
Mr. Watmore: That is fine, Chairman.
As the Government's Chief Information Officer, which I was until
January of this year, I was responsible for the IT profession.
About 30% of any IT activity is on new projects and programmes;
about 70% is on running the existing show to make sure that we
pay benefits, collect taxes and so on every day. Only about 30%
of any project or programme is really about the IT, so while there
is an overlap, I hope that a big portion of my job is outside
projects and programmes, and vice versa for John.
Chairman: Thank you. Could you speak
up a bit?
Mr. Watmore: I am sorry.
Q10 Chairman: Mr. Watmore, do you
think that it is important that Ministers are involved in this
process?
Mr. Watmore: Of course. I think
that leadership of any function or programme starts at the top,
and the top in this particular case is Ministers.
Q11 Chairman: Would you like to look
at paragraph 2.11, which you can find on page 31? According to
that paragraph, a fifth of senior responsible owners do not discuss
progress with their Minister. What do you make of that?
Mr. Watmore: Personally, I think
that the progress of all projects should be raised to the highest
levels of Departments so that when there is a need to intercede,
the information is there.
Q12 Chairman: So, Mr. Oughton, how
are you going to ensure that Ministers are fully informed of progress?
How are you going to make sure that there is not a culture of
just saying "Yes, Minister" or, indeed, as the information
that I have just relayed to you suggests, of not informing Ministers
at all? How will you ensure that they actually step in and stop
a project and that they are given honest advice? Again and again,
when we have come across failing projects, civil servants have
not had the courage to tell Ministers, "I think you should
pull this project."
Mr. Oughton: I have also read
paragraph 2.11 carefully and I agree that the picture is not satisfactory
in every case. I would also expect Ministers to have this information
in front of them. I am contemplating a number of ways in which
we can strengthen the gateway review process further. One might
be to bring a first red rating to the attention of Accounting
Officers in Departments rather than waiting for two consecutive
reds. I am contemplating—although of course we would have
to advise Ministers about the change in procedure—whether
we should also alert Ministers directly at that point. I would
certainly give every encouragement to programme directors, senior
responsible owners (SROs) and Accounting Officers to bring any
difficulties to the attention of the supervising Minister—the
assigned Minister—at an early stage. I read paragraph 2.11
in a constructive spirit, because if you were to go back five
or six years to the time before the gateway review process started,
you would not find assigned Ministers for projects in every case
in this way. We have made considerable progress and we just need
to tighten that further.
Q13 Chairman: Do you think it is
important that senior responsible owners are very experienced
in this field, particularly when dealing with major critical programmes?
Mr. Oughton: Yes, I think experience
is important. You must remember, Mr. Chairman, that the concept
of a senior responsible owner as such is a relatively recent one.
I would be very surprised if I were to pick up a CV of a current
SRO and find that he or she had been an SRO in times past, as
we just did not describe them in that way, but many of them will
have had responsibilities for programmes and projects before.
Because SROs need support and assistance to undertake their roles
effectively, we provide a number of ways of support for them from
the Office of Government Commerce. One is through a mentoring
scheme; one is through providing non-executive board members to
the major programmes and projects—very senior and experienced
figures from the public and private sectors who can provide new
SROs with the support to help them to develop their roles.
Chairman: Thank you very much. I think
Mr. Touhig has some questions now.
Q14 Mr. Touhig: Mr. Watmore, the
Report makes it clear on page 4 that it is about success and how
IT-enabled business change can be got right. That probably comes
at some relief to you both, I am sure. We have had some of your
colleagues here with miserable tales of failure and excuses for
incompetence but in your particular case you have had a successful
career outside government, have you not?
Mr. Watmore: I have—I like
to think that I have, anyway. This comes as a relief in one way
and is not surprising in another. I have observed the government
industry both as a supplier and as an industry watcher, if you
like, over a long period of time. For every one of the projects
that becomes a cause célèbre, I have known
literally dozens that go on very successfully every day. This
has been a good opportunity for us both to bring some of those
to the surface and to learn the lessons from success as well as
learning the lessons from problems and failure.
Q15 Mr. Touhig: You have started
on a high; you have to keep it up now. You were managing director
of Accenture from 2000 before joining the civil service. Of course,
when you joined Accenture it was not called Accenture, but Andersen
Consulting.
Mr. Watmore: It was indeed.
Q16 Mr. Touhig: The company changed
its name to Accenture just months before the Enron scandal broke
and Andersen Consulting got rather bad press as a result.
Mr. Watmore: I think you will
find that the company now known as Accenture had left under the
arbiter's judgment.
Q17 Mr. Touhig: You are a man of
vision then, or just lucky?
Mr. Watmore: I think it was a
combination of both.
Q18 Mr. Touhig: Napoleon used to
prefer lucky generals to any other kind, so you have made a good
start.
Drawing on your private sector experience, have
you found that the civil service is receptive to the kind of ideas
that you can bring in from the private sector?
Mr. Watmore: I have, actually.
A lot of people have asked me that since I joined and have said,
"How is it? What's it like? Do they reject you? Are there
antibodies surrounding you and pushing you out?" The answer
has been, "Not at all." I have been genuinely warmly
welcomed, a lot of people have been keen to hear advice and guidance,
and I have learnt a lot in return. Another fact that I was very
clear on when I joined was that the public sector tends to do
more difficult things than the private sector has ever done. It
is not a question of our copying what goes on in the private sector,
because it has somewhat easier challenges.
Q19 Mr. Touhig: Paragraph 3.20 on
page 36 makes the point that very often there are serious commercial
skill weaknesses among the staff in the civil service. Would you
agree that that is a fair assessment?
Mr. Watmore: I think there is
a point about the side that this document refers to as the intelligent
planned part of Government, which has been weakened. When I first
worked with the Government, in the 1980s, it was quite a strong
part of the Government side of the machine, but in the 1990s a
lot of the IT capability was outsourced to the private sector,
and the effect that Government had in the return side was to say,
"Well, we don't need a big strong cadre of people on our
side, because we have outsourced it." Of course, the experience
is you need both a strong intelligent client or customer function
and a strong supplier. It is in that area that I and my colleagues
are most strongly trying to rebuild capability.
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