Examination of Witnesses (Questions 1-19)
JOBCENTRE PLUS
30 April 2008
Q1 Chairman: Welcome to the Committee
of Public Accounts where today we are looking at the Comptroller
and Auditor General's Report The Roll-out of the Jobcentre
Plus Office Network. We welcome back Lesley Strathie, Chief
Executive of Jobcentre Plus. Would you like to introduce your
team, please?
JOBCENTRE PLUS
Mrs Strathie: Jeremy Groombridge
was the project director of this programme and Peter Davies was
the project manager.
Q2 Chairman: You put me in a difficulty
because this is quite a good report. When it was published I issued
a press release saying I welcomed the fact that one of the largest
public sector construction projects in recent years—the
roll-out of over 800 Jobcentre Plus offices—had been delivered
under budget, albeit only slightly behind schedule. Congratulations!
If government departments continue to produce projects on time
and within budget all of us will be out of a job. However, obviously
we are not concerned to ask you just about how it was rolled out
but whether it will deliver real benefits. It has cost the best
part of £2 billion and I will ask about that. Perhaps you
would just tell us what lessons you have learned from the roll-out
for future projects of this type.
Mrs Strathie: We have documented
all of the lessons learned around good programme management and
some key facts which we have already shared with many others,
but I shall hand over to Mr Davies, project manager, who will
tell you about those.
Mr Davies: Very clearly, the lessons
that I have learned is to follow the best advice that already
exists. If I had not done that I would have been floundering to
begin with, so it is better to take advice that already exists
in the domain from the Office of Government Commerce and so on.
We have adopted those principles throughout. We have made very
intelligent use of the OGC throughout the programme and used our
internal auditors to help us understand the way we are doing things.
For me, the main lessons learned are the things identified in
the report, such as clear direction, good governance and support
from the top of the office in doing these things, including people,
and having clear plans.
Q3 Chairman: And to have the same
leadership team at the helm throughout the five years, as we have
been recommending for years?
Mr Davies: Yes.
Q4 Chairman: Having said all that,
we know that this money has been spent. Tell us more about the
benefits. How can we be sure that it will now deliver £6
billion worth of expected benefits?
Mrs Strathie: This programme has
been considerably reviewed throughout by our internal assurance
programme but also by the Office of Government Commerce and HMT.
We are already in a position where net present value is delivering
£562 million in savings. We set out to deliver £1 billion
in savings and we believe that the breakeven point will come several
years sooner. Overall, for the £1.9 billion we have spent
we will deliver £5.9 billion in total savings.
Q5 Chairman: Why do we then read
in paragraph 3.25 on page 21 of the Report that, "As the
roll-out project was not developed and set up as an integrated
programme the project team was not able to work out in detail
how all the various elements were joined together to deliver specific
benefits"? Obviously, if this was the private sector with
such a roll-out it would want to be sure it would deliver a better
bottom line. How can you be sure that you are delivering real
benefits when you do not measure whether or not the new approach
will help people back into work?
Mrs Strathie: We do know that
we are helping people back to work. Jobcentre Plus has set pretty
stretching targets each year and the business case was predicated
on business volumes as well as all the infrastructure changes.
Q6 Chairman: If that is right why
does paragraph 4.19 on page 29 say: "The Department's research
does not provide evidence on whether Jobcentre Plus led to more
customers finding work"?
Mrs Strathie: What I can say is
that the business case was not predicated on total customers put
into work; it was built on the number of work-focused interventions
that we would have with different customer groups, for example
lone parents who up until that point had not been part of a work-focused
approach. It was also focused on better outcomes for more disadvantaged
customers. I can tell you that since Jobcentre Plus was launched
we have supported over six million people into work.
Q7 Chairman: But if you have spent
£2 billion you want to be sure that you are helping more
people into work. That is the point of having these places, is
it not?
Mr Groombridge: To add to what
Mrs Strathie has said, this was about building a platform to enable
Jobcentre Plus to perform well into the future, so it is about
helping employers fill jobs and helping people to improve their
skills and gain access to a wider set of services. I would certainly
accept the point, which is reinforced in paragraph 2.29 of the
Report, that if you look at the totality of the roll-out there
may well be benefits that we have not necessarily counted towards
the success so far. What we have done here is establish a platform
on which the government can deliver effective welfare-to-work
services for a long time to come.
Q8 Chairman: Why do we read in paragraph
4.17 that having opened these smart new offices—there is
no point in having smart new offices just for their own sake;
they have to do a job—you are already closing some of them
after refurbishing them?
Mrs Strathie: It is some time
ago that the pathfinders were built and a lot has changed in terms
of the way the service is delivered. When we did the strategic
outline business case for the integration of the old legacy Benefits
Agency and Jobcentre Plus we could make only a best guess of the
shift we would make in electronic channels brought on board and
customer behaviour with those new channels. Business volumes affected
that. But it is also worth saying that we learned in real time
how to deliver better customer service. We also had our Spending
Review '04 challenge where we definitely did have to pause and
consider how best to roll out that service and deliver the efficiency
challenge set for the DWP.
Q9 Chairman: As you were rolling
it out you had pathfinder projects, did you not, with district
managers having considerable autonomy, but we read in paragraphs
1.3 and 3.10 that you were rather slow in realising that it was
proving rather expensive and you had to take back central control.
Why were you so slow on the uptake?
Mrs Strathie: That is a very fair
point. We accept that we could have delivered greater savings
if we had been able to apply all of the lessons learnt from the
pathfinders to the first year of roll out, but that would have
caused considerable delay. It is worth remembering that much of
our network was already pretty close to breaking point at that
time. We had ministerial commitments on which to deliver and we
had to deliver customer services. We did not close down anything
while we rolled out this massive project; we continued to deliver
the day job and improve on that. We could have delivered better
if we had had a pause but we may not have started yet.
Q10 Chairman: We are to replace Incapacity
Benefit by the introduction of the Employment and Support Allowance.
This is a massive new benefit with huge potential complications.
How well equipped are the offices to deal with this new challenge?
Mrs Strathie: I think we are in
very good shape to deliver the Employment and Support Allowance
to new customers from October 2008. After all, we are talking
about rolling out a package of support for customers who have
been on Incapacity Benefit. We have now just completed the roll-out
of Pathways to Work which means all of the support for those customers
is now already in place nationally. We have already put 82,000
customers into work through that programme and supported 36,000
through conditioned management. It is a huge challenge. This is
not just a new benefit; it is a complete culture change and new
regime. You certainly could not do that in old-style social security
offices with screens.
Q11 Mr Touhig: The Comptroller and
Auditor General's Report is very complimentary. Paragraph 6 of
the summary gives a very favourable value-for-money assessment
and states: "The way the project was managed compared well
with external good practice and there are important lessons for
other government transformation projects." Why do not other
government departments and agencies enjoy your success? Is it
because the senior managers are useless and not up to the job?
Mrs Strathie: I am very fortunate.
As the Chairman pointed out, we had the same leadership of this
programme from start to finish with the project director and programme
manager who sit beside me. I think we got on and did it but we
learned as we went with the help of the Office of Government Commerce.
We developed the gated process and had our own internal assurance.
As we incrementally went through the programme we paused and considered
what we could do better. We considered at every point how we could
get best value.
Mr Davies: In terms of other government
departments I think there is encouraging news to give you. Most
of the government departments that are doing something similar
have now made contact with us. We are doing some work with Her
Majesty's Court Service, DVLA and the Driving Standards Agency;
we have worked with NISA and are giving them the benefit of the
things we think we did well and some of the things we may not
have done so well so they can understand and share with them the
lessons learned. We hope that the message will transform some
of the way things are done in other government departments.
Q12 Mr Touhig: I think it is revolutionary.
This is the first time since I have been a Member of the Committee
I have heard anybody on that side talk about lessons learned.
We have been going on about that for years. Mrs Strathie, I see
that you are a member of the Permanent Secretaries' Management
Group and Head of Profession for Operational Delivery across Whitehall.
Mrs Strathie: I am.
Q13 Mr Touhig: Are these lessons
being shared with your Permanent Secretary colleagues? Are they
taking them on board as enthusiastically as perhaps Mr Davies
suggests they might?
Mrs Strathie: There is certainly
no lack of willingness in the Permanent Secretaries' Management
Group or among any of my senior colleagues to learn about how
to deliver successful transformation. What I have learned that
I share with others is that you need absolute clarity of purpose
and alignment about what you are trying to do. Many projects have
failed because they have been IT projects, not change that the
leadership of an organisation has wanted to deliver. We wanted
to make the transformation for customers. I think that is crucially
important.
Q14 Mr Touhig: Is that what you tell
your colleagues when you meet the Permanent Secretaries?
Mrs Strathie: Absolutely.
Q15 Mr Touhig: You are doing missionary
work there, are you not?
Mrs Strathie: There are many successful
programmes.
Q16 Mr Touhig: You just have not
come across them?
Mrs Strathie: Generally speaking,
good news does not sell newspapers, does it? We tend to read more
about failures or lessons learned.
Q17 Mr Touhig: It must be novel for
the NAO to come up with such a favourable report. It has devoted
six paragraphs in praise of you in summary. That is quite a success
for anybody. Recognising the success you have had and what you
are achieving, how do you see that spreading throughout the DWP
itself and your own department?
Mrs Strathie: We have already
learned from it. I give two major examples. The centralisation
of benefits processing from 650 sites to 79 with a completely
new business model and delivery was built around the lessons learned
from this programme, and the Employment and Support Allowance
has learned from this programme and other best practice as highlighted
by OGC and NAO. Therefore, I think we are in real time applying
those lessons across the Department.
Q18 Mr Touhig: I look forward to
seeing a transcript of your comments in this session because we
can give them to your Permanent Secretary next time he comes.
There were 47 new Jobcentre Plus offices which were found to be
unsuitable. Why were the sites chosen if they were not suitable?
Mrs Strathie: Are you referring
to the 47 identified for closure?
Q19 Mr Touhig: You identified them
as being part of the project and then you did not want them.
Mrs Strathie: As we rolled out
after the pathfinders in year one with the SRO4 challenge in particular
and looked at what we had learned and the shift in customer behaviour
and new channels brought on we paused and decided what we needed
to maintain that high level of service. I was at that time the
Chief Operating Officer for Jobcentre Plus and, along with Mr
Groombridge and Mr Davies, we reviewed the entire country.
| 
