House of Commons - Public Accounts - Fifty-Seventh Report

Select Committee on Public Accounts Fifty-Seventh Report

1 Launching and managing the project

1. In April 2005, the Department for Transport (the Department) approved an outline business case to set up an in-house centralised Shared Service Centre in Swansea to provide human resources, payroll and finance support services to its agencies and the central Department.[2] The Department decided on this course before the Cabinet Secretary required Departments to do so because it wanted to achieve savings and thought that it was the appropriate thing to do.[3]

2. The Department consciously set a very demanding timetable for implementing its Shared Services Transformation Programme, with the Driver and Vehicle Licensing Agency and the Driving Standards Agency expected to start using shared services in April 2006 and the whole Department by April 2008.[4] The accelerated timetable was based on the Department's belief that there was no advantage in planning for a longer detailed design and later start, although it recognised that some slippage might be unavoidable. The Department was advised by its consultants that it could achieve initial implementation within one year if it built shared services on existing systems in the Driver and Vehicle Licensing Agency, and used an existing contract with IBM, rather than go out to competitive tender.[5]

3. The Department has accepted that its demanding timetable was at the root of the subsequent problems and that it did not revise its implementation schedule quickly enough when the difficulties became apparent.[6] For example, despite an initial cost estimation of £16 million for delivering the shared services system, to save time the Department did not go out to competitive tender. If the Department had tested the market in this way, it would have had to specify its requirements with more precision. This approach would, in turn, have provided it with a much better understanding of its needs and helped to reduce the subsequent risks.[7]

4. The demanding timetable also resulted in inadequate system testing.[8] The Department reduced the main testing period from the recommended minimum of two months to two weeks to compensate for the slippage in other elements of the project. Reduced testing meant the system was not stable when it was turned on. When the first two agencies, the Driver and Vehicle Licensing Agency and the Driving Standards Agency, began using shared services in April 2007, all further system upgrades and additional remedial testing had to be conducted on the live system because the Department had removed a critical testing environment from its technical requirement in order to save money. The lack of this facility also caused system crashes as some software changes failed when loaded onto the live system.[9]

5. The inadequate system testing and poor definition of governance structures and management responsibilities by the Department are not unique. Similar problems have been experienced on several government projects examined by this Committee in the past. In this case, the Department could not resolve fully the inherent tensions in securing the agreement of seven separate agencies to a single set of processes. In addition, individual agencies were unable to provide appropriately skilled staff with detailed knowledge of their individual business processes to work at the Shared Service Centre in Swansea.[10]

6. Senior officials within the Department and within the Shared Service Programme management team should have identified and resolved these issues, but failed to do so. The Department has taken action against those individuals who had failed to manage this project properly, including the loss of bonus payments. Bonuses should only be awarded for good performance. However, simply taking them away does not constitute an adequate punishment for the particularly poor performance exhibited during this project.[11]



© Parliamentary copyright 2008	Prepared 16 December 2008