Examination of Witnesses (Questions 80-99)
DEPARTMENT FOR
TRANSPORT
9 JUNE 2008
Q80 Mr Davidson: So in answer to
my question about whether or not you are able to tell me how much
you would save by taking work to India the answer is no.
Mr Devereux: That is what the
Report records.
Q81 Mr Davidson: You agree with it?
I have seen this happen before when people say they want to take
projects abroad, to India in particular, in order to save money,
it quite often turns out that for a variety of reasons the money
that is saved is not actually there at all. As I understand it
you cannot tell me whether or not money was actually saved and,
if so, how much.
Mr Devereux: What the Report says
at the end of paragraph 1.18 is that neither we nor IBM were able
to supply figures for the cost reduction. There are two things
going on, one is that getting work done in India will have been
cheaper in terms of number per hours done. The question is whether
or not the extra effort that went into accreditation outweighed
that. I personally would be surprised, which is why the sentence
before says that we expect it would have made a savings. I think
what the NAO is recording is that we have certainly not delivered
a big catalogue of the full accounts in order to deliver that.
If you wish I will go back and see whether or not if I can find
any more information.
Q82 Mr Davidson: I think it would
be helpful to know whether or not putting this software abroad
did actually result in savings and, if so, how much.
Mr Devereux: I will do that.
Q83 Geraldine Smith: I just find
it incredible listening to this today. The point about it ending
up costing £81 million, okay you say there may be things
you will be able to do in the meantime before 2015 to make that
a little bit better, but the Department was supposed to be making
a saving. How do you think that looks to tax payers? That is tax
payers' money. Perhaps you would tell us how much you expect to
reduce the £81 million by? If you say it will not end up
with that figure, what will it be?
Mr Devereux: First of all, it
is not acceptable that it should cost £81 million. I am not
sitting here pretending that tax payers should be anything other
than cross about it.
Q84 Geraldine Smith: What are the
consequences of that happening? What action is taken to put that
right?
Mr Devereux: You asked me the
question, "Where might this go?" I tried to get one
of your colleagues to look at page 47 where the National Audit
Office has laid out an alternative trajectory which includes what
would happen if, for example, we managed to put low value procurement,
which is basically people buying office supplies in eight different
businesses, through one system and get the corresponding economies
of scale.
Q85 Geraldine Smith: The problem
is that the users have no confidence in you; the potential users
have lost confidence.
Mr Devereux: That is a separate
point. Let me just answer the first question.
Q86 Geraldine Smith: How do you get
them to use your service if they do not have the confidence?
Mr Devereux: At the moment, as
we observed in the table about shared service performance, actually
levels of performance are rising; we are very nearly at the right
target for making prompt payment, for example. It is very clear
that that was not the case when we started but it is now. That
National Audit Office Report on delivering shared services in
government had one interesting statistic in which I take some
comfort from. Less than one year in to the National Health's Service's
Shared Service Centre 75% of its users thought it was worse than
when they started. Just over two years in only 20% thought it
worse and 83% thought it was better. What that tells you is that
fairly consistently in the evolution of shared services, when
they go in, people typically struggle with them to begin with.
I am not pleased that my staff are having to deal with these sorts
of changes, but I am fairly confident that we will get to the
position where actually people do know how to use this system,
will be able to deliver well and actually we will get much better
information about it as a consequence. I was asked the question
earlier on that surely we should understand about businesses processes
and know they are difficult to do. They are difficult to do. One
of the potential benefits of going through the process that we
are going through now is in order to define these processes, and
get them standardised, and get them supported by systems, so that
we all know where we are and we all know what it is we are spending
the money on. That is going to be a benefit in the long run; but,
that individual users find it difficult in the first year, I am
afraid is par for the course in other implementations. It occurs
in the private sector and it occurs in the public sector as well.
Q87 Geraldine Smith: It still seems
to me a bit of a mess. You were going to do it in a year, you
say it might have run on to 18 months; that seems very rushed
to me. Even with the best will in the world with everything going
right I think that would have been a terrible timetable to work
to. I think that is the root of some of your problems.
Mr Devereux: I think it is the
root of some of the problems in that we did not change the timetable
quickly enough when it became apparent what the difficulties were.
I do not retreat though from the actual ambition here to actually
get on with this. It would have been perfectly possible to say
that we would do this over four years. I could have come to the
Committee and you could have said, "Hang on a minute, what
is best practice?" Best practice as advised to us by our
external consultants is: this is doable in the space of about
12 months.
Q88 Geraldine Smith: Did your consultants
tell you that?
Mr Devereux: Yes.
Q89 Geraldine Smith: How much did
the consultants cost?
Mr Devereux: I do not have the
figure with me, I am sorry. The point is that we sought to take
advice about what was possible and stretching; we did not seek
to do something which was soft and easy.
Q90 Geraldine Smith: Will those consultants
still be working for the Department for Transport?
Mr Devereux: They are not at the
moment to my knowledge.
Q91 Geraldine Smith: Is that a yes
or a no?
Miss Moorhouse: The consultants
who did the work for us originally made the assumptions very clear
on which the savings could be achieved. I think you have to go
back to the original discussion about how we and others manage
or otherwise to deliver to those assumptions. In fairness to the
consultants they were very clear that to achieve that timetable
would be—
Q92 Geraldine Smith: My question
was, are they still working for the Department?
Miss Moorhouse: I was going to
come onto the fact that they will almost certainly be employed
within the Department for Transport and they may have a role within
the Shared Service Centre Programme. They are not our main contractor.
Q93 Geraldine Smith: That just seems
incredible. Is anyone held responsible at the end of the day?
Is there any individual? Or do you just say, "Oh well, we
rushed it; it's a bit of a rush. It's £81 million we've lost
but we'll try to get it down a bit by 2015; we'll try and do a
bit better, we'll do a lessons learned paper." Is that really
good enough?
Mr Devereux: I can assure the
Committee that there have been consequences for individuals as
a consequence of this Programme.
Q94 Geraldine Smith: What were those
consequences?
Mr Devereux: For example, people
have not earned bonuses; they have had zero bonus payments. We
have taken steps which reflect individuals' contributions to this
project.
Q95 Geraldine Smith: That is the
only consequence, a loss of a bonus.
Mr Devereux: No, I said that was
an example.
Q96 Geraldine Smith: Perhaps you
will give me a few more examples. It is important. In any profession
people have to be accountable.
Mr Devereux: I absolutely agree
with that. The only thing I am pausing over is a giving of examples
to the Committee. You are taking me into a territory where I am
going to find it difficult to be as helpful as you would hope
I would be because essentially, having thought about where we
are with this, if I am giving answers to questions which go beyond
bonuses into the way in which employees are treated and what happens
to their careers, we are getting into territory which, in my view,
takes us into the area which needs to be confidential between
an employer and an employee.
Q97 Geraldine Smith: Can you give
me an assurance that something does happen to the individuals
who make these sorts of mistakes?
Mr Devereux: I have given you
assurances that there are consequences to this. I am not trying
to pull the wool over your eyes at all.
Miss Moorhouse: Can I just add
that the Report as well makes very clear that there has been a
lot of work done by the Department over the last 12 months or
so to try and recognise the lessons learned. In its own report
it drew attention to a number of the issues that have been highlighted
in the NAO Report as well to try to make sure that the Department
is itself taking all of the action it can to address the situation
that has been described here this afternoon. I think that is important
to record as well.
Q98 Geraldine Smith: Can I ask you
about some of the software that was developed abroad? People were
obviously very concerned about personal data; can you give us
an assurance that the data is safe, that those systems have been
developed correctly?
Mr Devereux: The reason why we
have difficulty making sure the stuff in India was done as fast
as it could be was precisely to ensure that it passed levels of
security that you would expect a government department to be using.
We have developed this to the very best of our ability consistent
with the standards the Government uses to protect data.
Q99 Geraldine Smith: When do you
think you will get all the users on board?
Mr Devereux: The plan at the moment
is to put the Maritime and Coastguard Agency in in October 2008
and to put the Highways Agency personnel work in from April 2009.
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