Good Governance - Effective use of IT

Written evidence submitted by Public and Commercial Services Union (IT 41)

Introduction and summary

1. The Public and Commercial Services Union (PCS) is the largest civil service trade union representing over 300,000 members working in government departments, non-departmental public bodies, agencies and privatised areas. We are in a unique position to submit evidence to this inquiry as our members work with IT systems across government every day.

2. We welcome the committee’s inquiry as an opportunity to share our anxieties about how IT has been procured and delivered across government, specifically the outsourcing and privatisation of IT service delivery as a means of securing efficiencies.

3. This submission therefore covers:

· The impact of spending cuts on the delivery of IT projects

· How well technology policy is co-ordinated across government

· Whether past lessons have been learnt

· How well IT procurement works

· How public sector IT will adapt to spending cuts

The impact of spending cuts on the delivery of IT projects

4. PCS has been concerned that UK governments have not utilised IT in the most effective manner to deliver high quality public services. Since the announcement of the Gershon review in 2004 which recommended cutting 100,000 civil service posts and rationalising government procurement, PCS has consistently held the position that these cuts could not be delivered without damaging front line services. Many reports by the work and pensions select committee and others have confirmed and that the pressure to deliver this programme would involve an escalation of outsourcing and privatisation. One aspect of which was the greater involvement of private sector contractors in delivering the IT needs of public bodies and Whitehall departments.

5. We were alarmed that the 2010 spending review announced that the cost of government IT projects was to be cut by more than £1billion and that the Cabinet Office had identified 300 IT projects that would be scrapped or cut back because they were deemed ‘unnecessary’. Since that announcement the government Deputy Chief Information Officer has confirmed that the figure of cancelled IT projects has now increased to 419 to be scrapped or scaled back.

6. We believe that no credible evidence has been forthcoming from departments or the Cabinet Office about the cancelling or scaling back of these IT projects and that given many of the projects are of great societal benefit – such as the new contact point child protection database – PCS strongly believes that the driving force behind the IT cut backs are purely financial. We think there has been little thought given to the damage the cuts will inflict on public services and the often vulnerable people who use them.

7. We also believe that many of these projects would have been better delivered and monitored had they been delivered in-house.

8. As examples, the Chancellor confirmed that while annual funding for police forces will be cut by 14% by 2014/15, this substantial cut should not impact frontline policing because of efficiency improvements to IT, procurement and back office functions. Leaving aside the doubts expressed by the Police Federation themselves, PCS’s experience with similar claims leads us to believe that cutting back office and IT support functions will adversely impact the effectiveness of front line police forces.

9. If the police cannot quickly access a database or IT package they need because it has not been updated or does not exist, or the administrative support that would have assisted them has been cut back, then this will clearly affect the time they can devote to being on the streets dealing with crime.

10. Similarly, the spending review’s contention that the UK Border Agency’s loss of about £500 million of its funding through the reduction of its IT (and the cost of its estate) will not affect the crucial role of the agency we believe is highly unlikely. At a time when quick and efficient IT support is essential for the UK Border Agency to keep abreast of personal data and international criminal databases, and to assist inter-agency communication in the UK and Europe, to cut the funding for such IT support PCS believes is profoundly irresponsible.

11. We also have similar serious concerns over the reduction in the running costs of HMRC by 25%, through staff cuts and from savings from its IT contracts. Firstly, the loss of staff will clearly impact the speed and efficiency of HMRC services at a time when an enhanced capability to collect tax (especially the estimated £120 billion of uncollected, evaded and avoided tax in the UK per year) could form part of the alternative to the massive public spending cuts the government is planning to deliver in the next few years. Secondly, many would assume that lessons had been learnt from the controversies that arose from HMRC’s loss of confidential personal information that was transcribed to discs, primarily because of cutbacks to staff and other resources, and the consequent need to collate and transfer the information as cheaply as possible. It seems, though, that HMRC’s staffing, technological and ICT infrastructures are to be cut even further, which could mean further shortcuts and potential loss or mis-use of citizens’ personal data.

12. While PCS remains concerned that cuts of this nature will damage public services, our concern should not be taken as support for the current model of IT provision (i.e. through a private sector contracting model). We would argue that the most effective method of delivering IT services within government is to retain the provision of such services within government departments and agencies. We base our concerns on the very patchy record of outsourced and privatised IT delivery in recent years.

13. The most telling example of this process was the fiasco of the Child Support Agency’s (CSA) outsourced IT systems. The NAO found that despite the CSA and its private sector supplier being fully aware that there were 52 defects within the system, the ‘go live’ authorisation for the project was given. The subsequent NAO investigation found that the CSA project was ‘one of the worst public administration scandals of modern times’.

14. Nor was this an isolated incident. An investigation in 2007 by Channel 4 News and Computer Weekly into the Defence Information Infrastructure project (DII) found that the M inistry o f D efence (MoD) and its main private contractor, the Atlas consortium, had delivered only about a quarter of the systems that were due under the original plan by the end of July 2007. 

15. Although the House of Commons were informed that the overall projected cost of the DII would be £4 b illio n over ten years, the cost was then estimated at more than £5 b illio n. The Chief of Defence Materiel, General Sir Kevin O'Donoghue, admitted in October 2007 that there were ‘ major problems ’ at the fir st site to have DII installed.

16. More recently, the NAO found that the DII programme was 18 months late and at least £182 m illion over budget. It is hard to believe a major project like this would have gone so far over budget had it been subject to civil service departmental budgeting restrictions and more accountable systems of oversight and reporting.

17. PCS firmly believes that m any of these failures are traceable to the model of outsourcing IT services that has become the default position of most recent government’s .

How well is technology policy co-ordinated across government?

18. We don’t believe it is co-ordinated very well. There is central IT strategy for government but it tends to offer great autonomy to departments to do what they want with regards to delivery.  Although Chief Information Officers have to report on their programmes and results to the Cabinet Office in monthly round-ups, the Cabinet Office actually has limited oversight.

19. PCS believes that if a co-ordinated technology policy could be developed this would ensure there was a responsible framework within which IT projects could be safely and effectively delivered. This should be based on the public provision of IT to criteria of societal benefit and social use, rather than as a means to channel public funds to private contractors.

Have past lessons from NAO reports etc been learnt?

20. Some individual projects have learnt from the NAO’s reports and recommendations, but we believe that central government policy making has not. The government tends to repeat the same basic procurement mistakes and does not appear to have the appetite for taking hard lessons on board. As an example, the NAO identified failings in computer systems used by the MoD which led to the loss of almost £300 million in payments and equipment. The NAO also identified other serious losses, ranging from the Department of Health’s flawed £12.7 billion National Programme for IT to the Cabinet Office’s £24.4 million write-off of the Scope project. It cannot be said the NAO reports of these failures were genuinely considered and that new processes put in place to ensure the failings they identified were not repeated.  

How well is IT used in delivery of public services?

21. We believe this is a very mixed picture. The disaster of the Rural Payments Agency (on which the NAO has very harshly reported, again with minimal acknowledgement or change in the outsourcing model) is one of the worst examples of inefficiency in government IT procurement and delivery.  

22. The CSA and the MoD DII project are other examples. PCS believe that downgrading of public sector expertise and the unmerited inflation of the claims of private sector delivery are at the heart of such failures.

23. The best way to deliver high quality public services – in all aspects, whether it is front line, back office or IT support – is through well paid, properly trained and motivated public servants operating to non-profit making criteria.

How well does IT procurement work?

24. PCS believe this is generally a poor picture as departments forced to outsource key IT work tend use 'template' contracts supplied by the Office of Government Commerce (OGC). These are often unchanged for years because of the limitations of OGC's framework procurement rules. As a result, departments buy what they believe is a particular service only to find it doesn't cover much of what they need. 

25. Also if a department decides not to use OGC frameworks, the procurement process is very long and expensive and expediency can often leave them in the same place as following the OGC route. This is often a reflection of level of IT procurement knowledge in government, where key IT contracts are often let by procurement without any reference to the full time civil service IT staff. 

How will public sector IT adapt to spending cuts?

26. In some departments most notably the MoD the spending cuts may have the effect of forcing managers to consider better and sharper ways to get value for money. PCS would recommend that one of these ways is to abandon their belief in the efficacy of private sector solutions and retain IT delivery in-house. In other departments such as DEFRA, the Home Office and the Department for Culture Media and Sport where budget cuts have already cut public services to the bone further cuts in essential IT projects and upgrades will inevitably reduce the quality of services and impact how the organisation functions.

January 2011