Government and IT - "a recipe for rip-offs": time for a new approach: Further Report, With the Government Response to the Committee's Twelfth Report of Session 2010-12 - Public Administration Committee Contents

1  Government and IT - "A recipe for rip-offs": Further report

1. We reported to the House on Government and IT - "A recipe for rip-offs": time for a new approach in our Twelfth Report of Session 2010-12, published on 28 July 2011 as HC 715. We received the Government response to that report in late October 2011.[1]

2. In our report, we expressed concern about the Government's over-reliance on an "oligopoly" of large suppliers; the costs and risks arising from skills gaps within Whitehall; the problems arising from legacy information technology (IT) systems; and weaknesses in the Government's capacity to plan and drive through wholesale change in the way it uses and exploits IT in delivering public services.

3. We also explored some possible ways in which the delivery of public services online could be reformed—and transformed—through a combination of data release, giving individuals control of their own personal records, engaging users (both within and outside Government) in the design of services, and opening up the online delivery of services to a wider range of organisations.

4. We have deferred publication of the Government's response until now in order to take advice on the Government's progress. In December 2011, the National Audit Office published its first review of the Government's progress in implementing its Information and Communications Technology (ICT) strategy (the NAO report).[2] We have found the NAO report very helpful in considering the Government's response to our report. We also sought the views of Professor Helen Margetts at the Oxford Internet Institute, University of Oxford, a witness to our initial inquiry and of Professor Patrick Dunleavy and Jane Tinkler of the Public Policy Group, London School of Economics; and of Dr Mark Thompson of the Judge Business School, University of Cambridge. We are grateful to all of them for their assistance. Their advice to us is appended to this report.

5. We commend the Government for its generally constructive and proactive response to our report.

6. In its response, the Government outlines substantial positive activity to address the well-known and historic problems associated with government IT projects, and we are encouraged by the NAO's finding that "the leadership, governance and compliance mechanisms for delivery are different to those from the past and have the potential to deliver benefits".[3] This is a promising start to a programme described by the Public Accounts Committee as 'very ambitious'.[4]

7. The Government appears to have maintained this initial momentum in implementing its IT strategy. The NAO report found that the majority of actions due for completion by September 2011 had been delivered on time, with only two out of 17 delayed.[5] The Government's response suggests that the Government is also taking concrete action to address almost all the points and concerns identified in our Report.

8. In its response, the Government explicitly agrees with almost two thirds of our report's recommendations. However, this also serves to highlight those areas where the Government's response fails to engage with some of our recommendations, particularly around benchmarking, legacy systems and capacity/capability gaps. We urge the Government to produce further detail, and a more coherent demonstration of how the various initiatives discussed in the report will work together to progress the wider strategic issues identified in our report. Effective leadership, and clear and specific implementation plans, will be crucial in ensuring that officials across Whitehall understand why they are being asked to do things differently, as well as how, if new ways of working are to be embraced and understood for the long term. The Cabinet Office is not itself a large IT-using department, and historically it had struggled to drive change within those departments with long-standing and deeply embedded relationships with large suppliers.[6] We understand from the NAO report that awareness of the aims and benefits of the Strategy amongst senior civil servants outside the IT profession also remains low.[7] In line with our recommendation for a stronger centre of government, we look to the Cabinet Office to be more proactive and engaged with departmental IT programmes.

9. We will continue to follow the Government's implementation of its IT Strategy with keen interest, as it touches on our other areas of interest in the Big Society, civil service skills in procurement and commissioning, and the growing links between the public, private and voluntary sectors.

Oligopoly of large suppliers and benchmarking

10. We reported on allegations about anti-competitive and collusive behaviour by some large suppliers, and we recommended that the Government establish an independent external investigation to determine whether there is substance to these claims. We are disappointed that the Government does not address this recommendation in its response, and we expect to return to this point in a future inquiry.

11. We also concluded that a lack of up-to-date and accurate information about government IT made it impossible for the Government to identify potential overcharging, leading to the waste of an obscene amount of public money. In addition to an independent investigation into allegations of cartel-like behaviour, we recommended that the Government work with "independent and specialist advisers and the NAO" to "seek to identify reliable and comparable cost benchmarks, and collect accurate information from departments in order to compare with those benchmarks."[8] The Cabinet Office's commitment to benchmarking through transparent data, as outlined in the Government's response, will help to quantify the gap between high and low cost products and services, but without the independent external advice which we recommended to identify reliable cost comparisons, the overall outcome will not change, and the Government will not achieve its cost reduction agenda.

Legacy systems

12. The Government's proposal to put 'wrappers' around legacy systems so that they can continue to be used within a new common ICT infrastructure avoids the core of our recommendation that it develop a strategy to deal with issues arising from legacy systems. Many existing legacy systems are large, and business-critical to the work of departments: changes to them are complex, expensive and risky. We understand that most such systems are already patchworks of overlapping 'wrappers', reflecting previous efforts to deal with the issue in a similar way.[9] Such 'wrappers' are not a long-term solution: maintaining and integrating these systems is extremely costly for the departments involved, and reduces, rather than increases, the scope for flexible service provision. Although dealing with legacy issues has up-front costs and risks, these risks can be mitigated by dual running of old and new systems, and staged migration to the new systems. Risks associated with maintaining ageing systems indefinitely are hard to quantify or to mitigate. There are also likely to be cost-savings to be made from decommissioning and replacing old systems with newer, more modern and streamlined systems.[10] We are not convinced that the Government's approach to legacy systems properly addresses the underlying issues. At the very least, the Government should produce a long term risk-register identifying where and when investment will be needed to migrate and replace existing legacy systems. We expect to return to this issue in a later inquiry.

Capability within Government

13. Our report found a number of gaps in the Government's IT skills and capacity. Government must integrate procurement and management of IT contracts. It must also integrate IT considerations into the policy-making process, to reflect the aim of making public services 'digital by default'.

14. Much Government IT expertise was outsourced in the 1990s. The Government now lacks a cadre of high-quality in-house IT professionals. In our report, we commended the Government's developing Technology in Business Fast Stream, which aims to build this capability. We are grateful for the Government's update on the progress of this scheme. We note the new ICT Capability Strategy published in October 2011 offers a 'blueprint' for career development within the wider Government IT profession.[11]

15. These are long-term measures, which will not address current needs. The recent NAO report found that the Government had not yet established a baseline for the ICT professional resources required in order to implement its ICT Strategy, and key immediate skills gaps remained.[12] It also lacked a resource plan for delivering the Strategy: the NAO concluded that Government will need to more than double the existing number of staff working on the IT Strategy if it is to deliver the projects in the implementation plan.[13]

16. We welcome and endorse the Government's acknowledgement of the need to grow its capacity in commercial skills of procuring and managing contracts, not just technical IT skills, in order to become an 'intelligent customer'.[14] Specific training for the Senior Civil Service in technology policy will also be welcome, as will the growth of a network of 'champions' of agile development. However, it is not clear from the Government's response to our report that its actions will be adequate to cope with the scale of behavioural and process change required across the whole of Government, nor that the agile 'champions' will have sufficient seniority, expertise or support.

Innovative service provision

17. Our report highlighted four areas in which the Government could use IT to transform and improve public services:

  • release of public data;
  • adoption of open standards;
  • changes to personal data ownership; and
  • engaging users in service design.

18. We are pleased that the Government agrees with many of our recommendations in this area, and is taking concrete action to increase access to public data, as set out in its Making Open Data Real consultation published in August 2011.[15]

19. There are obvious areas in which the Government could go further and move faster to implement 'digital by default'. For example, officials should be rewarded for using social media and digital channels to disseminate information and provide services (especially where this reduces reliance on other, more expensive channels).[16] User feedback submitted via the Directgov site provides the Government with a great deal of free data on the strengths and weaknesses of its service provision. The Government must make good use of it, alongside other information from social media produced outside Directgov itself, to understand better how its services are used and perceived and, in turn, to design better services.[17]

1   The Government's response is printed as Appendix 1 to this Report. Back

2   National Audit Office, Implementing the Government ICT Strategy: six-month review of progress, HC (2010-12) 1594  Back

3   Ibid. para 7 Back

4   Public Accounts Committee, Fortieth Report of Session 2010-12, Information and Communications Technology in Government (HC 1050) Back

5   National Audit Office, Implementing the Government ICT Strategy: six-month review of progress, HC (2010-12) 1594, para 4.3 Back

6   Dr Mark Thompson, University of Oxford, Appendix 3 para 3 Back

7   National Audit Office, Implementing the Government ICT Strategy: six-month review of progress, HC (2010-12) 1594, para 2.16 Back

8   Public Administration Select Committee (PASC) Twelfth Report of Session 2010-12, Government and IT - "A recipe for rip-offs": time for a new approach, (HC 715-I) para 20 Back

9   Professor Helen Margetts, Oxford Internet Institute, University of Oxford et al, Appendix 2 Back

10   Dr Mark Thompson, University of Cambridge, Appendix 3 paragraph 5(d); and Professor Helen Margetts et al. Appendix 2 Back

11   Cabinet Office, ICT Capability Strategy (October 2011)  Back

12   National Audit Office, Implementing the Government ICT Strategy: six-month review of progress, HC (2010-12) 1594, para 8 Back

13   Ibid. paras 3.5-3.11 Back

14   Government Response, Appendix 1, para 47 Back

15   Cabinet Office, Making Open Data Real: a public consultation (4 August 2011) Back

16   Professor Helen Margetts et al, Appendix 2 Back

17   Professor Helen Margetts et al, Appendix 2 Back

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Prepared 26 January 2012