Government and IT- "A Recipe For Rip-Offs": Time For A New Approach - Public Administration Committee Contents

Conclusions and recommendations

Lack of information

1.  Having access to up-to-date and accurate information about government IT is essential if the Government is to reform its IT successfully. Without it the Cabinet Office will be unable to monitor and enforce its programme of reforms. We were particularly shocked to learn that, on coming to office, the Minister had to ask the IT suppliers for information about the value of their contracts. We welcome the Government's commitment to rectifying this situation. We recommend that the Government work with the NAO to identify which data it needs to gather to monitor the progress of its reforms and outline in its response to this Report what information will be collected by departments and how frequently this data will be gathered. (Paragraph 15)


2.  The poor benchmarking of central government's IT expenditure is unacceptable. Without this information it will not be possible for the Government to advance effectively its cost reduction agenda. We recommend that the Government should investigate the claims of overcharging put to us and seek to identify reliable and comparable cost benchmarks, and collect accurate information from departments in order to compare with those benchmarks. Where possible bespoke projects should also be benchmarked, and the Government should trial ways of conducting benchmarking exercises for its more complex projects. The Government should use independent and specialist advisers and the NAO to assist with identifying objective benchmarking measurements. (Paragraph 20)

3.  Making data about expenditure available is not only a good discipline for departments; it also allows the Government to harness independent views on how to deliver services more cost effectively. The Government should publish in full all contracts. It should publish as much information as possible about how it runs its IT to enable effective benchmarking and to allow external experts to suggest different and more economical and effective ways of running its systems. Feedback it receives based on this information should be used to challenge and hold to account current providers, and to renegotiate, disaggregate and re-compete existing contracts where it becomes clear that more cost effective delivery mechanisms are available. (Paragraph 25)

Large Systems Integrators

4.  Extremely serious allegations have been made about the behaviour of some large suppliers. There are clearly very strong feelings on both sides of this debate. We are not in a position to come to a firm verdict on this matter. Having described the situation as an "oligopoly" it is clear the Government is not happy with the current arrangements. Whether or not this constitutes a cartel in legal terms, it has led to the perverse situation in which the governments have wasted an obscene amount of public money. The Government should urgently commission an independent, external investigation to determine whether there is substance to these serious allegations of anti-competitive behaviour and collusion. The Government should also provide a trusted and independent escalation route to enable SMEs confidentially to raise allegations of malpractice. (Paragraph 30)

5.  We recommend that the Government develop a strategy to either replace legacy systems with newer, less costly systems, or open up the intellectual property rights to competitors. Alternative means of dealing with legacy systems should be explored with the widest possible range of suppliers, including SMEs. (Paragraph 34)

6.  We take seriously the concerns expressed by many SMEs that by speaking openly to the Government about innovative ideas they risk losing future business particularly if they are already in a sub-contracting relationship with an SI. The Government should reiterate its willingness to speak to SMEs directly, and commit to meeting SMEs in private where this is requested. We recommend that the Government establish a permanent mechanism that enables SMEs to bring innovative ideas directly to government in confidence, thereby minimising the risk of losing business with prime contractors. (Paragraph 42)

7.  Where SMEs do subcontract with a large SI, the SI should ensure that it pays the SMEs on the same terms on which the Government pays the large SI. We welcome the Government's own efforts to improve the speed with which it pays its contractors, and we encourage it to ensure its prime contractors pass these benefits on to SMEs. (Paragraph 44)

8.  We welcome plans for IT contracts to be broken up to allow for more effective competition and to increase opportunities for SMEs to win Government work. We urge the Government to create more contracting opportunities worth much less than £100 million. (Paragraph 46)

9.  We welcome the efforts the Government is making to reduce the cost it pays for IT. However the Government's plan to act as a single buyer appears to be leading to a consolidation towards a few large suppliers. This could act against its intention to reduce the size of contracts and increase the number of SMEs that it contracts with directly. We are particularly concerned with plans to move SME suppliers to an "arm's length" relationship with Government. The Government needs to explain how it will reconcile its intentions to act as a single buyer, secure value for money and reduce contract size to create more opportunities for SMEs. (Paragraph 50)

10.  The way procurement currently operates favours large companies that can afford to commit the staff and resources to navigate the convoluted processes. It also encourages the Government to confine discussions to as few potential contractors as possible. If the Government is serious about increasing the amount of work it awards to SMEs it must simplify the existing processes. We welcome the Minister's assurance that the Government is simultaneously seeking to change the current European Directive regarding procurement and taking steps to simplify official guidance that surrounds the procurement process. We ask the Government to update us on the progress it is making on both initiatives in its response to this Report. (Paragraph 57)

11.  We recommend that the Government investigate the practices which seem unintentionally to disadvantage SMEs. When contracts and pre-qualifying questions are drawn up thought must be given to what impact they could have on the eligibility and ability of SMEs to apply for work, and whether separate provision should be made for SMEs. We believe it would be preferable if the default procurement and contractual approach were designed for SMEs, with more detailed and bespoke negotiation being required only for more complex and large scale procurements. (Paragraph 60)

12.  The Government presumption in favour of smaller, disaggregated contracts should lead to more direct contracting with SMEs. This will require Departments to invest more effort in managing relationships directly with SMEs meaning that more systems integration work is performed in-house, but this will yield longer term benefits through increased innovation and lower costs. Ministers need to ensure their officials have the skills, capacity and above all the willingness to deliver on ministerial commitments to SMEs. (Paragraph 64)

Integrating IT

13.  Government should ensure that the IT implications of new initiatives are properly considered near the start of the policy process on a par with the legal and financial considerations. This should simply be an extension of thinking about how the policy will be implemented in practice. We recommend that analysis of these issues be included in all policy submissions to Ministers. (Paragraph 69)


14.  We agree with our witnesses who argued that there was no such thing as an IT project - only policy initiatives and business programmes that use technology in their delivery. One of the primary reasons for these project failures is a lack of focus on the outcome and how the IT project fits into the wider benefits the Government wants to achieve. The Government must stop departments specifying IT solutions and ensure they specify what outcomes they wish to achieve, within the broad technical parameters to ensure interoperability. The market should then be able to provide a range of possible IT solutions. (Paragraph 75)

Challenges to using Agile

15.  Agile development is a powerful tool to enhance the effectiveness and improve the outcomes of Government change programmes. We welcome the Government's enthusiasm and willingness to experiment with this method. The Government should be careful not to dismiss the very real barriers in the existing system that could prevent the wider use of agile development. We therefore invite the Government to outline in its response how it will adapt its existing programme model to enable agile development to work as envisaged and how new flagship programmes will utilise improved approaches to help ensure their successful delivery. (Paragraph 87)

16.  The Government should examine how it can remove barriers to agile development as an integrated part of its wider efforts to reform the procurement process and increase the role of SMEs. The Government will have to bear in mind the need to facilitate agile development as it renegotiates the EU procurement directive and revises the associated guidance. (Paragraph 90)

Security and Privacy

17.  Governments have learnt that they must secure both personal data and data relating to national security, whilst also guarding against gold-plating its security requirements - which can greatly inflate costs without delivering any tangible benefits. Over-classifying routine administrative and operational information causes unnecessary technology and operational costs, and prevents the public sector taking advantage of the economies and efficiencies of commodity software and new opportunities. It also acts as a further barrier to more effective use of SMEs in the supply of IT goods and services. Government must do more to demonstrate how a risk-based approach is helping achieve a better balance in information assurance. (Paragraph 99)

An intelligent customer?

18.  Managing suppliers is as important as deciding who to contract with in the first place. To be able to perform both of these functions government needs the capacity to act as an intelligent customer. This involves having a small group within government with the skills to both procure and manage a contract in partnership with its suppliers. Currently the Government seems unable to strike the right balance between allowing contractors enough freedom to operate and ensuring there are appropriate controls and monitoring in-house. The Government needs to develop the skills necessary to fill this gap. This should involve recruiting more IT professionals with experience of the SME sector to help deliver the objective of greater SME involvement. (Paragraph 108)

19.  The strategic importance of Government developing and maintaining an intelligent customer function has been repeatedly highlighted throughout our inquiry. We are very supportive of the Government's efforts to develop its own talent in-house through the Technology in Business Fast Stream. The Government should use this scheme as a basis for a strengthened IT Profession within Government. It must ensure that it aligns the training curriculum with its ICT Strategy and wider developments in the world of technology outside of Government. (Paragraph 112)

Spread of skills

20.  Knowledge about how modern information systems and technology can be used to improve public services should not be restricted to the IT profession - this knowledge is essential to the work of all senior civil servants responsible for designing and delivering policy. The Government should explore how departmental boards and senior officials can best benefit from professional training and support in technology policy. A systematic programme to improve these skills across the senior civil service would also help support the Government's aim of ensuring public services become "digital by default" by improving the integration of technology and policy throughout the policy-making process. (Paragraph 115)


21.  We welcome the Government's intention to strengthen the role of Senior Responsible Owner (SRO) by ensuring that they stay in post until an appropriate break point in the project. Wherever possible SROs should stay in post to oversee the delivery of the benefits for which they are accountable and which the project was intended to deliver. It should be in Ministers' interests to ensure that this happens, and Ministers should take a personal interest in the leadership of politically sensitive programmes. (Paragraph 117)

22.  We are concerned that despite the catalogue of costly project failures rarely does anyone - suppliers, officials or ministers - seem to be held to account. It is therefore important that, when SROs do move on they should remain accountable for those decisions taken on their watch, and that Ministers should be held accountable when this does not happen. (Paragraph 118)

23.  Ministers should reconsider the governance arrangements for their departments' information systems and associated IT. Whilst it may not always be appropriate for the CIO to be a board level appointment, we think that more department boards should include CIOs given the essential role that information and technology play in delivering Departments' services. Where CIOs are not on a departmental board, another member of their Board should have proven expertise in, and act as a champion for, information and technology issues. (Paragraph 124)

Public data release

24.  Publicly releasing data has the potential to transform public services radically by allowing individuals to use data in ways most useful to them, rather than having to use and access the data in a way prescribed by the provider. We welcome the Government's commitment routinely to release public data. We recommend that the Government should release live, as well as historic, data sets where this is possible and that in future its information systems are designed to do so by default. (Paragraph 135)

25.  Bringing in outside developers to demonstrate to departments the potential of the information they already hold is an exciting way to innovate and provide new tools and services for the Government. We applaud the departments that have already been involved in "hack days" and recommend that all departments work in a similar way. (Paragraph 136)

26.  Government must continue to address the issue of public data access by removing licences from its own data and by encouraging publicly funded organisations to do the same. Placing this information into the public domain for free is in the long-term interest of data owners, users and the wider economy. (Paragraph 137)

Open standards

27.  Adherence to open standards is important if the Government is to make data more readily accessible. It will also help the Government avoid lock-in to any one provider. We welcome attempts to identify the open standards to be used across departments. However, we are concerned that the recent Government survey indicates that the current understanding of open standards is incomplete. The Government should prioritise the adoption of a set of core open standards which focus on interoperability between systems, making data available through open interfaces and formats that allow meaningful public access. (Paragraph 141)

28.  Government should omit references to proprietary products and formats in procurement notices, stipulating business requirements based on open standards. The Government should also ensure that new projects, programmes and contracts, and where possible existing projects and contracts, mandate open public data and open interfaces to access such data by default. (Paragraph 142)

Personal data ownership

29.  Giving control of personal data to the individual has the potential to improve data quality while reducing both costs and risks. Individuals are used to controlling their own data with private sector companies, such as Amazon and with utility companies. Moving to a model where the citizen maintains their own personal data with an independent, trusted provider and then can choose whether to authorise the sharing of that information with other organisations is an ambitious vision that will need to be trialled extensively. We also recognise that there may be legal constraints and concerns about privacy which could act as a barrier to implementing such a radical reform. We therefore recommend that the Government, working with the Information Commissioner, review potential barriers to the personal data model and explore the ways in which this model could best be developed. (Paragraph 156)

30.  We welcome the work being done to create an integrated identity assurance trust model for simplifying access to Government services. We suggest that Government consider integrating this work with the personal data model. This could represent an important step, placing responsibility and control of personal data with citizens in their interactions with public and other online services. (Paragraph 157)

User engagement in service design

31.  It is self-evident that the people using systems, be they frontline officials or members of the public are best placed to provide suggestions on how to improve them. User feedback should be directly integrated into the design of new systems and the development of existing systems and processes to ensure continuous improvement. We recommend that Departments exploit the internet and other channels to enable users to provide direct online feedback both in the design of services and in their ongoing operation and improvement. (Paragraph 162)

Open delivery of online Government services

32.  Government should open up online service delivery to non-public sector organisations and explore ways in which public services can be offered through other websites, applications, devices and providers. This should be developed by providing an open Government platform around which others can innovate and improve, built on the principles of open data, open standards and open source. (Paragraph 167)

33.  In doing so Government will need to address issues of liability for the external delivery of Government services. Moving to a model where third parties provide online Government services will require clarity about where citizens should turn for help when they encounter difficulties, as well as clarifying who is accountable for service delivery. (Paragraph 168)

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© Parliamentary copyright 2011
Prepared 28 July 2011