5 We supported the development of
the right skills in government to deliver value for money
52. Across all departments, although we recognise
the enormous commitment and important skills of public sector
workers, we have been frustrated by an inability to recruit, train
and retain people with the key professional skills required in
a modern civil service. Government too often lacks the expertise
it needs such as project and programme management, financial and
commercial skills, and IT expertise, meaning government is over-reliant
on expensive consultants. We have also seen a woeful lack of continuity
in senior project leadership and in many cases too little Accounting
Officer engagement.
We highlighted basic failings in how contracts
are procured and managed and helped departments act as a more
intelligent customer
53. The Department for Transport's procurement
of the West Coast Mainline demonstrated what can happen when government
does not get basic processes right and it fails to learn from
past experiences. The Department tried to reduce the cost of the
procurement exercise by using in-house staff who lacked the commercial
and other technical skills required. As a result it made several
mistakes such as forgetting to include inflation in its calculation,
which meant it incorrectly identified the amount of risk capital
it required from bidders to balance the riskiness of their bids.
Despite warnings from external advisers that the process was in
danger, senior managers at the Department for Transport failed
to apply common sense and challenge the answers given to them.
This blinkered approach exposed the Department for Transport to
the risk of legal challenge and left the taxpayer with a £50
million bill, most of which was needed to compensate bidders.
54. We are pleased that the Department for Transport
listened to our advice on the West Coast Mainline as its recent
procurements for Crossrail, Thameslink and Intercity Express have
all taken place with more consideration of expert advice and a
more appropriate level of challenge from senior staff.
55. The Work Programme, a DWP initiative intended
to help people who have been out of work for long periods to find
and keep jobs, is an example of the challenge faced when managing
40 complex contracts across 18 prime contractors, worth a total
of £2.8 billion. In this case the odds often seemed stacked
in the private providers' favour.
56. We examined the Work Programme three times
between 2012 and 2014 and with our last report in November 2014,
we were pleased to see that performance was starting to improve
after a very slow start. However we were concerned that the Department
was still not demonstrating a sufficiently intelligent contract
management style since despite none of its providers meeting their
targets at the time of our evidence session in 2014, they all
still qualified for incentive payments because of the way the
DWP had let the contracts.
57. Until departments have the negotiating skills
to match those of the private providers it is likely that value
for money will not be assured. The Department of Health's National
Programme for IT (NPfIT) in the NHS was plagued by poor negotiating
capabilities, weak programme management and oversight, resulting
in deals that were poor value for money. The project team did
not understand the complexities of the tasks at hand which meant
the project failed to deliver a paperless NHS as planned. The
Department of Health's lack of relevant skills meant that when
it subsequently tried to re-negotiate its contracts, it was in
a weakened position because it did not meet its own contractual
obligations in the first place. Despite highlighting these issues
many times, departments seem reluctant to learn from past mistakes.
58. We concluded that the Department for Work
and Pensions' management of the Universal Credit programme was
extremely poor. Like the NPfIT experience, the team involved did
not understand the nature and enormity of the task at hand; managers
failed to monitor and challenge progress regularly; and no-one
intervened when problems started to arise. Without the right project
skills being in place, problems were not addressed and a good
news culture developed. The DWP has since acted on our concerns.
However, significant risks remain and our successors will want
to keep this under close scrutiny.
59. In contrast, we saw how government can deliver
effectively with the Troubled Families project. The close involvement
of central and local agencies demonstrated to us that a joined-up
approach was critical for effective planning and delivery, and
achieving the intended outcomes. However, we still found there
was room for improvement as the existence of two similar, yet
separate programmes, at the Department for Communities and Local
Government and the Department for Work and Pensions had resulted
in confusion and unnecessary duplication.
We demanded more continuity of leadership in major
projects
60. A common theme in a number of these projects
was a failure to keep people in the job long enough to take responsibility
for seeing projects through, or managing them until a particular
phase has been completed. Universal Credit had a succession of
changes in senior posts that underscored the problems encountered;
whilst the Department for Transport failed to appoint a single
person with responsibility for the West Coast Mainline project
from beginning to end, leading to a three month gap when no one
at the Department for Transport was responsible.
61. The FiReControl project, intended to replace
46 local fire and rescue authorities with 9 regional control centres
using a national computer system, endured 10 different Senior
Responsible Officer in 5 years before the Department for Communities
and Local Government cancelled the project. The lack of leadership
and responsibility meant the original timetable incurred delays
and £482 million of taxpayers' money was wasted, culminating
in one of the worst cases of project failure that this Committee
has seen.
62. When we reviewed progress with the Department
for Transport's Crossrail programme we were struck by the leadership
that was in place. The joint sponsors of the programme, the Department
for Transport and Transport for London, worked well with the delivery
organisation, Crossrail Limited, to deliver the programme, which
at the time of our report was broadly on schedule and being delivered
within budget. The team focused on the essentials of programme
management, including defining a realistic scope, establishing
a management team with the necessary skills and securing the required
funding. Two years were spent on planning before construction
began, which allowed roles and relationships to be clearly established.
63. Stability within the leadership of a project
is intrinsic to success, yet Senior Responsible Owners in the
civil service move around too often and do not see projects through.
This is partly because of the way the civil service trains and
promotes staff, and partly because the accountability system does
not require a Senior Responsible Owner to take responsibility
for a project from start to finish. We no longer accept a Senior
Responsible Owner leaving his or her post as a reason not to appear
before us, and on inquiries like the Better Care Fund we recalled
previous Senior Responsible Owners to explain the performance
they delivered whilst in post.
64. We urged central government to take a stronger
and more visible role in the delivery of projects and it responded
by setting up the Major Projects Authority in 2011. We welcomed
its introduction and recognised the progress it has made with
strengthening project assurance and improving the transparency
of the costs, risks and performance of major projects. The Major
Projects Authority subsequently set up the Major Projects Leadership
Academy in 2014 to train senior project managers.
- It is our view however that government still
faces significant challenges if it is to achieve further project
improvements. Government still fails to train those it recruits
with the essential skills necessary to deliver major projects
and programmes. The focus is still on policy formulation rather
than programme and project implementation. The centre of government
also needs to be more involved in coordinating and prioritising
projects and portfolios at both the departmental and cross government
level to strengthen government's ability to put its best people
on the riskiest projects.
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