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I understand from the APA that there is still a significant gap in mobile data and information. A number of pilot programmes are running across the UK—in England and Scotland and in non-geographic forces such as the British Transport Police—and the results will help to inform the further work required.
The recent sale of O2 valued the Airwave business somewhere in the region of £4 billion. We need to ensure that full value for money is realised and that the planned and envisaged business benefits accrue. We need appropriate structures and processes to allow this important work to continue. Allied to that, we must ensure that large PFI contracts, which are delivered over a series of years, like Airwave—which, incidentally, is the biggest in Europe—and which are necessarily based on principles of partnership delivery, actually deliver in partnership and that the programme does not accept further costs unnecessarily.
Right at the start of these huge programmes, we need a common vision about what a service will deliver, how that service will be delivered and what degrees of flexibility it will have. If we begin to learn from the many mistakes of the past, we may begin to have large IT systems fit for purpose and fit for the 21st century.
4.10 pm
Baroness Byford: My Lords, I thank my noble friend Lord Lucas for securing this debate. He referred to three matters which struck a chord with me straightaway: the need to strengthen the Civil Service, the need for greater openness, and the fact that the gateway reviews should be held in public. I accept all those points as I hope the Minister will when he responds.
At the end of the day, whatever projects are selected, the Minister overseeing them must take responsibility for their delivery. Ministers must be accountable. In relation to Defra, my own topic, we in this House know that the noble Lord, Lord Bach, to his cost, was the one who took the fall. In the other House, the then Secretary of State, Margaret Beckett, whose idea it was to move to the new system, was not sacked but promoted to Foreign Secretary. That is not a satisfactory situation.
In a Written Answer to my noble friend Lord Northesk, the noble Lord, Lord McKenzie of Luton, stated that,
- “public sector annual IT expenditure was £12.4 billion for 2005-06”.—[Official Report, 5/6/07; col. WA 188.]
Annual running costs on operational systems and processes are £1.6 billion. I should be grateful if the Minister would confirm that.
I have a number of questions about the efficacy of this level of expenditure. First, how many of the systems developed within that expenditure are
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I am not so involved with complaints about the DWP, but I receive the CAB monthly bulletin and from time to time have to pass queries to the right quarters. Therefore, I am aware that the data surrounding child and working family tax credits, both of which were developed relatively recently, are subject to arbitrary change that is often put down to “computer error”. Can the Minister clarify whether that is the case or whether changes were introduced to the original specification?
Enormous changes have taken place in Defra. The move away from food subsidies to the single farm payment constitutes the biggest challenge and change that the farming community has experienced in recent years. Therefore, it is not surprising that I have submitted a bevy of Written and Oral Questions, some of which I draw to the Minister’s attention. Back in January I asked:
“Who was responsible for drawing up and agreeing the specifications against which contractors, whether internal or external, worked to set up the information technology systems used for the single farm payments by the Rural Payments Agency”.
“The original specification was intended to replace the software supporting the CAP schemes at that time and new elements such as a rural land register and integrated customer register”.—[Official Report, 23/1/07; col. WA 231.]
It became clear that all was not well. The RPA established a CAP reform implementation project, which included representatives of the Defra policy team negotiating the regulatory changes. That in turn led to major changes to the specification for that IT work, which was already under way. The changes involved additional tenders to extract data from legacy systems so that they could be used to inform customers about their historical claims and support the migration of the data into the Accenture-built systems. How many changes were made from the original specifications?
In December 2006, I asked how many permanent staff were involved in setting up and running the IT system. The answer was 184. The RPA had contracted Accenture to develop its IT systems, required under the change programme. That covers development support and ongoing maintenance for the system. The total cost of the contract was expected to be £55.4 million over seven years. Did that include the consultants who were also involved?
The noble Lord, Lord Livsey of Talgarth, asked a Question in October 2006 on the RPA. Later, I asked the Minister whether he accepted the findings of the National Audit Office that there were no checks, matrices or proper management in the arrangements for bringing in the single farm payment. I gave him some examples. The Accenture contract was estimated in November 2003 as being worth £27.5 million, but it turned out by March 2006 to be worth £50 million. The land register contract was
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I moved on to look at the IT consultancy that Natural England is using. It was asked to produce a communications strategy, and it went out to consultation, which cost a mere £69,000, not a lot of money. However, have the information that it came up with and the findings that it recommended been adopted, or has £69,000 been wasted?
I had a reply to a Question about the project Enabling IT system, which was awarded in the financial year 2004-05 in respect of some £850 million. I asked how much of that was spent from 2004-05 to 2006-07. The answer was that in 2004-05 some £28.26 million was spent; in 2005-06 some £111.12 million was spent and in 2006-07 some £147.56 million was spent. The note at the end of the Answer from the noble Lord, Lord Rooker, said:
“The outturn costs have been higher than the initial estimated yearly costs due to the increased demand for IBM services by projects in delivering Defra’s strategic objectives”.—[Official Report, 13/6/07; col. WA 257.]
That is not a happy tale, and I wonder whether other departments have struggled equally with the minutiae that have made these systems not work as they should have done.
Finally, when there is failure in a department, why are bonuses then paid to its employees? How many of those involved in the Rural Payments Agency were beneficiaries of bonuses for the years in which that department failed? It is a tale of incompetence, and I am only sorry to have to reflect it again this afternoon.
4.20 pm
Lord Maclennan of Rogart: My Lords, the House is immensely grateful to the noble Lord, Lord Lucas, for initiating the debate. It has been wide-ranging, covering particular examples of public spending in different sectors and departments. In drawing a conclusion on these Benches, I shall not attempt to touch on all that has been said. The debate has had a number of important themes. The first was taken up by the noble Lord, Lord Birt, who pointed out the important role now played by information technology in the provision of public services and the benefits already felt in areas such as benefits payment, healthcare provision, to which I will return, and, as my noble friend Lady Harris said, protecting the public. There are other areas which have not been mentioned where the public and government interact in ways that would not have been possible without this huge expansion, such as obtaining a driving licence and even seeking advice on the suitability of overseas holidays.
The growth of this business of government has resulted in institutional changes within the Government
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- “encouraging public sector organisations to work together in order to act as a better co-ordinated and joined-up client”.
I do not doubt that there is much to be said on both sides of that argument, but it illustrates the difficulty of attempting to cover such a subject in one short debate.
The basis of the present strategy appears to be the November 2005 paper Transformational Government: Enabled by Technology, which espouses an objective to which no one could take exception: that the policy should be devised around the needs of the citizen not the provider. But what follows from that is much less clear. It is certain that we will have to see new systems introduced from time to time and that there will be a need to redesign business processes and for a marriage of new and older IT systems. Each of these raises different problems, and they are not easy. We have been advised by the Public Accounts Committee that 120 mission-critical or high-risk IT programmes and projects are in train across United Kingdom central civil government at this time, each of which no doubt merits close consideration.
The noble Lord, Lord Birt, helpfully pointed to the need to focus on the delivery of IT-enabled business change and said that it was a major challenge. It undoubtedly is, and not just for central government, but, because of public expenditure considerations, that is what we are focusing on. The expenditure involved is simply enormous: it appears to be running at £14 billion per annum. That calls for a response from Parliament on a continuing, considered basis and possibly even a restructuring of our own committees to do justice to our scrutiny requirements.
The possibility of different views on what is happening was well illustrated by the speech of the noble Lord, Lord Warner, about expenditure in the National Health Service. He seemed particularly anxious, perhaps from a partisan point of view, to emphasise that his own record in these matters was beyond criticism and that the Conservative Opposition had got into the trenches on this issue. That is to oversimplify the actuality. The Public Accounts Committee recently produced a balanced report on NHS spending and, as the noble Earl, Lord Howe, pointed out, drew attention to the fact that there was no firm implementation date for the electronic patient records programme. At present, it appears to be two years behind schedule. The report made it clear also that the department has not kept a detailed record of overall expenditure on the
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I am trying to confine my remarks to enable the Minister to reply to the full spread of the issues raised. Reference was made to stability within departments, particularly by the noble Lord, Lord Lucas. We have noticed the departure of Richard Granger this week. There will be speculation about why he has gone after five years, when the programme is so far from complete. We have noticed also the departure of James Hall from the national programme for IT in the National Health Service and his being parachuted into the Home Office to take over the Identity and Passport Service, which is a strange translation. The loss of three key suppliers, Accenture, IDX and ComMedica, is also worthy of comment and examination.
In a debate of this kind, we do best to look at the structure of future consideration of these questions. I am bound to say that I do not believe it is black and white. I have no doubt of the great value flowing to the public from IT, but the levels of expenditure are so massive and the risk of the public purse being drained of taxpayers’ money so clear that transparency, which the noble Lord, Lord Lucas, called for, is important in making sure not only that we obtain value for money in short-term contracts but also that the whole process is better understood by those employed to work it.
4.29 pm
Lord De Mauley: My Lords, I am most grateful to my noble friend Lord Lucas for initiating the debate and I thank noble Lords on all sides who have participated. This is a subject of great importance and complexity, spanning as it does every government department. Before going further, I must declare an interest as a substantial shareholder in a company that provides information technology services, following the sale of my own IT business to that company last year.
In a book published last year called Digital Era Governance by, among others, Patrick Dunleavy, who is professor of political science and public policy at the LSE, Britain consistently comes bottom of a table of seven nations selected for examination in all aspects of management of government IT projects. Yet, according to a 2004 estimate quoted in the book, the United Kingdom was undertaking up to a quarter of all government IT capital spending across the entire Continent, apparently in an effort to portray the Government as hyper-modernist. So we are the worst at it, yet we persist in throwing the most money at it.
Noble Lords have spoken eloquently of successes and some of the major failures in our country’s central government IT projects. Failures should be the rare exception; tragically, they are not. Despite what the noble Lord, Lord Warner, said, in the NHS the Government do not have a glowing record of delivering IT systems either on time or on budget. I
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As we well know, technical problems also dogged the scheme known as Modernising Medical Careers; my noble friend Lord Howe referred to that too. Among other blunders at the Home Office, nearly 200 people applying for jobs were wrongly labelled as offenders when their details were checked by the Criminal Records Bureau. Computer difficulties stalled the official launch of the system and nearly caused the CRB to collapse. Following the Dunblane shootings, legislation was passed in 1997 to pave the way for a national firearms database, implementation of which we are still being promised, no fewer than 10 years and numerous false starts later. Then there is the ID card saga. In May, the Government admitted that the 10-year cost to the scheme had increased from £4.91 billion to £5.5 billion, an increase of £640 million, plus an additional £200 million to provide ID cards to foreigners. There is already evidence that the timescale has begun to slip. Much more worryingly even than cost and timetable, Microsoft’s national technology officer said that ID cards, as proposed, would—not could—lead to massive fraud. The noble Baroness, Lady Walmsley, spoke eloquently on her deep concerns about confidentiality and identity theft, both on that and in other areas.
Since 1997, the Department for Work and Pensions and its predecessors have spent £289 million on IT projects that have subsequently been cancelled. Last year, it was reported that 40 per cent of claims were failing to be processed by the customer management system of Jobcentre Plus. By 2010, the Government will have paid £381 million for the Child Support Agency’s failing computer system, described by the Work and Pensions Select Committee as “over-spec, over-budget and overdue”. By March this year, nearly 200,000 child support cases remained uncleared.
At the Treasury, the PAC estimates that fraud and error in the working families’ tax credit scheme now runs at over £1 billion a year, and that the Treasury has,
- “still not developed an adequate response to the unacceptable levels of fraud and error in the scheme”.
The system has now wrongly paid out almost £6 billion. Many people on low incomes now struggle with repayment, and recovery of a third is highly unlikely ever to be achieved. In the ASPIRE project, which, when it was awarded in 2003, was priced at just less than £3 billion, the costs have soared to £8 billion. My noble friend Lady Byford referred to some very serious problems at Defra, among other departments.
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Why do these projects go so badly wrong? Noble Lords, particularly my noble friend Lord Lucas, have mentioned several reasons with which I agree. I shall summarise those that I see as key ones—we all agree that these are complex areas. First, there has been a failure to follow the full evaluation process at the outset. A PAC report in July 2005 found that the first two stages of the evaluation of 254 projects, including assessment of whether the system was feasible, affordable and likely to achieve value for money, had been skipped in no less than one-third of cases.
Secondly, specifications have been changed after initial agreement with suppliers. My noble friend Lady Byford highlighted this problem. This inevitably leads to increased costs. The noble Lord, Lord Birt, spoke clearly of the need for early dialogue between all parties. There is no substitute for much more thorough work before signing agreements in order to get them right first time.
Thirdly, there has been a high turnover of Ministers and, indeed, civil servants, on which the PAC commented forcefully. The length of the normal procurement cycle frequently means that those who initiated a project have gone before it starts. The noble Lord, Lord Mitchell, referred to that.
Fourthly, as my noble friend Lord Lucas mentioned, communications between Ministers and their civil servants have been inadequate. The National Audit Office report of last November found that in no less than 21 per cent of cases of mission-critical, high-risk IT programmes, the Minister responsible had no discussion at all of the project’s progress with the hard-working senior civil servant in charge. Only half had discussions at least once a quarter with the civil servant in question. My noble friend Lady Byford spoke of the vital need for ministerial responsibility.
Fifthly and vitally, there has been a lack of negotiating skills and of project management and IT skills embedded in departments. Several noble Lords referred to this. Evidence to the PAC indicated that there was little or no in-house experience and more than 70 per cent of heads of centres of excellence expressed concern about a lack of skills and of a proven approach to project management within their departments. Programmes that rely on detailed specification and contracts—my noble friend Lord Lucas referred—negotiated by people without sufficient experience of the application to be served or of delivering a major change programme, are usually doomed before they start.
A credible way forward, as the noble Lord, Lord Mitchell, rightly said, is for central government to break major programmes into a series of manageable projects within an overall design architecture. That, at last, seems to be what the Government are finally trying to move to within their Transformational Government agenda, to which the noble Lord, Lord Maclennan, referred. But the legacy of big-system
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In concluding, I select the following few questions from all those that I might have asked the Minister. Will the Government undertake to introduce more openness, something for which several noble Lords called, including publishing the gateway reviews? Central government spent £2.6 billion on IT in 2004. What is an up-to-date figure for such spending? Since 1997, the DWP and its predecessors have spent £289 million on IT projects that have subsequently been cancelled. What is the equivalent figure for the whole of central government? Given the comments of Microsoft’s national technology officer that ID cards, as proposed, would lead to massive fraud, what is the Government’s plan to deal with this? When will the national firearms register come into operation? Lastly, to what extent are the Government addressing the reasons why these projects have gone badly and frequently wrong, some of which noble Lords have identified and which I have tried to summarise into five problem areas?
4.39 pm
Lord Davies of Oldham: My Lords, I am grateful to the noble Lord, Lord Lucas, for introducing a debate which has been not only interesting but so wide-ranging that I am trying to think of an area of government policy that has not been covered. The ones that have been referred to have attracted extremely detailed questions. I hope that the House will forgive me if I am not able to answer each of them in great depth. Where I fail, I will of course write subsequent to the debate.
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