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Public Sector: IT Projects

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 declarean interest as a substantial shareholder in a company that provides information technology services, following the sale of my own IT business to that companylast 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 NHSthe Government do not have a glowing record of delivering IT systems either on time or on budget. I welcome the comments of the noble Lord, Lord Maclennan of Rogart, on that. Of course it is not all bad, but it should be substantially good. The declared cost of the national programme for IT in the NHS was £6.2 billion, as my noble friend Lord Howe said, but the programme is now expected by the Public Accounts Committee to cost over £12 billion. It is not only a matter of cost and timetable; my noble friend Lord Howe spoke eloquently of the detailed issues, and I do not need to repeat them. It is good to hear from the noble Lord, Lord Warner, that he is confident that improvements have been made. We strongly hope that they will be effective. 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, nearly200 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 than10 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. These are not the only examples, but the point has adequately been made. The noble Lord, Lord Birt, and others have spoken of successes and improvements, and this is welcome news, but the Government have a record of projects turning to dust in their hands. 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 Ministersand 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 thinking on the part of politicians, suppliers and, indeed, those consultants of whom the noble Lord, Lord Mitchell, spoke forcefully, has yet to be overcome. The risk is that Ministers will become impatient for results and will again start to think over-ambitiously. The noble Lord, Lord Birt, referred to that. That way, I suggest, lies disaster. 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?