Scandal of HM Government rewarding for failure

Scandal of HM Government rewarding for failure

It is not often that this column calls for government regulation and ultimately the establishment of an enforcement body. The continuing scandals that beset the outsourcing of UK Government projects beggar belief. Defence Secretary Philip Hammond, Tim Donohue of the Public Accounts committee and others need to grasp the nettle and “invest” in ensuring that the £2.8Bn per annum of “waste” involved in outsourced services is held to account once and for all.

“Investment” is what’s missing from public accountability. HM Government invested in developing “sophisticated” outsourcing in the mid-1980’s with the handover of the DHSS IT processing to a then new Accenture, Sema (now Atos) and IBM. HM Government’s commitment to improving IT delivery, reducing cost and higher productivity led to the CCTA in 1986 developing a common set of operational guidance rules focused on Service Level Management. Renamed ITIL in 1989, it remains a world de facto standard for excellence.

That being said, HM Government demonstrates weekly that it has learnt nothing about controlling and auditing the monolithic contracts that were subsequently issued to the market place. Reliance has for far too long been on contractual clauses. Good consultants and lawyers can usually run rings around the “client’s obligations – inactions and failure to act early enough, allow suppliers to wriggle out of the best legal straight jackets, never mind the quality of service, once “change issues”and technological refreshment is also factored in.

NHS, DTI, DII, DWP, HMCE, HM Prisons, to name but a few, are now synonymous with very costly IT outsourcing failures. Some suppliers like Fujitsu, Accenture and CSC have paid the taxpayer back up to £1.2Bn for a single failure, only to be rewarded with yet another mega deal.

HM Government, like the sabre-tooth tigers and mammoths before them, continue to dive headlong into the” legal and financial tar-pit” and continue to award suppliers that they are in dispute with new business. The classic lame duck of all time is the NHS National Programme for IT, yet the public accounts committee recently heard that US giant CSC, who never fully delivered their original £1Bn contract, are now to get a £500m contract to install NHS replacement systems. This is for a mere 22 NHS Trusts. That is right, £22.7m per Trust to install new systems! It is the hospital parking charges you know! Well for perspective, £100mof the sum is apparently to cancel their previous contract (on which you will recall, they failed to deliver). Amazingly HM Government gave CSC a “total monopoly supply” contract.

Simple good governance would tell you:
a) not to hand out exclusivity, ever; and
b) make “failure” a deal cancelling penalty

Did HM Government seek external legal and consultancy advice in putting the world’s largest IT project together? You bet they did. Are they well known companies – you bet that they are! Why has there been no action been taken against the suppliers of such obviously flawed advice? Well Tim Donohoe and cronies – please speak up! What’s that? Are you sure? Apparently this aspect is” not in scope” for the public account committee. Gosh! Good governance might suggest that powers to go anywhere the money leads would be sensibly and not waste any more time, but no, sorry.
HM Government needs to design an approach to the governance that supports these types of complex and long-term deals and provide some real binding teeth, the ability to arrest failure early and to not reward failure with yet more business.

Whilst on the subject of going early – Atos, the once Anglo-French and now merely French outsourcer, secured a £185m disability assessment contract from the DWP. Cross-party peers have just learned that the original Personal Independence Payments (PIP) contract awarded to Atos some twelve months ago has uncovered a “disparity”. On the eve of beginning the rollout of PIP, a DWP investigation showed that in the ATOS tender they stated that they had “contractually agreed” with 16 NHS Trusts and 2 private hospital chains to provide assessment centres. It turns out that 12 Trusts and both private hospitals have dropped out. Leaving a mere 4 Trust assessment centres! As a result MP’s are asking questions.

The biggest question is “why didn’t DWP’s own governance threw this up as an issue?”. Has Atos committed a sin, told a white lie, or breeched their contract – who knows? The government tender process demands committed detail despite taking upwards of a year to complete – who knows what can happen in such timeframes. What can you say on the matter Mr Advisor and Mr Lawyer?
By the way, are you guys the same ones who did the CSC/NHS contract, or the Child Support Agency fiasco, the ill-fated National ID Card scheme, the £1.3Bn a year Defence Information Infrastructure Programme, the derided Single Payments Scheme by the Rural Payments Agency and of course the National Offender Management System? Just thought that we would ask!

All this demonstrates is that HM Government needs to grasp the nettle once and for all invest in fit for purpose joined-up governance and measurement processes. The CCTA became a part of the Office of Government Commerce (OGC) perhaps it is they that should take on this challenge and lead the world again is establishing governance standards and eliminating the bulk of this outsourcing waste.

Note to George – Might be able to sell RBS quicker – Editor


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