New Clause 1
Planning-gain Supplement (Preparations) Bill
4:34 pm
Mark Francois (Shadow Minister, Treasury; Rayleigh, Conservative)
I beg to move, That the clause be read a Second time.
I welcome you to the Chair, Mr. Hood. We now come to the information-technology related aspects of the Bill. The aim is to establish a reporting system on the progress of any new computer system that might result from the Bill’s provisions and specifically to ensure that the Public Accounts Committee is kept appraised of progress—or otherwise—twice a year. That is important, as the explanatory notes make it plain that one of the Bill’s objectives is to permit expenditure specifically on computer systems to assist with the introduction of the planning gain supplement.
Indeed, under the heading “Financial effects of the Bill”, the notes point out that
“The financial effects of this Bill will be to authorise expenditure principally on designing and building an administrative system to administer the PGS, including the necessary business processes and in particular an IT system.”
The Government estimate the cost at some £40 million. However, their overall record on managing IT programmes, such as the one envisaged in the Bill, is unfortunately far from encouraging. There are myriad examples of IT programmes that have gone badly wrong under the present Administration, but in the interests of time, I shall illustrate the point with only three.
The Department for Work and Pensions’s Child Support Agency famously spent almost £500 million on a new computer system known as CS2. It was eventually launched in April 2003, about two years late and £56 million over budget. The system was unable to migrate the backlog of CSA pages on to its mainframe, and it is generally accepted that the system will never work as originally intended.
I turn briefly to the Home Office’s IT record. Where should one start? I shall pick one example. The new database for the Criminal Records Bureau, which achieved notoriety for other reasons—I shall not dwell on them now—was introduced in 2004, but the costs had doubled from the original budget of £200 million.
We then have what I might call the mother of all Government IT projects—the new national health service computer system, including the link between GPs and hospitals and incorporating the so-called choose and book system. That massive project was due to be fully installed by 2012, at a total cost of £6.2 billion, but it is running late in many parts of the country. According to the National Audit Office, which reports to the Public Accounts Committee, the cost has now spiralled to about £12.4 billion—double the original estimate.
We might be reassured if the Treasury, which is supposed to be the guardian of public finances, had a better record in IT procurement. However, the Treasury and its agencies are not a great deal better. I remember speaking for the Opposition in the debates on the Commissioners for Revenue and Customs Bill, under which the Inland Revenue and Customs and Excise were merged. That merger involved some 250 IT systems being brought together in one organisation—a major challenge for Her Majesty’s Revenue and Customs.
One example that springs to mind is the tax credits computer system. I shall not dwell at length on the problems, but suffice it to say that the system has suffered a large number of technical problems. One used to be able to file online through the e-portal, but that had to be closed by HMRC because of a systematic attempt to defraud it of millions of pounds. Meanwhile EDS, the IT contractor employed to operate the system on behalf of HMRC—yes, HMRC—made such a hash of it that it had to give up. It was replaced by an alternative IT contractor, Capgemini, but not before the Treasury had sued EDF for £77 million for underperforming. In fact, the Treasury’s record of managing IT programmes is somewhat lamentable. In answer to a series of written questions last year, it was revealed that the Treasury’s IT programmes were running at a combined total of 17 years late.
What is the proposed procurement strategy for the new computer system that the Bill envisages? Specifically, which organisation mentioned in clause 1 or in the accompanying notes will have overall responsibility for the design and introduction of the system? Will it be the Secretary of State, HMRC or the Valuation Office Agency, or will the system in effect be designed by committee? If it is the latter, the warnings of HMRC’s own information officer, Mr. Steve Lamey, at the time of its merger will have been apposite. In 2005, he said of the lack of accountability in Government IT procurement:
“So much decision making is done in committees with huge matrix overlays that accountabilities tend to be very unclear.”
Perhaps that is one reason why the Treasury’s IT programmes, when combined, are running 17 years late.
From what basis is the £40 million estimate derived? The figure seems specific, although the explanatory notes say that there may be wiggle room for it to increase. Nevertheless, we have been given a broad figure of £40 million today, and I should like to know how it was arrived at.
I should like to question the Minister about the proposed system’s security and the related issue of data protection. Much of the information on the system would be commercially confidential among businesses that operate in the property market, and they would want to be reassured when filling in their returns that the information, which is important to them, was held securely and treated appropriately by the Valuation Office Agency and by HMRC.
In another series of written answers that I obtained from the Treasury, it was revealed that some 1,600 Government computers have been lost or stolen since 1997. The worst culprit was the Ministry of Defence, and the second worst was the Home Office. The Treasury—to be fair—was further down that league table of shame, but 53 of its computers have been lost or stolen.
In summary, under new clause 1, given this Administration’s poor record of managing IT programmes—including, specifically and unfortunately, those in the Treasury itself—we seek to establish a regular reporting system that would apply to any planning gain supplement-related IT system, with the report having to be submitted to the Public Accounts Committee twice a year. That would help to concentrate the minds of those involved in the project, thus helping to reduce the risk that the taxpayer would effectively bear if and when such work were commenced. On that basis, I commend our new clause to the Committee.