Public Sector: IT Projects

– in the House of Lords at 2:59 pm on 21st June 2007.

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Photo of Lord Lucas Lord Lucas Conservative 2:59 pm, 21st June 2007

rose to call attention to the management of information technology projects by government and public agencies; and to move for Papers.

My Lords, I am extremely flattered by the quality of noble Lords who have put their names down for this debate. I am looking forward to it, although I suspect that what I say will be challenged quite heavily by some. Let me start by saying that this Government have much to be proud of in what they have done in the field of government IT. They have seen through some very successful projects: the DWP payment modernisation system, Consumer Direct, pension credit, Warm Front from Defra and NHS Direct. I could have given a plethora of examples; those who want to know about them may turn to the e-Government National Awards or TickIT for a list. The Government have also made a number of structural improvements in how IT is dealt with in the Civil Service. The gateway reviews are an excellent innovation. Senior responsible owners, chief information officers and the Office of Government Commerce all speak of a Government who have at least an understanding of what is required to make a successful IT project. So why oh why are we faced with the likes of ID cards, the firearms licensing system, the rural payments system and the current mega NHS project? Why are we faced with failure and catastrophe on that scale?

In my preparation for this debate, I have concluded that there are four underlying themes. This Government have a fondness for centralisation, a lack of trust in professionals and others, a tendency to undermine rather than strengthen the Civil Service and a lack of openness. Although that could also have been said of previous Governments, I suspect that these are ineradicable qualities of this Government. However, I have hope for a future Conservative Government. That is what moves me to speak today; I am speaking as much to my own Front Bench as I am to noble Lords opposite in the hope that I can convince them that there are ways to avoid these problems in the future.

I shall not spend too much time dealing with the detailed problems of individual systems. My noble friends Lord Howe and Lady Byford will do that for me, and they will do so much better than I ever could. I want to focus on thoughts about what we should do to make things better in the future. First, we should take the attitude of strengthening rather than undermining the Civil Service. Civil servants are the people who have to see these projects through. My experience of the Civil Service is that the focus is much more on policy origination than on policy delivery. That is how civil servants gain credibility and move their careers on. I have seen this particularly in the context of my wife's charity, which works for the Prison Service. She and her colleagues have been steadily in post for 13 or 14 years now, but I doubt whether any civil servant whom she has had to deal with in a serious way has been in post for more than 13 months.

The business of high-flyers rushing around like demented bees is no friend to policy delivery. It destroys the whole basis for it. We have to develop within the Civil Service a career stream that is motivated by and rewarded according to policy delivery. People will stick with projects from the beginning to the end and their kudos within the service will be based on that. There are many such posts within commerce, but while the Civil Service does the chief executive officer position well, it seems not to do so with the chief operating officer. These are and should be well rewarded people in the Civil Service. If we can get that going, we will find a much better relationship developing between the Civil Service and the users of government services.

Policy origination often tends to be quite antagonistic where existing users are concerned—we need only look at the relationship between the DfES and teachers. There is a perhaps unnecessary degree of opposition and argument. If you want to be effective in policy delivery, you need to build strong relationships and good communication with users. Those are among the fundamental principles underlying good IT project delivery. Similarly, if we went down that route for the Civil Service, we would find that relationships with providers became much better.

The procurement side of many government departments is less than satisfactory, to put it mildly. Procurement staff tend not to be valued by their colleagues and not really to have the interests of the rest of the department at heart; rather, they focus on their own ways of doing things. Indeed, many instances can be found, particularly in IT projects, where those bidding for a contract are not allowed access to the users of the service. How on Earth can you design a system without being allowed to talk to the users? How can you put in a decent proposal, or innovate or find new ways of doing things, if you are restricted to talking to procurement specialists and do not talk to the users?

That sort of problem arises because of the lack of value placed on this function within the Civil Service. Again, the people heading up these functions in major departments should be well paid. In commerce, they would earn £250,000 a year to head that sort of department. I doubt very much whether that sort of status is accorded within government procurement departments. As we know from our debates on the salary to be accorded to the Lord Speaker, salary and status are closely linked.

Secondly, we need to put much more emphasis on trust. The people who can really make a difference to an IT system are the users. To make something successful, you have to engage the knowledge and commitment of a user group. The buzzword termis "federated systems". In other words, you do not design a mega-project, because it never works. Instead, you look at individual user groups and give them a mandate to design systems that suit themselves. You then put the central work into making surethat those systems have standards, specifications and interfaces that make it possible to work with the wider IT designs.

That is such a basic principle, and so well known, that it is astonishing that systems such as ID cards and the big NHS project appear to have ignored it entirely and as a result have fallen flat on their faces. It must be the absolute centre of all IT development. Trust the professionals, the people doing the job, and then work with them to produce a really effective system. Beyond anything else, systems developed in that way can continue to innovate and evolve of their own accord. Something that is designed centrally gets stuck and in five years' time it is out of date. No one knows what to do with it any more because there are no mechanisms for making it fit with changed circumstances.

The third underlying problem is centralisation, which is where politics comes into it. Politicians like things big and they like things fast. They are not around for long. Some Ministers stay in post for two or three years, but that is nothing in terms of the length of a big IT contract. Mostly, they want announcements and results very fast.

If we want to achieve something in our political lives, and it is only natural that we should, we must have in the Civil Service a real expert resource against which those ideas and ambitions can be tested. We need a real understanding of the technologies and their possibilities and of the principles for the development of good IT contracts. If we have such a resource, it must clearly involve a lot of people from outside the Civil Service, but it must also take in IT and delivery specialists from other government departments and give them some experience of real IT professionalism.

If we had had that, I do not believe that we would have been lied to in the way that we were when the ID card proposal was going through Parliament. I do not think that the Government saw it as lying at the time, but they must look back now and realise that what they said about the big centralised database, and about iris and other recognition technologies, was a lie. They were misinformed and misled because they did not have within government the ability to challenge what they were being told by a relatively inexperienced consultant.

If we were to design such an expert resource, I would put it in the Treasury, because, first, the Treasury has a natural power and involvement in almost any major project and, secondly, the problems with, and a quantity of the expenditure involved in, a federated system arise at the interfaces between individual departments or elements of them, and no budgets exist for them. A lot of the problems that have been occurring in police systems, notably the firearms licensing system, seem to have arisen because no one focused on the requirements of those interfaces. In case the firearms licensing system has not surfaced on noble Lords' radar, I inform them that the problem with it is that it takes more than a minute for a simple drop-down menu to appear on a screen. If you want to transfer a firearm from one force to another force, the process on a computer takes a day. That is entirely due to the lack of bandwidth in the system and the mis-specification of the interface between one system and another. If you have not planned it right, that has devastating consequences, but it is simple to get it right if you think of it first. We need to make sure that this does not happen, because it has happened in other instances.

I turn lastly to openness, the lack of which has certainly been a besetting sin of the Civil Service since I encountered it in a non-IT context when I was on the Front Bench. Bad news does not travel well in the Civil Service. There is a tradition of shooting the messenger. Certainly, Ministers do not want to know bad news. That leads to a tendency among civil servants to say, when a project is going wrong, "Give us another month and we'll get it right", and it leads to the building-up of an irrational exuberance that they will be able to solve their problems in the end.

I remember this particularly because I was my party's agriculture spokesman in the Lords when the BSE crisis broke. It exactly characterised what had gone on in previous years. Everything was focused on the hope that the disease would not infect humans. Every little bit of evidence that it might not was grasped, while there was a lack of questioning about what was really going underneath, where the evidence was moving and whether the actions that we were taking would really eradicate the disease. When the crisis broke and we were forced to be open, everything changed. We gave all the data that we had to independent experts and, a month or so later, we understood what had been going on. They looked at things differently and could suddenly see what was happening. If we had had that openness earlier on, we would have avoided a lot of the problems.

This Government have had a similar experience on the IT front with the NATS contract, which noble Lords may remember ran many hundreds of millions of pounds over budget and about five years late. It was not until we brought in Arthur D Little to review it and find out what had been going on that allthe obfuscation and difficulties were cleared away. Indeed, we have ended up with a successful system. Openness can make an enormous difference to how successful an IT project is, because it focuses people on what is really happening and allows difficulties to be admitted early rather than covered up. I know that that is difficult for civil servants—it is very difficult for politicians—but it is great for making things happen.

If I urge the Minister to do one thing, it is to drop the Government's opposition to making gateway reviews public. It is like jumping into a cold swimming pool—it will be wonderful when they are in, as it will make such a difference. There is so much good news there, beyond anything else; there are so many things going right. It will make it much easier to catch the problems when they are going wrong, and much easier to admit it.

When there is a real problem, as in the NHS, the Government must—for goodness' sake—do what they did on NATS and call in an outside consultant. The National Audit Office is just too much part of government to do these things well. The Government must grasp the nettle and do what was done before with such success. It is possible to get these things right, but I do not have a lot of hope that this Government will; their underlying tendencies prevent them. I look forward to my noble friend confirming my beliefs that we shall be much more successful at it. I beg to move for Papers.

M

....and the Firearms Licensing Management System (known by the apt acronym of "flimsey" ) Has - together with the bureaucratic and cumbersome licensing system, led to far more firearms offences being committed than ever was the case before.

Why? Because it is an offence to be in possession of a gun without a current certificate (even if you have applied for one) and thousands of otherwise law-abiding people are being put in this position as their certificates are not renewed on time by the police.

Submitted by Mike E.

Photo of Lord Warner Lord Warner Labour 3:14 pm, 21st June 2007

My Lords, I am grateful to the noble Lord, Lord Lucas, for starting the debate; it certainly provides me an opportunity to describe the reality of the Connecting for Health IT programme, and to contrast that with the fantasy and exaggeration presented by its extreme critics—parliamentary and otherwise. As the House will know, I was the Minister responsible for the programme until January, and I will draw on that experience.

Connecting for Health is one of the largest civil IT projects in the world. It is not a catastrophe and has not fallen on its face, as the noble Lord, Lord Lucas, said; it is a highly complex 10-year programme aimed at rescuing the NHS from its position in 1997 asone of the last bastions of paper transactionsand garage-designed computer systems. The one thing that you could guarantee about those systems was that GPs could not transfer information about patients electronically to another GP or healthcare provider.

Of course there have been problems, but the programme's achievements have been remarkable. They follow a four-year programme of extensive user and public/professional consultation and piloting before the letting of contracts in 2003. There has continued to be a willingness to listen and adaptsince, especially through the network of hard-working clinical champions interacting with professional users. One can always do better on user involvement, but the critics who claim lack of professional involvement are simply rewriting history. Indeed, the level of professional discussion and involvement has led to the two-year delay on the electronic patient record, and one of my jobs as a Minister was to unblock that logjam, which has now been done.

The contracts for this programme were an "exemplary example" of public procurement. Those are not my words, but those of the former chief executive of the Office of Government Commerce, supported by a June 2006 NAO report. Risk under those contracts rests with the contractors, not taxpayers as all too often has been the case in the past. Last year, Accenture learned that lesson the hard way and moved out of the programme, but without disrupting progress. The credit for the success of the contracts, worth nearly £7 billion over 10 years, goes not to Ministers but to the director of Connecting for Health, Richard Granger, and his talented team, including many doctors. The NAO in June 2006 found that the programme was well managed, was based on excellent contracts, was delivering major savings, had made substantial progress, and was on budget. Now that Richard Granger has announced that after five years running that huge project he will step down towards the end of the year, we should all pay tribute to a remarkable public servant who I hope will be given the recognition that he deserves.

The unfair and unrelenting criticism of the project, and by implication my staff—Ministers can take it but these are day in, day out, attacks on staff trying to do their best for the public and the NHS—becomes all the more extraordinary when one looks at the benefits to patients and to NHS staff that the programme is already producing. For the first time, there is a national spine that provides the capability to move information reliably and securely between 20,000—not 2,000—varied NHS sites, ranging from large acute hospitals to small chemists' shops. The published reliability figures are impressive, with the NHS experiencing availability of at least 167.9 hours out of a possible 168 hours each week. It is untrue that the system is insecure, because it is the only public sector IT system to use e-GIF level 3 requiring a smartcard and PIN issued only on production of ID and address, with serious disciplinary consequences—including prosecution—for malpractice.

What has been achieved so far is stunning. Using the new secure e-mail system, the 250,000 registered users have now sent their 200-millionth e-mail, helping to speed up patient services. We are ending the ferreting around in hospital basements for old X-rays through the digital Picture Archiving and Communications SystemPACS. Some 6,000 new images a week are being generated by PACS, which is now in the majority of hospitals, with 260 million images stored and easily retrievable on the system. This is saving the NHS millions of pounds and reducing patient exposure to radiation.

Patient safety is being further improved by the rapid implementation of the electronic prescription service. More than 2,200 GP systems and 2,600 pharmacist establishment are now live and about 1 million prescriptions are being transmitted each week. EPS will not only make patients safer but will cut fraud and save millions of pounds for the NHS. Patients and their GPs can now book their hospital appointments electronically through Choose and Book. I acknowledge that there have been problems with that in some places, but nearly 4 million bookings have been made and the usage is about 90,000 bookings a month. Of course not everything has gone smoothly. Progress on new hospital patient administration systems has been too slow, with 200 new systems still to be installed. That is partly because we have been too inflexible over local systems—I acknowledge that point—but that is changing quite rapidly.

Finally, there is the big prize of a transferable electronic patient record, about which there has been much controversy. This record of individual patients will make patients safer, save lives, improve whole-population public health and aid medical research and training. I recognise that there are genuine concerns about patient confidentiality and privacy, but we cannot have the patient benefits of this IT system without networking local systems. It is possible to work our way through these concerns, as I and others—including my noble friend and successor Lord Hunt—have been doing. That is why I set up a taskforce with many of the professional critics and asked Connecting for Health to develop pilot schemes for electronically transferring patient records with a scope for people to opt out, but with the dangers of doing so properly explained to them. It is interesting that from these early adopter sites only 0.2 per cent of patients have so far wished to opt out.

Some of my puzzlement over hostility to the programme has been removed, since leaving office, by discovering people working together to campaign against this programme. The campaign seems to be made up of the Foundation for Information Policy Research, the Big Opt Out organisation, the Conservative Technology Forum, Computer Weekly, Medix surveys and the Worshipful Company of Information Technologists, which I only recently discovered. An energetic presence in this network is a Cambridge professor called Ross Anderson. Some interesting e-mails of his have found their way to me. One e-mail of 27 November 2006 says:

"The Big Opt Out org will be a separate campaign (which many of us help). The principal organiser is Helen Wilkinson"— who I believe is a Conservative councillor. Another e-mail, of 13 February, talks about,

"how we might put the IC on the spot".

The IC is of course the Information Commissioner. Another e-mail, of 8 March, after Professor Anderson had been asked to be an adviser to the Health Select Committee, says:

"Well I said yes on the grounds that I can probably do more on the inside than on the outside".

Another e-mail which I particularly like is of 24 May 2007, sent after a lunch with Conservative front-bench spokesman Damien Green MP, who is quoted as saying,

"the Tories had taken an uncharacteristically principled line on the ID card and now felt exposed".

Ross was asked to provide some other arguments—a little less principled, I assume. Finally, in a quote from an e-mail of 20 December 2006, we have something a little closer to home:

"After speaking to Andrew Lansley, Tim Loughton, Malcolm Harbour and Lord Lucas I'm maybe starting to get the message across".

I have insufficient time to entertain the House with more extracts. I am willing to let them be seen on a private basis by my honourable friend in the other place who chairs the Health Select Committee. In a spirit of bipartisanship, I would encourage Conservative parliamentarians to look closely and sceptically at some of the sources of advice they appear to be using. The Connecting for Health IT programme should not be a political football. Too much is at stake for patients and the NHS.

Photo of Baroness Walmsley Baroness Walmsley Spokesperson in the Lords (Education & Children), Education & Skills 3:24 pm, 21st June 2007

My Lords, I, too, am most grateful to the noble Lord, Lord Lucas, because in recent years there has been a proliferation of information databases on children. Indeed, a recent paper from the Information Commissioner lists 11 of them. They all raise issues of privacy, security and consent. I intend to restrict my remarks today to the proposed national child Information Sharing Index, now to be called ContactPoint, and the much smaller databases of biometric information that some individual schools compile, often without the permission of parents and with the tacit approval of the DfES.

The ContactPoint database is to be universal. It will cover more than 11 million children and will potentially have 330,000 to 400,000 users. We are told that it will cost £224 million, which I suppose must be seen as a bargain in the light of the £12 billion cost of the NHS database and the £18 billion cost of the proposed national identity database. The £41 million per year that the database will cost to run, according to the Government, is a considerable amount of money, but the Government's figures are disputed by the Information Commissioner, who believes that it could cost up to £1 billion. Perhaps some of this additional cost will be borne by local councils. Ifso, we should be told. However, the Information Commissioner has pointed out that the database throws up,

"real data protection and privacy issues which need to be addressed".

The declared objectives of the database are to bring together the various professionals working with each child and to make early intervention easier. Those are both laudable. However, the database will cover every child in the country, including those who have no special needs, and it will have no professional input, save from the school and general practitioner. Thus, there will be many children on the database who do not need to be there.

When the database was first proposed, some of us suggested that the money could be better focused on ensuring that children's services professionals, who work with the children who do need their services, had reduced caseloads and improved training, thus making sure that they had both the time and knowledge of how to interact with other professionals for the benefit of their young clients. The Government, however, did not agree, so we now need to know how they are getting on with addressing our concerns and when the database will go live. It is scheduled for next year. Is it on target?

Many parents have expressed the same concerns that I raised when we debated the legislation during the passage of the Children Act 2004. There is no such thing as a totally secure database, and a large number of people will be able to access it. Although there is to be a two-part security authentication, the Government have recently seen fit in guidance to advise users not to access it from an internet cafe and not to leave it logged on when not working on their computer. That indicates the potential for misuse. How do the Government propose to monitor this? The sensitive information on the database would be invaluable to the predatory paedophiles who stalk the internet intent on child abuse. Some of it, such as contact with sexual-health professionals, is also very private. In addition, there will be information about the parents—for example, whether they are separated or single, whether they offer positive role models, whether they give the child a healthy diet and whether there is a problem such as drug or alcohol abuse. Therefore, it is not just a database of innocuous information about where the child goes to school, who has parental responsibility and who the GP is; it tells you a lot about the whole family.

Most parents and children will not know what is on the database, whether it is accurate, how to change it if it is not, and who is being given access to it and so on. Although parents and their children will have the right to ask to see the information about them and challenge it if it is wrong, I am sure that few will do so. Can the Minister say how parents will be informed about their rights in this respect and whether he will report to Parliament about how many exercise those rights? There has been some media excitement about the fact that information concerning the childrenof some high-profile parents will be electronically shielded if they are considered to be at increased risk, but surely the Government can see the potential of risk to all vulnerable children—even those whose parents have never appeared in a tabloid newspaper. We even hear that Ministers may be able to decide to exclude their own children. Can the Minister tell us whether he has any such intention himself?

There are also serious concerns about "function creep" into the proposed national identity register and other databases since the police have had new powers to access information on any database. It is clear to me that this information will be shared much more widely than any of us feared when we were debating the Bill that set it up.

There are also concerns that the database will give rise to self-fulfilling prophecies, where children with a number of "flags of concern", as they are coyly called, will be treated as potential delinquents. The database will require enormous restraint and professionalism from those who access it. I hope they will all understand its potential for harm as well as good. The sheer size of the database is also a cause for concern. Some commentators are afraid that serious cases might be overlooked because of the amount of time spent inputting and accessing trivia. The same skill of identifying priority cases will be required with this electronic database as has always been required when dealing with a set of paper files. The computer will not replace professional judgment.

Government IT projects have an appalling track record of breaking down. That was even admittedby Margaret Hodge when she told MPs on the Education Select Committee on 9 February 2007 that this gave her cause for concern. So, if professionals are relying on this database to alert them to signs of neglect or abuse, a breakdown could place vulnerable children at even greater risk.

On another closely related matter, I should like to ask the Minister about the much smaller databases of unique biometric information that are being held by schools. As the Minister may know, I have for some time been expressing serious concern about the fact that some schools are taking children's fingerprints for trivial uses such as registration, school dinners and use of the library, all of which can be better done in other ways. Most of this is done without the express permission of the parents, or even their knowledge in many cases. When I asked about this on 19 March, the noble Lord, Lord Adonis, said that schools receive "fair processing guidance" as to how to comply with the Data Protection Act, in which parents should be consulted about the collection and use of all information about their children.

There is much evidence that that is not happening. How are the Government monitoring whether schools are complying with the Act? However, it has become clear that, in response to concerns, the DfES is working with Becta to produce guidance for schools. I have looked hard and can find no such guidance yet, despite the fact that, on 5 February, in answer to a Written Question from my colleague in another place, the Member for Leeds, North-West, the Minister, Jim Knight, promised that the guidance would be available on the Becta website by the end of March 2007. As of this morning it still was not there.

In the mean time, there have been disturbing press reports suggesting that the guidance will not insist that schools obtain express permission from parents or guardians before taking fingerprints. On any interpretation of the fair-processing rules, that cannot possibly be compliant. This is a different kind of vulnerability: vulnerability to identity theft. These databases are not kept on stand-alone computers; they are on the ordinary school computers that are connected to the internet and are therefore vulnerable to attack by hackers. If I were an identity thief, I would get the data about 15 year-olds and wait patiently for a year until they got their first credit card. Then I would pounce. The risk is severe and yet the Government do not seem at all bothered. Besides, if there is nothing wrong with taking children's fingerprints, why do the Government not ensure that schools are asking parents or at the very least informing them? They are not doing so and that is a disgrace.

Photo of Lord Birt Lord Birt Crossbench 3:33 pm, 21st June 2007

My Lords, I congratulate the noble Lord, Lord Lucas, on raising this important issue and applaud the thoughtfulness and balance of his contribution. Although our emphasis is different on some matters at least, as he will hear—possibly to his surprise—we are in accord. I also declare two interests: I am a former member of the Cabinet Office Strategy Board, and my wife is the managing director of a technology company supplying to government.

Information technology can transform the effectiveness of almost any major institution. For government, it offers the prospect of new products and services for the citizen, with previously unimaginable speed and convenience. It brings mobility, enhanced capability in the field and services available anywhere at any time. It enables policy-makers to collect and analyse massive amounts of data and to acquire new and penetrating insights. It can facilitate a step-change in operational productivity and effectiveness. Technology can enable us to fight crime more effectively, to deliver better health and education outcomes or to improve our overburdened transport system.

Yet no one should underestimate the awesome difficulty of introducing new IT systems in practice. I have been closely involved as a non-executive director with companies that have been among the most successful in the world at deploying technology. I have witnessed at first hand what a herculean task it can be and how much capability is needed to do it well. At the BBC, I oversaw the transition of the corporation from an analogue rustbelt to a digital pioneer. That long journey, with plenty of stumbles and trip-ups along the way, demonstrated to me just how difficult it is to make the right decisions on infrastructure, how hard it is painstakingly to re-engineer core processes and to integrate different systems and what a challenge it is for any organisation and its people to acquire wholly new skills and capabilities.

Whitehall came a little late to a full and rich understanding of how the true power of technology can be unleashed to achieve better public outcomes. Decades of underinvestment in the UK public sector in general and in technology in particular were part of the reason for that. Ian Watmore's appointment as essentially the Government's chief technology officer marked a sea change. Now, the Government's leadership in technology, in the Cabinet Office and the departments, is the strongest functional support in government. I include Richard Granger in that.

Ian Watmore, John Suffolk and their colleagues have professionalised the IT function within Whitehall. Alongside the Office of Government Commerce, they have sought to improve the procurement process. The technology market is very competitive, and government is undoubtedly striking hard bargains. The CIOs have begun to wrestle with cross-governmental issues such as identity and interoperability. They have championed the importance of improving the service to the citizen. If you renew your motor vehicle licence online, sort out your pension entitlements in minutes, not months, or navigate your way to some critical piece of information on Directgov, you will appreciate the improvement that they have wrought.

Most technology in the public sector works seamlessly—it is not a disaster—and we never hear about it, which is the way of the world. However, it is plain that some technology does not work well and some projects have not gone well. We need to learn the lessons of that and improve. Many thoughtful people in the system, and there are many of them, believe that success on large projects would be more assured if the specification process were far more sophisticated than it is now. They believe that can best be achieved by a far more intensive dialogue between the purchaser and potential providers in advanceof the formal bidding process and before the specification is carved in stone. Such a Green Paper dialogue would need to involve all practitioners, not just technologists. The line managers and the policy makers must also own the specification, and, eventually, the procurement. The dialogue should cover outcomes and the means of delivering them; it should identify what is deliverable and not just desirable; and it must be a true partnership and joint venture involvingall parties.

Once the dialogue is over, the Government need to settle the specification far more speedily than they sometimes do, and to a previously declared timetable. Many suppliers justifiably complain about the length and expense, as well as the limitations of the current process.

I have one last point on procurement. This is not aimed at anybody present. Ministers have sometimes made unachievable demands of systems and have as a result launched a ship holed below the waterline that will never float. OGC needs—and here is the echo of what the noble Lord, Lord Lucas, said earlier—an independent gateway process to vouchsafe that the scope is truly deliverable before the bidding process begins; and, while I am at it, if, wholly commendably, Gus O'Donnell can publish the departmental reviews, could he not, with benefit, extend transparency to the gateway process too?

I have already said that most technology projects in the public sector succeed—they do. None the less, I suspect that the failure rate is higher than in the private sector. I do not think that the reason for that is likely to lie with the technology companies, for self-evidently they work freely across both public and private sectors; rather I fear that the skills gap lies elsewhere and in the public domain. Managing a complex IT project tests the most skilled manager. He or she will face myriad issues, and only a few will be purely technological. Entrenched interests, for example, will dig in and resist system change. Therefore, managing a large IT project normally means managing whole system change. That requires not only a highly and widely skilled senior responsible officer but managers with the appropriate skills set throughout the system undergoing change.

These skills are not yet widely available in Whitehall. Successive Cabinet Secretaries have identified this issue, and Gus O'Donnell is running hard with this particular ball. His vision is to add modern business disciplines to the silky private office skills of the old mandarinate. That process of training has long begun. But until it is complete the drivingof many large projects in government will remain significantly underpowered.

There is much to be pleased with. Public sector IT in the UK is undergoing a fundamental transformation. It is a job not yet done, but one very much begun.

Photo of Lord Evans of Temple Guiting Lord Evans of Temple Guiting Government Whip, Government Whip

My Lords, before we hear from the next speaker I remind all noble Lords that this is a time-limited debate. When "9" comes up on the clock, would you please finish your remarks? Otherwise you will be eating into the Minister's time, because there is no slack.

Photo of Lord Mitchell Lord Mitchell Labour 3:47 pm, 21st June 2007

My Lords, this debate is long overdue, and I thank the noble Lord, Lord Lucas, for introducing it today. I speak as someone whose total professional career has been in the IT industry: first with IBM, as a systems engineer, and then as an entrepreneur in the services sector. I have also consulted for IBM and Hewlett Packard. I have never been directly involved in a big IT project, but I know people who have. I am indebted to all those who have helped me with their views, opinions and deep experience in the preparation of this speech.

Political life is not always fair. An impression gains hold in the public psyche and once there it is hard to remove; and so it is with public sector IT projects. Rightly or wrongly, the general view is that Governments—this one or any other—are unable to control those large projects and as a result taxpayers' money goes down the drain. The truth is that some projects go well and are unsung, but others go spectacularly wrong and grab the headlines.

In my day, the government sector was a no-go area, light years behind the private sector. Less qualified people worked there. Decision processes went on for ever. Life was too short and the rewards uncertain. That has changed. Since this Government came to power, quite correctly in my view, the managerial emphasis has been on information. Without information, you simply cannot manage. Obtaining information is not easy, especially if you are starting with primitive systems. To bring departments from the Stone Age into the 21st century requires massive investment on new and mega-sized systems. That all costs money, lots of money. As they say, with £10 billion here and £10 billion there, pretty soon you are talking about serious money.

Then there was an about-turn. In the late 1990s, all the IT companies became very focused on the public sector. That is where the money was. After the dotcom crash, when the private sector froze, the opportunity presented itself. The problem was that, unlike the private sector, the public sector was not equipped to handle such huge projects. It did not have the people, it did not have the culture and, in particular, it had to deal with snooping politicians who did not have a clue how to ask the right questions.

I should like to analyse why public sector IT projects have had such a dismal time and then make a few suggestions as to how they may be improved. First, there is a problem of scale. It seems to me that the public sector has always favoured the big-bang approach—introducing a fully completed project in one fell swoop. That is a very dangerous game. It is far better and much safer to make the project as small as possible, make sure all the bugs are ironed out and then roll it out slowly.

Then there is what I would call the major problem: the public sector fixation with contracts and penalties. I am afraid that that is part of the Civil Service mentality. Somehow the Civil Service believes that, if you make the contract tight enough and the penalties onerous enough, everything will come good. It is a mentality that says that the supplier is the bad guy who is out to rip us off, therefore we must use the power of the contract to protect ourselves.

I have always had a simple mantra in business: sign the contract, stick it in the drawer and never look at it again. The day that you take it out of the drawer, you are in serious trouble. But, then, I come from the private sector, where we regard suppliers as partners. Our attitude is that there will always be problems, but we sort them out by sitting on the same side of the table, not glaring at each other across the room. Here is the truth about onerous penalties: they do not incentivise suppliers; they make them live in fear. Furthermore, no penalty, no matter how large, will ever compensate for a failed project.

Then there is the problem with the departments' personnel. Those huge projects take ages to spec, ages to negotiate, ages to procure and ages to implement. Those who start the project are seldom there at the end. How many civil servants are still in post after three years? No one takes responsibility for the project from beginning to end.

Then there is the whole area of consultants. A few years ago, I was consulting for Hewlett-Packard. A new CEO was appointed in the United States. His first act was to fire almost every consultant—including me, I am sad to say. That action resulted in a saving of nearly $1 billion a year. Did the company collapse without those paragons of wisdom present? Not a bit of it. Freed from those interfering busybodies, the company has gone from strength to strength. Consultants are the curse of business. They are used as a crutch, a prop, to support third-rate management. They give senior management an opportunity to abrogate responsibility that should not be abrogated. They are used by insecure and inept managers to cover their backsides, so that they can say when something goes wrong, "Ah well, the consultants recommended it".

It may seem obvious, but consultants, like lawyers and accountants, are all in it for fee income. Shortening the project by making it easy and simple is not in their remit. It is not how they are assessed at head office. Their incentive is to make every project as big and as complex as possible, and their hope is that it goes on generating fees for ever. I am not joking when I say that we would all be served if every consultant were fired tomorrow. Managers should stand on their own feet and take responsibility for their own decisions, and not hide behind the skirts of overpaid time-wasters.

The result of bad practice in government departments is that many IT companies also behave badly. The suppliers overplay their abilities. They over-promise what they cannot deliver, they underbid on costs, and they try to recapture revenues every time the specification is changed—and the specifications often change. They get themselves into a terrible mess. Let us imagine, if we can, the state of mind that Accenture must have been in, as my noble friend Lord Warner said, when it withdrew from the NHS project. It cost the company £220 million—an amazing figure—to get out of the contract. Clearly, it judged that it was better to cut its losses than to continue losing money hand over fist dealing with the NHS. This is not a triumph of contract, but a total failure of the whole project. I am of the old school, but I really want my suppliers to make a reasonable profit when they deal with me. If they are happy, I am happy. If they are disgruntled, I will have problems. The Civil Service will never understand that, which is why it gets into so much trouble. An arrogance also pervades these big projects—a "we know best" frame of mind. If nothing else, it has proved beyond doubt that it does not know best.

What can we do about it? First, civil servants need to be trained and educated about the nature of contracts and partnership. They should know that, in any project, we are all on the same side. There should be a senior responsible owner on every project. In the private sector, IT is increasingly deemed to be too important to be left to the nerds. One cannot imagine Goldman Sachs having a chief information officerat a junior rank. Data are life and death to an investment bank, and too important to be relegated. It should be the same in government departments. Here is a suggestion. Why does not the whole public sector adopt a uniform delivery infrastructure? Why not make it all one utility, from which various departments can work?

Finally, on the human side of IT, why don't we market what is out there? The noble Lord, Lord Birt, talked about all the projects that are out there. I bet that most people in the street have no clue about what is going on. A little marketing would really help to make them aware of it. My analysis is simple: make the project small, make the specifications tight, make the suppliers your friends, make the consultants redundant, and make the users want to use your project.

Photo of Earl Howe Earl Howe Shadow Minister, Health 3:52 pm, 21st June 2007

My Lords, the NHS Connecting for Health programme, if its constituent parts are put together, is the largest civilian IT contract in the world. It started in 2002 as the National Programme for IT. The Government's central vision was to establish an integrated system known as the NHS Care Records Service, consisting of detailed electronic patient records that could be used by GPs and in local healthcare communities. Alongside that is a national summary clinical record known as the spine. In addition, the programme comprises an electronic booking system for patients known as choose and book; electronic prescriptions to enable GPs to transmit prescriptions instantly to pharmacies; an e-mail service for NHS staff; computer-accessible X-rays; and a broadband network known as N3.

To achieve all this, Ministers took a conscious decision to centralise procurement for the entire NHS in England at the Department of Health. This was achieved extremely rapidly. By 2004, contracts worth £6.2 billion had been awarded to four lead service providers, covering the five designated regions of the country. The total cost over 10 years, according tothe most recent NAO estimate, is £12.4 billion. Nevertheless, about a year ago, the noble Lord, Lord Warner, was reported as saying that the full cost was likely to be in the region of £20 billion.

Photo of Lord Warner Lord Warner Labour

My Lords, may I correct the noble Earl? I actually said that the NHS would spend a total of about £20 billion on IT overall—not on this project alone—over the 10 years of the contract.

Photo of Earl Howe Earl Howe Shadow Minister, Health

My Lords, I am sure that the House will be grateful to the noble Lord. He will be relieved to know that I am not going to make a strident attack on Connecting for Health. Indeed, I support its aims, for the most part enthusiastically. However, in April this year, the Public Accounts Committee in another place published a report on the current state of play. The largest single element of Connecting for Healththe Care Records Service—is running about two years behind schedule. The suppliers to the programme are struggling to deliver. Not only that, but the department has failed to win hearts and minds in the NHS, especially on the question of whether the system will be fit for purpose. Four years after the programme started, there is still huge uncertainty about its cost across the wider NHS and considerable woolliness about the value of the benefits that it will eventually provide.

The noble Lord, Lord Warner, is right: this is not a picture of a disaster. However, the conclusions were nevertheless pretty disturbing. On the surface, the Government insist that everything is on course, albeit delayed. The Prime Minister was informed in February that there were no technical problems with the programme, only a certain amount of difficulty over winning hearts and minds. That advice was manifestly incorrect. In the southern cluster, Fujitsu is installing software supplied by Cerner Millennium. In April of this year, 79 doctors, nurses and secretaries at Milton Keynes General Hospital—one of the pilot sites—signed an open letter stating that, in their opinion, the new care records system is not fit for purpose and should not be installed in any further hospitals. They drew on numerous case studies and cited a catalogue of serious faults.

That situation is worrying enough, but in three of the other clusters the position is, if anything, even worse. The software programme on which the system is to rely has not yet even been written. iSoft, the company responsible for writing it, is in severe financial difficulties as a result of its failure to deliver and is currently under investigation by the Financial Services Authority. As we have heard, Accenture, the main service provider for two of the clusters, resigned last year and in so doing made a provision in its books for $450 million. Its contracts are being taken over by CSC. In CSC there have been no fewer than 10 resignations at very senior management level in recent months. We may well be told that these are not significant, but such events do not serve to reassure the outside observer. Equally unreassuring is the fact that two other key suppliers to the programme—Commedica and IDX—have also fallen by the wayside.

The line taken by Ministers, which we will probably hear again today, is that it is better to get things right than to rush. Fair enough, but where are we heading? One of the concerns expressed about the Care Records Service is its potential to blow patient confidentiality out of the water. How do you make someone's medical details available to any NHS doctor in the country while at the same time giving that patient the cast-iron reassurance that there will be no unauthorised access to his file? This is a fundamental consideration, which was not properly thought through when the programme was commissioned. It is one that has come to the fore again in the context of the online application system for postgraduate doctors, MTAS. So insecure was this system that extremely personal details about individual doctors, including their sexual orientation, were accessed by reporters working for Channel 4. It has been said that if the Government cannot guarantee the security of 30,000 doctors, what hope is there for 50 million patients. It is not surprising that in a recent poll only a third of GPs said that they would advise their patients to allow their information go on to the national spine. The Government have agreed that any patient will be able to opt out of the spine, which is surely right. However, I believe that part of the Connecting for Health budget should be directed towards a public information campaign on that issue.

Records held by a GP and made available to the local hospital present little or no difficulty, but when records are placed on a national spine there is a real problem of accountability for the security of the data. Who exactly is accountable? But there is a wider issue here. There are many who believe—I am one—that in a major respect this massive IT programme was not soundly conceived. None of us, I am sure, would argue that holding patient records in electronic format in a GP practice or at PCT level is a bad concept; far from it. But exactly what cost-benefit analysis was done to validate the central vision of a nationally accessible patient database? The answer to that, so it appears, is practically none. The underlying thought was, in truth, a pretty loose one: that it would be handy to have someone's medical records freely available in an emergency at any hospital in the country. The evidence to support that idea was nil. The overwhelming majority of patients access NHS care within their local community. If you have a heart attack or you are in a car crash miles from home, there are established clinical protocols that should make access to your medical records almost irrelevant.

It is telling that in Wales the Assembly has opted for a much less ambitious and much less costly IT solution. The original estimate for a Welsh equivalent of the Care Records Service was £1.5 billion. That option was rejected in favour of a system costing a mere £3 million. For that sum of money, the Welsh NHS will get a single patient record system available to GPs, local acute trusts and doctors performing out-of-hours duties. In other words, the vast majority of situations for the vast majority of patients will be covered. I am told that doctors in Wales are more than content with this approach. That is the key difference between Wales and England, where stakeholders feel resentful about not being more involved in the procurement process and, above all, lack a sense of ownership of a system that they are being asked to operate. How do the Government propose to remedy this, given that only one-quarter of GPs now say that they support the programme? In 2004, the figure was well over 50 per cent.

I do not for a minute doubt the benefits that Connecting for Health will bring, especially those relating to patient safety; I acknowledge them fully. But there are serious question marks over the programme's design and the benefits that it will offer at the margin measured against the marginal costs, both originally and now. All that points towards adopting two things that my noble friend Lord Lucas so eloquently argued for: honest and regular re-evaluation, and greater openness, including publication of gateway reviews. Surely that is how this vast and vital project, whose success we must all wish for, stands the best chance of reaching fruition both on time and on budget.

Photo of Baroness Harris of Richmond Baroness Harris of Richmond Spokesperson in the Lords, Northern Ireland Affairs, Spokesperson in the Lords (Police), Home Affairs, Whip 4:01 pm, 21st June 2007

My Lords, I, too, am grateful to the noble Lord, Lord Lucas, for securing this debate. I assure him that my contribution will be on only the IT area in which I was involved a number of years ago, which is slowly proving to be a success. That was not always the case but, as your Lordships know, large IT systems cost far more than originally expected and generally take much longer than anticipated. It was and still isso with Airwave, the terrestrial, trunked, digital multi-frequency radio service for police and now, thankfully, for other emergency services in England, Scotland and Wales.

Airwave is managed through a programme board made up of representatives from the Home Office, the Association of Chief Police Officers, the Association of Chief Police Officers in Scotland, the Association of Police Authorities and the National Policing Improvement Agency. It is procured by the NPIA and provided by Airwave O2 Limited under a private finance initiative.

I must declare my interest in this area. I was a member of my police authority for 20 years and chaired it for almost eight years until 2001. I was also a member and deputy chair of the Association of Police Authorities and sat on a number of national committees including the Police Negotiating Board and the Police Advisory Board. Moreover, I was a member of the National Crime Squad Service Authority before it was absorbed into the Serious Organised Crime Agency.

Airwave was crucial to the accurate relaying of messages throughout all the force areas on the UK mainland, before which we all had our own systems and hardware, much of which, in my force, North Yorkshire Police, was at the end of its natural life. Indeed, it was so much at the end of its life that I recall us having to cannibalise old radios to make sure that most of the operational ones that were needed actually worked. It was a desperate and wholly unacceptable situation, which only the introduction of a modern, affordable and technically competent radio system could remedy.

I was present when the then policing Minister, Charles Clarke, told a small deputation from the Police Advisory Board that—I will not be able to use the word he chose to use to describe what he would do to the reluctant forces that did not want to purchase Airwave—we would all take it, whatever we thought and whatever the cost, because it was to be the only solution on offer. However, he coated his threat with a promise of more money for forces to purchase the system, on which he was true to his word.

Airwave began its life as the Public Safety Radio Communication Project in the early 1990s. It wasto be managed through the Police Information Technology Organisation, which was a public body set up to support police and partnership agencies in the criminal justice community. PITO has now evolved into the National Policing Improvement Agency. Initially, as I well recall, the Government emphatically refused to pay for the PSRCP, knowing that it would cost a huge amount of money, but eventually they capitulated and, in the end, all police forces received a capital grant towards its purchase. A decision was made by the then chief constable of North Yorkshire Police that it was absolutely essential that we were one of the first forces to go "live" with Airwave.

We took operational early access of the system—which meant that we were going live in one district while Airwave, the company name, was still building sites in other parts of the country—in 2001. It certainly had its teething troubles. Rolling it out over such a huge geographic area, with some officers having access and others still using the old system and kit, was hardly ideal. We finally managed to cover the force area by mid-2002.

Officers in Scarborough made the first switchover to Airwave and colleagues within the district soon began to appreciate the benefits from the vastly improved communication in areas where previously their old analogue sets had struggled to get radio coverage—not a pleasant situation to find oneself in when on the tops of the moors, out of radio contact with any help and having to stop a suspicious car with four tough-looking men in it. So it was a great relief to be able to be in contact with the rest of the world in a potentially dangerous situation. Airwave handsets provided emergency buttons for officers, enabling instant radio access to help.

The cost of obtaining Airwave was the single most important factor for forces having to make the decision to purchase. The original arrangement with PITO and O2, formerly the mobile communications arm of BT, for a new radio service for police forces, was that O2 would design, build, finance and operate the service, while PITO and the police would pay charges over 19 years of some £1.5 billion. As we will see in a moment, this is now much, much more. In the 64th report of the Committee of Public AccountsHouse of Commons Paper 783 of 2001-02, published on 28 November 2002—the conclusions of the committee were as follows:

"In negotiating a deal with O2, PITO and the Home Office failed to secure any clawback for the taxpayer of additional profits if other emergency services decide to join Airwave or if the system is sold by O2 to overseas governments. O2 was prepared to share the rewards from bringing extra users onto the system only if the Home Office was prepared to share the risk if extra users did not join. Failure to negotiate a clawback agreement was a product not just of O2 being in a powerful position as the only bidder but also the inability of the Home Office to bring the fire service and other safety organisations on board by demonstrating the real benefits that Airwave had to offer".

So, in the initial stages at least, proper thought had not been given to such a massive investment, and a public sector comparator was not made until much later on in the procurement process. As it happened, the committee felt that at that stage it was doubtful whether the use of a comparator added anything significant to the decision-making process. It suggested that departments needed to think through what financial and other analyses would be needed at each stage of the procurement process to determine and implement the most effective means of ensuring value for money. Can the Minister assure me that this kind of late comparator is no longer a favoured form of doing business and that in future large projects such as Airwave will be managed in a more efficient manner at the outset?

The National Audit Office, in its evaluation of the Airwave project, said in the report of the Comptroller and Auditor General in April 2002:

"When procuring a step change in technology, such as Airwave, it must make sense to develop mechanisms to ensure that the maximum possible benefits are obtained for what will be a considerable investment of public money. This requires the allocation of resources up front to analyse performance before the service is introduced. In this deal, such investment was not undertaken either early enough or in sufficient depth during the procurement".

The Airwave system is very significant—currently costing around £4 billion—and we must ensure that we get the planned benefits from it.

I understand from the APA that there is still a significant gap in mobile data and information. A number of pilot programmes are running acrossthe 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.

Photo of Baroness Byford Baroness Byford Shadow Minister (Food & Rural Affairs), Environment, Food & Rural Affairs 4:10 pm, 21st June 2007

My Lords, I thank my noble friend Lord Lucas for securing this debate. He referred to three matters which struck a chord with me straight away: 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 efficacyof this level of expenditure. First, how many of the systems developed within that expenditure are working successfully and how many required remedial work between being signed on and signed off?How many of the systems developed within that expenditure are doing the work they were intended to do to a 98 per cent level of accuracy?

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 Answer was:

"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".—[Hansard, 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 gavehim 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 estimated at £6.8 million but eventually turnedout to be £16 million. The customer communications contract, originally estimated in 2003 at £1.2 million, turned out to be £9.8 million. That is not satisfactory. When the noble Lord, Lord Rooker, responded to my question, he started by saying:

"My Lords, this is not a happy tale".—[Hansard, 30/10/06; col. 8.]

Clearly it is not.

I moved on to look at the IT consultancy that Natural England is using. It was asked to producea 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".—[Hansard, 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, andI am only sorry to have to reflect it again this afternoon.

Photo of Lord Maclennan of Rogart Lord Maclennan of Rogart Spokesperson in the Lords, Scotland, Spokesperson In the Lords (With Special Responsibility for Civil Service Reform), Cabinet Office 4:20 pm, 21st June 2007

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 themselves. A Cabinet Minister, the Chief Secretary to the Treasury, chairs a Cabinet sub-committee, and new offices have been established to oversee this work. I raise en passant the question whether Parliament itself has reorganised its operations adequately to maintain a continuing review of this work so as to enable us to consider in a balanced and deliberate way what needs to be done. It has to be said that some of the general principles enunciated in this debate seem somewhat contradictory. For example, the point that the noble Lord, Lord Lucas, made in his opening speech about the danger of placing undue emphasis on centralisation counters, to some extent, the view of the Office of Government Commerce, which has been talking about cross-departmental co-ordination and,

"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 matterswas 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 kepta detailed record of overall expenditure on the programme and that the estimates of total cost have ranged from £6.2 billion to £20 billion. With the greatest respect to the noble Lord, Lord Warner, I do not think that partisanship is appropriate in looking at these facts.

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.

Photo of Lord de Mauley Lord de Mauley Deputy Chief Whip, Whips, Shadow Minister, Trade & Industry 4:29 pm, 21st June 2007

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?

Photo of Lord Davies of Oldham Lord Davies of Oldham Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords) 4:39 pm, 21st June 2007

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.

I want to concentrate on the broad principles of this issue. The noble Lord, Lord Lucas, made some very interesting and challenging points, which were followed up in the debate, and I shall seek to reply to those in a moment. Possibly the most interesting thing that he said was that he was not addressing this debate to the Government, on whom he has long since given up, but to some future—I know not when—Conservative Government. If he was looking to his Front Bench to provide a constructive stance on IT, he must surely feel that the noble Lord, Lord De Mauley, has singularly failed him.

The noble Lord, Lord De Mauley, accurately identified some challenging IT issues, and I am the first to recognise that we have areas of difficulty as well as areas of conspicuous success. The House will not be surprised if, in the short time available to me, I comment on some of those areas of success, if only to right the balance of the debate as a whole. However, I do not think that the noble Lord identified an alternative strategy to that of the Government to improve the situation.

We do not think of projects as IT projects. We see the extensive use of systems and technology as being of huge advantage to government, but the technology is merely an enabling contribution. It enables the delivery of some policy change, which invariably means changing the way that we run our departments or interact with citizens. Of course, change is difficult and it gives rise to criticism when not everyone is in sympathy with certain projects that are pursued.

However, I want to emphasise that the complexity of change is now on an unparalleled scale. It is suggested that the Government should be less ambitious, but how, without being ambitious, can the Government serve the public in a modern age with their ever-increasing demands for information and for government to interact with them on a prompt and proper basis? That is why we have introduced a range of systems which bring significant advantages to our nation.

By the same token, such schemes will not produce value overnight. I was not at all surprised, and nor will the House be, that, despite criticism of National Health Service projects, my noble friend Lord Warner immediately identified how the NHS Connecting for Health project has considerably improved the service that we offer the community. He was well aware that, if no one else did, the noble Earl, Lord Howe, would draw attention to some of the problems. We are still in the early days of the project and, as the noble Earl, Lord Howe, noted, it will take years before such a development meets his demands in full. However, unless we lay the ground at this stage and unless we are indeed ambitious with regard to IT, we will not get the delivery that is possible.

It is startling that more than 50 per cent of the NHS has gone from wet-film X-ray images to digital technology in just three years. That is saving lives and money and improving the satisfaction of dedicated health professionals. In many parts of the country, patients no longer need to visit their GPs to collect repeat prescriptions. They can have them sent electronically to their chosen pharmacy, and already 10 per cent of new prescriptions are delivered in this way. Of course, 10 per cent is not 100 per cent, so it can be looked on as a 90 per cent failure. That is merely a reflection of the obvious fact that it takes time for all the local inputs, such as the GP and pharmacist, to be brought into the system. My noble friend Lord Warner largely spoke on the health service and covered areas that I would otherwise have needed to cover. It represents a conspicuous advance, greatly valued by the public, and an indication of how we need to be ambitious. But we also recognise that we will always be open to the charge that, in the short term, we are falling short of the ultimate goal established for such programmes. For instance, citizens can now obtain their passport in four hours for urgent over-the-counter applications, and that99 per cent of passport applications are completed within 10 days. There is not a single Member of this House who cannot recall a time when we have renewed our passports in rather more arduous circumstances. It is another product of IT services and change which brings real advantages to our communities.

The Government produced the Transformational Government strategy in November 2005 and set out—contrary to what has been contended on the Opposition Benches—a clear strategy on how we intend to continue the transformation of public services underpinned by the effective use of technology. It is rightly structured on the key areas we have heard about today; namely, the citizen, shared services, using what we know works and continuing to develop and be supported by IT professionals.

I accept the point that my noble friend Lord Mitchell made in his extremely perceptive contribution, which was also emphasised by the noble Lord, Lord Birt, and the noble Lord, Lord Lucas, who introduced the concept at the beginning of the debate. There is a necessary skills gap which needs closing. The Civil Service was not equipped to deal with the programmes we are introducing, and there is a necessity for enhanced skilling. Several contributors to the debate suggested that the problem was the transition of civil servants who could not see projects through because they were not in post long enough. The aim—and, increasingly, the practice—is now that senior civil servants concerned with these projects are in post for at least four years. It may again be that that is suggested as a limited time against the bedding down of such projects, but I emphasise that the Government are fully cognisant of the necessity for the right skills and experience, that they are built over time and that people must stay in post to see projects through and be answerable.

The noble Baroness, Lady Byford, is right when she says that Ministers are responsible. Of course they are responsible, both for the development of policy and its implementation. She will know that when things go seriously wrong, Ministers must quite properly answer for that. However, within this framework, there are bound to be difficulties as the Government struggle—as do private corporations and companies—with the demands of implementing new technology against a background of a limited level of available skills within the community. They are much in demand. That means that, as time goes on, we get greater security of the efficiency of government provision because we have the right number of people within the departments to ensure that it takes place.

Within that framework, I recognise that there have been problems in the past. Particular problemshave been identified with procurement issues, a point emphasised by my noble friend Lord Mitchell. We accept that on some contracts it would be unwise and unsafe to position a small group to take the lead on a large government project. That is why when we call in support we need to call it in from organisations that have large resources because such projects can be beyond the capacity of a small organisation to deliver. A balance has to be struck on contracts. We wish to drive value for money, quality and delivery but government and government services serve the people and the important thing is that people can relate effectively to the service being provided.

I was challenged particularly strongly by almost every speaker about the advantages of greater openness in the process of implementing technology. I recognise that we will be successful with the citizen only when the citizen is aware of what services are being provided, knows how best to make use of them, and is helped to do so.

In one area, I shall disappoint nearly everyone who spoke in the debate. The noble Lord, Lord Lucas, addressed a question directly to me and I shall answer it as best I can. He said that there would be great advantage if there were greater transparency through the publication of gateway reviews. The gateway process has helped to achieve more than £2.5 billion in value-for-money savings. In the Government'sview, disclosure would seriously undermine the effectiveness of the gateway process, as confidentiality is essential to the whole process. The process is a crucial management tool to improve the success of the Government's projects and programmes. In our view, it is just not in the public interest to put that effectiveness at risk by disclosing the information in the two reports in this case. I recognise that thatwill disappoint the House. The noble Lord, Lord Maclennan, is always assertive about the necessity for open government. He also raised the issue and I know he will be disappointed by the response. However, a balance has to be struck between the undoubted merits of openness about the Government's actions and areas such as this where very delicate confidentiality issues are involved.

We undoubtedly have to recognise weaknesses in IT implementation and provision, and the noble Baroness, Lady Byford, mentioned the Rural Payments Agency. As she will know, that weakness has been fully recognised by those speaking from this Dispatch Box. However, the public sector performs some of the most demanding tasks in the world. Europe and in the UK can learn much from the private sector about how to respond quickly to consumers' needs. We are all aware that the very best private organisations can pride themselves on how quickly and effectively they respond to consumers' needs. Government is, however, a good deal more complex than much of the private provision. We have seen that in today's debate—which has focused on education, the Home Office, police, agriculture and, particularly intensively, the National Health Service. Scarcely any area of government has not been covered. That is a greater range of issues than the private sector has to address. Therefore, there will of course be illustrations of weaknesses. However, IT introduction is not an untrammelled success story in other organisations either.

We ought to recognise that we are still at the beginning of what the Government regard as their transformational strategy. We recognise that we have a great deal more to do—more on using ICT to improve public services, more on improving the value we create for the investment that we make and more on improving the success rate of our business change programmes.

The IT profession within the public sector now comprises an estimated 50,000 dedicated individuals. Every day, their dedication and hard work supports those who keep the traffic flowing, ensure that benefits are being paid, save lives, educate our children and prevent crime. These services are vital for our people and delivery is of the greatest importance to the citizen. These services are the product of extremely complex processes for the development of public policy and IT will continue to play a crucial role in providing that support. But it would be inconceivable that we could introduce projects of such significance, with the success rate that we have achieved in so many areas, without noble Lords being able to identify areas, as they have today, where we have fallen short of expectations and difficulties have occurred.

In most cases, those occur at the origins of a successful IT introduction. The message that things will inevitably get better and improve tomorrow is not necessarily or automatically welcome, because the evidence shows some difficulties. But in processes of this kind, it is in the very nature of things that the early days will be attended with acute problems. The Government are committed to a strategy and already have successes to their name. We are prepared to provide the resources and manpower to guarantee that we reap the rewards of the investment. I give way to the noble Baroness.

Photo of Baroness Byford Baroness Byford Shadow Minister (Food & Rural Affairs), Environment, Food & Rural Affairs

My Lords, I tried to intervene a minute ago but was slightly frowned upon. The Minister indicated that problems happen also in the private sector. But it is no use apologising when we know that the mistakes made with the RPA in 2005 will not be rectified until 2008. Surely that is unacceptable.

Photo of Lord Davies of Oldham Lord Davies of Oldham Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)

My Lords, we are hoping to reach a very high correction rate of such situations this year. But the noble Baroness is right: absolute achievement with regard to such a significant failure cannot be done overnight. Is that surprising? We are addressing a very large number of difficult issues concerning the RPA. As the House will recognise, it produced an unparalleled response by Ministers—not happily matched in any other government department—who recognised an acute and substantial mistake. We should not look on that as illustrative of the future. We should look on it as a case in which the Government learnt a lesson from the mistakes. I have indicated areas of conspicuous success which point to successful implementation of IT in government. That is what I think this debate sought to identify.

Photo of Lord Lucas Lord Lucas Conservative

My Lords, I was confident that I would learn a great deal from this debate and I was right. I was equally confident that the Government would learn nothing, and I was right. I remain confident that my honourable and right honourable friends will learn a great deal from it, and I trust that my noble friend on the Front Bench will make sure that I am right on that too.

I do not want to part on a sour note with the Minister. I can offer him some good news. He will have been wondering which Liberal Democrat Peer has been offered his job. I can assure him, and I have it on the best authority, that it was not the noble Baroness, Lady Walmsley. So he can cross her off the list. I beg leave to withdraw the Motion for Papers.

Motion for Papers, by leave, withdrawn.