The IT factor
4 August 2003
1 July 2013
11 April 2014
New Model Services Contract — New Model Contract precedent for government ICT and business process outsourcing contracts
11 April 2014
4 April 2014
23 May 2013
The UK Government is the biggest single spender on IT services in the country and every major project, successful or not, is subjected to intense media scrutiny. But despite notable disasters such as those concerning tax credits and criminal records, there are also Government successes - the NHS Direct Call Centre service, for example. This article looks at the development of new guidance designed to ensure the future success of Government IT procurement.
The UK Government will spend nearly £6bn on IT procurement and outsourcing over the next few years. This is driven by its attempt to make all Government services available electronically by 2005 through the Electronic Government Programme, and by the ability of technology to improve their delivery. The Government not only spends the most on IT, it also has the highest profile when it comes to projects over-running or leaking cash.
It has been noted that failures in IT projects are common in both the public and private sectors. 'Chaos', a report published every year by US consultancy the Standish Group, found that only 28 per cent of all large IT projects complete on time and within budget. The Government's mistakes, though, are much more public and the press has been quick to print headline-grabbing details of project failures and the attendant waste of taxpayers' money over the past few years.
One such example was the 1996 PFI-funded joint procurement by the Post Office and the Benefits Agency, known as the Pathway Project. The National Audit Office has estimated that this project wasted £1bn of taxpayers' money and, in its summary, the Public Accounts Committee noted that this was the 40th Government IT project to come before it.
But the Government does have unique problems to cope with when dealing with IT procurement. These include many groundbreaking and very large projects, technical problems around system integration, poor project management, protracted and complicated regulated procurement processes, multiple stakeholders (both politicians and citizens) and firewalls.
There is also the scale of the services to be transformed: the Government is involved in approximately five billion transactions a year, has 20 departments, 480 local authorities and over 200 agencies. But despite these considerable difficulties, many Government IT procurement projects are still a success.
The success of the NHS Direct Call
Centre service is well known. Many local council IT projects have been extremely successful, possibly because of their lesser scale and obvious proximity to their customers.
Since the Government announced its 2005 target for all Government services to be delivered online, there has been a huge growth in legal work based on local e-government projects. For example, Field Fisher Waterhouse has recently advised one city council (Newcastle) on three separate technology projects: a strategic partnering agreement concerning the whole of the
council's IT systems and services, a web portal and a broadband access project.
Faced with such negative press surrounding certain projects, though, the Government has had to become more proactive in producing guidance and reports to help improve its departments' procurement of IT services.
A landmark report was published by the Cabinet Office in May 2000 entitled the 'Cabinet Office Review of Major Government IT Projects - Successful IT: Modernising Government in Action'. Widely known as the 'McCartney Report', it was commissioned to provide advice on the proper implementation of central Government IT projects.
Its main recommendations included the need for clear ownership and accountability for projects, proper training and retention of staff, competent risk management and increased cooperation between suppliers. Most importantly, it stressed that IT projects should not be considered in isolation but as part of the overall business transformation of Government.
The Office of Government Commerce (OGC) reached the same conclusions in its report 'A Guide to eProcurement for the Public Sector: "Cutting through the Hype"'. It argued that procurement "must be accompanied by a re-engineering of business processes in both client and supplier organisations, and the leadership necessary to realise the potential benefits".
The McCartney Report also threw up some difficult decisions that the Government will have to resolve in order to improve its IT procurement. For example, it found that Government projects may be more successful if they are approached incrementally, rather than trying to make large-scale technological changes. But this could produce a problem of compatibility across different Government departments.
The Government will also need to work out how to balance the need to share data and information on citizens between departments (so-called 'joined-up government') and the need to comply with the privacy obligations contained in the Data Protection Act.
The OGC has also been active in providing guidance and direction on IT procurement. Following publication of the McCartney Report, it created two programmes to implement procurement reforms and guidelines. The first, 'Successful Projects in an IT Environment' (Sprite), came in January 2001, the second, 'The Senior IT Forum', in November that year.
The Government Procurement Code of Good Practice is one of the things to come out of the above forum. Although not legally binding, any breaches of the code will be reported to, and scrutinised by, the Government. It is hoped that the code will improve all aspects of Government IT procurement, helping to get projects completed on time and within budget, and also helping to improve relationships between all the parties involved.
There is a lot at stake. Implementing electronic solutions effectively and refreshing the technology used by Government to provide services can dramatically decrease purchasing times and improve the efficiency of Government. The OGC has predicted that effective IT procurement could deliver £3bn worth of value-for-money improvements between April 2003 and March 2006.
The amount of money invested in Government IT projects looks set to increase (the National Programme for IT in the NHS is currently seeking IT suppliers for contracts worth £2.3bn, for example), so the need for projects to be managed effectively and not run hopelessly over budget is as strong as ever.
The introduction of new technology into Government, the outsourcing of the running of Government IT and the preparation for electronic service delivery of Government services offers the potential to revolutionise the way in which Government operates and delivers services to its citizens. Hopefully, if the Government learns from its mistakes and follows the OGC and Cabinet Office guidance, which appears to be the case, it can use technology as a catalyst for change within Government. But it will need to make some tough decisions along the way.
Michael Chissick is head of the technology law group at Field Fisher Waterhouse