Select Committee on Environment, Food and Rural Affairs Minutes of Evidence

Annex 3


  The PFI partnership with IBM for the provision of the Agency's IT infrastructure and managed services (the SPIRIT project) was negotiated in 1997 to run for seven years. It began in August 1998. It created a strategic partnership for the delivery of IS/IT facilities and services and covered the replacement and upgrade of the then Countryside Commission's IT infrastructure.

  The business case submitted to the Department (then the DETR) in 1997 considered a range of options. It noted that the outsourcing option would be slightly less than 7 per cent more expensive than the base case (using a mixture of in-house and contracted suppliers), but that the partnership approach would more than justify the modest additional cost, in terms of transfer of risk, business continuity, flexibility and responsiveness to future IS/IT delivery.

  Savings of around £201,000 per annum were anticipated on IS/IT staffing costs, as four posts would be removed from the Commission's complement and on other IS/IT running costs (such as hardware and software maintenance contracts). These savings were realised—the existing delivery team of four staff was disbanded and other IT contracts terminated or transferred to IBM as appropriate.

  Since 1997, as our business needs have changed and the Agency has grown, IT costs have risen commensurately (with Departmental approval). IT developments delivered by IBM have included one-off tasks to facilitate the merger between Countryside Commission and RDC, preparation for the Year 2000, an increase in network capacity to cover increasing levels of electronic communication and an increase in service provision to meet the needs of more staff (the original contract provided for only 270 users and we now have around 680 users, including part-timers, job-shares and temporary staff).

  We are planning further improvements in services to meet Modernising Government targets over the coming years—including electronic records management, electronic service delivery and other e-business initiatives, a further upgrade to the network capacity, upgrades to our hardware to run up-to-date software and a switch to industry-standard Microsoft Office to enable us to communicate more easily with partners.

  We remain very conscious of the need to ensure value for money in the procurement of IT and work closely with the Office of Government Commerce, which provides us with specialist contractual advice and an "intelligent customer" function, giving us further quality assurance when we need it. We are well aware of the findings of the McCartney report on "Successful IT Projects" and are following the recommended Gateway procedures for new developments.

  Although day to day service provision has been satisfactory, we believe the PFI partnership has not always delivered the strategic and proactive guidance we had anticipated. Four years into the contract, we believe it is time to review our needs and intend to renegotiate with IBM to ensure we are getting the best service possible for the funds we commit.

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