Select Committee on Work and Pensions Minutes of Evidence


Examination of Witnesses (Questions 1-19)

MR DOUG SMITH, MR VINCE GASKELL AND MR MARK NEALE

WEDNESDAY 22 MAY 2002

Chairman

  1. Good morning, ladies and gentlemen. Can I declare the formal session of evidence open this morning. The Committee is doing a one-off evidence session on the Child Support Agency and we are pleased to have as witnesses the Chief Executive Doug Smith and his team, which consists of Mr Vince Gaskell, who is the Child Support Reform/Change Director, and Mr Mark Neale, who is from the Department for Work and Pensions and is the Children and Housing Strategy Director. Thank you, gentlemen, for coming and thanks for the written memorandum which is valuable. I think we should say at the start that the Committee had already planned an up-date session with you just now, at this stage in the year, before we had notice of the Secretary of State's decision to delay implementation of the new reform system. The inevitable question to start with is what can you tell us about the delay?

  (Mr Smith) I think, first of all, it is worth noting that the delay is to one part of the Child Support Reform implementation and the Agency has implemented some of the early phases. Child Support Reform is a large and complex project that involves new legislation, new IT systems, the way the Agency is organised, the way the staff go about their jobs and embraces more than simply the IT changes. Focusing on IT, we knew from the outset that this was going to be a large and complex IT development, in that it is a brand new IT system we are looking to put into place to support the new legislation. We did try to ensure that we did learn the lessons from other large developments, so we did put in place a comprehensive approach to risk management, which Vince Gaskell will talk about. We did ensure that we had external reviews of the project at regular intervals and we did ensure we built contingency into our plans. The early development work on the project, the IT aspects of the project, went well. They went broadly according to plan. As the size of the system grew, as the whole build grew, we started to see some delays creeping in to the development and testing. That was containable. We expected to see some delays, that is why we built some contingency into the arrangements. EDS remained confident as we went through the build of the system that it would be completed and tested in time for our expected go-live of April this year. Around the back end of last year—very much at the back end of last year—we started to become aware of the difficulties that EDS were having in integrating various elements of the system to work together in an integrated way. In December jointly with EDS we agreed to replan the final phase of activity leading up to April on a different basis, so that we worked together and we did the final stage of testing in parallel rather than sequentially, to support a go-live in late April. That also required us to scale back with some reluctance our plans to live-test the system in our offices before go-live. At the back end of last year/early this year we both recognised—we and EDS—that there were risks attached to that approach. At that stage we believed that the balance of probability remained that we would be able jointly to deliver a system in April this year.

  2. Can I just stop you a moment? None of us are computer experts on the Committee, but you are talking about risks and I understand that the complexity in a project of this scale is actually about the management of the introduction and in the scaling up of the process. However, do I understand you to mean a software and application kind of problem, or is it a hardware problem, or is it an interface problem with other parts of the agency system? Can you pin down for us in language that lay people would understand what the actual problem is that is causing you all these new risk assessments and analyses?
  (Mr Smith) The issues around the turn of the year that were concerning us the most were how you put the different components of the system together.

  3. Within the CSA?
  (Mr Smith) Within the CSA.

  4. So it is not an interface problem with Income Support or any other aspect of the Benefits Agency?
  (Mr Smith) I will come to that because down the track we did discover some interface issues around the interface with the Benefits Agency and Jobcentre Plus. The issues around the turn of the year were largely about how you actually bring together the chief components of the system and put together the mainframe at the centre, the boxes on the desktop, the communication links, the telephony and how you interact the telephony with the IT and how you integrate our work management system with the IT.

  5. How was that missed? I had rather assumed, with the information that was available to us in the public domain, that the work was proceeding apace and problems arose only when you really, towards the end, started linking up, almost at the completion of the project. It would appear to me that the risk of problems in an internal configuration of the system could easily and should have been, surely, foreseen.
  (Mr Smith) Yes, they were foreseen and this was not something that came unexpectedly. We knew that as we brought the different components togther—and Vince can speak in more detail around this area—there were going to be issues, and we allowed time for those to be resolved as we went into the first quarter of this year. So this was not a surprise to us. Inevitably, with a large, integrated system, bringing the different components together, bolting them together and operating the system in an end-to-end way for the first time, issues are going to emerge. That is why we built time in to the timetable. We expected to see some of those issues and, true enough, they emerged. However, those were not the key issues, at the end of the day, around why we deferred it. This was an issue around the end of the year that I referred to. It did push out and shorten the amount of time we may need between the time that EDS have broadly dealt with those problems and go-live when some other issues came up, like the interface, that had to be addressed within a short time-frame.

  6. So was this EDS' fault?
  (Mr Smith) I do not think it is an issue of fault. I really do want to stay away from fault. This is a joint project that we are developing together. This is an issue of fact, though: as we brought the various components together they took longer to integrate than we expected within the plan that we agreed.

  7. But it has wrecked your annual plan, has it not? All the planning assumptions are out of the window, as they say.
  (Mr Smith) It has wrecked our ability to deliver Child Support Reform from April, and that is a big issue for us and it is hugely disappointing. What is not wrecked is our ability to maintain our level of service to our clients.

  8. It is a substantially reduced level of service. You had been busily writing to your customers earlier saying "Don't worry, reform and paradise is round the corner". It was a-win-win situation because the people who had custody of children would get benefits, in fact, because of the change in the maintenance premium with a £10 increase, but so would the non-resident parents have, on average, reduced levels of maintenance to pay. So everybody was expecting and waiting, and with some anticipation, on this new system being rolled out. All of these expectations are now as nothing. We have no idea when we are going to get access to these advantages.
  (Mr Smith) Indeed. The Agency was equally waiting to be able to confer this advantage, and so we are disappointed that we cannot deliver.

  9. Just come back to some of the technical issues. You say it is internal to the Agency. Does that mean that you still have to do the interface issues once you have resolved the internal problems? Mr Gaskell can probably tell us a bit more. I am really keen to get on the record what exactly it is that you still have to do, because it is only then that we can have any kind of assessment about how long it is going to take to fix.
  (Mr Gaskell) The way that the system was being developed, really, by joint agreement between us was in what we call a series of builds or chunks. As Doug indicated, the early work on those builds went broadly to plan. As they added the later builds to the rest of the system that increased the complexity of the system inevitably and we started to hit problems in terms of the amount of lapsed time to do the testing on those later builds. As those builds start to come together, which they did towards the back end of last year, a number of other things then need to happen. First of all, this system would not have operated on the old infrastructure we have in our offices. So to help reduce the risks of the programme we had gone for a programme of implementing PCs in all our offices in the vanguard of the Department's Early Office Infrastructure (EOI) project[1], and that was completed to time in December. So all our offices were equipped with those PCs but that did not materially affect the testing. What we needed to do at that point, and with EDS, was as the software was being developed for the main system to include the new rules and new accounting and so on that we needed. It then has to be seen to be working across that new infrastructure and all the supporting infrastructure that EDS would need. As Doug touched on, that has brought the new mainframes that EDS have to put in place, linking those to the network, through to the servers and into the PCs in our offices. We simulated that environment in Newcastle to try and make sure that that worked properly. As those things were starting to come together, as they should at that point, the testing that was under way to see if all of those worked together well and the software itself was working well—parallel stream testing taking place with EDS—the defects and problems they were finding, which you would expect to find during a period of testing, were inhibiting progress on testing. So that in the run-up to the Minister's decision what we were looking for and would have expected normally is to see that corner being turned and the number of defects being identified and rectified going down, and you would expect to see a clear period when we would expect the testing to end. Both those things we did not turn the corner on—the number of defects being found in both the application of the software itself and some related to how that software was working in the infrastructure too. You mentioned the interfaces. Clearly, to make our maintenance premium work this particular application software has to interface with the Jobcentre Plus systems, Jobseekers Allowance and Income Support. There were particular problems from the outset in testing to see if those interfaces work in getting the data across from the Jobcentre Plus systems and then populating the relevant parts of the new system for Child Support. There were problems at both ends. Those were particularly problematic and meant that the testing particularly on the interfaces was stalling. So the position that we had as we approached March was we were not turning the corner on testing, defects were still rising—we were finding more defects in testing than we were clearing—and we could not see a clear, projected end to testing. Neither, at that point, did we have the interfaces working. There were one or two other issues, just for clarity. Populating the part of the system on managers' work flow—this is the work allocation to individual members of staff—there were particular problem areas in there too that we had to sort out, and trying to get the notifications out to our clients was problematic because of the number of defects we were finding there. For that reason that was a negative impact on our clients and a negative impact on our staff with no clear idea of when we would turn the corner.

  10. That is very helpful. Let me make it clear: we might be asking you some tough questions here but we are absolutely with you and with the Secretary of State in deciding that none of this should be rolled out until it is absolutely robust. We agree with that. We said that in our earlier Report and so nothing that we say this morning should be taken as contradicting that decision. However, that does sound slightly worrying because it sounds to me as if you have not actually got the internal system debugged even to the extent of being able to approach the interface problem and the Legacy systems. That is what I felt was always going to be the hardest bit of it. I cannot understand why the internal work that could and should have been anticipated is causing so much difficulty. Is it a question of scale, as so many of these PFIs are? Bench-testing the applications and the systems on a small scale—has that been done? Have you demonstrated on a small scale that the applications and the system are robust? Does it work at any scale?
  (Mr Gaskell) I can answer that in two levels. First of all, we wanted an extended period of what we call live-testing and we wanted that to begin in December. We were not able to achieve the level and degree of live-testing because of the number of defects that were being found in testing. That was inhibiting progress, but we did have a limited start to live-testing in December, and have progressed since then. So both ourselves and EDS have got an understanding on two things from that: first of all, which parts of the system are not working in a live environment and we have also got to understand how that interacts with the changes to the business process and the way of working. That is still working at our site at Newcastle. The second thing we have done, because, jointly with EDS, we were concerned about the still rising number of defects being found, and this inhibiting progress, we were therefore unable to form a clear judgment because we had not got sufficient progress in testing, that the system itself across the infrastructure would perform at the required service levels, even with this period of live-testing. Crucially, EDS were not able to get to that point in testing to be able to fully demonstrate that. So what we have done with them, working jointly, is to understand what the pattern of defects was pointing to, both across the interfaces and within the software itself, to see if there were any particularly worrying areas that pointed to a potential fundamental flaw in the system or whether it was just going, in the elapsed time needed, to work through those defects and complete the testing. That has led us to conclude that at this point there is no fundamental flaw in the system itself. These are newly recruited, high-calibre, external IT experts that have helped us within the Department, working jointly with EDS, to form that view. That is based on the testing that has been done to date. The result of that about what it shows is a particular pattern of defects. So that has given us a degree of confidence, but clearly you do not get that full degree of confidence until you are sufficiently through testing—particularly user-acceptance testing—to be fully satisfied that the system is robust.

  11. So it is a question of refinement rather than redesign, at this stage?
  (Mr Gaskell) At this stage the indications are that that is the case.

Rob Marris

  12. Who set the timetable? It seems to have been very tight, to start testing in December to start in April. I am not an IT expert but that seems to me pretty tight. Who set the timetable?
  (Mr Gaskell) The timetable we agreed with Ministers and with EDS. EDS were under no particular pressure to come up with a particular timetable and that was set some while ago.

  13. How long ago?
  (Mr Gaskell) The timetable was agreed, I think, in January/February, if my memory serves me correctly, in the year 2000 and the contract was signed with EDS for this particular system in August.

  14. Why did it take eight months?
  (Mr Gaskell) To do what?

  15. From January/February to August?
  (Mr Gaskell) I do want to go back to testing—I do not want to lose that point—because we did not just start testing in December. If I can just cover that point about the period between January and August, one of the recommendations from I think it is the Public Accounts Committee in the past has been that there needs to be a period up-front with your supplier to work through jointly and to reach an understanding about what the business requirements are, so that they can put together a firm and clear plan for delivery and a period where we can understand how they are going to meet those requirements.

Chairman

  16. Is that what is known in the trade as a gateway review?
  (Mr Gaskell) There was a gateway review pre-contract.

  17. I will come back to that in a moment.
  (Mr Gaskell) Can I follow up a separate point, because it would be a wrong conclusion to draw that we started testing in December. One of the things that we did to help manage the risks associated with the programme is we went into this jointly with EDS with our eyes open, knowing this was a large-scale and complex programme. We tried to explore ways with them about whether there was any other way to develop the system and the approach that we came up with was a joint one agreed between the Department and EDS. Following that, what it allowed us to do is as each of the chunks of the system—or the builds of the system—were coming through it allowed them to carry on their system-testing and their technical testing of the system and for us to be able to do some user-acceptance testing on those parts of the system. That pattern of testing has proceeded not since December but well before then. The precise start date for that I cannot remember but it would have been sometime in 2001, if my memory serves me correctly.

Rob Marris

  18. I thought Mr Smith said the testing that was done was changed and it was not going to be done sequentially, as you originally planned, but done in parallel. You now seem to be suggesting that it was being done sequentially.
  (Mr Gaskell) To begin with we started to do this sequentially, based on the build approach. As the system grew and its complexity grew problems started to emerge around about spring to summer of last year around our ability to stick to the current planned timetable. Consequently, they are things that we incorporated in the contingency measures that we built into the plan. However, by the time all the components started to come together at the back end of last year, as Doug has already indicated, that led us to do the further re-plan. Rather than do things sequentially, to try and secure an implementation in April we agreed to change the approach to the previous form of testing—which is the ideal way to do this—and to try and do some of that activity in parallel. Hence the revised approach.

Chairman

  19. Can I come back to the gateway reviews. My understanding is that the new procurement rules require that the Office of Government Commerce set up some so-called gateway reviews. Can you tell me what they amount to and whether the project went through any gateway reviews?
  (Mr Gaskell) Yes, we have gone through gateway reviews. In the early days of this particular programme they were not called that, they were called the McCartney Reviews at that point. We went through a pre-contract gateway review. However, the pattern of those reviews was still being established—it was very embryonic days—and at that point there was no clearly agreed pattern for those gateways.


1   The Department's project to upgrade/replace its IT systems. Back


 
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