Session 2010-12
Publications on the internet

CORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 1050-i

HOUSE OF COMMONS

ORAL EVIDENCE

TAKEN BEFORE THE

PUBLIC ACCOUNTS COMMITTEE

IT LANDSCAPE REVIEW

MONDAY 16 MAY 2011

IAN WATMORE and JOE HARLEY

Evidence heard in Public

Questions 1 - 101

USE OF THE TRANSCRIPT

1.    

This is a corrected transcript of evidence taken in public and reported to the House. The transcript has been placed on the internet on the authority of the Committee, and copies have been made available by the Vote Office for the use of Members and others.

2.

The transcript is an approved formal record of these proceedings. It will be printed in due course.

Oral Evidence

Taken before the Public Accounts Committee

on Monday 16 May 2011

Members present:

Margaret Hodge (Chair)

Mr Richard Bacon

Stephen Barclay

Stella Creasy

Jackie Doyle-Price

Chris Heaton-Harris

Mrs Anne McGuire

Austin Mitchell

Ian Swales

James Wharton

Amyas Morse, Comptroller and Auditor General, Gabrielle Cohen, Assistant Auditor General, Sally Howes, Director, National Audit Office, and Marius Gallaher, Alternate Treasury Officer of Accounts, were in attendance.

REPORT BY THE COMPTROLLER AND AUDITOR GENERAL

Information and Communications Technology in government: Landscape Review

(HC 757)

Examination of Witnesses

Witnesses: Ian Watmore, Chief Operating Officer, Efficiency and Reform Group, Cabinet Office, and Joe Harley, Government Chief Information Officer and Chief Information Officer of the Department for Work and Pensions, gave evidence.

Q1 Chair: Welcome back, Ian Watmore, and welcome for the first time to this Committee, Joe Harley, who is known to some of us.

We have all, I think, read the strategy and universally think it is a very good document. I do not think that anyone could quarrel with the direction and principles that you enunciate in it. Where we want to focus this afternoon, if that’s okay with you, is far more on the implementation.

I ought to start you off with a look back-both of you have been in government for some time-at the good things and the bad things. Of the good things, Joe did the ESA, or employment and support allowance, and the DVLA, which is always trotted out as an exemplar of good practice. The bad are always the NHS, on which we are taking evidence next week for a new report, and which we don’t expect to be very much better, and the Rural Payments Agency. What are the three biggest things? Perhaps you could both answer. What did you learn from what went wrong and what went right, as to what you have to do now? Would you like to start, Ian? Hearing from both of you would be really helpful.

Ian Watmore: I would be happy to start, Chair. On what we learned from what went wrong, the first lesson is that there is no such thing as an IT project; there are only business projects that involve IT. When something becomes about the IT, it has lost its sense of purpose and focus. One always has to go back to the original business purpose. The business purpose could be a policy announcement, or an efficiency drive or something. Quite often, somewhere along the way, the connection between the business purpose and the project gets lost, and the IT is blamed when the IT is the last in line that is standing. That is my first big lesson from what goes wrong.

The second big lesson from what goes wrong is that if the aspiration is too large and it will therefore take too many years to implement the change, you tend to find when you get there that the goalposts have moved massively and it is no longer a relevant solution. The consequence of that is shorter development cycles. The third thing that has often blighted these projects is that despite people being aware of the risk, they try to change the whole system nationally on a single day-the so-called "big bang" implementation-which is doomed to failure in almost every situation. You asked for three and I could probably give you three more, but those would be my big three.

In terms of what goes right-I won’t just give you the flip of those points, although that could be said-one would be when we design with the customer in mind. You kindly referred to the DVLA and the car tax online. That is an online transaction that was designed from the point of view of the motorist taxing his or her car, and everything flowed from there. Behind the scenes, what it does is really quite clever: it joins up knowledge about you with your car, with your insurance certificate and with your MOT, if that is relevant. All that is seamless to you, and then you pay the tax online. It is clever because it has been thought about from your point of view.

The second big lesson would be: either do smaller projects or chop the bigger projects up into smaller chunks and make sure that nothing meaningful takes more than two to three years to deliver, otherwise it takes too long to reach implementation. The third would be that the Government need to be more-what’s the right word? I was going to say bold-embracing of the new technologies, not just for the haves in our society, but for the have nots. I am working very closely at the moment with Martha Lane Fox in her digital champion role. As you know, she is passionate about trying to get more people connected to the internet. It was 9 million when she first took the statistic, and we want to get that down to 8 million, and then 7 million and then 6 million. The reason is that a lot of people who are not accessing the internet today are the hardest to reach-the elderly person, the poor and so on-and we could help them so much more if they had access. If you are an immobile person at home, the internet can be very enabling. If you are from a poor background with limited life chances, the internet can open up your access to skills, jobs or whatever. My third lesson would be for policy makers, particularly, to embrace the new technologies as ways of tackling, or as routes into, deep-seated social problems.

Q2 Chair: Joe?

Joe Harley: I would-

Chair: Concur. We expect you to concur with your boss here.

Ian Watmore: The idea of Joe having a boss!

Joe Harley: I would just add a couple of things. When scope is not managed properly and managed well, it can lead to time scales being extended and costs going up. The whole area of scope management and requirements management has been something we have needed to improve, for sure. There have been occasions when people have been leading projects who maybe did not necessarily have the experience or the capability to do so. Going forward, one of the things that will work is continuing to strengthen capability in Departments. What works is when the SRO-the senior responsible owner-who is accountable for the project or the programme as a whole, embraces that and stays with the project or programme to ensure the benefits get delivered. There are a number of things there.

I would add that the NAO Report, "Common Causes of Project Failure" has been helpful in projects and programmes assessing themselves against that and managing the risks around it. I welcome that Report. It is frequently referred to. Those are some additional points.

Q3 Chair: You have a new strategy, the ERG, at the heart of it. Bluntly, in the past, even those who were part of that past would say that the Cabinet Office could not deliver the co-ordination that is implied in your strategy, either because you could not persuade people to do it, or because you did not have the clout, or because you could not establish that good management across Government. For sceptics like me, can you tell us what on earth will be different this time?

Ian Watmore: I think Francis Maude and Danny Alexander would both say that one of the necessary parts of success was to lay down the controls in the spending review, which enabled them, if required, to take close micromanagement of a particular project. That was not because they wanted to do that, but because the knowledge that that could be done brings people to the table.

Q4 Chair: But you had that before.

Ian Watmore: Not really. When I took the job in 2004-the job that Joe now has-we spent the first month introducing everyone to each other. The heads of IT had never met.

Q5 Chair: Have they now?

Ian Watmore: Absolutely. There is a thriving CIO community, which meets regularly under Joe’s leadership.

Q6 Stephen Barclay: Do they have a dotted line into the CIO?

Ian Watmore: Absolutely.

Q7 Chair: So they’re accountable to you?

Ian Watmore: For the delivery of the activities in the strategy, absolutely. We did not have the tough measures and controls of the spending review, which have been put in this time. They are draconian, if used. We do not want to use them all the time, but they are there for use when necessary. That means that people are bringing things to the table much more readily, and discussing things with us earlier and we are then in a position to help. I could give you many examples.

The second thing is that the economic climate is different. It has to be said that this is causing people to think differently about almost everything they do in government. This is another area. If you are trying to make 30% to 40% administrative cost reductions, you cannot carry on as you were and tweak it a bit. You have to do things differently. A combination of those two things gives us a chance. I also think-Joe will be able to comment more strongly on this-that the cadre of people we have is markedly better than it was seven years ago, when I started. We have a lot of really high calibre people around.

Q8 Chair: In the centre or in the Department?

Ian Watmore: Both in the centre and in the Department. Quite a lot come from the private sector, but quite a lot come from the wider public sector’s successful implementations of local government or Transport for London measures. A lot of the best people now come through from within the civil service.

Q9 Chair: If it is so important, why are you only part-time, Joe, as CIO? [Interruption.]

Ian Watmore: It’s the sonar sound on my phone. MI5 is listening in, probably.

Q10 Chair: Why are you only part-time?

Joe Harley: I do not view myself as part-time; I view myself as having a role which is-

Q11 Chair: You are part-time. That is what they say. I am assuming you will have to deliver the great big single benefit as well, in the DWP.

Joe Harley: What I have to do is prioritise carefully what I personally need to get involved in. I have a good, capable team, which I have grown over the years in the DWP. I also have a capable team in the Cabinet Office.

Q12 Chair: I know that that is what you have been handed, but you sit back and think, "All this is important; it’s all going to change. We won’t get any nasty horrors before the PAC ever again, because there is this magical new group", and then you give him a part-time job.

Ian Watmore: First of all, I would never say what you just said in the opening half of your question. Of course there will be challenges. This is difficult stuff. The British Government, by the nature of the national structure of our systems, have one of the hardest jobs in the world-public or private-for implementing business change. That is a fact, so they will always be on difficult territory.

In terms of Joe’s role, I regard him as the best person in government. He has a long background in the private sector, with BP, ICI and others. He is now very experienced in government and he is delivering the whole agenda across the big Departments for their IT. It is much easier to do that when you are one fifth or one quarter of it yourself. Something like universal credit, which is one of the biggest Government projects, will be successful only if there is a partnership between the Revenue and local government, so having Joe as the CIO brings benefits to both the Department and us.

I have also supplemented the role with a new head of digital services. We hope to make an appointment in May, to start on 1 July, and we have a very good candidate. We have not finalised the terms yet, but we will let you know as soon as we do. We are bringing in someone externally, too, to disrupt the way we do things in project terms, to use the new project methods-agile methods and so on. I am building a team of people across Government to deliver a very complicated and high-scale challenge. To view Joe as a part-time CIO is completely wrong, for those reasons.

Joe Harley: There is an immense amount of talent in the Departments themselves that can be counted on to get things done. It is not just me doing things; it is about bringing together people with the talents that Ian has talked about-grown over recent times-working in collaboration to get big things done.

Q13 Austin Mitchell: It is a big strategy, so I am surprised to hear that you are part-time; it seems as though you are trying to downplay it. We cannot but welcome the strategy, as the Chair did, because it exudes all these good intentions. It plans 30 actions in 24 months-like the "two and a half minutes to save the NHS". That is a pretty big bill, because you do not give us a baseline showing where the actions start or quantitative targets that they are going to achieve, so it will be very difficult for us or anyone else to evaluate whether they will be successful or whether they will be value for money. A big job for you and a difficult one for us.

Ian Watmore: It is a difficult area to evaluate, I make no pretence about that. We have set ourselves two broad objectives. One is to deliver on the activities, which we have laid out clearly, and you should hold us to account for delivering those. But the real success or not of the strategy will be whether it translates into business outcomes for citizens and businesses in this country. That is a broader thing than just the IT. You will only judge whether universal credit is a success when you look at it in the round, in terms of its policy, its change in the community and the IT as well.

Q14 Chair: Just to interrupt, that is terribly wide. "Have we delivered the reforms to the NHS?" We put a tick against that and then we say, "Therefore the Efficiency Reform Group and its IT capability have been good." You have lost the direct indicators that would have measured you. It is a good strategy, but it is a bit motherhood and apple pie; nobody can really disagree with your objectives. You need something tougher against which we and others can assess you. I think that was what Austin was getting at: where is that toughness?

Ian Watmore: I am happy to take the challenge offline to see whether we can develop that further, if that is what you feel. I feel that the actions in the strategy document are a very good start to hold us to account. In the end, however, you will regard it as a success if we help to introduce change in the wider system in a way that makes sense from a policy point of view. I cannot hide behind that. The business objectives are the ones set by Ministers. The IT objectives are there to support them, and that is what we have to trade off.

Q15 Austin Mitchell: When we looked at ICT projects on this Committee, I thought that the main cause of failure was the over-grandiose expectations on the part of the Department or the civil servants applying the system and the over-grandiose predictions on the part of the sales force of the ICT firm concerned. They both went into it with a series of misconceptions and that has led to big problems such as the ones in the national health system, which have turned Richard Bacon’s hair grey. He was a youthful-looking, dark-haired character when I came on the Committee, but look at what worry has done. How will you get round the problem of expectations and sales?

Ian Watmore: Both of those are very good challenges. Both have happened in the past: over-ambition from the Departments and certainly over-selling from the companies. Simplistically, we have two mechanisms for getting around those two problems. First, we are insisting on what we call a starting gate review for every major policy announcement. In that starting gate review-very early on in the cycle of a decision being made-we are trying to test for all the common causes of failure and push back to Ministers and to policymakers at that point. We are doing that on universal credit to make sure that the programme sets off with the right approach in mind. One of the reasons for overselling that is that we have such large, long, multi-year contracts. If you are a salesman and you have a £2 billion number, you will say whatever it takes within reason to get that and then you find that it is a change control nightmare for ever and a day. What we need is to have much shorter contract terms, smaller projects, and more frequent changes to the supply arrangements, as we have outlined in the strategy.

Q16 Austin Mitchell: The Office of Government Commerce tried to disqualify firms that oversold. Will you do that?

Ian Watmore: To disqualify a vendor, did you say? I’m having trouble hearing. I’m sorry; could you ask the question again?

Q17 Chair: What is different from the OGC or from the gateway process in what you now describe?

Ian Watmore: The gateway process used to come in much later down the track. The first gateway review was after the thing had been announced. The programme was set and the ambitions were there. From then on, it was a matter of trying to claw back from what may be very famous politicians having made very big commitments, and nobody was prepared to do that.

Q18 Mr Bacon: May I pursue this point? You were talking about push-back and about push-back being earlier. When you were talking to the Public Administration Committee, you said something that I thought was fascinating. You said that it was usually either project management done incorrectly or that the policy ambition was too ambitious. A moment ago, you said that business objectives are set by Ministers. You went on to say in the hearing then: "The reason why IT is the place where it gets found out is that that is the place where all the codification of what has been decided finally comes to fruition and the machines are pretty bad at handling ambiguity." Are you saying that in this push-back in the early stages-the much earlier gate-including in the push-back on the policy, you are making it clear to Ministers what the consequences are of trying to codify the ambiguity that they may still have because they have not come up with a clear enough policy.

Ian Watmore: Correct. Absolutely.

Q19 Stephen Barclay: Let me quickly pick up on that. At the public administration hearing, Francis Maude said that the quality of our central data is woefully inadequate. Given that you were the figure at the centre at that time, why was it woefully inadequate?

Ian Watmore: What Francis and I had both been talking about was that management information on a whole range of topics-not just this one-at the centre of Government for the whole of the Government is very important. For example, when Philip Green came to do his review of procurement, he asked to see how much money was spent on x, y or z. It was very hard to tell him because every Department counted the numbers in a different way. In a Department, it may look okay, but when you add it up across Government it is incoherent. That is why you get such vast divergences, such as £4,000 for a laptop or something.

Q20 Stephen Barclay: To make it more specific to IT, Mr Harley in his opening remarks stressed the importance of senior responsible owners. The PAC made a recommendation in 2006 on SROs vis-à-vis IT programmes, where it found that half of SROs were in their first role and half only spent less than 20% of their time on their duties. How many SROs are involved in delivering the major projects covered by this strategy at the moment?

Ian Watmore: "Major projects" is broader than just IT. The Major Projects Authority is for everything-the Olympics, other things and big construction projects. I think that we have about 40 to 50 projects in the very highest category across Government.

Q21Stephen Barclay: Okay, let’s take it back a step: is there a common definition of a major project?

Ian Watmore: In the process of compiling this, we are setting one.

Q22 Stephen Barclay: If I look at the ERG major projects review, as long ago as August 2010 you identified, "require ERG to establish a single universally accepted definition of what constitutes a major project"-

Ian Watmore: That is what we are doing now. By the end of May we will have pulled together what we determine to be the major projects of Government. They tend to be defined by their size, cost or public-

Q23 Stephen Barclay: What I am driving at is how many major projects will be covered by the strategy. Do you know how many?

Ian Watmore: On the Major Projects Authority, we will lead on about 50 projects across Government, of which about two-thirds, I guess, will have a major IT component.

Q24 Stephen Barclay: Is there a common definition of an SRO? Is it commonly applied?

Ian Watmore: Yes, but-

Q25 Stephen Barclay: I am interested in what Mr Harley said earlier. You made it sound like there was some choice in the matter, and that is what worries me. What works is when the senior responsible owner embraces the idea of the responsibility and stays on. It is referred to in the Report in paragraph 2.24; the fact that they have not embraced the responsibility and stayed on has been a serious part of the problem, but why haven’t they? What constitutes a senior responsible owner is crystal clear and has been for years. The whole idea of a senior responsible owner is so that there is clarity over who is responsible, but it turns out that they are sort of part-time non-executive chairmen in some cases.

Ian Watmore: I think that is a valid criticism of what has happened. The best examples are the people who have good programme and project experience, an understanding of what you are trying to do-obviously-and will live with the consequences of what they decide. We have had that discussion recently-I will use universal credit because it is the most topical example. Terry Moran is the SRO for universal credit; he will be the person who has to live with its consequences and that is really important.

Q26 Stephen Barclay: Sure, but that is, in a way, where it is defined by you. You were looking at more than 200 projects, as well as the major projects we covered, and the definitions seemed quite vague. As part of the strategy now, you will be looking at about 50 projects.

Ian Watmore: Yes.

Q27 Stephen Barclay: Will they have a maximum or a minimum value?

Ian Watmore: Each project?

Q28 Stephen Barclay: The scope. You have chosen 50 projects.

Ian Watmore: They range from the Olympics to-

Q29 Stephen Barclay: The projects’ definition before included things as vague as, "of particular concern to the Minister", which could be anything, so I am trying to define the group of projects that you define as major projects covered by the strategy. What is within the scope?

Chair: Sorry, to what? Stephen, let him finish his sentence. They range from what to what?

Ian Watmore: They include the bigger ones, such as the Olympics, universal credit and some of the big defence projects. If we did a policy change, such as rural payments, we would probably put in that kind of policy; even though the scale is not huge, but because of its complexity and its impact on society, we would probably put something like that in. If we were doing big capital procurements again, such as Building Schools for the Future, we would put those in. We are putting in those kinds of projects.

You often find that the ones that go wrong are the ones that have been under the radar a bit. I do not know whether you remember a project about doctors’ training that had a lot of problems that were blamed on a website. No one would ever have picked that as a major IT project because it was a £10 million website, but it was a major reform to training in the NHS. I think one must go back to those sorts of big business objectives to get them under the portfolio-

Q30 Stephen Barclay: You are going to have far more than 50, aren’t you? That’s the issue. Are you including projects within Health, DFID and the MOD?

Ian Watmore: Yes.

Q31 Stephen Barclay: They were excluded from your initial review.

Ian Watmore: Yes, we certainly got defence in that.

Q32 Mr Bacon: You and Francis Maude in your previous exchanges with the Public Administration Committee were quizzed on the possibility of having a large, powerful capability at the centre. I think Francis Maude said, "No, a small, powerful capability." If you have all the projects under your purview that Mr Barclay is talking about, how do you stay small?

Ian Watmore: We have a major projects team of approximately 40 people. I can flex it up and down a little, but it is that sort of size. That team oversees the reviews of the various projects. The first thing it does is to manage the portfolio, and to identify them all. The second thing it does is to call in expert reviewers to go and review the projects. I do not send those people out to do the reviews themselves. The third thing it does is to collate the information so that if there are particular areas that need to be taken up with someone-for example, if something is very troublesome-it is escalated immediately to the Minister and myself, and to the corresponding SRO Minister in the other Department-

Q33 Stephen Barclay: Is it fully up to the 40 strength?

Ian Watmore: Yes.

Q34 Ian Swales: May I move on a little to the procurement side? I have a little experience in the field, and from observing it I feel that the power in the procurement process has rested a bit with the sellers. They have a vested interest in long time scales. Are you satisfied that we have the right sort of capability on the buying side to cut through some of that, and to allow, as the strategy says, smaller and medium-sized companies into the game? That has not seemed possible in the past.

Ian Watmore: I think that in the past, the long and large contract has been of mutual interest, and for buyers as well. One is done every 10 years, rather than after a shorter period. I think it has to change on both sides.

We held a very good launch in January when the Prime Minister spoke personally. To get the Prime Minister to come to a seminar on procurement is quite a challenge. He did so because he cares so passionately about it. He spoke about the need to knock down the barriers that stand in the way, particularly of the SME and voluntary sectors. We announced a whole range of things-such as getting rid of pre-qualification questionnaires, publishing things on contracts, and so on-I could go through those at greater length offline. I think there is a change in attitude by both the buyer and the seller, and in the business practice set by the Government and responded to-

Q35 Chair: Hang on a minute. We had those reviews. If you look at the NAO Report, we had one on SMEs, so let’s just take this one-this is the old cynic, I’m afraid. In 2001 the same objective, 2003 same objective, 2008 same objective. What is magical about 2011?

Ian Watmore: I think there is ministerial commitment behind it, which I do not remember there being in the previous regime. I saw the words, but they weren’t a mantra running through everything, whereas now I think Ministers across the departmental spectrum are challenging everyone to find ways in which innovative SMEs can come in-and come in directly, not just underneath the prime contractor role of some of the big contractors, when they are smothered and we pay a double margin. It feels different.

Q36 Ian Swales: If I could come back on that, because it is very important, some of the costs of some Government projects are so large, such as for an internet project, that you feel that for 1% of the money you could get two or three smaller companies to try to do the same thing, and they probably would when you look at the scale involved.

It must be about 15 years since Jack Welch, who at that time was chief executive of the biggest company in the world, said, "Don’t bring me an IT project longer than six months, because if you do you haven’t thought it through properly, and it’ll be out of date by the time it’s implemented." Are we being ambitious enough, given how much the ability of software development and so on has changed in those 15 years? Are we being ambitious enough about saying that we will try to get things down to two or three years? Is that really ambitious enough?

Ian Watmore: I would like Joe to describe what is happening on universal credit as an illustration of that.

Joe Harley: In universal credit we are using some agile approaches. We are doing it elsewhere in the Department, too, but certainly for universal credit we are employing that. That is quite different from, let’s say, more traditional methodologies-so-called waterfall techniques. In the waterfall, it takes quite a while to do a design-maybe a year or two-and then to develop it in the way you described. By the time we come to execute, things have moved on.

In the agile world, it is a way of providing rapid solutions very quickly. Normally, and in universal credit it is monthly, one designs, develops, implements and produces a product very early on in the cycle. It is particularly useful and appropriate when the users themselves-in the universal credit, citizens themselves-can participate in the creation of it. It is about user-centric, rapid deployment solutions. That is what we hope to achieve.

Q37 Ian Swales: I know this partly because I am on the Welfare Reform Bill; you have a fixed date, in a sense, for that project, don’t you? In policy terms, that has to be completed by when?

Joe Harley: October ’13 is when they want to go live, and it will be over four years, I think up to 2017 or so, by the time it is fully transitioned.

Q38 Ian Swales: But you will have a working system implemented in two years and four or five months?

Joe Harley: October ’13.

Q39 Ian Swales: And would you say the universal credit system is one of the most complex that the Government have ever attempted?

Joe Harley: I don’t know whether it is the most complicated one that the Government have ever attempted, but it is significant.

Q40 Ian Swales: Perhaps Mr Watmore could comment on that complexity. What I am trying to do is to get a fix on how long these projects should take. Is five years ever a sensible number, for example?

Ian Watmore: It is complicated because it also links with the Revenue’s systems. The real-time information-I think that is the jargon: the RTI-into the Revenue is a necessary predecessor project for the universal credit to come in. We are actually building the RTI on a faster time scale and bringing the universal credit in afterwards.

Q41 Ian Swales: So if we hit that date in October ’13 there would be little excuse for any other business transactional type system of Government taking any longer. Would that be a fair comment?

Ian Watmore: I would have thought that if we achieve that, it will become the precedent and benchmark for Government projects.

Q42 Mr Bacon: You make it sound like you might not achieve it. You just mentioned HMRC, and the thing that worries me is that we know that HMRC is just throwing £900 million at trying to stop its system falling over; it is called the two years of the stabilisation programme. While HMRC is trying to stabilise, you are throwing this whole new thing at it and telling it to integrate it and talk to DWP about a completely new system.

Ian Watmore: I am quite happy to say "when," but all good experience says "if." We have to sit here and say that these things are difficult and complicated.

Q43 Chair: And it’s got to talk to local authorities for rent levels, and it’s got to talk to employers for changes. That is heckishly complicated, and it is big.

Ian Watmore: We are both, in our different roles, very closely scrutinising what is going on. We think on both the Revenue side and the DWP side they are doing the right things to make this a success.

Q44 Chair: What about the other relationships?

Ian Watmore: And the local authorities as well.

Q45 Mr Bacon: Can I pursue the SME point before we lose it completely? Plainly, the Prime Minister and Francis Maude have talked about the need to remove obstacles so that SMEs can get more involved. If you had evidence that providers were being excluded by Departments because they were SMEs, what would you do about it?

Ian Watmore: We have the ability to challenge the procurement that they are doing and change it if necessary.

Q46 Mr Bacon: There is a procurement going on at the moment in what is called the ASCC contract within the national programme for IT in the health service-the additional supply capability and capacity, which is just in the south, in that cluster-where SMEs have been specifically excluded. It is very clear that it is national providers only, despite what has been said. Is that the sort of thing where you would go to take a look? Is that the sort of thing where you would go to take a look?

Ian Watmore: Yes. I don’t think that is specific. I was referring primarily to central Government. I don’t intervene in a local authority.

Q47 Mr Bacon: It is not a local authority. It’s the NPfIT.

Ian Watmore: In the lobby it is bound up in the wider issues of NPfIT contracts. Certainly, I am always happy to have intelligence on what is going on and to go and investigate it.

Q48 Mr Bacon: I am always happy to give it to you.

I have one more question. Mr Harley, I go back to the question of CIOs in Departments. If you have a CIO who wants to achieve reform, can they deliver and achieve what they want or will they end up being blocked? I imagine you probably have more clout inside the DWP than some other CIOs may have in other Departments. Are they going to get what they want?

Joe Harley: I think it is very important that all CIOs have board-like conversations in their Departments, and deal with top executives at the formation of policy, not later on, after it has been formulated.

Q49 Mr Bacon: Are all CIOs going to be on boards?

Joe Harley: No. About four are on boards at the moment.

Q50 Chair: Only four?

Joe Harley: Yes, four: myself, HMRC, Defence, I think-no, not Defence. Can you help me?

Ian Watmore: I think it is also the Home Office and Justice, but I would have to check that.

Q51 Mr Bacon: They are all big, heavy IT users, but so is Defence. Why wouldn’t you always have a CIO on a board, anyway?

Ian Watmore: It is a matter of debate across Whitehall, about all the different professional functions. Everybody wants their "head of" to be on the board. The board then becomes an exercise in crowd control, rather than a board. Under the new-style boards, we have three or four Ministers, three or four officials and three or four non-exec directors. It would only be in the very largest Departments that it would be worth putting one of those officials as a CIO. Usually, however-this is the important point-there is now much better access to the key board discussions for the CIOs. The important thing is that they have the route, through Joe and me, to escalate if they feel that the board has not really heard; we will take it up on their behalf.

Q52 James Wharton: I would like to take a step back to some extent to look at accountability when projects do not quite go as you had hoped. Invariably, no matter how well the overall strategy works, there will be examples of failure in the system. I would also like to look at SROs. One of the problems that we often have is in trying to trace an accountable person when something goes wrong in Government procurement or spending, or whatever it might be. Part of that is because people tend to change roles and disappear from projects. What are you going to do about that problem in IT procurement to stop SROs reaching a certain point and then disappearing? A new SRO comes in and then, obviously, everything is the fault of their predecessor.

Ian Watmore: Joe talked about SROs, and he might come back to that. I think there is a ministerial role in all this as well. I was asked, when the new Government were formed, to do a bit of ministerial training. They asked for a personal thing from me, and I said two things. One was that because it is announced, it isn’t done. The second was: worry about what your predecessor’s predecessor announced, because that is likely to blow up in your face without you even realising it was going on. Quite often, it takes three or four years for these things to go wrong. The average tenure of a Minister is typically about 15 to 18 months. I think there is a ministerial issue, as well as an official SRO one. I happen to know that the Prime Minister is particularly keen to keep Ministers in their jobs for longer; that is one of his mantras in Government. We will see whether he is able to do that, with the forces of politics being what they are.

From an SRO point of view, we have had the same problem: people have taken the job and then gone off after 15 or 18 months, so you are dealing with the "predecessor’s predecessor" problem on the official side. That is what we are saying: we have to get SROs to be the people who will live with the consequences, like Terry Moran on universal credit. If we do not achieve that, the same problem will appear in the future.

Q53 Chair: All this is good theory stuff, but you are operating in a context where you have to seek massive savings. You are trying to keep them off front-line services, but inevitably all the guys and women you are talking about are not in front-line service jobs, so there might be cuts of 30% or 50% there. In such a climate, how on earth will you achieve your objective in practical terms?

Ian Watmore: In a world with less money, you focus even more on what really matters. If it is one of these priority projects or programmes-

Q54 Chair: Are you not allowing people to leave voluntarily in any of these jobs? Are you actually selecting people? Presumably, you are losing 30% or 50% in some Departments, so are you saying that people with IT skills-

Ian Watmore: We are trying to keep the best people in the system.

Q55 Chair: You will have to do it through compulsory redundancies, then.

Ian Watmore: No. Most reductions in the system to date have been done through voluntary schemes.

Q56 Chair: Yes, but if you do that, with the greatest respect, that will mean that the best people will go.

Ian Watmore: There are voluntary schemes and voluntary schemes, and we are very strongly encouraging the best people to stay. They know who they are, and for the most part, they are staying. I am sure we have lost some people whom I would rather not have lost, but in the main, we are keeping the best resources in the civil service. One thing that we are prioritising is project and programme skills-that is something that we value, going forward-and not only policy-making skills. We are trying to emphasise that that is a really important aspect.

Q57 Chair: I have to say that at that level, when you are making cuts of 30% or 50%, unless it is done in a compulsory way, I cannot see how you can do it.

Ian Watmore: We might have a word offline, and I can explain to you how the schemes are working in practice, but believe me, we are targeting keeping the best people, and we are placing a particular focus on project and programme skills, as well as policy-making skills.

Q58 Chair: Without salary increases.

Ian Watmore: That is the climate we are in, isn’t it? There are lots of ways to motivate people other than with pay.

Q59 James Wharton: Referring to the strategy, my understanding is that part of the issue with SROs-this returns to my original question and the point about ensuring the continuity of accountability-is about looking to establish appropriate break points, so that if somebody is going, you can say, "Up to that point, we can measure what you have done. We can hold you accountable and assess you against the project up to there," which I think sounds perfectly reasonable. My concern is what you are going to do, and what other planning you have done, around SROs who might leave before you reach a break point where that assessment can be made, so that SROs can be kept until at least those fixed points at which they can be tied to the work that they have been responsible for.

Ian Watmore: I think that comes back to Mr Swales’s question about shortening the life cycle of these projects. If they are going to be six-year projects, it will be much harder to say to somebody, "You must stay for six years," because you can’t enforce that. However, if we are going to say to somebody, "This project goes live in less than two years, and we are expecting you to see that through its early live running period, as a minimum," that is a perfectly reasonable expectation to have of people. That is what we are trying to do.

Q60 James Wharton: So you will be implementing policies to try to ensure that is the case. It is all well and good to say to somebody, "We expect you to be there; it’s only two years," but after six months, they might get a better offer or have another opportunity, so are you actually going to change things to keep people there?

Ian Watmore: There are limits to how much you can pin somebody to a desk, if they have another job offer. However, within the major projects group cycle, we are looking to identify the SRO and say, "This person is committed to whatever the significant date is"-the go-live date and the first few months thereafter. We would regard that as an assessment of risk for the project. If, for any reason, that looks like it is changing-it could be because the person is leaving the system, or not functioning, or whatever-we would have to make a change very carefully, if we were to introduce one. In the past, we have allowed somebody to go off and somebody to come in, and they pick up the baton as though it were a relay race; they just pick it up, and off they go again. We need much better methods of doing that.

Chair: I call Stella, and then Amyas. [Interruption.] Sorry, did you want to come in, Joe?

Joe Harley: Sorry to interrupt. On the point about SROs, I would expect SRO availability and their constantly being on the job to be part of the risk to be managed. I would expect mitigating actions to be in place. In the event that another job came up or whatever, there would be succession; there would be the issue of who was ready and who was being groomed, in that eventuality. At least then there would be a smooth transition.

Q61 Stella Creasy: I want to move on to a subject that, as I think the Committee knows, is a particular bugbear of mine. You say that one of the ways that you will reduce cost is by working in different ways-more use of open-source technologies, more use of the cloud, more collaboration. At the same time, you talk about some major projects that will cut across a number of Government Departments, and also work with local government and third parties. In that sense, is it not slightly worrying that there is only one reference to cyber-security in the document?

Ian Watmore: It is interesting, because as of this week, my Minister has responsibility for cyber-security, so this is a subject that I shall be particularly keen on. On whether the document references it enough, that is a good challenge for us to think about, but we have to get a balance between real security-you see what happens, as in the Sony situation at the moment, when you get that wrong-and smothering everything with security so that nobody ever uses the technology as it takes four hours to log on, because you have 83 passwords. We have a creative tension in that world. The best examples of that are where the real assets-the data and the core systems-are put in a place that is very secure, but then you enable multiple devices to access that: laptops, mobile phones or whatever.

Q62 Stella Creasy: Sure, but you are talking about some major projects that would be clear targets for attack.

Ian Watmore: Absolutely.

Stella Creasy: Take the example of the Olympics: we all know the scenario in which somebody does something around the Olympics. How many cyber-security resilience professionals do we currently have working within Government, and how many do you think we need, given that need to learn how to do it?

Ian Watmore: I do not know if you have ever had the privilege of going down to GCHQ in Cheltenham and seeing what its guys do. They have a division called CESG. I cannot remember what the acronym stands for, but I am sure that the "S" is for security. They are among the best in the world. I cannot talk too much about what they do, because I would have to shoot you all, but they are among the best IT people at this that I have seen in the world. They are the sort of people who advise product manufacturers on security flaws in their products.

Q63 Stella Creasy: Are they working with the CIOs?

Ian Watmore: Absolutely.

Q64 Stella Creasy: I have not yet had the opportunity to go down to GCHQ, although I have concerns about this, but I know that America has already identified that it needs double the number of people with these skills working within Government. What are we doing in the UK to make sure that it is not just GCHQ, but the people with whom you are working now? The cost to us, were there to be some kind of attack-we know that these attacks are happening on a regular basis now-would be far greater than that of developing the skills that it takes to be able to make resilient systems under the sort of working process that you are talking about.

Ian Watmore: Yes. The whole industry is after the same people. We have to recognise that there is a worldwide shortage of people with these skills. One advantage that we have is that some of the very best people in the world like to come and work for, in this case, the British Government for a lot less pay than they would get in the companies that specialise in this, because they are on the inside. We have set aside a big budget in the spending review. I think the figure is £600 million; I will have to check that.

Q65 Stella Creasy: The £650 million in the strategic defence review?

Ian Watmore: Yes.

Q66 Stella Creasy: You think that is going to be enough to attract all these people?

Ian Watmore: I am sure that if that was all on pay, it would attract everybody in the world, but a portion of that money will undoubtedly go on investing in our capability to grow this. We do have some of the best. When we have enough-

Q67 Stella Creasy: When will you have clarity on that? When will we know that the skills development that we need for people working across Government on these projects, so that they are able to provide protection from those kinds of attacks, will be happening?

Ian Watmore: I think I am struggling to understand the question. You will never have enough top security people in a world where this is changing all the time, but-

Q68 Stella Creasy: Perhaps my question is not clear. Obviously, you are developing project management skills and the ability to do technology. What about security skills? What programmes have you got for that?

Ian Watmore: The guys in CESG have an investment budget to grow skills down there as well, and they are the people whom we rely on for these very sharp, internationally sponsored or major terrorist attack infrastructures. Those are the guys that we call on around the system. We then have, within each Department, people who are security and information officers, some of whom are ex-CESG or from the industry. So we have a grouping right across the Government, but the real core of expertise that we rely on is in Cheltenham, and it is fantastic.

Q69 Stella Creasy: With something like the universal credit, what percentage of the work is being managed by people who are looking at its security aspects, rather than its deliverability?

Joe Harley: The security in the universal credit is absolutely key, and we are relying on CESG and other members in GCHQ who are actively engaged on it. I don’t know exactly how many people that is, but it is crucial that they get involved, help us with it and are constantly advising us.

Ian Watmore: And they accredit every system.

Joe Harley: And they accredit it, before it goes anywhere.

Q70 Amyas Morse: I should just like to move this around to the effects of using information on taking layers out of the organisation, and having a more information-led approach to working. Are you satisfied that there is real understanding of that outside your own community? We are talking about people being on the board. This is a bit of a general statement, but I have been a bit surprised, frankly, when looking at a lot of the cost reduction proposals that have come forward so far, at how few of them seem to be driven by genuine change in the way of working-something that is likely to be really sustainable. We can understand that in the short term, but it would be pretty disappointing if through this whole period we did not get to something where people began to see a deeper change in ways of working in Government.

Ian Watmore: Are we talking about within the civil service, or in the wider public sector?

Amyas Morse: I guess that mostly I am seeing it immediately in the civil service.

Ian Watmore: I don’t think that we have really scratched the surface yet of what we could do in enabling people in the civil service to be more flexibly deployed-to be the "knowledge workers" that people have talked about. I think that most of the professional services organisations and IT organisations have set a high bar for how the knowledge worker can work, and we are well short of it at the moment. We are too hierarchical in our structures, we’re not flexible enough in our IT to move around and we don’t have the mobile tools with the usability that enables us, as knowledge workers, best to do our jobs. I would see that as one of the strands that we want to improve on significantly over the next three years.

Q71 Amyas Morse: How are you going to get people bought into that? You have excellent recognition of the problem. What I see is technology-driven change often happening in quite an incremental way, and you keep thinking, "Why isn’t it happening on a wider scale and moving a bit faster?". It seems to be because of a sort of inherent conservatism, and perhaps a lack of understanding of what the implications are.

Ian Watmore: There’s a generational shift going on in technology that isn’t just about the civil service. If you go to most businesses, there’s a group of people leading them who are not themselves technologically the world’s best yet, but the notch below them are fantastic and are coming through, and I’m trying to accelerate that change by showing the art of the possible more. What we’re doing with our team in the Cabinet Office-I picked up the team from various buildings all over the place-is moving them all to the Treasury, which is an open-plan environment, and on to the same flexible IT platform, with laptops etc., and we are trying to use people in project-team-type structures, rather than in rigid hierarchical ones. If we can do that, so can other people in Government-it is trying to create the cascade effect. It is a good challenge, and one that I think we are behind the private sector on.

Q72 Ian Swales: I would like to talk a little about the speed and ambition of the strategy. In the preamble to the strategy, you say that "public bodies too rarely reuse and adapt systems which are available ‘off the shelf’", that "infrastructure is insufficiently integrated, leading to inefficiency and separation", and that there is "serious over-capacity" in data centres. From about paragraph 32 onwards, there is an extremely ambitious set of statements about new ways of working, openness, cloud computing and so on, culminating in paragraph 36, which says: "The Government will create a common and secure ICT infrastructure, based on a suite of agreed, open standards which will be published and updated." Remembering that this strategy is aimed at a two-year time horizon, that seems incredibly ambitious from where we are now. Can you get to that point within two years?

Ian Watmore: Obviously, I have to say yes, because we published the strategy six weeks ago. So we would say yes, but I think that the previous question from Mr Morse highlights the challenge, because in our own working practices there is a degree of conservatism with a small "c" that we have to overcome. All the symbols that we can set to lead to that will be welcome. For example, I keep asking, "Why do we ever publish any document? Why don’t we just put it on the web in some open document format?", and everybody says, "Because Parliament insists on having 200 bound copies," or something.

Q73 Mr Bacon: And there are 9 million people in the UK who do not have access to the internet. That is the other reason.

Ian Watmore: But the other argument around that is that there are people, as Martha Lane Fox would say, who are set up to help people get hold of information in that way. There are libraries, online centres, post offices and so on. My point is that if we can send some really strong signals from the top of the civil service, ministerially and from Parliament, we might have more of a chance of changing that situation.

Q74 Ian Swales: Let us take cloud computing, for example. In its purest form, it removes applications and software from everybody’s desktop and from data centres and puts them into big data centres that are internet-enabled. Do you believe that that is a direction that we could go in? Lots of companies are going that way, and even some public sector organisations are, such as the state government of California. Do you see us going in that direction?

Joe Harley: The answer is yes, and in response to your previous question, the strategy itself is ambitious. That is one of the reasons why we have decided to spread it around a bit, and to empower and hold to account other Chief Information Officers in Government Departments to get things done, so that things do not always need to be done by the Cabinet Office. If we spread it around, things will get done even more quickly. The governance needs to be tight to make sure that happens.

Q75 Ian Swales: Perhaps I should refine my comments. I am not sure that the strategy is technically ambitious. What it is ambitious about is the approach to people. We all know that most IT projects fail because of people, not because of technology. I suppose that my point is really that the strategy is ambitious in terms of changing the behaviours of tens of thousands of people inside Government, the behaviours of thousands of suppliers and indeed, as you said, the behaviours of Ministers and other people involved in making policy and so on. Are we equipped to get that amount of behaviour and culture change, as opposed to simply changing the technology that sits underneath it?

Joe Harley: I think we have the skills and capability to do that. We are tackling it on a number of fronts. We are tackling it on the procurement front, with the suppliers. We have Crown representatives, who are now associated with each supplier, modernising the relationships and holding them to account. We have strands of the strategy laid out and spread across Government with the assurance being held by the Cabinet Office. It’s very ambitious.

Q76 Ian Swales: If we are sitting here reviewing this strategy in two years’ time, as I suppose we may well do, and Mr Morse and his team have produced a report-let’s hope for great success; let’s hope that the strategy is so successful that we don’t need to talk about it, but on the assumption that we may be talking about it-what do you think are the top three things that you would worry about? I’m particularly talking about the whole change in approach that is laid out in the strategy, rather than specific systems. What are your biggest worries sitting here right now?

Joe Harley: There would be a few worries, but I think the channel shift in society, in terms of the digital strategy, is a big ambition. We are very much behind Martha Lane Fox’s review, and we will help as much as we can to get that work done. It is another front for us and we will, as Ian said, be appointing a digital director to pick up that and lead on it.

I think we have to make real inroads into the costs of IT in Government. I would be looking in particular to make real progress in the data centre consolidation, because I think that, if we can get that consolidated, rationalised and virtualised, it will place you on a good footing for real cloud benefit realisation. Those would be a couple of the things that would be on my mind.

Ian Watmore: I would add that we have more clarity on what we mean by civil service reform. I would include the way we use tools, information and working environments and all the other things we were talking about. If we change the way we work, that will have a cascade effect on everything else.

Q77 Ian Swales: Are you saying that that is one of your worries-whether the civil service will change alongside this?

Ian Watmore: I was thinking about what we will think in two years’ time. I will assume for the purposes of this that Joe and I will still be here and will not have changed three times.

Ian Swales: You’re the SROs for two years.

Q78 Chair: Looking at your report, the failures and the great things that you are going to change in the future, I see that 65% of what was being delivered on IT has been delivered by the private sector, and that-to the extent that the NAO has been able to quantify it-out of 135,000 people who work in it, 100,000 are private sector people. Are you therefore thinking of bringing it all in-house or something? Private sector people have been the problem. It is not so different from other experiences; you have a small oligopoly of providers-interestingly, this is not so different from what we see in defence-who have ripped off the state.

Ian Watmore: I could not possibly agree that they have ripped off the state.

Chair: They have been very expensive, have delivered late, and they have not delivered to specification.

Ian Watmore: Your point about the fact that most of the design development and operation of IT is done by the private sector is correct, and that will continue. Your point about the oligopoly is correct, and that will not continue. We need to change that. That is one of our key procurement strategies.

Q79 Mr Bacon: Why don’t you make prohibiting SMEs from taking part a job-losing issue for a CIO?

Ian Watmore: Effectively, it is. In central Government, they would not last very long.

Q80 Mr Bacon: But they seem to in the Departments.

Ian Watmore: No-central Government, including the Departments. It gets harder when you get into the wider public sector.

Q81 Chris Heaton-Harris: What about accountability for overruns and penalties for suppliers that do not perform? Are we building those in now? We certainly have not in the past.

Ian Watmore: They have always been built in.

Chris Heaton-Harris: Are we policing those now? Are we increasing those now?

Ian Watmore: You get into a dilemma on these things. They are never black and white when it comes to it, because one person’s delay and overrun is another person’s change of mind. The lawyers have a field day in this territory-Mr Bacon and I have talked about this often in the past-because it is really hard to pin down and say, "You failed, and the reason why was nothing to do with something that we did differently," such as a Minister changing their mind or a policy being changed. It is really hard to get the contractual penalties lined up. Multiple contracts have been set like that. The best way to get success is to contract for success and not contract for failure. I think that what Mr Swales was talking about earlier sets the benchmark for that-set your contract, smaller companies, more people taking part, shorter delivery time frames, more rapid change in the way you develop things. That is more likely to lead to success than the mega-contracts with huge failure penalties.

Q82 Mr Bacon: You sounded quite confident about universal credit. Will you send us the initial gateway review for universal credit?

Joe Harley: The starting gate review?

Ian Watmore: The starting gate review. I don’t have a problem with that.

Q83 Mr Bacon: Great. It seems to me that, if there are issues to be flagged up, the more out in the open they are-rather like the Olympics-the more likely they are to get addressed.

Ian Watmore: I have always thought that. We have agreed on this in the past.

Q84 Chris Heaton-Harris: I should declare an interest, because I help manage a small IT firm that is involved in gambling-it is in my declaration of interests-which is why I get frustrated with anything to do with Government and IT. There seems to be a fascination with hardware and not delivery and software. I think what Ian picked up was the fact that it is a work force and training issue as much as it is a what you are providing them with issue. Surely the best way forward, as well as training the work force you have, is to bring in more people from the private sector and smaller companies and give them more opportunities, because out there in a garage somewhere are another two blokes who are going to be the next Google. They could easily be doing Google services for Government, as George Osborne, the Chancellor, was talking about earlier today. Why aren’t we running things like competitions for people who can provide better public services-small company competitions and things like that?

Ian Watmore: That is precisely what we are doing through the changes to the way we are procuring and the SME procurement. We have appointed a guy, who you may wish to meet in another forum, called Stephen Allott, who is from the high-tech sector. He has come in as the SME Crown commercial representative, as we call it; you or the press would doubtless call it the tsar. He is the guy who is leading on the SME side. He has put up websites for people to bid ideas in. He has SME surgeries going on. The first one happens to be in the west midlands, from memory. There is a rolling programme now to try to get more innovative SME companies to pitch their ideas to us rather than respond to our RFPs.

Q85 Ian Swales: May I ask a supplementary? One excuse that is often used against SMEs-I should declare an interest as my son runs one-relates to security and continuity. Obviously if we are using open source software there must be ways to ensure that SMEs are not excluded from the bidding process because there is a concern about security and continuity. The two guys in the garage might go off and do something else. That is one of the big obstacles. It is one of the reasons why your buyers in all the councils and Departments will run away from the local firm. However good the product is, it does not feel that they will have the support necessarily that they need.

Ian Watmore: That is the trade-off.

Q86 Ian Swales: Exactly. The Government need to think a bit more about how the power of Government can help to solve that one.

Q87 James Wharton: I may have imagined it, but I thought I saw relief on your face as my colleague, Mr Barclay, had to leave. You will be pleased to know that he has handed me a document that he would like me to ask you about. He has given me the transcript of our meeting on 30 November when we looked at the CSR and departmental business plans. One issue is highlighted-the amount that arm’s length or partner bodies spend on consultants. Mr Barclay suggested that Sir Gus O’Donnell had said that it would not be practical to gather that data. But in reply, Mr Watmore, you said that in future it would be and that "we probably would only start to get really good data from April 2011 onwards". Are we getting that really good data and can you tell us what it reveals?

Ian Watmore: We are going to put out the information we have publicly in the next few weeks, so correct me if I have misremembered it when you see the data. We now have information about consultancy spend by central Government Departments and their arm’s length bodies and we believe it to be under half what it was in the last full year of the previous Government, so it is a reduction of about 55% reduction year on year.

Joe Harley: As part of the spending controls and the moratorium processes that took place, requests for consultancy services over £25,000 needed ministerial agreement. So it has really choked off the large spending.

Q88 Chair: That’s a 55% reduction in the use of consultants?

Ian Watmore: Yes.

Q89 Chair: I will bring you in, Austin, but this is an area that I wanted to pursue. You also committed yourself to reducing general IT expenditure.

Ian Watmore: I don’t think I have ever done that.

Q90 Chair: Reports suggest £1 billion-

Ian Watmore: I have always been quite careful on this one. On what we do today I think we ought to be able to do it for a lot less money. Equally, I expect us to be dealing more online and more digitally.

Q91 Chair: Where have I read £1 billion or £800 million?

Ian Watmore: That was on the supplier contracts-the £800 million figure you quoted. We went to all the big suppliers of government, most of which were IT companies-not all of them, but the vast majority. We negotiated an £800 million reduction in the cost to us for the year just ended. That is another figure, but alongside-

Q92 Chair: What’s that? A 5% reduction?

Ian Watmore: From memory, it was about £800 million on just under £10 billion-so just under 10%. That was in-year; annualised it was probably worth about 15%.

Q93 Austin Mitchell: Why is it only a two-year strategy? Is that to allow you to clear up the existing messes primarily?

Ian Watmore: I think the strategy is a direction for longer, but we put the plan in place for two years and we expect to renew it on an annual basis.

Q94 Austin Mitchell: And the two years begins with the implementation plan, does it? When can we expect that?

Joe Harley: The implementation plan for the strategy will be during the summer. It will cover each of the strands-

Austin Mitchell: What’s the summer?

Joe Harley: In the summer. Probably no later than August-

Austin Mitchell: I thought the summer was nearly over!

Ian Watmore: The summer in New Zealand is nearly over; it will be before we come back in September.

Q95 Austin Mitchell: What are you going to do about the major messes we have been involved with in the past-rural payments and the NHS IT?

Ian Watmore: Sorry, could you say that again?

Austin Mitchell: What are you going to do with the two major problems?

Ian Watmore: I have to be very careful what I say about the national programme for IT because I believe you are about to have a hearing on it

Q96 Chair: That’s all right, you can help us with it. The reason for putting them together is to have a more coherent programme for us.

Ian Watmore: We set up this thing that we called the major projects authority, to take effect from April this year. We have targeted it on two or three key activities, one of which is the national programme for IT. We are doing the review in the week commencing 23 May-that must be next week-and we will be feeding that back to respective Ministers, probably during June. Then it will be for the political, programme and commercial decisions which have to be taken. However, we are doing that very aggressively.

On rural payments, DEFRA are considering what next for the Rural Payments Agency, and how to take it forward, because a particular cycle is coming to an end. They are seeking our advice on what should happen, but it is not being formally reviewed in the way that the national programme is.

Q97 Austin Mitchell: Are you satisfied that you and Departments generally have an adequately IT-qualified and trained staff to deal with this issue? Or, as we have developed the numbers, have they been subject to poaching by that oligopoly of suppliers? Have you been losing or gaining and are you satisfied with the quality?

Ian Watmore: I don’t think we ever have enough; I think that was my answer to Ms Creasy’s question on security. We can never have enough really good people in this field.

Q98 Stella Creasy: You can make an assessment of the numbers. That is what the American Government have done, haven’t they? About the need to increase tenfold, basically, over the long term people with these skills-that is planning, isn’t it?

Ian Watmore: We need more.

In terms of the IT skills we have, I think we have some really great ones. Mostly, they are people who have worked on some of these problem projects. They are a great place to learn; you learn what not to do, as well as what to do. Secondly, we have found it relatively easy, compared with the pay differentials, to attract some very good people to our side of the fence. People who would be paid 10 times the money in the private sector, will come to our side of the table because they believe in the challenge they are trying to support. So, actually, we have quite a lot of top-quality people. Do we have enough? Probably not. Do we have high quality? Yes, definitely.

Q99 Amyas Morse: Presumably you have the planning for the numbers that you need? Just supporting what Ms Creasy was saying, don’t you think it is reasonable for us to ask you what your aspiration is for numbers of IT people? Isn’t that reasonable?

Ian Watmore: I am quite happy to take that as a challenge from the Committee and come back to you with some ideas about it.

Q100 Chair: We are drawing to a close. Thank you for your evidence.

There are two further things. You have committed yourself to a massive set of objectives, and you are the senior responsible officer.

Ian Watmore: I won’t be here in two years’ time. [Interruption.] Just teasing.

Q101 Chair: You will be here in two years’ time, and we look forward to holding you to account for it.

Finally, how can we, as a PAC, help to ensure that this ambitious programme is met?

Ian Watmore: A very good question. I would highlight the two or three things that we started with. Number one, you should stop talking about IT disasters, which makes the problem worse, and start to focus on the business problems that lie behind them. IT is very rarely the problem; it is nearly always the business challenge that has been set. Number two, you should be pressuring people to shorten their time scales for project delivery, in the same way as we are. You can help with that, which we have talked about a lot. The third way that you could help is by evangelising making public services digital by default, to use Martha’s phrase. Public services should be designed with the eye of the citizen in mind, not the eye of the Government Department.

If you were able to help in those three ways, it would be massively helpful.

Chair: Good. Thank you very much indeed.