Government response
Introduction
The Public Administration Select Committee (PASC)
published its report Government and IT - "a recipe for
rip-offs": time for a new approach: Further Report,
with the Government Response to the Committee's Twelfth Report
of Session on 26 January 2012. The Government welcomes the
Committee's interest in and support for Government Information
and Communication Technology (ICT). ICT is vital for the delivery
of efficient, cost-effective public services which are responsive
to the needs of citizens and businesses. The Government's ICT
Strategy set out how the Government ICT landscape would change
over the current spending review period, and included 30 actions
which form the foundation activities for achieving the Strategy's
core objectives of:
- reducing waste and project
failure, and stimulating economic growth;
- creating a common ICT infrastructure;
- using ICT to enable and deliver change; and
- strengthening governance.
The Government published a Strategic Implementation
Plan in October 2011, which set out how the ICT Strategy would
be translated into action and outlined how implementation of the
strategy would be managed as a portfolio of 19 individual delivery
areas with Senior Responsible Owners from the CIO Delivery Board
providing oversight and driving delivery of strategy commitments.
Responses to the Committee's further recommendations
are set out below.
Oligopoly of large suppliers and benchmarking
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| The Cabinet Office's commitment to benchmarking through transparent data, as outlined in the Government's response, will help to quantify the gap between high and low cost products and services, but without the independent external advice which we recommended to identify reliable cost comparisons, the overall outcome will not change, and the Government will not achieve its cost reduction agenda.
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Government is committed to creating a fairer, more
competitive and open marketplace from which it buys its ICT services
and solutions. Government is in the process of breaking the contractual
lock-in which places the majority of Government ICT business with
a small group of major systems integrators. This process will
remove exclusivity from the contracts, and rigorously record every
contractual breach. It will also gather data centrally on the
performance and pricing of all suppliers to provide a consolidated
view of their competitiveness and performance.
In parallel, Government is consulting on new frameworks
that will enable more agile procurement, and open the market to
more Small to Medium Enterprises (SMEs). Some existing frameworks
are not in alignment with government policy, and are limited to
existing large suppliers. These frameworks will be deprecated
in favour of new frameworks that support re-introducing greater
competition into the provision of ICT goods and services. Doing
so will remove the current advantage enjoyed by the existing large
supplier base in order to re-establish a truly level playing field.
The recent work to restructure the current ASPIRE
contract demonstrates how government is working to ensure better
value for taxpayers, break up large contracts and create opportunities
for new, smaller companies to enter the market. HM Revenue and
Customs (HMRC) and the Cabinet Office negotiated with the IT supplier,
Capgemini, to deliver a significant restructure of the current
ASPIRE contract and savings for HMRC. The new deal reached will
lead to a diverse supply chain with transparent pricing (removal
of the current exclusivity agreement), open choice for HMRC and
significantly enhanced value for money. By 2017 the new deal will
help deliver:
- Cost savings:
£200 million saved by paying less per unit of IT services
provided and potential for further savings by open competition,
volume reductions and direct relationships between HMRC and subcontractors;
- More freedom: HMRC
will now have more control to run open competitions for its IT
needs, enabling more opportunities for innovative SME suppliers
and greater control over the volume of work going through the
contract;
- Greater transparency:
transparency in pricing is enhanced further to assist with value
for money comparisons; and
- Future Model - a future
model that breaks lock-ins and gives HMRC the flexibility and
control to drive its own savings and innovation.
Government is working to improve the quality of its
ICT management information. One example of substantive progress
is the recent G-Cloud framework which requires all suppliers to
openly publish full details of their pricing (see http://www.govstore.net/).
In addition to this transparency, the pricing levels achieved
for provision of these services are being used as benchmarks against
which incumbent suppliers are being measured. Government expects
all supplier costs to be reduced to match or better these benchmarks,
producing substantial cost reductions. A project is also beginning
to gather information on contracts data for all current ICT suppliers
and departmental benchmarking of ICT unit price data. The unit
price benchmarking will build on a tool established within HMRC
which, following a year of use, provided HMRC with a detailed
breakdown of costs relating to IT and helped the department realise
many benefits including £24m savings and a 30% reduction
in the number of confidential desktops.
The National Audit Office has recommended that the
tool be rolled out further across government. This project will
provide the opportunity to benchmark across government, and also
enable external independent reviews to measure comparability with
private sector peers. The Government's intention is also to publish
as much of this data for public scrutiny as possible. It is looking
to embed this approach in its handling of all its large suppliers,
including software developers.
The Government will also shortly be announcing a
new memorandum of understanding with Oracle that will show how
its new, commercially aware, intelligent customer approach will
deliver financial and significant operational benefits.
Legacy systems
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We are not convinced that the Government's approach to legacy systems properly addresses the underlying issues. At the very least, the Government should produce a long term risk-register identifying where and when investment will be needed to migrate and replace existing legacy systems. We expect to return to this issue in a later inquiry.
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The Government has recognised the challenge it faces
in delivering services with both new and older systems. It is
right to ensure that departments have a range of credible options
regarding the choices they make about their legacy systems. Different
circumstances will require different options. Departments, which
understand in detail both the business functions provided by their
systems and the technical constraints that act upon them, are
best placed to determine the appropriate option. All departments
will be producing plans to show how their systems will conform
over time to the Government's ICT Strategy principles, objectives
and standards. These will be subject to challenge and co-ordination
to ensure that they result in a viable plan for Government as
a whole.
All major commitments to expenditure, whether in
"wrapping" legacy systems to enable their continued
use or in implementing new systems to provide the necessary business
functions, will be subject to appropriate spending controls and
approvals. Assessments at this stage will take account of relevant
factors including value, cost, budgetary constraints and risk.
Capability within Government
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We welcome and endorse the Government's acknowledgement of the need to grow its capacity in commercial skills of procuring and managing contracts, not just technical IT skills, in order to become an 'intelligent customer'. Specific training for the Senior Civil Service in technology policy will also be welcome, as will the growth of a network of 'champions' of agile development. However, it is not clear from the Government's response to our report that its actions will be adequate to cope with the scale of behavioural and process change required across the whole of Government, nor that the agile 'champions' will have sufficient seniority, expertise or support.
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The Government recognises that raising commissioning
and procurement skills is vitally important to get better outcomes
for the taxpayer and to stimulate growth through public procurements,
including greater use of SMEs. It has already developed new LEAN
standard operating procedures for central government underpinned
by training available for all civil servants. It is now working
on similar improvements for contract and supplier management and
commissioning. The Cabinet Office has also been piloting a two-way
commercial interchange programme with industry to bring private
sector expertise into Government. Civil Service Learning (CSL)
is currently developing a suite of training on commercial awareness
which will be available to all Civil Servants via the CSL portal
in spring/summer 2012.
In parallel, the Government is determined to return
world-class Project Leadership capability to Whitehall to improve
the delivery of the Government's £400 billion portfolio of
Major Projects, which includes ICT projects. In order to
achieve this, the Major Projects Authority has established the
UK Major Projects Leadership Academy (MPLA), in partnership with
Oxford Saïd Business School, to target the SROs and Project
Directors leading the Government's Portfolio. The key focus of
the MPLA will be on leadership, business acumen and commercial
expertise from both an academic and practical angle and will include
lessons learned from previous major projects including ICT projects.
Part of the Academy programme will involve an assessment
of capability and previous experience of Project Leaders, with
a tailored development plan designed for each individual. This
will ensure that there is a clear picture of the capability within
the Civil Service and inform decisions of where to best deploy
their expertise.
The Government fully recognises the point that agile
"champions" may not have sufficient seniority, expertise
or support and are working on identifying and putting in place
senior Agile Leads within departments to drive and embed the behavioural
and process change required to make this a success.
Innovative service provision
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| There are obvious areas in which the Government could go further and move faster to implement 'digital by default'. For example, officials should be rewarded for using social media and digital channels to disseminate information and provide services (especially where this reduces reliance on other, more expensive channels). User feedback submitted via the Directgov site provides the Government with a great deal of free data on the strengths and weaknesses of its service provision. The Government must make good use of it, alongside other information from social media produced outside Directgov itself, to understand better how its services are used and perceived
and, in turn, to design better services.
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Government Digital Service (GDS) are building a single
domain for government known as GOV.UK, which will provide
better, simpler, more accessible information for citizens and
will be cheaper and easier to operate for departments. The GDS
will also develop a global experience language (GEL) to provide
clear, consistent design, user-experience and brand clarity for
users. This will also include a standard set of guidelines for
government Application Programme Interfaces (APIs).
The GDS has used social media (principally Twitter
and Get Satisfaction) to get feedback on the alpha and beta versions
of GOV.UK website and the team regularly blog about the development.
The GDS is engaging with departments to accelerate their digital
by default and channel shift plans using relevant social media
and digital channels. GDS is working with departments to
fundamentally change the way their policy teams think of social
media. GDS are promoting the use of social media to not only gather
feedback from their audience (like Directgov is doing), but to
also use it as a means to deliver services or policy objectives
thus making significant expenditure savings.
As outlined in the Making Open Data Real consultation,
the Government is considering how user feedback can be integrated
into the design, delivery and continuous quality improvement of
public services. Internet-based tools are likely to be an
important channel for collecting and reporting user feedback and
we will continue to look at how we can encourage the development
of this critical source of data from citizens.
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