Examination of Witnesses (Questions 40-59)
MR BRIAN BENDER CB AND MRS JULIE FLINT
WEDNESDAY 19 JUNE 2002
40. Is that what he has told you to say? I should have declared an interest, having spent three decades as a senior manager in public sector computing, before taking this job in May of 1997. You referred in your evidence, on 14 November, which I am sure will spring to mind immediately, to this Committee, seven months ago, of "glitches in getting the former DETR IT system to talk to the former MAFF IT system in a way that happens seamlessly and immediately . . . the real answer to it is a single system" blowing of trumpets "which we are rolling out to the DETR people in the coming months;" that is seven months, or more, in the past. Presumably, that single system has been fully rolled out?
(Mr Bender) Absolutely, yes. I got into trouble with the Chairman for using the word rolling out, so I will not use it today. It has been rolled out, between January and March, so those earlier problems do not exist any more.
41. Which single system was chosen, the DETR or the MAFF one?
(Mr Bender) For cost reasons, we based it on the former MAFF one, but with some improvements.
42. Right; and who undertook and designed and implemented those improvements? Was it an in-house operation?
(Mr Bender) I believe, though I would need to check and come back to the Committee if I have got this wrong, that this was Fujitsu, the company formerly known as ICL. But I would like just to check my facts and come back to the Committee if I have got that wrong.
43. What, if any, problems continue to be caused by the previously incompatible systems?
(Mr Bender) I do not think we have continuing problems on that. I think the challenge is to try to ensure that, actually, people use the technology available to change their working methods and actually to change the way they relate not only internally but relate to customers and stakeholders externally. You may not like the language, but I would hope you would support the notion that actually the technology allows for a whole different relationship between the public sector and the people out there, whether it is the farmer, whether it is the citizen; and our e-Business Strategy provides a number of headline areas. So, just taking farming as one example, and referring back to the British Cattle Movement Service, 18 per cent of entries on the cattle tracing system are now done electronically, rather than in hard copy; so that is the sort of development that, when it fully takes off, will reduce errors and be cheaper.
44. In the Departmental Report, it says, on page 20, second column, about halfway down, that the Department has decided to outsource IT delivery, and the programme is expected to take around two years to the award of contract. Is not the information in communications technology so central to the strategic development and operation of newly-integrated Departments, like DEFRA, in terms of its acquisition of information, its shaping, the analysis and the way in which it redirects the objectives of DEFRA, should not that really be kept centrally within the Department; is not outsourcing it akin to the, I do not know, outsourcing of the surgical department of St. Thomas's to Sainsbury's butchers, or something? Because, in my experience, I have to say this to you, Mr Bender, and this is not meant personally, I am sure you will not take it personally, but my experience of outsourcing in the public sector has been that it has been the last desperate act of an incompetent top management, that is drowning in a technology that it does not understand, that is seduced by private sector IT sharks into buying a solution, which, in essence, is grasping at expensive straws as they float by. Is not this the sort of thing that rings any bells with you?
(Mr Bender) No. Let me give a serious answer to the question. Of course, there are huge risks in going down this track, and there are many cases that this Committee, and certainly the Public Accounts Committee, will be aware of where there have been failures. But the fundamental question is whether the business needs of an organisation like ours, which is a complicated business, are best met by having, in practice, over 200 people internally as the essential service providers in this area, or whether we should simply become much better at knowing what the business is and managing the external skills of a company whose core business it is to provide IT service. And it is the second that most organisations, private and public sector, have gone down, that it is not their core business to have the IT skills, though they do need to have the skills to manage, so they are not handing over the crown jewels for someone else then to run rings round them with; and that is plainly the big challenge.
45. Pre-May 1997, I was one of Major's optimists, but, since then, I must admit that my heart sank even lower than normal when I read this sentence in your answer, "DEFRA is getting help from the Inland Revenue, which has substantial experience of outsourcing . . ." If the Thames had been remotely close to where I was when I read that, I think I would have jumped in, at that point. What on earth are you doing, on this; it is not a matter of outsourcing that which is not part of your core business, which Mark is about to agree with you on, I think, but the fact remains that it is part of the core of the business, in any modern organisation, and it is increasingly powerful and influential and essential. And for that to be outsourced, in the way that you glibly suggest it will be, over the next two years, I would guess that in the first year of the Brown term, of autumn 2005, we shall still be reading reports of this kind, saying that we are about a year away now from having a fully-integrated system which meets the needs of the newly-reshuffled DEFRA, or whatever it is called at that time. I have got no confidence in it and I am surprised that you have.
(Mr Bender) Before Mr Todd comes back, as perhaps he wishes to, on this, first of all, I am not glib about it, this is an important and risky project. Secondly, one of the reasons that the Committee did not get this material as early as it wished to was that I wanted to have an opportunity to read it, and I would have read it rather more carefully overnight, and I would probably have taken out the reference to the Inland Revenue, because they are advising us, but they are not the sole source of advice. And, in fact, we are about to recruit an IT Director on the open market to help us with this, we are taking advice from other people who have done outsourcing internally and externally, and we do have our own skilled people internally.
David Taylor: The Passport Agency.
46. You did say a couple of sentences there which were the first ones that I had some confidence in, in your evidence, which was your strategic understanding of the position of IT in your organisation. It is clearly much more important that you learn how to do the things that are critical to your organisation than become expert at IT, which I think would be some decades ahead, based on my knowledge of the systems that you have used in MAFF up until now. My criticism actually is much harsher than David's, which is, you were asked a question, does an IT strategy for the new Department exist; I think, in about five or six paragraphs, you find that, actually, the correct answer to that question is "no". It says something about your e-Business Strategy, and it says something about your decision to outsource, and it says that a fuller IT Strategy may be expected to be developed at some point: there is no IT strategy?
(Mr Bender) There is an e-Business Strategy.
47. Sorry, let me stop you just there. You cannot have an effective e-Business Strategy, or a decision to outsource, without an IT Strategy; so the fundamental thing is, do you have an IT Strategy on which those informed decisions can be based?
(Mr Bender) We have an IT Strategy, it needs to be a fuller one, more comprehensive, to inform the decisions that will be taken over the period ahead; and that is, indeed
48. This is absolutely fundamental?
(Mr Bender) We have an IT Strategy.
Mr Todd: Well, let me just explore this a little further. You have clearly been told by central government you must have an e-Business Strategy, and they commit the same error as you, incidentally, which is, you see e-business as an entirely separate activity from the fundamentals of how you organise your information technology infrastructure; that is an error which is common in Government. All I am saying is, you are repeating it, and the outcome of that will be poor-quality systems, because they will be incoherent, and if you then load on that a decision to outsource, without any fundamental analysis of how your information technology interacts with the rest of your business, you will be making a serious mistake.
David Taylor: They will eat you alive; they will eat you alive.
49. Yes. David and I, who do know something about this, agree on that, we do not agree perhaps on the outcome, which is whether you should outsource or not, but it is absolutely critical that you get a strategic grasp of this before you make substantial progress on either of these activities; and I am not reassured by what you have said. So I would certainly welcome a copy of such an IT Strategy as you say exists; could you make that available to the Committee?
(Mr Bender) We will. I will write to the Committee on this. The development of what you would accept as an IT Strategy is work in progress, and the Board is looking at this twice in the next month.
Mr Todd: Honestly, do not just take our word for it, consult anyone who knows anything about information technology, and they would repeat what I have just told you.
David Taylor: It is work in progress, Chairman, to the extent that a pile of bricks is the start on a house; it really is not advanced at all.
50. Let me make one other, I am afraid, harsh statement here. You are involved in probably the highest-risk IT and process re-engineering project I know of in Government.
(Mr Bender) It is the Rural Payments Agency.
51. The Rural Payments Agency; and you have just told me that the way in which you are approaching this is not founded on any proper IT Strategy at all. That is alarming in itself, and, I have to say, I am surprised the Gateway Review has not identified that; it has already identified it as an extremely high-risk project, I can buy into that statement 110 per cent.
(Mr Bender) The Rural Payments Agency process Change Programme is based on a business case, has an IT Strategy, has passed through a couple of the Office of Government Commerce Gateway phases, and, more recently, the Chief Executive of the Office of Government Commerce has written to the Secretary of State saying that it is high risk, but it is in a green box in a traffic-light system, because of the way the Department is seeking to manage those risks. I do not underestimate those risks, it is hugely high risk, but I do not accept the points you made leading up to that, as far as the RPA developments are concerned.
Mr Todd: Let us hope you are right; but I would have put more money on Saudi Arabia winning the World Cup than seeing this come true.
52. Now for something completely different. What would you say was the principal reason to produce an Annual Report?
(Mr Bender) To inform Parliament and stakeholders of the Department's performance.
53. The Department's performance; and yet we get to performance in Chapter Six, which, if it is the principal reason, one might imagine that performance might be somewhat promoted up the chapters. Anyway, having said that, because there is a whole list of targets for the Public Service Agreement, and just picking out a couple, inevitably focusing where there is "some slippage," and such, one of those PSA targets was in relation to secondary treatment of sewage, which, certainly down in my part of the world, with the beaches and the sea, and such, is a very important part, the target provided for towns of at least 15,000 populations to be secondary treated for sewage by 31 March 2002. Now we have got to 98 per cent, which, in percentage terms, seems actually pretty good; having said that, I would be keen to know which towns of more than 15,000 people in England and Wales do not now benefit from that, and, of course, when they may do? Now I suspect that the note that you are going to send to the Committee is getting longer by the minute, but I think we would like to see that, to the extent, 98 per cent seems pretty good really, but if 2 per cent of that includes a substantial number of towns then, obviously, it would not seem quite so good. So I think the other aspect we want to say is, well, it is very good to have the targets, but sometimes the information as to where we are on the targets is not as helpful as we might expect. I do not know whether you can provide that sort of detailed information now, or whether you will be able to send it to us?
(Mr Bender) I will follow up the question, Chairman and Mr Breed.
54. Can we then just briefly look at one of the other targets, which is to "Bring into favourable condition by 2010 95 per cent of all nationally important wildlife sites," it is on page 45 of the Report. When will 95 per cent of the nationally important wildlife sites be in a favourable state; there has been some slippage, what is the extent of the slippage?
(Mr Bender) The latest figure from English Nature is 56 per cent. There is an issue here, a kind of self-evident issue, which I think is worth bringing out, which is that, plainly, targets need to be funded adequately; and one of the issues we are discussing, in the context of the present Spending Review, with the Treasury, is trying to get a better match. Because I think the honest answer to your question on this is that this has not had the funding that it would need in order to guarantee the delivery of that target, and that is something we are discussing internally and then discussing with the Treasury in the context of the present Spending Review.
55. So is that something, in terms of when these targets are set, are they always set with that proviso, because I think that has not been clear, in that sense?
(Mr Bender) No. It should not need to be a proviso as far as the public is concerned, it should be a proviso in the discussions between the Department and the Treasury, that when Public Service Agreements are published the Department concerned has the funding and the delivery plan to achieve it; and that is an area where, right across Government, more work is needed. And this is an example where there has been slippage, and it has been a slippage because, in part, there was not, in the past, adequate funding; there has also been a delay because of foot and mouth disease.
56. Was the inadequate funding due to inadequate budgeting, or because the Treasury did not provide the amount of money that you had expected to have for that particular target?
(Mr Bender) This was an issue that followed the Spending Review of 2000, and was between the then DETR and the Treasury; but I think the then Department felt that there was inadequate funding available for delivery of this in full over this timescale. So that is an issue that, across Government, we are discussing, each Department with the Treasury, for this Spending Review, to ensure that we do not sign up to targets that we are not confident, providing we have robust delivery plans, we can deliver. It is not something that should trouble the external world, it should be implicit internally.
57. So there are no other measures, like policy changes or legislative changes, or anything like that, which need to happen to meet these targets, it is really related to the amount of money?
(Mr Bender) I think there was a delay here because foot and mouth delayed the Site Condition Assessment programme; so there is a catch-up needed there. But primarily it is a combination of slippage for that reason and whether there is adequate funding available.
58. Just one further point. The Report suggests that 40 per cent of nationally important wildlife sites are not currently thought to be in a favourable condition; why do you think so many of these so-called nationally important wildlife sites are in such a poor state?
(Mr Bender) I would speculate, and from your own interest you may be more expert than I am, but I suspect it is a combination, it is essentially an issue of neglect over a period, and positive action is needed by authorities like English Nature and with encouragement by farmers to help restore the land.
59. So we go round designating all these sites and then do nothing more about them, really?
(Mr Bender) Not doing enough about them quickly enough.