Wednesday 12 October 2011

Less for more

First Katie worked for James and Ian. Then Ian left and so did Katie. When James left as well, Katie stopped working for Ian and went to work for James. Then James left and Sarah took over. There was no room for Katie so she went back to working for Ian. Until Christine left and now Katie finds herself working for David. Or is it the other way around? Will Ian's will prevail? Just how much are we paying CSC? And for what? How did the Daily Mail get themselves suckered? And where does Andrew come into it?

All of that and more – including Sir Anthony Blunt – in the latest edition of the long-running programme, Whitehall in control ...

Like a lot of people in Whitehall, Katie Davis used to be a partner at Accenture.

She left in 2005 to join the Cabinet Office, home also to Ian Watmore at the time. Mr Watmore, of course, is a former managing director of Accenture.

In 2007 she moved to the Identity & Passport Service (IPS), where she was appointed Executive Director of Strategy. After three years of her strategy, IPS imploded. They left their offices at Globe House and retreated to the Home Office mother ship in Marsham St. The Chief Executive, James Hall, previously a managing partner of Accenture, retired and was replaced by Sarah Rapson, never worked for Accenture, ex-American Express, MBA from the London Business School.

Five directors of the IPS board were cleared out at the same time and so it came to pass that Katie found herself back in the Cabinet Office with the title Executive Director, Operational Excellence, working for Ian Watmore's Efficiency & Reform Group (ERG, previously OGC). The quiet life of operational excellence there beckoned but was soon rudely interrupted when Christine left.

Christine Connelly was the Chief Information Officer at the Department of Health. She was for years the most articulate and impassioned supporter of NPfIT, the NHS's £11 billion+ National Programme for IT. In June 2011, she resigned.

There had been a few problems.

By this stage in the career of NPfIT, there were only two contractors left. Accenture had pulled out with losses of over $450 million. Fujitsu also had pulled out, and are still thinking of suing HMG for £700 million. Leaving only BT and CSC.

CSC – Computer Sciences Corporation – are an American software house. They took over Accenture's NPfIT contracts. As part of the deal, they inherited iSoft, the software house that developed Lorenzo, the package on which NPfIT depends.

iSoft got into financial problems. The market took a dim view of their habit of booking profits based on nothing more than vague promises that someone might at some stage in the future possibly buy a copy of Lorenzo or not. CSC had to take them over to keep them afloat.

Lorenzo continued to perform badly, causing CSC to miss certain important milestones in their delivery plan for NPfIT. What with that, and a minor misunderstanding in the US with the Armed Services Board which cost them $250 million, their shareholders were getting edgy and CSC asked Christine Connelly to sign a contract guaranteeing them £3 billion. They also offered a discount. How about we take 25% off the price, CSC asked, but only deliver 50% of the services?

Less for more. An attractive proposition as anyone would agree.

At least, Christine Connelly thought it was attractive and she was minded to sign. Not so fast, said Richard Bacon MP, a hero. Not so fast, said Rt Hon Margaret Hodge MBE MP, a hero. Not so fast, said, Ian Watmore, Chief Operating Officer of ERG, whose motto, devised by Lord Brown of Madingley, Chairman of ERG and previously Chairman of BP and the Gulf of Mexico, is "more for less".

Even David Cameron asked Ms Connelly to stay her hand. For months, it looked as though, with the support of her boss, Sir David Nicholson, Chief Executive of the NHS, she was going to tell the lot of them to take a running jump. A power which, it may come as a surprise to those who believe we live in a polity where politicians control Whitehall, she had. Then she was gone.

Had Ian Watmore at last managed to assert his authority over the Department of Health? Who knows. But one way and another, Christine Connelly was replaced by Katie Davis.

That was back in June. On 22 September 2011, the Daily Mail carried this front page headline:
£12bn NHS computer system is scrapped... and it's all YOUR money that Labour poured down the drain
Their heart was in the right place but the story was false. The Department of Health agree that NPfIT has a few problems (mutt) but according to Sir David Nicholson, to paraphrase, we all owe our very existence to the genius of NPfIT (jeff), which will go on. And on. Until we've spent all the money we're entitled to. And then we may need some more. Firm up on that one later.

This is Sir Gus O'Donnell's Whitehall. He has been head of the home civil service since 2005. He leaves at the end of the year. We shall miss his deft organisational powers. Public administration in the UK may never be the same again. With any luck. GOD retires from top job – to be replaced by a new trinity, as they say in yesterday's Times newspaper.

Talking of which, when the Times look at NPfIT, they say:
The history of the NHS computer system is one of criminal incompetence and irresponsibility
Whereas when Sir David looks at it, he says:
We spent about 20% of that resource [the £11.4bn projected total spend on the NPfIT] on the acute sector. The other 80% is providing services that literally mean life and death to patients today, and have done for the last period.

So the Spine, and all those things, provides really, really important services for our patients. If you are going to talk about the totality of the [NPfIT] system … you have to accept that 80% of that programme has been delivered.
Sir Anthony Blunt was the world expert on Poussin. Standing in front of an obvious fake once, he declared it to be authentic. Why? Perhaps Sir David Nicholson could tell us.

The quotation immediately above is due to Tony Collins, the award-winning investigative journalist, one of the few people on the planet who know what's going on NPfIT-wise, and a hero. Andrew Lansley? Admittedly Secretary of State for Health but, when it comes right down to it, just a politician. Not sure. Katie Davis?  At least she's sort of a mandarin and a former Executive Director of Operational Excellence, but even so – not sure.

The sun never sets on Sir David's empire. Now a group of American investors are suing CSC in a class action. They clearly don't think Lorenzo is kosher either, any more than Richard Bacon, Margaret Hodge et al. Somehow, mysteriously, the shareholders have got hold of internal CSC reports going back to May 2008 saying that Lorenzo could never meet the NHS's requirements and that the package is on a "death march".

Not the sort of march you want a health service to be on. But then what has any of this £11 billion of public money got to do with health?


Scott Gronmark said...

Irt would be interesting, DMossEsq, to get your meta take on just why every large-scale Public Sector technology project ends in costly disaster, and why the disaster takes so long to identify, and why, even when the full scale of the unfolding disaster has been identified, pulling the plug appears to be almost impossible, and even when the plug finally gets pulled (rare, I kinow) the incompetent numbnuts responsible never gets taken out and publicly shot . A magisterial overview would be appreciated. By the way, I know that 90% of all technology fail and that 90% of those that fail fail because of scope-creep. is that the case here?

David Moss said...

Sorry to disappoint but I'm fresh out of magisterial overviews. And I'm not sure that's what's needed.

The National Audit Office, in particular, have produced several authoritative reports over the years analysing the causes of failure and recommending solutions. The solutions always sound unimpeachably sensible.

But then Whitehall goes and pulls another stunt like FiReControl – £467 million spent (PA Consulting again) and nothing to show for it. It's a work of Dadaist art. It's a reductio ad absurdum.

In that case, we're not looking for new procedures for Whitehall, are we – we're looking for a new Whitehall.

NPfIT we know about. Looking ahead, keep your eyes peeled for UC and RTI. Watch DWP, HMRC and the Treasury. This is going to be the connoisseur's FiReControl, a vintage will be declared.

UC = universal credit. It's a DWP project.

UC should replace the current tax credits system. That's a Treasury system. Empires don't shrink without a fight. Co-operation DWP should expect from HMT? Nil.

UC depends on HMRC's RTI system. RTI = real-time information. That's real-time information gathered by HMRC on every payroll in the country. Desirable? No. Doable? No. No RTI, no UC.

Quentin Vole said...

If it's any consolation (actually, it isn't) the private sector is just as capable of similar cockups. A true story (been there, done that, got the t-shirt):

A very large US multinational was looking to outsource its IT infrastructure. We got the usual suspects in, but one quote was far lower than the others. As head of IT for EMEA, I doubted that the figures they were providing could be achieved. We sat down with their CEO and he assured us they could meet the price and make a profit. We had some very good procurement guys who drew up a watertight contract defining our service requirements. I was still unconvinced and told our CIO: "you do realise that once we've handed over all our infrastructure and staff, they'll have our balls in a vice". I was told in no uncertain terms to shut up and that if I voiced my concerns to anyone else it would be 'career limiting'.

Several years later they announced that they couldn't make any money on the existing contract terms and they were unilaterally withdrawing support for any further changes. We indicated the watertight contract and told them we'd pointed this out at the beginning. They said (in effect): "sue us". Of course, suing them would have taken years (and cost untold millions) and meanwhile we couldn't make any IT changes. Long story short - there's a new contract on 'enhanced' terms. The senior management responsible have been promoted and/or moved on to pastures new (aka 'the next sucker'). None of this has been made public or could be ascertained from published information. I'm sure it has happened innumerable times before and will happen again.

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