Saturday, 5 July 2014

GDS's agile business plan

The Government Digital Service (GDS) released its business plan yesterday for the period April 2014 to March 2015.

"GOV.UK has been live since early 2012, and gets over 1.5 million visits per day, saving at least £50 million per year", they tell us.

But that's not all. In addition "We’ll deliver at least £700 million in efficiency savings and improve user experience by ...".

Further, looking at eight central government departments, "we estimate that by digitising all transactional services we could save £1.4 billion every year".

These are attractive numbers. They haven't been audited. But they're undoubtedly attractive.

You may think you've heard some of them before.

You're probably thinking of the Digital Efficiency Report published in November 2012 which "estimates that approximately £1.2 billion of savings could be created during the current spending review period" and says that "total savings made over the remainder of the current spending review period are approximately £1.2 billion" and that "potential total annual savings" vary between £1.4 billion and £3.7 billion (Figure 22) although the Executive Summary says "this report estimates that between £1.7 billion and £1.8 billion could be realised as total annual savings to the government and service users".

Take your pick.

Some, all or none of these savings depend on 80% of all government transactions becoming digital which, according to Figure 10, could take about 11 years from the start of digital-by-default, which hasn't started yet. The achievement of £1.2 billion of savings in 2014-15 is harder than it looks, which is just as well for 40,000 public servants because this figure "amounts to a total FTE [full-time equivalent] savings estimate of at least 40,000 [redundancies]".

If you weren't thinking of the Digital Efficiency Report, though, perhaps it was Public Servant of the Year ex-Guardian man Mike Bracken CBE's speech to the Code for America Summit in October 2013 when he told people that the Efficiency and Reform Group have already saved £10 billion of Whitehall costs and that that represents 4% of gross domestic product. If you check, it turns out to be only 0.6% of gross domestic product but, again, the unaudited figure is attractive.

Going back to yesterday's business plan, we learn that, thanks to G-Cloud, "at the current rate of spending (£16 million per month), savings of around £200 million could be achieved in the financial year ending March 2015 by ..." and that "G-Cloud has helped to grow the UK economy by creating new jobs". G-Cloud – the government cloud – is Whitehall's gesture towards the current fashion for losing control of your data and your applications by putting them in the cloud.

You may disagree. You may think it's prudent and businesslike and responsible and rational to use the cloud. Up to you. What you can't disagree with is that taking £200 million out of the economy shrinks it. It doesn't expand or grow it.

This, we must conclude, is a very agile business plan, centred more on user needs than fusty old figures.

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Update 10.7.14
GDS's grip on public expenditure

Updated 18.7.14

"These are attractive numbers. They haven't been audited. But they're undoubtedly attractive." That's what it says in the post above. That, and "the unaudited figure is attractive".

Funnily enough, the auditors have been in, and they've just published their report, The 2013-14 savings reported by the Efficiency and Reform Group.

£10 billion is how much the Efficiency and Reform Group (ERG) claim to have saved in the financial year 2012-13. The auditors told ERG off about that. They weren't impressed with ERG's way of measuring "savings".

This year it's all much better. ERG claim to have saved more – £14.3 billion in 2013-14 (para.11, p.39). And, in the main, the auditors are happier with the methods used for calculating savings. But there is a problem in one of ERG's clusters.

"Clusters"?

Yes. Clusters. It's a modern organisation, ERG, and it has clusters rather than departments. The Transformation Cluster is our good friend the Government Digital Service (GDS). And this is what the auditors say (para.3.8-3.12, pp.22-23):
GDS controls

3.8 The Government Digital Service (GDS) operates controls on certain types of ICT and digital spending at the business case stage. It calculates savings based on cases where it directly enforces a change in plans and cancels or reduces costs, and also where its intervention changes a project, which results in lower costs. The method is largely the same as that used in 2012-13. GDS compares the revised and approved spend forecast to the original spend forecast submitted for approval. GDS counts cancelled projects as having savings, and deducts additional short-term costs from the cancellation from those savings.

3.9 We reviewed GDS's planned method for the controls savings. We then reviewed internal audit’s work and a sample of the evidence that supported the calculated savings.

3.10 The evidence for savings is hard to follow. There was uncertainty over some numbers with aspects of the cases still being removed or evidenced well past year-end. There were also cases where the evidence did not support the decision on whether some savings-related activities were a cancellation of previous activity or a continuation of previous activity. While GDS's business model is based on an ‘agile’ approach, developing proposals flexibly, it still needs to ensure that it gathers sufficient robust evidence to support savings claims.

3.11 In many cases, GDS did not calculate savings correctly in accordance with the guidance and method. In some cases, not all relevant costs were included. For example, in one contract, the business case included costs for customised software support for the chosen option but they were not initially deducted from the savings.

3.12 GDS corrected the savings figure to account for all the errors identified. However we reported similar issues in 2012-13. Since the data and the process are entirely within Cabinet Office, GDS could have made more progress to resolve them.
Never let it be said that auditors don't have a sense of humour: "while GDS's business model is based on an 'agile' approach, developing proposals flexibly, it still needs to ensure that it gathers sufficient robust evidence to support savings claims".

How amused are you, though, when you read "the evidence for savings is hard to follow" and "there was uncertainty over some numbers" and "there were also cases where the evidence did not support the decision" and "in many cases, GDS did not calculate savings correctly in accordance with the guidance and method"?

The auditors told them last year, "we reported similar issues in 2012-13", but they're still getting their homework wrong and it's another poor end-of-year report: "since the data and the process are entirely within Cabinet Office, GDS could have made more progress to resolve them".

Hat tip: ElReg.

1 comment:

Anonymous said...

Just an other dimension about use of "cloud" it is a pay as go with inbuilt lock in which when cost over years is truly "added up" may not be quite so smart. But makes good short term headline news?

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