First, we will ensure that policy decisions take account of implementation constraints.  This is not to allow technology to dictate policy.  But Ministers must be aware of all the costs and risks which will flow from their preferred policy approach.  If a Permanent Secretary believes that a course of action carries unjustifiable risks and costs, he can ask the minister for a direction in writing.  This has only happened eight times in the last twelve years.  This procedure could have prevented immense waste of money in those years, for example in the implementation of the Tax Credits system and the NHS NPfIT.

Second, we will strengthen the capability and accountability of Whitehall departments for procurement and management.  We will appoint senior private sector non-executives to departmental boards, and in any department where ICT plays a significant role in delivering services, we will recommend that at least one non-executive board member has strong ICT/operational expertise.  At present departmental CIOs are not always accorded the authority and support that enables them to question and challenge requirements.  Just as we have undertaken for Finance Directors (It’s Your Money), we will build the CIO role to give them greater responsibility for the effective management and delivery of projects.  In addition both Ministers and Permanent Secretaries should expect to be held to account for the success of projects within their departments.  Big expensive capital projects have to be the responsibility of the most senior leaders in a department.

Third, we will reform the design and procurement process.  The design process should first explore simple, low-cost solutions – this would be the main function of the CIO’s skunkworks.  It should also examine existing solutions before contemplating bespoke commissioning – the ICT Asset Register will help with this.  The design and procurement process should allow for more vendor input and creativity through outcome-driven specifications, and be encouraging toward Open Source solutions.

Procurement can be much faster and cheaper than at present, without sacrificing quality and competitiveness.  Too often consultants are hired on day rates to manage complex procurements.  This adds cost and time.  The government has to be an intelligent and capable customer able to manage such procurements in-house.  When the ASPIRE contract was renegotiated in 2004, the costs of the procurement (to the government) was £27.5 million.  UK government procurements on average take 77 weeks.  This is roughly double the average time taken in Germany.  The EU Public Procurement rules imply a minimum of eighteen weeks.  Suppliers complain that it costs them twice as much to bid for a government contract as for a similar contract in the private sector.  This creates a barrier to entry for smaller suppliers, and of course the additional cost is ultimately passed on to the taxpayer.

Fourth, we will upgrade the role of Senior Responsible Officers (SROs). We will create a presumption that they should stay in place for the duration of their projects. Currently there may be three or even four SROs in the lifespan of a project. Accountability is diluted and large cost overruns and delays are the common consequence. We want to make sure that if large cost overruns or delays occur then there is clear accountability and conversely if projects are delivered on time and to budget then rewards are duly given. In order that this does not hold back careers, this may involve an official being promoted in post when running a large project.

Fifth, we will manage contracts to minimise costly changes. Contract terms must be structured to accommodate the inevitability of some change (political, organisational or technological) without costing the taxpayer.  It is well known in the industry that much of a supplier’s margin is made from client changes to the original specification. 

Sixth, we will encourage innovation and qualitative judgements. Today’s grossly inflated costs of design and development are driven by a desire to have a process immune from criticism.  Tenders which are specified to an excessive level of detail enable a supplier to be chosen on the sole basis of price.  The audit culture promotes the feeling that no one can be criticised for choosing the cheapest.  Yet the best procurements are not just based on price but on overall value.  This requires judgements that are qualitative, not just price-based.  We believe that the involvement of senior non-executives from the commercial world will give greater confidence that such judgements are justifiable and can be defended.

We will encourage SROs to publish their plans online via low cost platforms like blogs, and we will encourage them to solicit feedback from the IT literate public and to explain why design decisions are made as they are.

Seventh, we will expect to publish all ICT contracts, and will benchmark pricing against domestic private sector and foreign public sector contracts.  Much greater transparency of contracts will enable comparisons to be made much more readily.  We are sceptical that the requirements of commercial confidentiality genuinely justify the secrecy that surrounds these contracts.  It is extraordinarily difficult at present to establish their content.

Eighth, we will invigorate the Gateway reviews, and insist that failing or redundant projects are abandoned. Too often the public sector feels captive to sunk costs.  The fact that large amounts of public money have already been wasted on an unsuccessful project is not a reason for wasting yet more.  It is estimated that in the private sector only 30% of projects actually survive to completion.

There are several expensive ICT systems in various parts of Whitehall which had become redundant well before their completion, and which still sit unused.  They should have been given a decent burial well before completion.  But the abandonment of a project, however justified, tends to be seen as an admission of failure.  Much better to save the money and scrap the project.

In addition, we will publish centrally online the Gateway Reviews when they are produced, and allow the public to scrutinise the value and progress of a project.

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