£81 million wasted on Government Efficiency
(Via Cruising on Ujima 98)
The House of Commons Public Accounts Committee released a new report today, and it's pretty grim even by the standards of Government Waste. The report relates to a Business & IT project undertaken by the Department for Transport(DfT).
The Cabinet Office has estimated that central and local government could save about £1.4 billion annually through greater sharing of corporate services.
We've got a bit of local experience with shared services agreements in the South West. Have a look at my old posts on SouthWest One, or see Bridgewater MP Ian Liddell-Grainger's blog for regular updates.
What could possibly go wrong?
There are three ways in which implementation can fail: through delay in introducing planned developments; increased cost; or by providing poorer services.
And where did the DfT go wrong?
[The Department] has suffered all three [failure modes] in implementing its shared services project. Yet, despite the extent of mismanagement in this case, no individuals have been dismissed or been properly held to account.
Well, at least management set realistic goals.
The Department was overly optimistic in planning to introduce shared services within one year and for all its agencies to use the system by April 2008. In practice, the first two agencies did not start using shared services until April 2007 and, to date, only the central Department and two of the Department’s seven agencies are using the Shared Service Centre.
Oh dear. But at least management didn't try to take any shortcuts when they realised the project was in troube.
In an attempt to meet its original timetable, the Department took shortcuts which subsequently caused problems. For example, it did not subject its IT support arrangements to full competitive tender, specify its requirements precisely enough or manage its suppliers sufficiently closely. It also reduced the time available for testing which meant that the system was unstable when it was switched on.
Right, let's just cut to the chase. How much did it cost taxpayers?
The Department initially estimated that it would cost £55 million to set up the Programme and that the benefits over the first 10 years would be £112 million, yielding a net benefit of £57 million. Current forecasts show that the Programme will cost £121million, benefits over the first 10 years will be £40 million and the net cost to the Department will be £81 million.
Users of the system have little confidence in its abilities and the Department’s performance indicators show a very poor and variable level of performance for the whole of the first year of operations. In some cases the service is worse than that previously provided.
Brilliant. Just brilliant. We're going to be down £81 million and the system doesn't even do what users want.
Successful projects are run by experienced project managers, but the Department failed to provide that expertise for its shared services project. The Accounting Officer gave us his personal commitment to turning this project around, pointing to potential savings from adding routine procurement to the Shared Service Centre. The feasibility and costs of doing this have not yet been established and so these benefits remain speculative.
This is something for both prospective customers and management of SouthWest One to consider.
