Feature

Housing Corporation holds back report on troubled IT project

The Housing Corporation presents itself as open and transparent. The trust's chief executive has personally written to the information commissioner, Richard Thomas, highlighting its "proactive approach in trying to be as open and transparent as possible". And Housing Corporation chairman Peter Dixon is a lay member of the Information Tribunal, which hears appeals over disputed Freedom of Information requests.

But despite this apparent openness, the Housing Corporation has refused to disclose the results of an inquiry into a troubled IT project - one that could offer valuable lessons for other public sector IT projects - under the Freedom of Information Act.

At issue are the results of a 10-month investigation by independent experts from Methods Consulting into the Housing Corporation's problematic £17m application service provider (ASP) project.

The project, which underpinned the Housing Corporation's IT modernisation programme, has been beset by delays and technical problems since the Housing Corporation awarded the contract for the project in February 2003.

The Housing Corporation's chief executive, Jon Rouse, commissioned Methods Consulting in May 2005 to complete an in-depth report into the project, in an attempt to draw a line under the troubled project he had inherited from the previous management when he took up his post in June 2004.

The inquiry, based on interviews with current and former Housing Corporation staff and an analysis of project records, was designed to identify what lessons could be learned from the project, following what the corporation said were "legitimate concerns" over its "commissioning and implementation".

Computer Weekly submitted a Freedom of Information request for the Methods Consulting report and related correspondence last year. Although the corporation released redacted copies of letters it sent to individuals and organisations concerning the report, it declined to release any of the contents of the report itself.

The Housing Corporation upheld its decision not to release the report in January, following Computer Weekly's request for a review of the decision.

Computer Weekly has now submitted a complaint to the information commissioner. It follows evidence which suggests that the Housing Corporation worked from the presumption of non-disclosure rather than from a presumption of disclosure when assessing the merits of publishing the report.

Computer Weekly is arguing that the Housing Corporation is using exemptions to the Freedom of Information Act that do not apply, and has failed to give adequate weight to the public interest in disclosure.

It has emerged that Rouse asked his then freedom of information officer, Matthew Sabourin, to seek advice from Treasury solicitors on exemptions that could be used to block Freedom of Information requests for the report months before the report was completed.

Well before any findings were known, Sabourin circulated a memo summarising the potential legal exemptions the corporation could use to block any future Freedom of Information requests.

The Housing Corporation later deployed similar arguments when it objected to Computer Weekly's Freedom of Information application in November 2006, and again when the magazine asked for a review in January 2007.

These arguments include the claim that the Methods Consulting report is exempt from disclosure because it contains details of the government's Gateway reviews into struggling projects.

The Housing Corporation argued that publication would "prejudice the effective conduct of public affairs" by inhibiting the ability of civil servants to produce full and frank reports into government IT projects.

Early discussions held by the Housing Corporation suggest that officials were at least initially unsure of the veracity of the "prejudice of effective conduct" argument. At one point, the corporation's freedom of information officer described this exemption as a last resort that was unlikely to apply to the Methods Consulting report.

The question of whether Gateway reviews should be published was put to the test earlier this month at the Information Tribunal, which for four days heard a government appeal against a ruling from the information commissioner that it should publish Gateway reviews of the government's ID cards programme. A decision is expected shortly.

But the central tenet of the Housing Corporation's objection is the claim that the report would prejudice its commercial interests if it was published while it is engaged in legal and contractual negotiations with the former IT supplier, Elonex. The Methods report, it says, mainly relates to goods and services provided by Elonex - material it regards as "commercially sensitive".

Computer Weekly is challenging the claim on the grounds that there would be very little in the report that Elonex would not already be aware of.

We are also questioning whether the Housing Corporation and Elonex's commercial interests would be prejudiced by the disclosure of the report.

Elonex went into administration in June last year, leaving substantial debts. Its assets and name were sold to a printer ribbon manufacturer, Applied Film Industries, which subsequently went into administration itself last September.

The fact the Housing Corporation had searched for legal exemptions to withhold the report before it was concluded suggests it had presupposed that the Methods Consulting report should be withheld.

Computer Weekly is calling for the Housing Corporation to publish at least a redacted version of the report so that others can learn from its experiences managing a difficult IT project.

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Chequered history of Housing Corporation project

The Housing Corporation's troubled £17m IT modernisation project began life in 2002 when the corporation launched a programme to reduce IT costs and improve the services it provides to housing associations.

The corporation, a quango responsible for distributing more than £2bn a year to housing associations, set out to replace its outdated legacy IT systems with a modern thin client network.

At the core of the project was a plan to transfer its key business packages to an outsourcing supplier, which would in turn make them available to Housing Corporation staff, housing associations, and customers over the web using an application service provider (ASP) model.

But the project ran into difficulties almost from the start. In late 2002, before it went out to tender, the Office of Government Commerce issued a red Gateway review warning light, alerting the corporation to urgent issues with the project.

To make matters worse, there was opposition to the project among the Housing Corporation's own IT staff, prompting a series of walk-outs.

The Housing Corporation awarded a seven-year contract for the ASP project to Elonex in February 2003. But analysts raised questions over the effectiveness of the tender process when it emerged that there was a £17m discrepancy between the lowest-cost bid from Elonex and that of a rival bidder.

In June of that year, the ASP project failed to meet its original deadline to roll out the web-based system across all Housing Corporation offices.

The corporation started trialling the system in its Leicester office in December 2003, but a series of technical difficulties led to further delays in rolling out the system.

The project faced further disruption during the first few months of 2004, when several senior Housing Corporation staff, including the former chief executive responsible for the project, left the organisation. In the meantime, a second Gateway review gave the project an amber light, highlighting the need for remedial action.

By June 2004, the Housing Corporation's newly appointed chief executive, Jon Rouse, made a concerted effort to address problems with the project. He revealed in an interview that he was spending 25% of his time on the long-overdue project, and blamed it for low morale within the organisation.

A month later, The Housing Corporation and the Office of the Deputy Prime Minister ordered an inquiry after a whistleblower made "serious allegations" over the project.

In August 2005, the Housing Corporation ordered a detailed external review following further technical problems and a series of slipping deadlines. It hired London-based IT and business consultancy Methods Consulting to conduct a complete investigation.

The corporation terminated its contract with Elonex in December 2005, transferring responsibility for the ASP project to Elonex's sub-contractor on the project, Netstore.

IT director Peter Ford told staff that contractual difficulties with the project had brought work on the corporation's content management system to a halt, and had obstructed plans to replace the corporation's finance system.

Elonex went into administration in June last year, leaving debts estimated at £7m. Administrator Deloitte sold the business, assets and the use of the Elonex name to printer ribbon manufacturer Applied Film Industries a month later. That firm went into administration in September following trading difficulties.

The Housing Corporation is now developing plans for a replacement for the ASP project. It is expected to select a supplier this year.

Staff walk out over outsourcing plan

Inquiry into £17m ASP contract

Housing Corp ends Elonex contract

Comment on this article: computer.weekly@rbi.co.uk


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This was first published in March 2007

 

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