News Analysis

NAO struggles for truth in Defra IT inquiry

The Rural Payments Agency's Single Payment Scheme uses a £350m IT system to pay farmers the right amount in EU subsidies. But the National Audit Office (NAO) said in a report it published on 16 October that the agency's systems are "very expensive", "cumbersome", difficult to change to keep up-to-date with new policies, and are in danger of becoming obsolete.

But the system is only four years old.

Accenture has 100 contractors working full-time on the system. Each one cost taxpayers £200,000 in 2008/09. The Single Payment Scheme costs about £1,700 per claim, which is six times the cost in Scotland of paying subsidies to farmers.

IT consultant Ben Toth, who runs a small farm and has come into contact with the Rural Payments Agency's Single Payment Scheme, says, "It has got to be one of the most ridiculous IT projects ever.

"The average farm receives a payment of £2,567 per annum from Defra [Department for Environment, Food and Rural Affairs, which includes the Rural Payments Agency]. We receive less than £1,000. How can Accenture feel they have done a good job when it costs more than £1,600 to process each payment? It would have been better to employ 400 new graduates with Excel spreadsheets."

The NAO has published three reports on the problems of the Single Payment Scheme and its IT. The latest NAO report is the most negative. It said that Defra and the Rural Payments Agency had a "scant regard for the proper management of public funds".

Unusually, the NAO was published without Defra's agreement of the factual content of the report.

Normally, as part of a "clearance process", departments sign off NAO reports to show they agree with the facts and figures.

But this time Defra refused to sign off the NAO report - and the NAO published it anyway. It is thought this is the first time in more than 20 years that the NAO has published a report without any sign off.

The episode shows how hard it is to get to the truth after a major government IT failure.

There was also conflicting information given by civil servants to Defra.

The NAO found that, since October 2008, Defra published internally a performance report which contained a formal 'traffic light' assessment of progress against ministerial targets, including targets for the Rural Payments Agency.

In the six months up to March 2009, 13 out of 15 assessments were "green", the other two being "amber". This suggested that Defra was impressed with the agency's performance.

But the NAO did not agree with all of the good reviews of performance.

The NAO also discovered that while ministers were being given a wealth of green lights over the agency's performance, they may not have been given a copy of the agency's internal risk register, which put seven out of the top 10 risks at red and the other three at amber.

When Computer Weekly asked Philip Gibby, a director at the National Audit Office, whether ministers were misled into believing all was well with a £350m IT project at the Rural Payments Agency, he gave no immediate answer.

"I don't want to use the word 'misled' but there has been over-optimistic reporting," he replied.

He added, "[The Rural Payments Agency] has been over-optimistic in the information it has been giving the department and there is not enough scrutiny and challenge of the information the department has been receiving."

The odd thing about Gibby's complaint of over-optimism is that officials at Defra had conceded to MPs three years ago that they had been over-optimistic over their plans and reporting on the IT system from Accenture to pay subsidies of £1.6bn to about 116,000 farmers.

Indeed, excessive and unwarranted optimism has dogged many government IT projects, including the £12.7bn National Programme for IT in the NHS; the Home Office's £234m C-Nomis IT scheme, on which costs more than doubled; and the Libra system for magistrates courts, in which costs rose from about £180m to £444m.

Clearly, over-optimism was a factor in the downfall of the Single Payment Scheme. But it is not the cause; and although the NAO has identified what has gone wrong at the Rural Payments Agency, it has not said why.

This is because the NAO is barred from discussing political policy - although it is the incomprehensible complexity of the government's policy that is a likely cause of the implementation failure.

On 26 October 2009 the Public Accounts Committee will meet to question civil servants at Defra and the Rural Payments Agency over the Single Payment Scheme. With so many facts in contention, it could be an acrimonious session.

But still it won't decide the cause of the failure - because the Public Accounts Committee, like the NAO, is not allowed to discuss political policy.

So will the full facts about the Single Payment Scheme ever emerge? In government IT disasters they never do.

Posterity nevertheless has the benefit of the comments of Richard Bacon, an MP on the Public Accounts Committee:

"The problem was clear: the government chose to introduce the most hideously complicated of all the possible payment schemes, in the shortest of all the possible timescales, while sacking its most skilled and experienced staff and replacing them with temporary agency workers in order to achieve 'efficiency' savings."

These won't be the official findings of the Public Accounts Committee, but they are the closest anyone is going to get to the truth.

NAO hits brick wall over Defra's Agency's IT failure - IT Projects Blog >>


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