Channel 4 Dispatches - Is the National Audit Office a mere critical friend to government?

Channel 4’s “Dispatches” documentary on Monday 24 September 2007, to which Computer Weekly contributed, questioned whether the guardian of public spending, the National Audit Office [NAO], is too close to some of the departments and agencies it audits.

Labour MP David Taylor, an auditor by profession and former computer manager, told the programme:

“There is almost a cosy cartel at the very upper echelons of the NAO and government departments. There has been a whole succession of failed major projects where the NAO has been very quiet and I am very concerned about that.”

Peter Oborne, presenter of the Dispatches documentary “Nice Work If You Can get it”, said the close relationship between departments and the NAO is “very convenient” for ministers who regularly in the House of Commons quote positive comments from audit office’s reports in support government decisions.

I said on the programme that NAO criticisms of the NHS’s National Programme for IT [NPfIT] were removed before the final document on the programme was published in June 2006.

The programme’s makers had much evidence of how the draft versions of the NAO’s report on the NPfIT were watered down. The NAO to its credit had agreed to our requests under the Freedom of Information Act to release the draft reports..

Tory MP Richard Bacon was also interviewed for the Dispatches programme. He is a member of the House of Commons’ Public Accounts Committee which uses NAO reports to question civil servants on projects and programmes.

He said of the NAO report on the NPfIT:

“I suspect there were people inside the NAO who were fully aware of the scale of what was going on and the scale on which things were going off the rails. But those concerns did not, in their entirety at any rate, and to a very large extent, make their way into the finished, published version of the NAO report.

“I think part of that was [because of] the way in which the clearance process – by which the final text is cleared with the government department concerned – took much longer than normal.”

Peter Oborne said the so-called clearance process is very murky.

“Dispatches has learnt in secret meetings with former NAO auditors that [the clearance process] is not a simple fact-checking process with the appropriate government department. In reality it is negotiation over the report’s conclusions. Even worse our informants told us how departments use clever delaying tactics and bully NAO staff to ensure positive reports.”

Oborne asked Bacon how he could tell when the clearance process has led to a dilution of other NAO reports.

Bacon replied:

“Could there be other occasions when NAO reports are softened in a way that we don’t necessarily get to here about? That could happen. In the case of the NHS IT programme it was very obvious because there were lots of people in NHS IT who were prepared to talk, at least off the record, to me and others and, if you followed it, it was very clear what was going on. It’s a fair question. The only way really to counter that is to be aware of what is going on in whatever area one is looking at.”

The NAO told the programme that it is independent of government and its work is professional and robust. It said that it did raise concerns about the NHS IT programme to Parliament and is now working on a second report.

Comment:

It’s not the fault of the NAO that it is not always ruthlessly independent of the departments and agencies it audits. The problem is the way it is set up. Some senior officials will want ministers to know only the good side of an important project or programme; and a department’s accounting officer has the right to refuse to sign an NAO report until he or she is content with what it says.

So an NAO report that’s unacceptable to the government can go unpublished until it acceptable to the accounting officer of the audited department or agency. The longer the delay the more likely the report will be out of date when it is published. This then gives ammunition to government spokespeople to denigrate its findings as irrelevant or dated.

Leonard Woolf said of his wife Virginia that she, with dogged persistence, worked at every word, every sentence and every paragraph of everything she wrote, from a major novel to a trumpery review – or what almost every other writer would regard as a trumpery review. It’s possible to visualize an official in Whitehall, pen in hand over a draft report of the NAO, reworking every word, every sentence and every paragraph, as did Winston Smith at the Ministry of Truth in George Orwell’s 1984.

Orwell said of Winston’s job, which involved rectifying past Party truths:

“Day by day and almost minute by minute the past was brought up to date. In this way every prediction made by the Party could be shown by documentary evidence to have been correct, nor was any item of news, or any expression of opinion, which conflicted with the needs of the moment, ever allowed to remain on record. All history was a palimpsest, scraped clean and reinscribed exactly as often as was necessary. In no case would it have been possible, once the deed was done, to prove that any falsification had taken place.”

The NAO report on the NHS’s National Programme for IT

Publication of the NAO’s report on the NHS’s National Programme for IT [NPfIT] was so often delayed that when finally released it was almost lyrical in its flattery of the Department of Health and NHS Connecting for Health, which runs part of the programme. Three ministers have quoted from it at various times in Parliament, as though if it were anything but a party pamphlet, to counter criticism of the programme – though they did not always quote from it accurately.

The accusation that the NAO is too close to the departments it audits is not helped by its having had one of its senior members on the programme board of the NPfIT.

But does it matter if the NAO is little more than a critical friend of the government?

It does in public sector IT because the NAO is the only organisation in government that issues formal reports to Parliament on the progress or otherwise of some major IT projects and, more importantly, points out mistakes that are nonetheless repeated regularly.

Last year the NAO published an excellent report on the lessons from IT successes.

But the NAO is not set up to provide the regular external, independent scrutiny that departments need. It writes one-off reports on some large projects and investments; and it audits annual accounts.

A new oversight body?

There needs to be new oversight body that reports regularly to Parliament on the administrative efficiency of government departments and agencies. Without such an organisation, Whitehall departments will continue to be at a disadvantage to the private sector, especially when managing large IT-based projects and programmes.

Whitehall’s disadvantages over the private sector

This disadvantage is marked because in the private sector the fear of project failure among directors is honed by the threat of financial and job losses. This is a strong incentive to succeed.

In the public sector there is no effective individual responsibility on projects. There is instead a senior responsible owner who will be replaced once, twice or even more before the project has finished.

Then there is the minister who has temporary responsibility for a project until there is a reshuffle. Then there is a chief information officer who is probably on a short term contract and who finds that the word “chief” in their title a misnomer.

The public sector is at a further disadvantage. The board of a private company has only the project’s success to consider and it can cancel one that’s costing too much and looks like delivering little. The public sector has to be alive to the fragile sensibilities of the minister whose party can countenance only success.

All these things – plus labyrinthine complexity – work against the success of IT-based projects in Whitehall. So the NAO is all important counter-balance to the lack of accountability and transparency on big and risky IT projects and programmes.

If it is to be any real use to departments and agencies, the NAO has to cut a path through bureaucratic and political interests. It has to assert its independence always. It has to be feared, as the board of directors in the private sector fears the scrutiny of its shareholders. Decisions are sharpened by a fear of the consequences of bad decisions.

Links:

Dispatches – Nice Work If You Can Get It – broadcast 24 September 2007

Computer Weekly contributes to Channel 4’s “Dispatches” broadcast on Monday

BBC – NHS IT report had criticisms deleted

Delivering successful IT-enabled business change

Policing IT in government – is the National Audit Office too timid?

Some Parliamentary questions and answers on the work of the NAO

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Is there any way to find the anticipated publication date of NAO reports, and is there any indication in the difference between scheduled and actual release dates of the degree of departmental amendment concerned before the report could be signed off?

Can we (the voters) safely assume that if an NAO report is delayed, it contains criticisms which Sir Humphrey (and the Minister) would find embarrassing?

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