Getting more for less: the reform of public service delivery

IT suppliers find it hard to understand the animosity to them from politicians when they are blamed for “failure” despite having done all that the contract said. The reason is that the politicians remember being told that the new system will do whatever they want – but not that they had to be clear about what they wanted – and were not allowed to change their minds.

That is the first message from the politicians crib sheet just released by the Information Society Alliance – EURIM.  – a one page summary of the main points from their Guide to Good Practice in Procurement – produced to aid discussion on good practice in delivering best public service delivery at lower cost – with links to the current guidance from the Audit Commission, OGC and National Audit Office.

Commending the summary to MPs and to Parliamentary Candidates, Stephen Timms, Financial Secretary to the Treasury as well as Digital Britain Minster, said:

“I welcome EURIM’s brave attempt to summarise thousands of pages of reports and guidance into a simple crib sheet for politicians. I hope it will cause those responsible for policy planning, procurement and implementation to follow up the references to the Audit Commission, BCS, Intellect, NAO and OGC material on which it is based. It is a useful aide memoire for us all, as well as a succinct summary of what the next generation needs to learn, to avoid repeating the mistakes of the past.”

A key message is that the degree of clarity over objectives and candour over the risks to be managed usually determines success or failure before the start of the procurement process.

The full text is below:

Good Practice in Procurement

“We know why projects fail, we know how to prevent their failure – so why do they still fail?” Martin Cobb, Treasury Board of Canada Secretariat.

EURIM has distilled the reports and guidance on procurement produced by the Office of Government Commerce, the National Audit Office, the Audit Commission, Intellect (the Technology Trade Association), the British Computer Society into 4 pages, including links to the sources.

The key points are:

1. Agree clear business outcomes before you start
Procurement should not start until those at the top have set clear, achievable, objectives – including what “success” means and how it will be measured. It is lack of clarity and consistency with regard to objectives, not size or complexity, that makes public sector projects riskier than those in private sector

2. Be realistic and candid about risk, especially politically related risk, at all stages

The cost of public service contracts reflects the risk of changing political objectives and priorities in the face of external pressures. The transfer of unmanageable risk increases cost. Risk is best managed by those in a position to take timely and effective action.

3. Avoid inventing new wheels: reduce risk by recycling and adapting where possible

Most public sector projects can be delivered using technologies that have been tried and tested elsewhere. The bigger challenge is the need for changed ways of working on the part of those using the new systems. Management and staff need to be motivated to welcome change that enables them to deliver tangible benefits, rather than for its own sake.

4. Do not over-emphasise price: lowest cost is rarely best value or service

Pressing suppliers too far on price is counter-productive. They will ultimately have no choice but to cut quality by, for example, using cheaper, less experienced staff. Best value also requires looking at the solution proposed, relationship, delivery approach and behaviour.

5. Focus on rewarding achievements, not on penalising failure

Incentives need to be thought through: time to answer calls, for example, should not become more important than providing a satisfactory answer. Shared programmes to develop skills in relationship management and disputes avoidance can help cement co-operation.

6. Regularly monitor performance and continued relevance of outcomes

It is good practice to agree a Joint Statement of Intent between senior executives in the customer and supplier organisations, in parallel with awarding the contract. This should then be communicated to all involved as the basis for ongoing review of delivery, including whether the outcomes are still relevant and achievable.

7. Do not skimp on testing, including of security, resilience and people processes

Additional testing cannot make up for deficiencies in specifications but it is essential that projects under time or cost pressure do not economise on planned acceptance testing, particularly with regard to periods of use under working conditions by typical operations staff before going live.

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A key point that your article and much of the guidance consistently fails to address is the role of poor business and process design in both IT failure and poor public service delivery.

Many of the recent major failures, including the Child Support Agency (CSA), HMRC's New Tax Credits (NTC) and the Rural Payments Agency (RPA) have their roots in excessively complex business processes which are then labouriously built in to the IT design. This leads to complex and difficult to support IT systems and delays in implementing changes to regulations and legislation.

In each of these cases the public sector has devised a complex business process requiring data to be capture and documentary evidence to be provided (which then has to be scanned and electronically retrieved). There appears to be little or no reality check on the proposed processes before procurement or implementation. So each of these systems suffered because the process design failed to take account of reality, e.g. for the CSA - the real world circumstances surrounding child support and the breakup of relationships; for NTC - the initial reporting requirements for personal/family circumstance changes were onerous and created a high volume of changes to awards - resulting in recalculations and repayments; for RPA - a complex capture of data, reflected in processing costs for single farm payments which are 6 times higher in England than the equivalent processing costs in Scotland. Clearly lessons are not being learnt and simply issuing more procurement guidance is not going to change this ingrained behaviour.

Re number 4. ("Do not over-emphasise price: lowest cost is rarely best value or service"); it can not be repeated too often that "price" and "cost" are not synonyms and this piece of advice should be criticised for such an egregious error of wording.

Comment from Philip Virgo: the wording in the summary was deliberate - to cause readers to pause for thought about the difference between price and cost, read the longer version and then move on to some of the more detailed guidance,