Information systems failure led to today's budget

The Chancellor started his statement with the mantra that we are having to cope with the fall-out of a financial crisis that started in America. An alternative view is that the crisis was caused by a global failure of information governance. This started in the overseas operations of the American Banks (based in London) and spread via the delusions of grandeur of the Scottish banks. Those at the top did not understand the risks they were running. Worse, they still do not.

The state of UK public sector finances can be traced to similarly spectacular failures of information governance, compounded by an obsession with clever hardware and software structures rather than the wetware (alias people processes) that the technology is there to support. 

The good news is that both Prime Minister and Chancellor have recognised that part of the way out of our current crises depends on using world class communications networks to cut the cost of public service delivery.

The less good, but not necessarily bad, news is that they are looking to plan their way out while accusing the opposition of leaving it to market forces: the implication being “planning good – market forces bad”. The Chancellor said they would not be “interventionist” but it would be irresponsible to be “hands-off”. That was the language of Tony Benn’s Ministry of Technology tri-partite planning agreements and the associated co-funded studies.

As a young business graduate in 1973 I found myself running one of those studies: the ICT-DTI Study Contract into “Data Processing in the Water Industry. It was the only one to succeed – we won 80% of the market in open competition because we understood what the customers wanted and, equally importantly the constraints withion which they would be operating.

One of the keys to our success was that I got clearance to begin with a six week exercise in which a couple of the senior finance directors in the industry helped me take apart the finances of the industry as a whole, using the year books of the Institute of Municipal Treasures and Accountants, The Sewerage and Drainage Boards and the River Authorities to build a “computer model” of “a typical Regional Water Authority”. They wanted this for their own purposes and part of their guidance was to ensure I understood, but kept quiet about, who used which tricks to rig their position in the “league tables”. 

In the course of that exercise I discovered just how little Whitehall (alias then Department of the Environment) know, or even thought it should know, about the industries it was blithely re-arranging. That did not come as a surprise because I was born into a public service “tribe” and had been told what to expect.

I fear the same is still true today – including with regard to the telecommunications industry. The main difference is that we have an even bigger morass of misleading data and even more unrealistic aspirations on the part of Whitehall and its accolytes, including regulators and consultants.

I hope that if the PM and Chancellor really do believe in a new generation of MinTech style industry strategies they will learn from our past successes as well as our failures. My study was launched with no fanfare and no statements of public support (although the key players recognised the sections they had “dictated”). The parallel study into law enforcement systems had a public fanfare, statements of support from on high and sank without trace.