CIO interview: Simon McKinnon, chief digital and information officer, DWP

The Department for Work and Pensions’ CDIO sheds light on its digital ambitions and how it is bringing more digital capability in-house through the integration of Benefits and Pension Digital Technology Services staff

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The Department for Work and Pensions (DWP), which has close to 100,000 staff and disburses around £160bn in welfare payments each year, has taken another step in its strategy to bring digital capability in-house.

Around 1,000 IT professionals at the Benefits and Pension Digital Technology Services (BPDTS) company became civil servants on 1 July, as part of DWP Digital.

The BPDTS was set up as a government limited company in 2016 and was originally made up of former HPE employees. Around 400 HPE staff joined the subsidiary organisation, which has provided IT services to DWP’s digital group since March 2017. 

Its integration, says Simon McKinnon, chief digital and information officer (CDIO) at the DWP, is part of a move to bring IT and digital expertise and operations in-house.

McKinnon has led DWP Digital since January 2019, prior to which he spent seven years as children, health and pensions services technology director at the department. He started his career in IT as a management consultant at Price Waterhouse in 1982, having previously studied geography at Mansfield College in Oxford.

He describes the BPDTS absorption as part of an overall plan to “disaggregate our large, long-standing outsourced contracts, which were past their usefulness”.

“We wanted to bring our skills in-house to take back accountability. As part of that, we’ve derived significant savings, which we’ve used to invest. But we also needed to TUPE out the people who were in HP. [They helped us] create the kernel of a wholly owned government limited company to provide a partner supplier capacity for the DWP. For four-and-a-half years, that organisation has been providing services and capacity to help the department drive through its digital agenda,” he says. 

“Bringing [BPDTS colleagues] into our organisation gives them the opportunity to be in the mothership and [means] we will be able to lean on their capability and ideas and drive our digital agenda forward more aggressively”

Simon McKinnon, DWP

“We were reviewed by the Treasury and its recommendation was that we brought the two organisations together. We’re really excited about that, because there are 1,000 colleagues in BPDTS who have a lot of capability and skills. Bringing them into our organisation gives them the opportunity to be in the mothership and [means] we will be able to lean on their capability and their new ideas and drive our digital agenda forward a bit more aggressively.

“Over the past nine months, we’ve been managing the process to TUPE them into the civil service, into the department, as part of a new digital group for DWP. And that’s where this opportunity has come from. As a consequence, the headcount I’ve got will go up by roughly 1,000 people, to 4,700, making us one of the larger digital functions in central government,” says McKinnon.

Moving BPDTS into DWP might sound like a big change for the department, but McKinnon doesn’t believe it will be a radical one. “The two organisations have worked side by side, desk by desk, for much of the past four years,” he says.

What will be different is that previously, those working in BPDTS were providing services based on strategy driven by DWP colleagues, but will now be able to take a more active part in driving the agenda forward.

The digital agenda

The merger fits nicely into the department’s wider and rather ambitious digitisation plan of existing services. Over the past few years, DWP has moved away from being a largely outsourced department, gradually moving services and products in-house.

A prime example of this is the build of its in-house virtual machine environment (VME), which replaced 11 key benefit systems paying out more than £150bn a year to citizens, without any downtime. The project came to a culmination in the midst of the pandemic, and was a massive undertaking.

DWP’s old VME mainframe services had been fully managed by Fujitsu since the system was first installed in 1974, and most of the department’s critical IT systems, including the benefit systems, were still being run on the proprietary operating system, originally developed by ICL before its acquisition by Fujitsu.

There was, unsurprisingly, no longer a wish to maintain a 40-year-old operating system, says McKinnon, adding that many of the old services in the department no longer met users’ needs.

“Users now want to have, in general, an online service. They want to have better communication, and those services are so old, it’s very difficult to give them the sort of experiences they want, so we’re rewriting all of them over the coming three to five years,” he says.

Moving services in-house has also meant changing the way teams work. The department has built agile teams around the services and built up skills and capacity over recent years.  “Our intention is to use those agile squads to advance on a fairly broad front – the transformation of our services and the automation of those services,” he adds.

Changing culture and branding

“We were largely a supplier management function five or six years ago [but] we’ve now built our own capacity. That’s meant we’ve had to change our culture, we’ve had to change the way our brand is seen in the marketplace so that we can attract people who have more contemporary skills,” says McKinnon.

“We think we’re now a fairly modern IT function, whereas historically we were rather behind the curve. I think we’re now quite close to the front.”

About two-and-a-half years ago, the DWP began a project to migrate most of its hosted applications from a managed service in a third-party datacentre to services that the department built out through the Crown Commercial Service framework, taking a hybrid cloud approach.

Following its migration to the cloud, McKinnon says service levels have improved beyond all recognition. “We have less than 10% of the outages that we used to have four or five years ago,” he says.

However, moving services in-house does not mean getting rid of suppliers. The department still works with several third parties to supplement its skills base and bring additional capacity, as well as working with software providers and consultancies.

“It’s not that we brought everything in house – what we have done is brought the ownership of things in-house. [Rather than being] dependent on suppliers, we now use them to supplement our own teams, and that’s been extremely effective in helping us drive forward some of the transformational work we’ve already done.”

Universal Credit

As well as bringing existing services in-house, one of DWP’s biggest projects over the past few years has been the much-talked-about and sometimes controversial benefits service, Universal Credit (UC).

The UC programme first began in 2010, before a restart at the end of 2013/early 2014 when DWP began rolling out the new benefits system in stages. By the end of 2015, it had rolled out a limited version of the system, referred to as the “live service”, but targeting only the simplest of claims and using an IT system run by external providers that was rarely updated. 

In 2016, it began rolling out UC “full service”, covering the entire complexity of the scheme to replace six different in-work welfare benefits with a single payment. The roll-out was completed in 2018.

“You have to understand your customers really well to give them the services that they can consume”
Simon McKinnon, DWP

The service has had its challenges, but McKinnon describes UC as a “really resilient service” that “got us through the pandemic”. Without the digitisation of that service, he says, DWP wouldn’t have been able to cope with the extra demand, which in the first week of lockdown was 10 times greater than normal.  

During the first couple of weeks of lockdown in 2020, nearly one million people signed up for UC.

One of the issues around UC has been the use of the government’s identity platform Verify, which resulted in users struggling to verify their identity. The government is now working to shut down Verify and replace it with a new digital identity service.

“The trouble with Verify was that it was not very well suited to the demographic of people that we serve. It required people to have passports and driving licences, and ready access to data that would substantiate who they were,” says McKinnon.

“Many of our customers are simply not in that position because they’re a little bit more vulnerable in society and may not have access to those sorts of documents. So we’ve broadened the ways in which we can verify people, including using our own data to make that possible. That’s increased our ability to verify people online and therefore give them access to the benefits they are entitled to.

“Part of the lesson we’re all learning is that you have to understand your customers really well to give them the services that they can consume,” he says.

Coping with Covid

As well as ensuring the department could cope with the huge increase in demand for Universal Credit during the Covid-19 coronavirus pandemic, DWP also had to figure out how to enable a largely office-based organisation to work remotely.

“We had to do some pretty challenging things to increase our capacity to work from home, but also to get PCs to people. We’ve rolled out over 80,000 PCs to people’s homes,” says McKinnon.

The DWP also had to build new services quickly. In eight weeks, the department put in place an online application form for pension credits to free up capacity on UC, as well as spinning up its new Kickstart scheme in six weeks. Kickstart aims to provide funding to employers to create jobs for young people on UC.

McKinnon says these sorts of experiences have provided two lessons for DWP. “The first one has been that demand for digital services is high, and that the propensity of some people, particularly those on pensions credit, to use digital services was probably higher than they thought.

“It’s also taught us something internally about the value and opportunity that comes from digitising our services, and that’s why we have ambitious plans to move forward on that automation journey.”

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