DWP outlines challenging progress to cloud and smaller contracts

Madeline Bennett Profile picture for user Madeline Bennett April 2, 2017
The Department for Work and Pensions (DWP) doesn’t have the best track record when it comes to digital agility. Can it make the necessary improvements?

The Department for Work and Pensions (DWP)

was at Cloud Expo Europe last week, keen to highlight the progress it has made on its digital transformation journey, one that has been typically long and complicated as befits any large UK government department.

The journey was prompted by the arrival of the coalition government’s ICT strategy back in 2011, which called for better efficiencies, reuse of services, openness, and a move away from large IT contracts and towards smaller suppliers. Under the strategy, no contract was supposed to be over £100m for its lifetime value and no hosting contract was meant to be longer than two years.

At the time, DWP IT was totally outsourced, so James Barton, head of Delivery Leadership at DWP Digital, knew everything had to change.

There was going to be a move away from Tier 1 suppliers, levelling the playing field for smaller suppliers, sharing solutions and a cloud-first policy. This has been a long journey, it’s six years and still counting. A department like ours is very large, so changes do take a long time.

There has been scant evidence of the DWP’s savvy handling of IT contracts. Back in 2008, the department launched the tendering process for a two-package desktop services deal worth £4.5bn, which HP won a chunk of. By 2010, the DWP had ditched HP and handed the contract to Fujitsu; a year later, roles were reversed – Fujitsu lost the deal and HP was reappointed.

This pattern continued even post-2011. In 2014, the DWP put out a request for bids for an IT contract worth up to £120m to replace the DWP’s existing hosting services deal with HP, signed back in 2002 to the tune of £440m. Fast forward to February 2015, when the deal was about to expire, and the DWP announced it had awarded a three-year hosting contract to none other than HP. But Barton insists the DWP is adapting its approach to suppliers.

We want the department to be a better place to support third parties. Removing barriers of entry we had in the past from the outsourced contract and making it so that subject matter experts and small organisations can come in and do what they do best in a cost-efficient way.

As the UK’s biggest public services department, responsible for delivering pensions and benefits, the DWP has millions of people relying on a successful transformation. Barton, who has been with the DWP for 10 years and is responsible for all major IT infrastructure projects, compares its scale to that of a sizeable retail organisation, with 800 locations and a large network of contact centres employing 85,000 people across the UK. The DWP pays out £2.8m every day in benefits, has a budget of £168bn, and serves 22 million customers, who Barton says can expect an improvement in services.

We’re looking to build a better digital service. We want to do this around our new systems, based on cloud. We want to choose the best technology out there. This is digital transformation on a massive scale. The department still has a lot of legacy systems, a lot of old systems and this is part of transforming all that into the new cloud technology.

Moving away from legacy

But the DWP faced a large obstacle to achieving this kind of transformation: its existing all-encompassing IT outsourcing contract, according to Barton.

It fixed all the problems we had prior to that contract around resilience, security and stability. But there are problems with those large monolithic contracts: maintaining the currency of the technology; continually struggling to get off the old operating systems; applying patches; unable to get the cheaper, quicker, better devices in as there’s no real incentive for innovation.

We drifted away from market competitive prices. We ran benchmarks and by the last one we had no single price in competitive rates.

But exiting such a large contract was never going to be a short-term programme, and Barton noted that the DWP was lacking the facilities, the capabilities and the people to support its own IT.

We were looking to disaggregate, we want contracts that are less than £100m. When we started this seemed impossible, to get to £100m. We had an annual spend of £260m. The strategy was to do something very different.

Barton emphasised how big a job the DWP faces in moving its applications from one outsourced infrastructure to its own cloud-based systems by sharing the current IT setup at the department.

We maintain over 1,000 applications. They’re not all big, but some are extremely big – we have some of the largest databases in Europe, if not the world. Some are very small, you wouldn’t really refer to them as an application, more a spreadsheet or an Access database.

We process more payments every day than several banks. We run 50 million lines of code within the applications. We exchange 10 million data records with other departments, with local authorities and their agencies. We have about 10,000 changes to our IT systems every year. Most of those changes are legislative, we have to put those changes in line and respond by a certain date. And we respond as a department to 2.2 million IT issues per year, in the offices, on the phone and online.

The problem the department faced quite quickly was that systems needed to be migrated away from the old mainframe and Unix infrastructure. One of the first steps on the DWP’s digital journey was to acquire some of its own data center space to host applications, along with starting a DevOps programme and building its own cloud capability. It is using private cloud hosting for the most sensitive data, and is also considering services such as AWS for functions like testing.

By the end of April, the data center will be ready to host applications, and it already has its private cloud tested. The next step is to migrate the applications onto cloud hosting.

The key elements of that, both in terms of monitoring, and deployment and testing, is we’ve made big strides as a department to introduce the automation required to enable repeatability and resilience. So far about half of the applications have been moved out of the monolithic contract. The data center is up and running for test and dev; within the next month, that’s when it’ll start being ready for production.


Barton also has to contend with the current government’s commitment – or lack of – to the digital and cloud-first strategy set out by previous Cabinet Office Minister, Lord Francis Maude. As Derek du Preez noted in his exclusive interview with Maude in February, there is a general consensus among the new powers that be that too much power at the centre is fractious, and more emphasis is being placed on departmental-level capability. There is also a softening of approach towards the larger technology suppliers. When questioned on how this affects his job, Barton explained:

Why does it take us from 2011 to do some of these things? It’s those kinds of reasons. There were five predecessors heading up the programme that delivers this, one was initially my boss, he was a really really good guy. Why did he fail? Things change, the money wasn’t there.

It’s a real problem for delivering things across government. How do we keep things going? We have to remain flexible, we have to be able to react to those things, and I think cloud gives that.

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