IT Stockholm Syndrome is slowing down reform of bad practice in government - part 2

Stuart Lauchlan Profile picture for user slauchlan July 24, 2014
In part two of this article, the ghost of the NHS National Programme for IT rises up to remind government why it shouldn't pick a fight with its suppliers.

In the first part of this article, we looked at the progress - or lack thereof - of HMRC's efforts to reform its Aspire outsourcing contract. In part two, we touch on a grim reminder of a really bad government IT project...

For all its evident issues at present, Aspire has long been held up as a good example of a forward looking public sector IT and outsourcing contract, unlike the totem to bad public sector ICT, the NHS’s National Programme for IT (NPfIT)

Although now officially (if not practically) cancelled, the NPfIT  this week provided a timely reminder of what happens when government does decide to pick a fight with its suppliers - and why that so rarely happens.

I don’t propose to dig over the history to this devilish project - there isn’t time for one thing,  but you can get the background here - but the pertinent incident to note on this occasion was the decision by Fujitsu to sue the Department of Health (DH) for £700 million after it was was kicked out of its £896 million share of the contract.

This week it emerged that after going to arbitration, it looks like Fujitsu won and the government lost. Neither party has yet issued formal confirmation of the outcome, but if the payout were close to the £700 million being sought,  then it would be the biggest single compensation payout in the NHS’s 60 year history.

And that’s before we add in the government legal bill fighting the claim, which were last stated to be £31.45 million back in 2012. What the final bill comes to is anyone’s guess at present.

Fujitsu's on a PR hiding to nothing here for that alone, regardless of the merit or otherwise of its claim! As TechMarketView's Georgina O'Toole notes:

The trouble for Fujitsu is that, whatever the outcome, it will be seen as the bad guy. If the press reports are correct, it will be criticised for taking a huge amount of taxpayers’ money. But if the opposite outcome were true, it would be criticised for ineptitude on a major Government IT project.

In the long-run, we would say that protecting its reputation as an IT supplier to Government capable of delivering on large programmes is preferable. The negative impact of a Fujitsu 'win' will likely pass far more quickly (today's news, tomorrow's fish & chip wrapper).


Hush hush

I’m not going to try to take sides or comment on the specifics of the possible verdict since, as one of the taxpayers who's funded the case and now presumably the compensation, I, in common with the rest of the British public, have not been made party to the details of the case.

Nor does it seem likely that we will be let in on the secret. A Cabinet Office spokesman told the BBC:

Fujitsu are an important supplier of IT services to the government. The government does not comment on contractual disputes with suppliers.

Meanwhile a Fujitsu spokesman dutifully added:

Fujitsu has been a strategic partner to the UK government implementing critical IT for the last 40 years and we are committed to working closely with the UK public sector for the next 40 years and beyond. However, we do not comment on our government contracts.

Jolly good - that puts my mind at rest certainly.

I find myself in complete agreement with veteran public sector campaigner Tony Collins, who notes that governments do not like going into an open courtroom against their suppliers and airing their dirty laundry - and their contracting bad practice:

In an era of open government it is probably not right for officials and ministers at the Cabinet Office and the Department of Heath to be allowed to secretly plunge their hands into public coffers to pay Fujitsu for a massive failure that officialdom is too embarrassed to talk about.

Why did the DH in 2008 end Fujitsu’s contract rather than renegotiate its own unrealistic gold-plated contract specifications? Should those who ended the contract be held accountable today for the settlement?

The answer is nobody is accountable in part because the terms of the dispute aren’t known. Nobody knows each side’s arguments. Nobody even knows for certain who has won and who has lost. Possibly the government has paid out hundreds of millions of pounds to Fujitsu on the quiet, for no benefit to taxpayers.

My take

I’m enormously supportive of the Cabinet Office’s determination to reform public sector IT and applaud the efforts of those in the upper echelons who are driving through change.

That said, the near demonisation of the big ticket suppliers, the oligoply, probably went on too long. There’s little sign to my mind of their grip on government - or rather the government IT decision makers at departmental level - being genuinely broken. Resistance to change at a cultural level is the biggest single barrier to reform. You don’t get sacked from buying from IBM etc etc.

There’s an election looming next May and with the polls the way they are, no-one can predict which party will responsible for IT strategy this time next year. I’ve already heard of one ‘oligopoly’ member who’s unofficial policy at present is to ‘sit it out and see’ in the hope that the current reformers are replaced.

It is to be hoped that whatever administration wins power, the reform path will continue to be pursued. As the rumored Fujitsu settlement reminds us all too depressingly, there’s an awful lot of public money at stake here.

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