Government to review all Atos contracts over £10m – but can it really point the finger?

The Public Accounts Committee recently criticized the outsourcing firm after it emerged that Atos had not delivered on a NHS data extraction system, costing millions of pounds.

The British government is to hold a review of all contracts worth more than £10 million held with Atos, following a scathing report from the Public Accounts Committee that found that the outsourcing company did not show an “appropriate duty of care to the taxpayer” when working on an NHS IT project.

However, whilst Atos has proven to be an ineffective supplier in a number of cases, when the government is conducting its review it should also consider the role it has played in managing these agreements.

It’s worth remembering that this isn’t the first supplier to come under fire for poor performance following a botched IT outsourcing deal. CSC, G4S and Serco have all faced similar scrutiny.

And so, whilst Atos likely deserves its fair amount of criticism for its role, equally I think we need to remember that there are two parties involved here and that the government cannot likely place all responsibility for failure on its private providers.

And that the government’s commercial capability has been regularly highlighted as lacking when it comes to contract management, which often leaves it in a tight corner when things go wrong.

Equally, how effective are these reviews in driving change? Obviously something needs to be done, but it seems that the long term results are never particularly significant. For example, those suppliers that have been investigated or criticised in the past still continue to win government contracts.
All eyes on Atos

The project that has prompted this review is the General Practice Extraction Service (GPES), which was intended to allow eight NHS organisations extract data from all GP practice computer systems in England. The data extracted was supposed to allow for better monitoring of quality, better planning of health services and to keep up with medical research.

However, the Public Accounts Committee found that the project overran by a number of years, the costs increased from £14 million to £40 million (with at least £5.5 million of write-offs) and that the service was only delivering about half of what it was specified to do.

The report stated:

“We are not satisfied Atos provided proper professional support to an inexpert client and are very concerned that it appears to have acted solely with its own short term best interests in mind.

We found that Atos’s chief executive, Mr Adrian Gregory—the company’s witness in our enquiry appeared rather indifferent to the plight of the client; we expect more from those contracting with government and receiving funds from the taxpayer.”

In addition, the Committee recommended that the Cabinet Office should “undertake a full review” of Atos’s relationship as a supplier to the crown. Today the Cabinet Office said:

“In line with the Committee’s recommendation Cabinet Office is undertaking a review of all current ATOS contracts with Central Government with an annual spend over £10 million.”

Estimates of how much the government spends with Atos vary, but is thought that this could be anywhere between £500 million and £3 billion.
All eyes on government

However, as noted above, Atos wasn’t the only party to come under fire from the Public Accounts Committee. Yes, it has a duty of care to the taxpayer, but if the government is going to insist on outsourcing much of its capability to the private sector, it needs to realise that more often than not that those companies are going to mostly be concerned with their bottom line.

And that if they want to get the most out of the suppliers, they need to have a capability that matches what can be found in the private sector.

For example, the Committee’s report also noted:

“The Department accepts that NHS IC did not have the expertise or capability required to run this project and that the governance arrangements were not fit for purpose. There was an exceptionally high level of staff turnover in key roles with ten project managers over a five year period and three Project Board Chairs over three years. The Department did nothing about this despite concerns raised by their own gateway review team. The Department also raised concerns about the adequacy of the testing, but NHS IC did not act on them but instead chose to accept the risk and sign off the system.”

And:

“Whitehall is not learning from past failures in IT projects, and is still repeating the same mistakes. This project exhibits many weaknesses common to other high profile IT failures such as the National Programme for IT in the NHS, the Single Payment Scheme and Tax Credits. These include; lack of staff continuity, inadequate testing, the wrong contracting approach and a governance structure which was not fit for purpose. Whitehall has to start learning from these failures and make real changes to how IT projects are managed and delivered.”

As the Committee highlighted, on this particular project, plus many others, the government did not fulfil its duties to the taxpayer by acting as the best buyer it could to deliver on requirements.

We have seen similar criticisms across a number of IT projects in the past, where the government’s commercial skills have been so poor that suppliers have been allowed to fail without any repercussions. The government’s inability to properly manage contracts has often meant that a lot of the responsibility (and cost) has often fallen with the buyer.

We are all too aware of the skills problem facing the public sector at present, where the need to attract some of the best tech talent is being balanced against the need to slash budgets. And whilst certain gaps are being filled and there is evidence of some top talent being attracted, it’s clear that the skills problem is still very real.

And until that problem is solved (which is likely going to not only come from bringing in top talent, but g-cloud-big-ben-government-westminster-cropalso up-skilling current civil servants and figuring out ways to change behaviours and culture), these project failures will persist.
My take

 

Whilst the Atos review is probably entirely necessary, I hope that when the government is assessing all of the contracts it holds with the company that it is prepared to find that it is also not performing as well as it should.

Both outsourcing provider and government buyer have a duty of care to the taxpayer. But it seems that for the government it is sometimes easier to point the finger of blame outwards, than it is for it to consider that for long term change it needs address its internal faults.

Want long lasting change? Fix the problems internally first.

Source: diginomica.com-Government to review all Atos contracts over £10m – but can it really point the finger?

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