UK public sector could save £20B by swerving mega-projects and more, claims chief auditor
- Reference: 1705405506
- News link: https://www.theregister.co.uk/2024/01/16/dolphins_not_whales_will_help/
- Source link:
Along with modernizing legacy systems and improving technology procurement, Gareth Davies, head of the National Audit Office, said tackling fraud and getting a grip on failing mega-projects would also help liberate cash.
[1]Speaking to the Financial Times , he said more than £7 billion ($8.84 billion) of savings could come from overhauling public procurement, £10 billion ($12.62 billion) from clamping down on fraud and £6 billion ($7.57 billion) from lashing tax evasion and avoidance.
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But legacy IT systems were also in his sights. Better use of IT is vital to improving public services, said Davies. Some government departments were using 30- and 40-year-old computer systems. For example, in 2021, the [3]NAO found that a computer system from the 1980s was one of the causes of a scandal which led to more than £1 billion ($1.26 billion) of state pensions not being paid.
[4]
[5]
He also encouraged the government to take risks with IT project, even if the [6]Post Office's Horizon scandal highlighted the dangers of new projects.
"Our view, as auditors, is that those are risks that need to be embraced rather than [government] being so risk-averse that you fail to take advantage of the big opportunities that are coming," he told the broadsheet.
[7]Gov to take axe to big IT contracts soon, will hand chunks to SMEs
[8]HMRC signs up Bain for £10.7bn Aspire migration
[9]UK Post Office admits false accusations after computer system cockup
[10]UK.gov plans to overhaul £6bn in big IT deals 'watered down'
Davies argued that failures, such as Horizon and the now-abandoned £10 billion [11]National Programme for IT in the NHS, showed targeted, smaller projects could reach their goal faster.
"The phrase used in the IT industry is 'dolphins not whales.' So manageable projects compared to gigantic, overambitious attempts to change the whole world with one IT system," he said.
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In December 2022, the NAO reported legacy services were becoming increasingly expensive to maintain. It said a [13]Cabinet Office-commissioned report , "Organising for Digital Delivery," cited government analysis which indicated that nearly half of all technology expenditure across government in 2019 was dedicated to "keeping the lights on activity on outdated legacy systems."
How governments become addicted to suppliers like Fujitsu [14]READ MORE
Despite Davies' claims, it's important to note that the government has been here before. In 2017, [15]The Register revealed how the plans to overhaul £6 billion ($7.58 billion) in large IT contracts expiring within the next three years have fallen by the wayside. Insiders said the distraction of Brexit and a lack of will by the Government Digital Service under Kevin Cunnington's leadership were to blame for the watering down of the reform agenda. ®
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[1] https://www.ft.com/content/778af0b1-f93c-4b78-b980-0cf6da9be6f0
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/publicsector&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2Zaa2NzoFZTNmWSs9I6KgxwAAAAk&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://www.theregister.com/2021/09/22/icl_mainframe_uk_pension_errors/
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/publicsector&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Zaa2NzoFZTNmWSs9I6KgxwAAAAk&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/publicsector&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Zaa2NzoFZTNmWSs9I6KgxwAAAAk&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[6] https://www.theregister.com/2020/06/11/ukgov_post_office_fujitsu_horizon_review/
[7] https://www.theregister.com/2016/03/22/gov_will_hand_more_it_biz_to_smes/
[8] https://www.theregister.com/2015/10/23/hmrc_signs_up_bain_for_aspire_mega_deal_migration/
[9] https://www.theregister.com/2013/07/09/post_office_admits_false_accusations_after_computer_system_cockup/
[10] https://www.theregister.com/2017/05/18/ukgov_halts_6bn_overhaul_in_it_contracts/
[11] https://search.theregister.com/?q=npfit&advanced=1&author=&date=the+dawn+of+time&results_per_page=20
[12] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/publicsector&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Zaa2NzoFZTNmWSs9I6KgxwAAAAk&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[13] https://www.theregister.com/2022/12/12/governments_spending_analysts/
[14] https://www.theregister.com/2024/01/11/fujitsu_public_procurement/
[15] https://www.theregister.com/2017/05/18/ukgov_halts_6bn_overhaul_in_it_contracts/
[16] https://whitepapers.theregister.com/
Re: A plan to
This might be a ridiculous idea, but rather than a bunch of generalist civil servants and politicians negotiating with an IT supplier, how about involving people who know the technology and people who know what the problems are to be solved by the technology.
I have seen outsourcing work quite well when there isn't a pressure to deliver $mega_system but rather to implement what the end users need. Actually that's been a recurring theme in my career: lots of expert user involvement correlates with success and little or no involvement correlates with delivering a pile of expensive crap. Oh, and the purchaser has their own IT involved in design assurance and all that
Re: A plan to
Yes, but how this would help party donors buy another yacht?
Re: A plan to
"how about involving people who know the technology"
But where are these people? Certainly not in ministerial office and probably fairly fe in ministerial offices. Long term dependence on outsourcing is liable to end up in a lack of the knowledge to manage the outsourcing effectively.
Erm
"£6 billion ($7.57 billion) from lashing tax evasion and avoidance."
Tax avoidance is acting legally. Its following the law and being a good person. Why try to conflate legal good actions and tax evasion?
Re: Erm
In many instances remains tax avoidance because big corporations are not being investigated by HMRC, perhaps deliberately.
Re: Erm
HMRC are not well resourced. I am sure that this is unrelated to the funding of political parties. I don't see any private companies thinking that slashing your accounts receivable department is a good idea. Not even Twitter.
Re: Erm
HMRC have resources but they are misallocated. Why would they do some real investigative work if they can put their feet up and focus on low hanging fruit and wild goose chases?
Re: Erm
>>Its following the law and being a good person.
Hmm... Naïve or just an apologist? Hard to tell.
Re: Erm
@AC
"Hmm... Naïve or just an apologist? Hard to tell."
So everyone is a criminal even if they are law abiding? I see why you are AC
Re: Erm
"Naïve or just an apologist? Hard to tell."
Neither. He's just stating the fact, which is that it's a legal definition. There was a legal judgement long ago which stated that no man was obliged to organise his affairs to maximise the tax he had to pay. That you aren't aware of that does not make Codejunky either an apologist or naive.
Re: Erm
Tax avoidance is legal, yes. However, very often it's achieved through exploiting loopholes in the system. Tax revenue can be increased by closing those loopholes.
Re: Erm
@Roj Blake
"Tax avoidance is legal, yes. However, very often it's achieved through exploiting loopholes in the system. Tax revenue can be increased by closing those loopholes."
Exploiting not meeting the criteria to have money taken off you by the laws? We can close loopholes by having a flat tax without adjustments. Scrap ISA's and no capital gains on your primary residence etc. No progressive tax bands etc. No tax breaks on pensions etc.
Exploiting the law by not breaking it is generally considered a good thing.
Re: Erm
The biggest source of avoidance - and loophole is probably the wrong word for it - is the entire way that international taxation works. For multi-national corporations there's a world-wide competitive market in corporation tax.
A country with a relatively small real economy can offer a better price in the form of lower corporation tax if, by doing so, it can get a few large multi-nationals to be head-quartered there for tax purposes. By their size, even at a lower tax rate, they will contribute sufficient to the smaller economy and, as a bonus, local businesses are also enjoying the lower tax which can help them be more competitive selling abroad.
In short, if you're a multi-national you can arranged to be taxed in Ireland on profits made on the business conducted in the UK. It's perfectly legal, it's not a result of some quirk of UK tax legislation but of the freedom to do that and the disparity in tax rates. Sorting it out would require international agreements and those smaller nations who benefit are in no hurry to agree.
Not that I'm explaining this to you, Codejunky, as I'm sure you're as well aware of that as I, but there's always an element of the commentariat which isn't.
IR35
They could save even more by scrapping IR35 that prevents small and medium business from running and artificially inflates costs by added bureaucracy, limited competition and by freeing the salary bands in public sector to reflect the market.
The current corrupt government (and previous ones) keep salary bands below market rate to ensure departments cannot hire competent workers in-house and they have to seek external suppliers (then pay market rate wage and consultancy mark up and other overheads).
This is just a massive gravy train and it is a shame NCA and SFO have not investigated how IR35 came (especially changes made by Sunak and co) about and their effect on funnelling tax payer money to big corporations. The behaviour of HMRC and Treasury in that regard bears a lot of similarities to Post Office scandal, except there are magnitude more victims.
Add to that Home Office participation where they give skilled worker and intra company visas like confetti so that big consultancies can bring in overseas workers way below market rate and further increase their profits at the expense of British business.
The phrase is "bacon slicing"
Rather than trying to go the whole hog with far reaching projects, the government needs to learn how to "bacon slice" useful systems into existence - delivering piecemeal improvements and functionality that work together, rather than fat, inflexible monoliths that committees and architecture astronauts have spent years planning.
Re: The phrase is "bacon slicing"
It still impresses me that when you put a sufficiently large number of people on a project (or, likely, a "program"), how little they can achieve. I'm sure many have heard the old joke about the team leader being called into the boardroom and asked for an estimate on a new thing. "How long will it take if I give you five programmers?" "One year" "What if we gave you 20 programmers?" "Two years" "What if we gave you 100 programmers?" "It will never be finished"
It's coming up to 50 years since Fred Brooks wrote TMMM and we haven't learned a damned thing.
the government could save at least £20 billion by modernizing IT systems and other measures not giving dodgy contracts to mates and friends/family of mates.
There, fixed that for you.
Savings
I've seen these kind of arguments before: we can save $20 billion on software by spending $20 billion on building new crap software.
Some airlines claim they need more frequent flights (including during the night) to financially support their transition to becoming a sustainable industry. All of this is complete BS.
I would support the government publishing functional documents on needed software and paying open-source developers to build these systems. The source code would then be published on a government GitHub clone.
Wouldn't change anything without changing suppliers
If they move from mega projects to smaller projects it'll still be implemented by massive lacklustre consultancies so that all involved can receive their bungs. Costs are then more likely to go up..
Target smaller companies, insist on a third party source control audit by another smaller company whilst the project is still in development, have a clause that if the project is not sufficiently maintainable or flexible there are severe penalties.
A plan to
save £20 billion by updating and modernising IT systems at a cost of £40 billion if the usual suspects in government IT projects are involved (crapita, fushitshow , etc etc etc)