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The £16 billion question: What's wrong with government IT?

The Treasury estimates that Government IT costs approximately £16bn per year. Despite these vasts sums of money, government IT seems locked in a vicious circle of failure.

The Institute for Government's new report finds that government is struggling to get the basics of IT right and is falling further and further behind the fast-paced and exciting technological environment that citizens interact with daily. The result of this is billions in wasted money and time.

System Error: fixing the flaws in government IT argues that government’s approach to IT is fundamentally flawed. Without a radical re-think in this important and often controversial area of government millions of pounds of taxpayers' money and government time is at risk. 

The report is based on 70 interviews with Whitehall insiders, suppliers and external experts who spoke about the difficulties of getting government IT to work with the realities of day-today government. 

To date the government has adopted an approach to IT that assumes that the world works in a rational and predictable fashion. Specifications are drawn up in advance, 'solutions' are procured, and then delivery is managed against a pre-determined timetable. 

Glacial pace – average procurement process takes 77 weeks

In reality, as was seen in £5bn National Identity Scheme and the £12.7bn NHS National Programme for IT, political priorities change rapidly and technological development is increasingly unpredictable.

Most government IT therefore remains trapped in an outdated model, which attempts to lock project requirements up-front and then proceeds at a glacial pace. The average procurement process alone takes 77 weeks due to the excessively detailed commissioning processes in the UK. The result is repeated system-wide failure. 

New approach

A new dual approach will end long term big business IT contracts that lock government in. A totally new approach is needed that emphasises adaptability and flexibility while retaining the benefits of scale and collaboration across government.

We describe these twin tracks as 'agile' and 'platform'.

  1. Agile - In the IT profession, 'agile' refers to a specific software development methodology. However, the principles can be applied to all IT projects. At its most basic level, agile techniques are about projects becoming much more flexible, responsive to change and innovative. Development is modular and iterative, based on user involvement and feedback. The benefits of this more flexible approach to projects are that components are broken down to manageable chunks that can be revised or cancelled without major financial consequences. Such an approach would make it easier for civil servants to respond to ministers’ priorities and feedback on usability. 
  2. Platform - We use 'platform' to refer to a shared, government-wide approach to simplifying elements of IT. The aim of the platform is to bear down on costs, reduce duplication and establish shared standards. The focus here is on commodity procurement, coordinating delivery of common IT facilities and services, and setting common and open standards to support interoperability. 

Universal Credit

The government has taken an agile approach to delivering one if its flagship policies, Universal Credit. This will allow the Department for Work and Pensions to deliver a prototype in June of this year.

Users and stakeholders will see the incremental growth of the whole solution in regular 'show and tell' sessions throughout the coming months and the system will be revised in line with their priorities. Under the traditional approach, real users would not have seen the product until May 2014 at which time priorities and technological options are likely to have shifted.

Andrew Adonis, Director of the Institute for Government said: 

"The billions spent on cancelled IT projects, such as ID cards and National Programme for IT, demonstrate precisely why we need a much more flexible approach to government IT.
"Our report has looked behind the scenes at this often unexplained back-office function that is fundamental to the effective and efficient running of government and public services. If a new approach to IT in government is not now put into practice, this will risk further haemorrhaging of public money.
"This report shows there is a better way that is more flexible and allows for the fact that government priorities continuously shift."

Sir Ian Magee, Chair of the Improving Government IT Taskforce said:

"Government IT offers many challenges but, it seems, few solutions that satisfy everyone. There is a well-documented history of too many high-profile and costly failures.
"The good news is that on the basis of the substantial research described in this report, we are convinced that there is a much better way forward for government IT."

Metropolitan Police trial 'agile' IT project

Working with a Taskforce comprising departmental chief information officers (CIOs), top private sector CIOs and IT thinkers, the Institute for Government has:

  • observed and reviewed the trialling of a live 'agile' IT project in the Metropolitan police
  • interviewed over 70 leading IT experts
  • reviewed the evidence from international and private sector case studies.

The result is one of the most fundamental reviews of government IT in years.

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