Good morning. I thank members for their time today.
As chief executive of the Scottish Public Pensions Agency, I welcome Audit Scotland’s section 23 report and its four key messages. The report focuses on the period between 2013 and 2017, a time of transformational change in the agency, and the implementation of a pension software platform was a major component of that change.
I joined the agency as chief executive in July 2017. A key priority was to fully understand the pension software project’s status and direction. I recognised an immediate need to implement thorough project governance reviews that would better support our supplier.
In February 2018, I made the decision to end the contract with our supplier following the office of the chief information officer’s January 2018 technical assurance report, which rated the project as red. Within two weeks of the report being delivered, I convened extraordinary meetings of the audit and risk committee and the management advisory board to share the report’s findings and brief the Scottish ministers on the decision to close the project.
Our focus then was on putting the customers first, and that is the focus now. I reiterate that there has been and remains no risk to the pensions that are paid by the Scottish Public Pensions Agency, which continue to be paid on time and in full.
I recognise that there are key recommendations in the report that the agency and the wider Scottish Government need to take forward.
The first key message was on our business case and procurement exercise. A number of measures have been implemented to improve the agency’s approach to improving capability throughout. In particular, a new structure has been defined for the digital transformation and information technology operations, project management and procurement. That will ensure that our portfolio of digital improvement initiatives has robust governance and is continually reviewed, tested and moved forward. The agency is also changing the procurement approach to one of open and complete dialogue with vendors in order to ensure that the scope is feasible and achievable within the timescales.
The second message was on project governance and resources. The agency has implemented stronger governance across the current suite of in-flight technology projects, together with closer and more proactive engagement with Scottish Government technology and digital assurance. As part of the planned target operating model, the agency has put in place and will continue to put in place effective and consistent project management capability to ensure that governance is understood and applied in a well-planned and structured fashion. That will allow better scrutiny and challenge of our strategic suppliers.
The third message was on contract delivery and external reviews. We agree that our supplier was not able to provide a working system and did not achieve any of the project milestones. Our new procurement processes and guidelines mean that, if such a bid were received now, it would not be accepted.
The fourth message was on our failure to achieve value for money in the project. We have thoroughly reviewed our spending commitments since the closure of the project, and we are investing in current and future capability to provide greater functionality, wider automation and continuity of core services.
I also ask you to note that Capita paid £700,000 in compensation in November 2018, following the conclusion of the legal process, and the SPPA outlay under the contract was £681,000.
The figures in the 2018 report are potentially estimates and, should the committee wish it, I can provide a concise answer on our current spend and forecasts in writing.
In conclusion, as part of the lessons learned from the project, and the required transformation of the agency to better meet customer needs, a new strategic plan was created to make clear the agency’s strategic direction and ambitions for the years 2019 to 2024.
The principal focus of the strategic plan is to prevent any similar occurrence from happening again, and the successful implementation of the transformation will enable the agency to respond more effectively to changing customer requirements, to increase efficiency, to deliver best value for tax payers, and to position the agency to increase the number of members serviced.