“The 2013/14 audit of the Scottish Government Consolidated Accounts: Common Agricultural Policy Futures programme”
We move on to agenda item 3, under which we will hear evidence from the Auditor General on her report “The 2013/14 audit of the Scottish Government Consolidated Accounts: Common Agricultural Policy Futures programme”.
With us are Caroline Gardner, the Auditor General for Scotland; Mark Taylor, assistant director at Audit Scotland; and Gemma Diamond, senior manager at Audit Scotland. I invite the Auditor General for Scotland to make an opening statement.
Thank you, convener. Today, I am bringing to the committee a report on an issue arising from the audit of the Scottish Government consolidated accounts. The report is about the common agricultural policy—or CAP—futures programme, which is a five-year business change process to deliver CAP reform in Scotland.
The programme is currently expected to cost £137.3 million. It has two elements: first, the redesign of working practices to focus on the customer and generate efficiencies; and, secondly, the development of a new information technology system to deliver the new CAP and improved ways of working.
The programme is a significant one for the Government. Each year, it distributes approximately £700 million of European funding, through the CAP, to Scottish farmers and rural businesses, and any failure to meet the new European Commission regulations could lead to significant costs for the Scottish Government.
The purpose of my report is to highlight the significant risks that the programme is carrying. The Government recognises that risk in the governance statement that is included in its 2013-14 accounts. My report is based on a high-level review of progress in the first 18 months of the programme. We are undertaking more detailed work and will report on that as the programme reaches its critical milestones over the months ahead.
Overall, my report highlights that the programme has so far proved significantly more complex and challenging than the Government anticipated. The programme team has recognised that, and it has recognised that there is significant risk to the programme arising from the potential late delivery of milestones and also from increasing costs.
The business case for the programme was approved in December 2012. At that stage, detailed information on the EC requirements was not known. The programme has experienced continuing difficulties since then, and total forecast costs have increased from £88 million to £137 million as the team has had more detail on the EC requirements and the IT that is needed to deliver on them.
It is important to note that the programme is working to fixed regulatory timescales. Within the next three months, the team will have to make critical decisions about whether the new IT system will be ready to manage the payments application process or whether it needs to implement contingency plans.
In a bid to meet the timescales, the programme team has had to scale back some of the original scope of the business case, changing plans for the IT component to map registered land and removing some of the wider business change elements that were originally included.
Management acknowledge the difficulties and are taking action. The most recent independent assurance review, which was in May 2014, concluded that significant changes to the programme were required immediately if successful delivery was to be achieved, and as a result the programme board established a corrective action plan. There is evidence of progress against the plan, but it is too early to see whether the actions will increase the confidence in successful delivery by the required milestones.
I have concluded that the futures programme will carry significant risk right up until implementation and beyond. The purpose of my report is to bring that to the Parliament’s attention together with the continuing risks to successful delivery of the programme and overall value for money.
As always, convener, my colleagues and I are happy to answer questions from the committee.
I was surprised how interesting the report is. I had thought that we would just note it, but the more I read, the more concerned I became.
I have some brief questions. First, paragraph 5 states:
“The Scottish Government has estimated that it could incur costs of up to £50 million per year if the IT system failed to deliver ... CAP reform”.
That is a lot of money, and it seems obvious that that is a possibility. Where would that money come from?
My second question relates to paragraphs 8 to 10. You said that the cost in the original business case was £88 million and that the forecast cost is now £137 million. Who is the IT partner?
My next question relates to exhibit 2 on page 7. Will the farmers be paid? For December 2015, the exhibit quotes the following “Risk arising”:
“Reputational risk as customers have previously been paid in December... new complexities ... may affect the usual timetable.”
For June 2016, which is the EC deadline for making payments, the “Risk arising” is:
“Regulatory risk with financial penalties arising from non-compliance.”
I ask you to comment first on the £50 million cost that the Scottish Government might incur, which seems to me to be some sort of fine for not achieving deadlines; secondly, on the huge increase from £88 million to £137 million for the IT system; and thirdly on the uncertainty for farmers. I have no doubt that they will be paid, but will it be when they expect to be paid? They need the money to purchase grain for the following year. Also, will there be future fines for the Government in June 2016, given the financial penalties?
First, I am delighted that you are finding the consolidated accounts interesting. We think that they are fascinating, and part of our mission is to convince you all that that is the case.
My life is very sad, really, but thank you.
I will start on value for money and the costs, and then I will bring in my colleagues. We will then move on to the IT system and the impact on farmers and rural businesses.
The financial or value-for-money risks fall into three categories. First, the cost of the system is clearly already significantly higher than was envisaged, given the increase from the original estimate of £88 million to the current estimate of £137 million and the possibility that that might increase further.
Secondly, and linked to that, we already know that the scope of the system and the programme will be more limited than was originally planned, with some important elements being taken out of the current phase. If they are to be developed, they will need to be part of a future business plan, and future costs will be associated with that.
As you suggested, the third cost relates to the possibility—it is only a possibility at this stage—that, if the programme cannot deliver the EC requirements, the Scottish Government might incur direct financial consequences or penalties. I will ask Mark Taylor to talk about the £50 million.
My other question was about farmers.
I will answer that question before I bring in Mark Taylor, because it is key. It is fair to say that the Government is absolutely focused on ensuring that payments can be made to farmers. Farming is a vital part of Scotland’s economy, and it is a huge part of the economy in some areas. A lot of attention is being paid to making payments. That still involves a risk, but it is the focus of efforts.
Another risk is that payments will be made without all the EC requirements on controls being met, which raises the possibility of fines. We can expand on that as our answers develop.
The £50 million is the Scottish Government’s estimate of what might be at stake in relation to the European Commission’s system to police how the Scottish Government ensures that it pays the right amounts to the right people at the right time.
Long-standing members might remember that the committee previously discussed how the Commission has the power to withhold funding when it feels that the control systems—the checks that are required to ensure that the right people get the right amounts—are not as robust as they should be. Requirements on how systems should work are laid down.
The Government’s assessment is that, if it develops a system to deliver the new CAP programme and the European Commission identifies that some of the checks are not built into the system or are not being operated as robustly as they might be, £50 million might be at stake. That number is factored into the business case.
The Government has made it clear that it needs improved systems so that it operates a system that is as robust as it can be, which will prevent the £50 million from being at stake. We think that a lot of work has still to be done, which the Government recognises, to put in place robust systems. That is why the report refers to the £50 million, which features in the Government’s business case on the need for the proposed system.
What you say makes me more concerned, but I will leave it there.
The system will be more limited. Paragraph 15 says:
“this investment will not provide all the functionality originally planned.”
We will not have the new system that we wanted; we will have to try to make an updated system work.
You did not mention who the IT provider is.
Gemma Diamond will pick that up.
I mentioned the £50 million and the risks to farmers and the Government from not meeting deadlines. The £50 million is sort of allocated to not meeting the deadlines. Could an additional penalty be imposed? Mark Taylor said that the EC could withhold funding if appropriate systems were not in place. Could the figure be more than £50 million?
The short answer is yes. I make it clear that the £50 million is not an amount that has been budgeted for and allocated. The assessment in the business case was that, if the systems were not ultimately as robust as they needed to be, that amount might be payable and might need to be budgeted for and allocated in the future.
Would the £50 million come from the agriculture budget?
To be clear, the Scottish Government would have to find the money from somewhere and manage that across its budget as a whole.
Would the Scottish Government have to find the amount from the agriculture budget or from the budget as a whole?
From the budget as a whole.
Gemma Diamond will answer the question about the IT provider.
The Scottish Government has contracted with CGI Group, which was previously known as Logica, as its IT delivery partner.
Thank you. I will leave it there.
First, I want to check that we are dealing with like-for-like figures. Are the £88 million and the £137 million like-for-like figures?
Not exactly, mainly because of reductions that have been made to the scope of the project. When the business case was originally put together in 2012, the overall estimated cost was £88 million. That has been revised upwards over the period since then and the current estimated cost is now £137.3 million, but that £137.3 million is forecast to buy a more limited IT system than the one that was planned at the start of the process.
11:30
I get that bit. My question was more to do with whether VAT was applicable to both figures.
I will ask Gemma Diamond to talk you through that to make sure that we do not mislead you. There are some factors about the treatment of VAT and contingency that are important.
That is why I want to make sure that we are dealing with like-for-like figures.
There are difficulties in comparing the business case figures and the spend to date because of how some factors have been implied, including inflation, so I will take you through it.
The original business case estimated the cost at £88 million without any VAT or inflation applied. The most recent business case, which was produced in March 2014, estimated the cost at £111 million. That is directly comparable to the £88 million.
If we then add VAT and inflation to the £111 million, that converts it to £127.8 million. That, in essence, is the full cost in the revised business case and we can compare that £127.8 million to the £137.3 million, which is the current forecast for the spend.
Let us take this back to the beginning then. If we applied VAT and inflation to the £88 million, what would that give us?
That was not calculated in the original business case. Because we could not compare the two, we have taken the steps to take you from the £88 million to the current spend to date, but we have not converted that original cost in the business case because the Scottish Government did not apply inflation factors and VAT at the time.
Are you able to give us those figures? We need to be able to compare one with the other to get the real level of uplift. Is it possible to obtain that?
We can give you our estimate of it separately. Gemma Diamond’s point is that it was not included in the original business case.
I understand that, and it probably should have been, but it would be useful for the committee to be able to examine the real starting figure and potential end figure.
I have a question about the possible £50 million fine, which would be a concern if it were to become a reality. Is the fact that the Government has removed some elements that were originally part of the functionality and is prepared to spend a bit more money to get to where it needs to be, even though the estimates are higher than they were at the beginning, an advantage in avoiding having to pay a £50 million fine?
We certainly welcome the fact that the Government recognises the significant risks that are associated with delivering the programme—which is key to the rural economy: farmers and rural businesses—and the fact that, as problems have become apparent, a lot of effort has gone into forecasting the potential impact on the Government’s budget and on farmers and rural businesses and into considering the options for responding to that impact.
There are two elements to that response: one is making contingency plans for dealing with applications from farmers when they come in if the system is not able to do it at that stage; the second is examining how the system can be reduced in scale to make it more possible to deliver what is required. That planning is a good thing. Having said that, we would all rather not be in the position where it is needed, given the importance of the investment to such a major programme with a big impact on large parts of the economy.
I am grateful for the report, because it highlights the risks clearly. However, Scotland’s farmers—Mary Scanlon has identified how important they are—will realise the complexity of the CAP and the scale of the challenge that we face in getting the system right.
In May or June this year—I am not sure of the exact date—we became aware of what the common agricultural policy regime would look like. It takes into account a myriad of aspects. Last night, I wrote down a few of the aspects that I know of: modulation between pillar 1 and pillar 2; convergence uplift payments; measures to deal with slipper farmers; regionalisation; specific provisions for islands; specific provisions for new entrants; measures around greening and ecological focus areas; voluntary coupled support for the beef sector; and voluntary coupled support for the sheep sector.
It is being asked that a hugely complicated system be designed to cope with all those elements. In those circumstances, are those some of the reasons why the Government has had a challenge on its hands to ensure that it has an IT system that is fit for purpose, given how late in the day it knew about what the elements would be?
There is no doubt that the complexity of the new CAP scheme and the late points at which some of the details became available to Governments across Europe have made things more complex.
One reason why I thought that it was right to report to the committee at this stage is that some of the underlying factors in the delivery of the programme are consistent with what we have reported in the past about large IT developments in the public sector. We have seen continuing problems in getting the right capacity and capability of staff; problems with the programme management from the outset of the business case and the development of the project; and changing governance arrangements that have not made it easier to deliver a project that was never going to be straightforward.
Both those things are true: the project is complex, and we think that there were shortcomings in its management that are common to a number of other public sector IT developments.
On the wider European perspective, I am aware of the opinion of the European Court of Auditors, as I did a Google search for that. On 8 March, it produced a report in which it expressed
“doubts as to whether the measures proposed”
in the CAP
“can be implemented effectively without imposing an excessive administrative burden on managing agencies and farmers.”
As far as CAP reform was concerned, it also said:
“The limited simplification and additional administrative burdens introduced will have an effect on the costs of the reform which the Commission estimates are likely to represent an increase of 15 % overall. Member States consider that the percentage increase in costs may be even bigger.”
According to the European Court of Auditors, the problem is not just a Scottish problem; it is a European one. Do you share that view?
I have said that it is clear that the scheme is complex to administer. Some members will be aware that we as auditors will be required to do more to verify the payments that are made in Scotland. The administrative costs and complexity are greater; there is no question about that. At the moment, I am not equipped to answer the question whether that investment is justified for the benefits of the scheme.
Mark Taylor is our expert on European agriculture funding. He liaises with auditors across the other UK Governments on the progress that is being made and the challenges that are being seen. He may want to amplify what I have just said about that.
It is fair to say that the challenges that the Scottish Government is facing at the most basic level to put in a new system against a tight timetable, fixed deadlines and the complexity that has been outlined are shared across Europe—of course they are—and different organisations and different countries are at different stages of responding to that.
Historically, there have been issues with other paying agencies in other parts of the UK, which have had difficulties in implementing their systems. Those difficulties are well documented in the rest of the UK, and each of the component parts of the UK currently faces such problems.
As the Auditor General said, we are keen to highlight to the committee the risk around the particular project, but against that context, we are also keen to highlight the way in which the programme has been managed. We do not underestimate the challenge. Common themes are coming out about some of the difficulties, which the Scottish Government has recognised. To be clear, we understand that it aims to address them, but as the Auditor General said, there are underlying issues to do with capability and capacity and detailed planning around a plan that is very difficult to put together.
I think that there has been some frustration internally within the Government that it has taken the period that it has taken to get more specific and detailed plans in place. I think that it recognises those issues, and we think that it aims to do something about them, but there is an underlying risk, which we are keen to share with the committee.
It was obvious from the 2005 CAP reform, I think, that huge difficulties were experienced in England in bringing in the new system. Obviously, that caused it huge problems, and I hope that we do not get to that level of difficulty here.
I want to continue exploring the issues to do with costs. The original business case was approved in December 2012. Several comments have been made about the delays in getting clarification on the regulations. Is it reasonable to say that it was the clarifications that drove the review of the business case in March 2014? Was that done reasonably timeously?
Gemma Diamond might be able to pick that up.
I think that it was part of the reason why the Government revised the business case. In essence, the programme team was further through the project and had more information and detail, so more was known about cost. The team had also been working with its IT delivery partner on the scope of the IT requirements, which were very much linked to the EC requirements.
The programme team keeps the business case as a live document and minor revisions are regularly made, but we are talking about a major update in March 2014.
Almost the entire increase in the overall business case is caused by IT costs. One can be cynical about IT costs, which always seem to work out as a multiple of what was expected, but is it reasonable to say that the virtual doubling of the IT costs relates directly to compliance with the new regulations and a realisation of the complexity in that regard?
I do not think that it is fair to say that, but Gemma Diamond worked closely on the area, so she can say more.
The EC requirements are part of the issue. When the programme team started working with the IT delivery partner, a long time was spent on looking at the requirements for the IT. So far we have done only a high-level review, as the Auditor General said, but we will continue to look at the issue and consider the most significant problems that the programme has encountered to date.
The EC requirements were part of the problem. However, the team was also looking internally at what it wanted to achieve, because the programme was about not just the IT but delivering business change and change in working practices. That involved working internally, to be clear about what that would mean in practice.
However, the increase in costs in the business case is almost entirely IT related and is not to do with the other part of the project. I take it that that is correct, because it is what you said in your report.
It is IT related, but what we are trying to convey is that that does not relate only to the EC requirements. For example, the Government wanted to have mobile technology that field officers could use when going out to verify land parcels and features of the businesses that attract grant. The approach was intended to generate efficiencies in the Government’s running costs, as well as to satisfy EC requirements. The EC requirements were part of the issue, but so were the requirements to do with ways of working more generally in the Government’s administration of the programme. Both issues affected the IT costs.
Those upgrades were in the original business case and the original IT costs.
That is right, and they are not in the £137 million forecast costs at this stage; they have come out of the scope, to try to contain costs and increase the probability of delivering a successful system on time.
The changes to the EC regulations must have been startling, if the IT budget has doubled despite a lot of key elements having been taken out of it, to keep things moving forward. There must have been quite horrific changes.
A number of things are going on. The first is that the scheme itself is different—the basis on which money is paid is different from the basis of the previous CAP scheme. The EC’s requirements in relation to controls, checks and validation, to ensure that money is properly paid, are more rigorous than they were in the past. Also, the Government was hoping to secure efficiencies in ways of working by investing in the new programme, by investing in mobile technology and the ability of landowners to update records of land parcels online. All three factors drove the IT requirements, so the EC requirements are just one part of that. They are important, but they do not account for the whole shift in the IT costs.
11:45
When did the IT partner come on board?
Gemma Diamond can confirm that.
The IT delivery partner was appointed in March 2013.
They were not part of the original programme that was agreed in December 2012—or did they participate in that?
The business case that was approved in December 2012 had an options appraisal in it about how the Government would contract with an external contractor to deliver the IT system. The option that was chosen within that business case was to appoint an IT delivery partner. Subsequent to that approval, the Government went through the tender process to appoint the external contractor in March 2013.
So when the external contractor came on board, in March 2013, the Government must have accepted the budget that was available.
The original business case had a forecast cost of £88 million. The tender documentation that went out for the IT delivery partner was not a fixed contract that was signed, because the Government knew that it would need to go through a scoping phase with the IT delivery partner to determine what was going to be delivered. At that stage, the forecast cost for the delivery partner was £20 million.
I presume that a contract is now in place that has a figure on it.
It is still the same contract that was signed at that time—it is not a fixed-price contract.
It is not a fixed-price contract.
No.
So, how is the pricing determined?
The pricing is determined through discussion with the supplier.
Each component part is priced and that price is agreed by the Government and the IT supplier as part of the contract. It is not an open-ended contract.
The Scottish Government and the supplier are taking an incremental approach to delivery of the IT, which means that they are delivering it not in big stages but in little bits at a time, and they are costing it according to that process. It is a different way of approaching it from the one that the Government has been used to in the past.
You are comfortable that the controls around it are adequate and robust.
Within the terms of the contract, the controls are adequate and robust. However, as is the case with many large IT developments, it is practically impossible to let a contract that has a fixed price at the outset. Costs increase as the work develops, the scope becomes clearer and the programme management improves. So, as we say in our report, there is a risk that costs could increase. At this stage we have no cause to be concerned about the way in which the contract is being managed, but there are significant risks to cost as well as to delivery, as we say in the report.
It sounds to me like a requirements and specification issue rather than a specific IT issue. It is not about failing computers or software; it is akin to a builder being asked to build a house before they have the drawings and then discovering, when they get them, that they are being asked to build a block of flats. That was a common issue in the IT projects that I worked on over the course of my professional career, and it is what happens when the customer—in this case, the European Commission—is not clear about what is required at the outset. It is hardly a surprise that, as the specifications and requirements are developed, the costs go up. That is not down to the IT partner, the Scottish Government or anyone else; it is, I presume, down to the requirements that were set out by the Commission.
When the system is up and running, will it last us for a period of time? Is there a lifespan attached to the system? Is it for as long as the CAP reforms are in place and until Europe changes them again? How long will the system stand us in good stead once it has settled down?
I will address your first point first, Mr Coffey. It is true that some of the increase in costs is due to the way in which the EC requirements have emerged over time. It is also true, as I say in my report, that we think that there are weaknesses in how the programme has been managed and governed, which have contributed to that increase in costs. Both those things are true—I do not want to suggest that it is one or the other.
On the lifetime of the programme, the new CAP scheme is a five-year scheme, but it is quite possible that parts of the system that is being developed can be used for future iterations. For example, one way in which the Government is looking to contain costs and improve the likelihood of successful delivery is to reuse elements of the old land-mapping system in the new system. It should be possible to reuse some of the programme for future iterations of CAP, assuming that it continues in something like the current form. Some of it may need to change, but I do not think that we are in a position to say that it will at this stage.
Do you want to add to that, Mark?
I reaffirm that last point. We are clear that there is more audit work to be done to understand the progress of the project and some of the detailed governance arrangements and controls that are in place, and we intend to do that work.
On how long it is for, the business case set out a period—Gemma Diamond will be able to help us with that—and the spend is based on getting benefit over that period of time.
The futures programme, which started in 2012-13, is a five-year programme to deliver business change and an IT system to help to deliver that change and the EC requirements over that period. We are currently 18 months into the programme.
If the potential cost is £700 million a year over the five years—I think that the Auditor General mentioned that sum—we are talking about a £3.5 billion programme. We want to get the system right on as tight a budget as possible, but it is a question of managing that size of budget, is it?
Yes. On current figures, the amount going into Scotland’s rural economy—to farmers and small rural businesses—will be about £3.5 billion over the period. The cost of the IT system is the cost of delivering that, but the aim is also to deliver efficiencies and better customer service and to avoid the risk of regulatory penalties if it goes wrong. It is an important investment given not just the direct financial costs but the wider costs and benefits that are associated with it.
Is everyone now totally clear about what the requirements are? Software engineers will say, “Tell us what you want and we will build it for you.” Is everyone now clear about the requirements and are they getting on with the job?
I think that everybody is now clear what the EC requirements are, and there has been a focused piece of work by Government to review the business case and to be clear about what should be delivered to maximise the chances of successful delivery over the next 18 months. However, that is not to say that there might not be more changes in how it is done. We all know that there might be such changes.
I ask Gemma Diamond and Mark Taylor whether they want to add to that general answer.
As you will understand, Mr Coffey, this is a long-term project with a number of releases and a number of different parts to it. The initial focus is on the early releases and on getting an application system that allows farmers and other rural businesses to apply for a grant. I think that those requirements are now well understood and work is progressing on them. The next challenge is to get the back-end processing in place, which will allow the data to be processed. There is a fair amount of understanding of that, but the detail is still to be worked through, and I do not think that that is entirely linked to the European regulations. There is a bit of work still to be done around that.
One issue that we have come across is the Government’s challenges in having the right commercial and contract management skills. We have talked about how it works with an IT provider, and it has recognised that it has not been doing that as well as it might have been in terms of getting clarity and the right relationship with the IT provider. As we go on to do more detailed work, one of our main areas of focus will be to really understand how that is working.
Okay. I look forward to hearing about that when you carry out that work.
It was depressing enough to read in the report about the money that the scheme is now costing even though no payments have yet been made, but I also note the depressing familiarity of it all.
We previously looked at your report on managing information and communications technology projects. Am I right to say that that was produced in 2012, before this contract was awarded and signed?
Yes.
I do not know whether you have asked them, but has anybody in charge of this project read your report on ICT?
I will ask Gemma Diamond to comment, but it is important to set the context. We are reporting the project to you now because of the risks associated with it and because it arises from the Government’s 2013-14 accounts. We are also doing a significant piece of work to revisit the 2012 report that you mentioned and look at how the recommendations have been picked up. Conveniently, Gemma Diamond is leading that piece of work as well.
The business case for the project makes reference to our 2012 report and some of the recommendations in it. The themes that we raised in that report—certainly the ones on capacity and capability—are not easily dealt with quickly. Our report was published in August 2012 and the business case was approved in December that year, so the weaknesses that we reported on in that report certainly could not be fixed that quickly—a continuing focus is required to make an improvement.
You suggest that there is increasingly little contingency. What contingency plans does the Government have? If the programme is not in place and does not work, will the Government go back to manual payments or what will happen?
The Government is actively considering a range of contingency options—it is putting a lot of work into that to minimise the risk to the payments. Those options include manual processing, using existing systems for a bit longer and accelerating certain parts of the new build and maybe holding back on others and so prioritising what needs to be done. The Government is also considering stand-alone existing IT applications that it might be able to use.
So there is an app for this, is there? [Laughter.]
You say that there has been difficulty filling some of the posts. Is that still the case?
Filling the posts has been a constant difficulty for the team, although most of the senior-level posts that were vacant, which related to programme management and contract management, have been filled. That relates back to the theme that we raised in our 2012 “Managing ICT contracts” report about capacity and capability across the wider Scottish Government in managing IT projects.
The programme has only been running for over a year. How many programme directors or IT directors has it had?
The programme has had one consistent senior responsible officer over that period.
What about the IT director or chief technology officer? Has that post changed?
That has changed. The chief technology officer is quite a new post.
Who is the minister in charge of the programme?
I cannot remember the full title—it is quite long.
It is the Cabinet Secretary for Rural Affairs and the Environment who has overall responsibility.
Right—Mr Lochhead. Has he reported on the issue to Parliament or to the Rural Affairs, Climate Change and Environment Committee? Are we the first committee to be aware of the matter, or are any of the subject committees in the Parliament aware of the crisis in the programme?
I cannot answer for any reporting that may have happened to other committees of the Parliament. I thought that it was an appropriate time to report to this committee, given your specific responsibilities for overseeing the use of public money and the value for money that is achieved for it.
Are you aware of any processes of accountability in relation to the programme so far? Has it been debated or discussed in committee at all?
I am not aware of that, but that does not mean that it has not happened.
It is not for the Auditor General to reflect on committee business in the Parliament.
Good point.
I have a small point on that. From memory, when we took evidence on the “Managing ICT contracts” report, we were given an assurance that, because of the huge cost increases that had happened, IT contracts over a certain amount would in future be managed by a team in the Government and would not just be left to public sector organisations, small and large. We were told that it would be much more professional. I hope that my memory is right, but I remember being given an assurance that we would not again see the likes of the issues in Registers of Scotland and the problems in the Procurator Fiscal Service and other bodies because a team in the Government would oversee all the contracts. Is my memory right and, if so, two years later, what has happened to that team in respect of the contract that we are considering?
I caveat my remarks by saying that we are looking at the wider follow-up of those recommendations and we are not in a position to report on that yet. Having said that, the information systems investment board was a new part of the governance arrangements that were envisaged for large IT contracts, and the business case for the programme was approved by that board in December 2012. We hope that that has improved some aspects of governance, although it is clear to us that some problems with governance remain. The committee will be hearing from me over the next few months regarding problems with other large IT investments.
There seems to be something systemic happening here, which we and the Government need to get to grips with, not only because there are often significant unanticipated associated costs, with benefits not being achieved, but because of the wider question of how public services respond to the continuing financial pressures that we know will be in the system for the foreseeable future. That will have to depend on making better, more creative use of IT. Collectively, we are not very good at that. I do not want to pre-empt the question of how well the recommendations have been responded to, other than to say that there is clearly still a systemic problem that has not been resolved.
Gemma, do you want to add to that, drawing on the work that you have been doing so far, or would you rather hold your peace until we are ready to report?
12:00
I would probably rather hold off. We have seen elements of what the Government said it would do after our 2012 report, for example with regard to the information systems investment board becoming a significant part of the governance process for IT projects within the Scottish Government. As we follow up our recommendations in the round, we can see what improvements have been brought to the process.
I find this quite disappointing. We were assured that that crack team from the Government would ensure that the errors of the past would be unlikely to happen again in future. Your report mentions a programme that
“will carry significant risk right up until implementation and beyond.”
I noted the assurance that the new Government team overseeing contracts would be quite rigid, and I put my trust in that. I am disappointed at what we see, and obviously more must be done.
Do you have anything to add, Bruce?
I will leave it until agenda item 6, given the time.
I thank the Auditor General and her colleagues for their contribution.
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Section 23 Report