“Managing ICT contracts in central government: An update”
Item 4 is consideration of the Scottish Government’s response on the AGS report entitled “Managing ICT contracts in central government: An update”. Do members have any comments?
Yes, I have a comment to make. I remind the committee that the current Auditor General’s predecessor, Bob Black, identified information technology as one of his most serious legacy issues. That was more than four years ago. To be honest, I am not impressed with the response that we have had from officials. We keep thinking that something will be done and it never is. Today, we have been looking at the IT system for CAP payments, the cost of which is predicted to be three times more than planned. We have also heard about significant risks. Last week, we heard that the IT system for NHS 24 appears to have collapsed. I will not outline any more problems.
We always hear from officials, but I spoke to an IT company last week, which told me that, of the 15 companies on the Government’s procurement list, one is Scottish, and that the Scottish IT sector gets 4 per cent of the public sector spend. I suggest that we take evidence from representatives of a small and medium-sized enterprise and a larger company to try to get a better understanding of why that continues to be a problem. In my time on the committee, we have never taken evidence from a company. We have heard only from officials and cabinet secretaries. I suggest that we hear from some companies on 9 December, which is the same day that the permanent secretary will attend the committee. That is the only way in which I would get some sort of insight and, I hope, be able to understand what is happening in IT in Scotland. Huge amounts of public money are going on IT systems rather than on the front line of public service.
I understand where Mary Scanlon is coming from, but I am not sure what we would ask these companies. They do not know anything about the Scottish Government’s systems.
We could ask them why IT systems cost so much and always go wrong.
I think—
One at a time, please.
It is going to be difficult to get somebody in for that and get meaningful evidence from them. I am concerned about what has been previously stated about the bureaucracy, the multiplicity of different layers that have been put in place and the knee-jerk reaction to try to manage that. That cannot be efficient. We need to pursue that piece of it. Although we should raise the bigger picture about IT with the permanent secretary, we should specifically target what we now know is a problem.
I rather think that Colin Beattie has asked exactly the questions that would be good to put to some businesses. Those businesses will be well placed to answer questions about the Government’s procurement mechanisms and whether they are good, bad or indifferent. The company that I would like to have before us is the one that spent £178 million not delivering farm payments. It may be the considered view of the convener that that is not for now because that process is still under way. However, if ever there was a company that deserved scrutiny—from the Government’s point of view but also from that of Audit Scotland and, more to the point, the committee—it is that one, because its system is so far over budget.
I would add to that the NHS IT because it is massively over budget and has been delayed three years. I agree with Colin Beattie about the structure—it is grossly overcomplicated. I raised that issue at First Minister’s question time and asked the First Minister to look at it.
I have two other issues. One is that there is, quite rightly, a requirement in some procurement contracts that SMEs should be given some of the subcontracting work. However, in at least one example, a significant SME has promptly been taken over by the central company and therefore the delivery by the SME was in effect nullified.
The other thing that I have discovered—are we still in public session?
Yes, we are.
We are live.
We are live. I will not get into that then.
I remind colleagues that we are in public session.
I will anonymise the contract. In the case of one very major contract, the bidder that won the contract promptly subcontracted to the loser. I find it extraordinary that the main contractor was unable to deliver without going to the subcontractor. Who is making money out of that? There is something very wrong with our procurement system.
I remind colleagues that this is about where we go after receiving this response. I take it that colleagues are concerned that the response does not meet expectations.
Absolutely.
If we are looking to attract businesses to come in and speak to us, we could have a round-table discussion, which is an approach that other committees have taken, maybe not this year but next year, before we finish up for the Scottish Parliament elections. That could help with the management of what is quite a difficult issue to deal with. The proposal is that the permanent secretary will come to the next meeting, along with the chief information officer, which would allow the Government to respond to the report on information and communications technology that the Auditor General has laid before us. The committee would then be in a position to hold a round-table discussion at a later stage.
I have huge sympathy for the concerns that colleagues have raised. However, we must also recognise that when it comes to the delivery of ICT contracts, ICT unfortunately moves on at quite a pace. I have said before in the committee before, by the time you ship a box of ICT equipment out of a factory, it is already out of date. One of the concerns that I have raised in the past is that specifications might change while a project is under way—we are sitting in a building where that happened. That point has to be included in our consideration of this issue.
I remind colleagues that we are just talking about how we manage taking evidence on this. We can get into those details if we have a round-table discussion.
I am entirely with colleagues who want to talk to the people who are delivering these contracts, but I am conscious that there will be commercial limitations on what they feel they can say. In the real world, it is extremely difficult for contractors to talk about their position with potential suppliers of further contracts. I wonder whether there are academics—for want of a better word—who have some understanding of this. Perhaps I mean consultants rather than academics—people who are not directly involved with any particular contract.
I want to draw this discussion to a close, because we could talk about it for—
Those are the people who might be able to give us unbiased advice.
The clerk will come back to us with a paper suggesting how we proceed with a round-table discussion. We will have a session with the permanent secretary and the chief information officer, at which we can take evidence.
Nigel Don makes a good point. None of us is an expert in this field. It is a very complicated field and, frankly, no one has it absolutely right. I think that we need an adviser on this issue, and I have a name to suggest to you.
I suggest that we do not name names at this stage. Let us first have a paper from the clerk and then we can discuss how we proceed. Is that agreed?
Members indicated agreement.
As previously agreed, we now move into private session.
12:38 Meeting continued in private until 13:09.Previous
Section 22 Reports