By Suzannah.Brecknell

04 Apr 2014

New DVLA chief Oliver Morley has arrived in the wake of a major review of the transport department agency, and will soon be joined by a new chair. Suzannah Brecknell learns that the scene is set for a transformation project

Oliver Morley has joined the Driver and Vehicle Licensing Agency (DVLA) at what he sees as a pivotal moment in its history. The agency has, he believes, the potential to “be one of the biggest and best consumer-facing businesses” – and it seems he doesn’t just mean within government. Meanwhile, a recent review of DVLA by transport department non-executive director Mary Reilly addresses a number of long-standing questions about strategy, presenting what he calls “a very interesting clean slate” on which to realise that potential.

There will be challenges: the DVLA has just been through a painful office closure programme, and staff morale is low (see box overleaf); while the Reilly review criticised a “leadership vacuum”, the lack of a clear strategy, and risks around IT systems and capability. Yet Morley is a glass half-full man, arguing that some of those challenges are already being overcome. On the question of IT, for example, recent contract renegotiations have positioned DVLA to move quickly away from its legacy systems. This change “should be, in my view, immensely liberating,” he says. “It’s a moment in time”. The phrase sums up his hope for the agency; it’s a moment that Morley is determined to seize.

Filling the vacuum
As Morley steps into the leadership vacuum highlighted by Reilly’s report, he won’t be doing so alone. The review, which has been accepted in full by transport minister Stephen Hammond, calls for the appointment of an independent DVLA chair, and a broader review of the organisation’s governance (which, it suggests, is currently too complex) to create a structure giving the chief executive “support and space to deliver change”.

The process of recruiting a chair has begun, says Morley; he expects the post to be advertised before the summer. This month, the DVLA is publishing a strategy building on Reilly’s recommendations, and it will be the chair’s role both to assist Morley in delivering this strategy, and to provide “assurance to the public and Department for Transport that we are doing what we said we would,” says Morley.

The headline of DVLA’s new strategy, says Morley, will be “simpler, better, safer”, though one senses that he is really aiming for “simplest, best, safest” – he notes later that he sees DVLA as competing with HMRC “to make the process of being taxed as good as it can be”. Similarly, he says his vision for DVLA is “for us to be the best”. He doesn’t specify exactly what he wants DVLA to be best at: it is a general point. He wants to “meet and exceed” the potential set out in the Reilly review, he says, adding: “My concern about the public sector is that we don’t hold ourselves to high enough standards.”

The potential, and the challenges
Chief among Reilly’s recommendations is the need to “accelerate and expand” the DVLA’s programme of digital transformation. DVLA runs some of the government’s largest transactional services: it already has a track record of creating successful online services such as the vehicle tax renewal system, and is running three of the Government Digital Service’s portfolio of exemplar services which are due to be live by April 2015. Given its scale and track record it has the potential to be a leader in government’s ‘digital by default’ strategy: the Reilly review talks of the potential for DVLA to become a provider of transactional services and digital expertise across government, and a hub for digital and transactional skills in South Wales.

The agency still has some way to go on its own digital journey, however. The Reilly review notes that paper-based processes underpin a “significant part of DVLA’s core business”, and Morley acknowledges that new services have often been built by bolting a digital front end onto existing processes. A significant shift to truly digital services will need an overhaul of DVLA’s outdated core IT systems, a focus on building capability, and a concerted effort to “bring the public along for the ride,” says Morley, “encouraging them to make the transitions that we need on digital”. This, he adds, will need to be done “elegantly” rather than through coercion or by making digital the best of a bad bunch. “The worst thing is that people go digital because your physical service is so bad,” he says. “You want them to use digital because your service is excellent across the board but digital suits their need.”

Although Morley is committed to digitising services wherever possible, he maintains that the “DVLA is a multi-channel business and will always be one, due to the nature of the work it does.” In part this is a question of transition costs. Some services are so complex, with such small numbers of transactions, that it won’t be cost-effective to make them digital in the near future. And some, such as medical assessments, will continue to require a non-digital element. “We can streamline [processes] and we can make [them] better,” says Morley, “but at the end of the day there’s always going to be a balance between online, phone and post, and we need to work out how best to do that.”

He’s used to striking this balance from his last job as chief executive at The National Archives (TNA). There, he says, “you have this massive paper legacy which you know it won’t make economic sense to digitise in its entirety, so you’ll always be providing it.” The question is “how do you get people to use the right channel at the right time, and how do you incentivise them to use digital?”

The DVLA review and its new strategy are, he says, about getting the agency to “work well across the board – as a multi-channel business.” So when he talks about its three exemplar services – two at the Alpha (or prototype) stage, and one preparing to go live – he doesn’t just praise their progress, but also emphasises that they’re just the first steps. “The opportunity for me over the coming years is going to be to turn them into things that will start transforming the rest of the business, as well as the front end,” he says.

Liberation from legacy
The first challenge in the business’s transformation will be replacing the legacy systems on which the exemplars are built. Morley describes the DVLA’s IT estate as “chunky, classic legacy stuff”; moving away from it will require “all the flexibility we can possibly get”.

“We have these big, chunky core systems, and inside there are the databases,” he explains. To create digital services such as the exemplars, “we built a wrapper onto those databases which allows us to deliver new services – but that’s not really the way to change the business. In the end, we’ll have to get down to those core systems and core databases.” The Reilly review also highlights this need, describing “a modern IT platform and new approaches to application development and implementation” as “an urgent pre-requisite” to the digital transformation.

In this respect, Morley believes his organisation is in a good position, having recently completed negotiations with its main IT contractor, IBM, to change its old contract and enable DVLA to build a modern IT platform alongside the supplier’s legacy systems. The contract is due to end in 2015-16, and until late last year DVLA was in the process of procuring an entirely new, open source system – a key step towards the multi-supplier model of IT provision which government is aiming for. However, this would have delayed real systems change until 2016, and brought with it the risks inherent in switching wholesale from one system to another.

Procurement was stopped when the Reilly review began. With “really good help from the Cabinet Office,” DVLA then took advantage of “an opportunity in the contract” to renegotiate its position, says Morley. He’s confident that the agency is in a good position now, with the flexibility to bring in new suppliers and greater control over the way systems are developed. It will still be moving away from the clunky old core systems and towards a multi-supplier model, but “in a far less risky way”. Rather than having to link IT development plans to an exit strategy from a large contract, DVLA can now build its new systems alongside the old ones, and move services onto new platforms in a staggered way.

Digital capability
Though the renegotiation also gives DVLA the freedom to develop new services and systems in-house, another challenge will be building the capability to do so. Despite the early progress on online services such as vehicle tax, Morley argues that “DVLA’s capabilities on digital were very restricted by both the legacy and the commercial restrictions they had, so I don’t think it’s fair to say that two or three years ago the digital capability was there”. He adds that: “one of the tragedies of the big systems integrator model [of IT delivery] was that you hollowed out the organisation. That’s certainly where the DVLA was a couple of years ago: there was capability, but it was very much focused on maintaining the legacy systems and meeting the needs of policy change rather than the needs of customers.”

Over the last two years, however, “since we started building those exemplars, we’re getting better at real speed.” There is still a way to go, he says, but the agency has begun to build new digital teams which focus on customer rather than contract needs.

As well as this drive to build internal capability, the DVLA has begun working with the Welsh Government and local higher education institutes to create a centre of digital and transactional capability in South Wales. “We’re really excited about this,” Morley says: though discussions are in early stages, he hopes they can start to communicate the idea that the public sector is a good place to work in technology, and to build on the fact that South Wales already hosts a number of companies providing large-scale digital transactions.

What will be needed to make this vision a reality, attracting more skilled developers to DVLA and more companies to South Wales? “Attracting developers is about providing interesting work, and a feeling that you are both on the cutting edge and impacting a lot of people,” he says. He adds that when it comes to building capability, he doesn’t think just in terms of his own organisation: “I think the civil service focuses far too much on retention; I’m really interested in giving people terrific careers but not with us – if they go on to a great local company but we gave them that opportunity, that’s great. It’s being part of the local economy, and a contributor to it, which I think is important.”

This drive to build capability may help address fears that many staff have about the shift to digital services: that it will ultimately mean job losses among delivery staff. Morley mentions several times that for DVLA, the opportunity to save money in the future is likely to come through non-staff costs, such as improving IT and selling buildings now empty thanks to last year’s office closure programme. He does acknowledge that “digital will generally mean fewer staff working on those transactional services in government: it’s what you would expect, and what you would see in the private sector,” but adds that since some of the complicated services DVLA provides “do not lend themselves well to digitisation, there will always be the need for qualified, intelligent staff who care about the public: that will not go away.”

Morley argues more generally that with digitisation, “you wouldn’t lose nearly as many jobs as you’d expect because you’d be able to build new opportunities, new business – both inside government and outside government – which will provide opportunities for staff.” At the DVLA this might, for example, include offering a contact centre shared service as other departments move to digital and seek to rationalise their call centres – an idea mentioned in the Reilly review and currently under discussion “within the DfT family”, says Morley. It might also mean making better use of the agency’s print and mailing capabilities to offer services to other departments, and developing businesses such as personalised registrations.

New delivery models
As well as setting out opportunities to develop new services, the Reilly review envisages a future in which the DVLA might see some services delivered through third parties. It doesn’t call for immediate moves towards privatisation – the review says it “did not find a case for changing the status of the agency at the current time” – but did point to specific areas which might be better provided through a third party, and called for DVLA to consider the case for different business models as part of a new five-year strategy. Morley doesn’t give specific examples of services that might be ripe for a new delivery model, instead saying that the agency will consider each service on the grounds of “customer satisfaction and efficiency” as it goes through the process of reviewing provision.

As well as producing a plan to open “the way for others outside of government to deliver some of its services”, the Reilly review said the DVLA should focus on simplifying services to reduce the burden of its requirements on customers; it noted the particular need to improve and simplify services for commercial customers.

The organisation already has good customer satisfaction scores, says Morley, and useful metrics on customer satisfaction – but it will need to look closely at these to find ways of understanding what its data reveals about different customer needs. He agrees that commercial customers have not been adequately supported in the past: most of the DVLA’s online services focus on individual transactions, for example, while many commercial transactions – which often include multiple payments or licences – remain lengthy and paper-heavy. Partly, this is because it’s technically easier to redesign services for individuals, he says; partly, it’s because government tends to focus on citizens rather than businesses.

Asked what drew him from the National Archives to the DVLA, Morley talks about the size of his new organisation, the potential to develop new services, and a sense of optimism about the agency’s digital future. After a career spent mostly in the private sector, Morley is also clearly enthused by the sense of policy in action which is present in both of these delivery organisations.

“The thing about businesses like DVLA and the National Archives is that when you first look at them, they are about files and licenses,” he says, “but actually this is where the innovation is; this is where you get close to the customer; and this is where the excitement happens in the civil service. We spend a lot of time agonising over policies [but] policy, outside of businesses like this, can be abstract. This is the real stuff.”

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