Civil service departments should take lessons from the success of a recent Bank of England modernisation programme and apply that knowledge to future digital transformation schemes, watchdog MPs have said.
A report from parliament’s Public Accounts Committee said the Bank of England’s nine-year, £431m renewal of its Real-Time Gross Settlement System (GPRS) offers “much to learn” for government – in particular the Cabinet Office and the Department for Science Innovation and Technology.
RTGS underpins all sterling payment systems in the UK and settles around £790bn in transactions every day. PAC chair Sir Geoffrey Clifton-Brown said the Bank of England’s success with modernising the system stood in “undeniable” contrast with government transformatiom programmes failures, most recently at National Savings and Investments.
The PAC report states that the Bank of England’s RTGS benefited from “strong leadership” from non-executive directors with relevant expertise who led the programme’s initial governance and kept a clear view of the programme. The committee also points to the presence of a senior responsible officer with a background in payments operations and stability of staff in senior roles.
According to the report, the Bank of England invested significant time and resources over multiple years in planning, analysis and design of the project – including input from specialists and industry consultation. MPs said this meant that working out what would be involved in implementing the project could be calculated with a greater level of confidence.
The report also pointed to the use of a “competitive dialogue” procurement for the project, which allowed bidders to develop proposals for the system as part of a consultation, prior to a contract being awarded. That work included a trial build of a simplified system, for which two unsuccessful bidders were paid.
Accenture was the successful bidder for the contract, but the Bank of England operates, maintains and updates the new RTGS in-house and also owns the intellectual property for the system design.
MPs praised the Bank of England for acting early and moving away from its old – but not obsolete – legacy systems to more modern technology, rather than just patching up existing systems. “This avoided a situation where ageing systems became a ‘burning platform’ dictating the timetable and scope,” they said.
Elsewhere, the report salutes the Bank of England for its flexible approach in adapting for different stages of the programme and the “inevitable challenges” that arose. It notes that four “replans” were executed in response to circumstances – with a review of scope, timelines and costs to strengthen focus on delivery.
Despite their admiration for the Bank of England’s RTGS programme, MPs acknowledged that its annual running costs had almost doubled from an estimated £21m to £41m. They said this was because of the adoption of a new target operating model.
Among their recommendations, PAC members said DSIT should prepare a lessons-learned paper identifying how the Bank of England successfully overcame challenges the committee has previously reported on in relation to departmental tech programmes “and what this means for government”.
They said the document – due within three months – should specify planned actions and timing, and address key areas such as getting the design of a system right before embarking on the contract for delivery. MPs said it should also cover the importance of addressing problems with legacy systems before they become an unsustainable “burning platform”, and collaborative working between business operations, IT and supplier teams.
Separately, PAC members said the Cabinet Office should draw on the Bank of England’s experience and set out practical steps – and a timetable for action – on how it will improve the ability of senior business leaders in digital business management and transformation, and strengthen the role and influence of digital specialists.
Clifton-Brown said the archives of PAC’s scrutiny of public sector digital reform and transformation could give the public the sense of an “endless litany of failure”. He said the Bank of England’s RTGS programme demonstrated “success is possible”.
“In the competitive tension that the process of having a collaborative procurement approach provided, such was the degree of cooperation that the bank was able to procure a fixed-price contract, retain all the intellectual property, and eventually take over the entire management of the scheme from Accenture,” he said.
“We have provided here for the government a guide informed by the bank’s success to avoid a repetition of the failures of the past; for instance, the disastrous handling of NS&I’s transformation programme exposing the public purse to unacceptable risk.
“The contrast is undeniable – the BoE scheme was procured at £431m largely on time and budget, while NS&I’s scheme is estimated to cost over £3bn and counting, and is a long way from being completed.
“There is a better way, laid out in our report. We urge the government to take our report as a manifesto for action if it is to improve the public sector’s overall reputation for successfully modernising the services on which we all rely.”
Among the report’s other recommendations, PAC said the National Infrastructure and Service Transformation Authority should update its guidance and support materials to reflect the distinct challenges of digital programmes and the success factors that the RTGS modernisation demonstrated.
MPs also urged the Digital Commercial Centre of Expertise and Government Commercial Agency to update guidance to the government commercial function to ensure that time is taken before contracts are let to properly understand the business and technical complexity and requirements for digital programmes. They said that work should be conducted with full engagement from technical specialists so that delivery time can be realistically planned and costed.
Finally, PAC called on DSIT to reinstate the role of “government chief digital officer” immediately, with the aim of providing sufficient expertise, capacity and focus in supporting digital transformation across government.
They said a candidate with “proven experience, skills and knowledge in digital business management and transformation” should be recruited within the next year.
The role of cross-department GCDO was scrapped with the departure of Joanna Davinson in September last year.
PAC did not unpack specific details supporting the recommendation to reinstate the GCDO position.
At a PAC session last year, digital government minister Ian Murray confirmed that the decision had been taken not to replace Davinson, who left government after the end of a fixed-term interim posting as GCDO.
He said the transformation of the department and modernising government did not require the role.
“GDS and DSIT are doing the work through the permanent secretary, and the permanent secretary is taking the lead on that,” he said.
Murray added that it was thought to be “far better” for the department to take the lead than to have a GCDO.