Invest to Save Budget Public Accounts Committee 9 Dec 2003

Examination of Witnesses

MR GUS O'DONNELL CB, Permanent Secretary and Head of the Government Economic Service, and MR ADAM SHARPLES, Director, Public Spending, HM Treasury; MR JOHN GIEVE CB, Permanent Secretary, Home Office; and MR LEIGH LEWIS CB, Chief Executive, Jobcentre Plus, Department for Work and Pensions, examined.

Mr Steinberg: Following three scousers is a bit like the Lord Mayor's procession - a dust cart! In paragraph 2 we are told that this joint programme is to get "improvements in service delivery and cost savings". Tell us what you have learned from this experiment, particularly how service delivery is being improved?

Mr O'Donnell We have learned on many occasions that there are some fairly obvious things you can do, firstly. When I went through the case studies, I have to say quite often I thought, "Why are we not doing that already?". The National Land Information Service, where they have been able to put together a system of being able to search when you want a land registry issue, has the minimum search time down to 13 minutes, I think, whereas the average search by a solicitor takes something like three weeks. That is an incredible saving and the saving will accrue to the customers, one hopes, not to the public sector directly, so I think what we have learnt is that there are lots of areas where using on-line delivery you can improve services, and improve the efficiency with which they are delivered, you can save money, and do things by joining together different services which you did not think you could do before. I think there are examples in the case studies there as well of bringing together different groups who do not normally work together and seeing that they can perform joint functions to everybody's benefit. I know it is a contentious example at the moment but when you look at the issue of putting together the emergency call systems for fire, police and ambulance, there are some interesting examples that emerge.

Mr Steinberg: So you have learned a lot?

Mr O'Donnell Yes, I think so.

Mr Steinberg: Why does it then tell us on page 24, paragraph 1.19, "Very few reports set out however whether the project had adopted the most cost effective solution for improving the service and there was less evidence of how lessons learnt by the project were being disseminated". So if you have learned all that, why does the report say that?

Mr O'Donnell Very few of the projects have finished so when it comes to learning the lessons we will want to get the lessons out there from those that are finished and when the evaluations are done, so I can give you evidence and tie them down. We are trying to get all the evaluations on our website; we are trying to make sure that we get together all the different people involved in these projects and establish networks, and hope they will go on. As Adam Sharples was saying earlier, the fact that the number of these projects that were piloted that are now being rolled out nationally has gone up so much suggests that --

Mr Steinberg: But we are being told that there is less evidence of how lessons are being learned. I wondered when I read this report whether the £310 million had been used to good effect.

Mr O'Donnell The average rate of return they are talking about is two for one in this. That is not bad.

Mr Steinberg: It could have been better --

Mr O'Donnell We will never be complacent; we will always want to try and improve and learn and build on what we have done. I think there is an enormous amount to learn from this - these are innovative projects --

Mr Steinberg: Is it possible that lessons are being learned and ignored?

Mr O'Donnell I do not think so. I think the lessons are being picked up; the question is how quickly you can feed them across the whole of the public sector. The people involved in the project may well learn the lessons. The issue for us, and I agree with you entirely on this, is disseminating those lessons across the whole of central government, local authorities, and all the other groups of partners involved in these sorts of projects. So that is quite a difficult task but we are using seminars, workshops, annual conferences, websites --

Mr Steinberg: This is all well and good and it sounds great and is very encouraging, but if you read the report it does not say that. If you look further down that page at figure 17, the analysis of the ISB project evaluation reports, and you consider the Treasury are renowned for their careful spending and wanting value for money, it seems to me here that they have been very lax in evaluating. Have a look and see some of the projects that have been partially achieved and not covered by evaluation at all. How do you account for that?

Mr Sharples I wonder if I could comment? I think what the National Audit Office were doing in this part of the report was looking at the first nineteen evaluations that have come through --

Mr Steinberg: They did not look at them very well, though, did they?

Mr Sharples At the point where the NAO did their study only forty of the projects had been completed and so the evaluations were just coming through and they were able to look at the first nineteen of them. What they have done, as in other parts of this report, is point to some ways that those evaluations could be improved, so what we will be doing is taking these lessons and communicating them to the other projects which are starting to work on their evaluations to make sure that these issues are covered rather better in future evaluations than in this first batch.

Mr Steinberg: I hope so because there are two questions: "Has the project made the most cost-effective solution?", and if you look at the little dots, most of it is not covered by evaluation and then: "Have steps been taken to disseminate the lessons learnt?", and again, virtually all of it is "partially achieved" or "not covered by evaluation", so really you have been giving us this glowing report but you have not even evaluated it?

Mr Sharples I do not think you should draw conclusions from these comments --

Mr Steinberg: I can only draw conclusions from what I see in the report.

Mr Sharples -- I do not think you should draw conclusions about the quality of the projects. It seems to me that these are comments on the evaluation that has been done and what this is saying is that, against the standard criteria for a good evaluation, these questions were perhaps not fully addressed, but there may be quite good reasons why these questions were not fully addressed in the evaluation. For example, a project manager has been funded to undertake a particular project, and so may therefore consider that it is not necessary to go into detail as to why alternatives to that project were not pursued. Similarly, when it comes to learning lessons, the job of learning lessons and applying those lessons often falls outside project management itself. For example, the Department may have the responsibility for learning lessons for the project on the criminal justice system, so I think those are two useful comments about the quality of the evaluations but I would not draw general conclusions --

Mr Steinberg: You have made the point, thank you - I only have ten minutes - but there is Mr Gieve sitting very quietly and if you have a look at page 35 and paragraph 37.6 it seems to me that the Treasury have not only been quite haphazard about the evaluation but also the Home Office, because you did not even bother to monitor the programmes - it was left to the sponsoring bodies and the managers to do. You did not seem to be very interested as head of department. Why was that? I would have thought after spending all this money you would have been very keen to know what was going on. It seems that you were not and you just left it up to the sponsoring bodies and managers.

Mr Sharples Yes. We took a decentralised approach to this initially and changed that in May, or at least introduced some central monitoring, and I think we should have done that earlier. But it was being monitored and I had to rely on my managers and, as you say, the sponsoring bodies but something like the police IT organisation which was responsible for this was responsible for hundreds of millions of pounds --

Mr Steinberg: But how did you know if the money was being spent efficiently or successfully?

Mr Sharples The same way I know how PNO is spending their money efficiently anyway.

Mr Steinberg: But you did not know because you did not monitor the programme centrally at all. You were leaving it to somebody else.

Mr Sharples In the case of the one I picked, which was the first of our examples, I got a copy of the final report which was done and commissioned by PITO rather than through our central unit.

Mr Steinberg: But if you read the report it says 20 per cent of the projects have been completed and there has been no evaluation by our Department of those projects. So it does not sound as though you were interested?

Mr Sharples I do not think it does say that, if you continue to read on --

Mr Steinberg: It says, "At the time of our examination none of the evaluations held by the ISB unit related to Home Office projects although around 20 per cent (8 projects) of the Department's projects had been completed. This increases the risk that opportunities to learn valuable lessons from Home Office experience could be lost. For example..." - and it goes on to say.

Mr Sharples What it says is that none of the evaluations were held by the Treasury ISB unit. It does not say that they did not take place. Actually some of those evaluations are now with the ISB unit, I hope, but the Phoenix project, for example, was evaluated, and I have the evaluation here.

Mr Steinberg: Let us move on. On reading the report I get the view that at the time that the ISB was set up it seemed to be a good idea but I get the impression from reading the report really that you began to lose interest in it, to be quite honest. Would you think that was fair or not?

Mr O'Donnell No, I disagree with that. Every single round --

Mr Steinberg: It took you four years to set up a monitoring mechanism. If you were interested in it you would have done that immediately; you would not wait four years.

Mr O'Donnell I think you can detect the sign of interest from the fact we have opened it up to more and more bodies. Each round that has gone on we have opened up to more bodies so we have been trying to generate more interest from more diverse sources of groupings of partnership.

Mr Steinberg: But it took you four years to set up a monitoring mechanism. How did you know that projects were not going wrong and that money was not being wasted?

Mr Sharples We have had a monitoring mechanism from the beginning. From the beginning we set up a website that would allow reports on all the projects to be accessed not just by other project managers and by departments but also the public. It is an excellent website which I recommend - isb.gov.uk - and it provides an opportunity both for project managers to report on progress and others to see how things are going. As to whether we have lost interest, I do not think that is true at all. For example, we have organised in the last two or three years four national conferences --

Mr Steinberg: My time has run out, I am sorry. On reading this report, I do not know whether literally millions of pounds of taxpayers' money has not been wasted. On reading this report I am not given that information at all. Is it simply because you do not know yourselves?

Mr O'Donnell Every single project has an implementation plan at the start; we get six monthly progress reports; there is an interim evaluation at the mid-point and we require a final evaluation done six months after completion of the project by somebody external to the project. That is pretty thorough monitoring, and people are telling us not to micro manage, so we have to be careful.