20 October 2006 | FM World

Government IT disasters: fear is the key

Gordon Brown has proposed to outsourcing policy on the NHS to an 'independent' board. That's bad for democracy, and bad for management, too

The news about outsourcing is bad, really bad. Accenture has bottled out of £2bn of contracts to manage NHS IT. Gordon Brown, outsourcing’s most assiduous backer (PFI, Bank of England’s Monetary Policy Committee), has outdone even himself. In floating the idea of an ‘independent’ board controlling the NHS, he has extended outsourcing not just to the largest employer in the EU, but also to government policy itself.

People need to know that the thrills and spills of an outsourcing contract, however weighty it might be, are nought compared to the dangers of outsourcing policy direction. The latter is, first, bad for democracy: at least Gordon Brown, PM, could be voted out of office, but an NHS Board would be under no such popular control. Second, it is bad for management.

For proof, look no further than… NHS IT. But let’s get the origins of the cock-ups right. The broad litany of complaints about government or NHS IT projects begins from the wrong premise. It starts from the market economics of private sector greed and corruption, when it should start from the New Labour politics of public sector fear and irresponsibility.

The litany has it that private sector specialists in outsourcing – Accenture, BT, Computer Sciences Corporation, Fujitsu and iSoft in the case of NHS IT – recruit ex-public sector bigwigs to help them win high profit, low wage deals at the taxpayer’s expense. In this scenario, powerful multinationals (especially American ones) suborn ministers before going on to demonstrate a professional competence akin to Halliburton and Donald Rumsfeld after the fall of Baghdad.

But wait. Private firms may address the Treasury more as desperate dinosaurs than as quick-footed Machiavellis. In the granting of outsourcing contracts, as in regulatory matters, the state, not capital, has the upper hand.

More important, what the litany misses is how the confused chains of command that surround public sector outsourcing are the logical outcome of fears: fears that bad medicine or bad medical IT will lead to political scandal and mass litigation. It is fear of risk that makes New Labour directorates outsource not just operations, but political ambition itself.

When NHS Direct first started, I made the mistake of phoning one of its call centre nurses. No sooner was she offering advice than she was covering her back against a lawsuit by taking most of her advice back, and qualifying it with plenty of complications and doubts.

The chain of causality is simple. New Labour and its pliant messenger, the BBC, first adapt to middle-class lobbies by whipping up fears about ‘wellness’: around BSE, work-life balance, the radiation from mobile phones, the MMR vaccine and, most recently, obesity. Then, government inquiries do their best to impugn the integrity of doctors and ward staff, casting every professional as a potential Harold Shipman or Beverly Allitt. Next, NHS managers express themselves surprised by a massive increase in the ‘worried well’ – those who no longer feel they know who to trust. Finally, to compensate for all the worry and chaos, outsourcing specialists and their clients are subjected to a new range of costly and bureaucratic checks and balances, unelected supervisory quangos, and all the rest.

It’s the same story with IT. The British Medical Association, the Guardian or Which? have only to whisper their fears that patient privacy will not be protected for the Government to insist on layer upon layer of IT security in response.

In Public services and ICT: where next for transformational government?, (1) a recent report for Adobe Systems Europe, Work Foundation researchers Alexandra Jones and Laura Williams take a very different view from mine. In the manner of the National Audit Office, they list many things that government IT projects lack: links between projects and strategic objectives; management and ministerial ownership and leadership; engagement with stakeholders; skills and resources; evaluation of proposals by long-term value rather than initial price; attention to breaking development, and implementation down into manageable steps.

Good, neutral, technocratic stuff. Indeed on page 24 there is even a magic formula for persuading stakeholders of the merits of change management: C = DxVxF > R. Change, you see, is equal to the level of Dissatisfaction with the status quo, multiplied by a Vision – or ‘picture’ – of the way things could be if our problems were solved, multiplied by First steps toward doing something about it; all of which need to add up to more than the Resistance to change.

Very John Birt, very Janet and John. But why does the Work Foundation also have stiff words for ‘scope creep’ in public sector IT projects? Because it seriously believes that Government is ‘too eager to take risks’ over IT. There are 56 mentions of the word ‘risk’ in Where next?, but just two of the word ‘innovation’. Indeed, the Financial Times (18 September 2006) quoted one of the authors as saying that the public sector ‘should not be about cutting-edge innovation’.

That’s a sure recipe for ‘transformational’ government, isn’t it? I call this approach irresponsible, because it wants to slow down innovation, and insists that leaders of public-private partnerships be subjected to yet more regulation. They should, it seems, ‘be required to publish ICT accounts’ covering – you guessed! – ‘the risk of poor performance in coming years’ (page 42).

While outsourcing companies and public sector managers must publish accounts, HMG refuses to be held to account. It outsources not so much costs or staff, as the very process of making promises and delivering upon them.

No matter how grateful outsourcing specialists are for the business they are given, they, along with the rest of us, should say that the outsourcing of policy is a step too far.

NOTE

(1) The report is on http://www.theworkfoundation.com/products/publications/azpublications/wherenextfortransformationalgovernment.aspx