'Here comes the enforcer' cover feature in Public Finance

12 Jul 2004

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The incoming ‘head of e-government’ is charged with revitalising efforts to get government on-line. But will changing the job’s title and powers make it any easier to overcome the myriad obstacles in the way? Paul Gosling reports.

Pity Ian Watmore. ‘Impossible’ is the word most often used to describe his new job as head of e-government. Well-wishers’ most fervent desire is that he avoids the morass of inter-departmental conflict that helped to bury the man he replaces in September – e-envoy Andrew Pinder.

‘Pinder made a big impact at first, but he ran out of puff,’ says one person close to the Office of the Deputy Prime Minister. ‘His work was diluted by the ODPM and there was continual conflict between them. He was peripheral.’

Councils, too, were unhappy with Pinder. ‘Local government was overlooked,’ says a well-placed observer. ‘Local government is delivering the bulk of the services, but Pinder did not recognise the issue of local government budgets and the need for investment to achieve savings.’

Another person close to local government says that Pinder had been squeezed between the prime minister’s over-ambitious aims and a lack of co-operation by departments. At the same time, the essential building blocks for electronic commerce to take off and for

e-government to bed in – a common legal framework for e-business and new protocols on data sharing across the public sector – have not been put in place. The failure to establish a common approach to data sharing in particular has already had dire effects, as was illustrated by the Soham murders, this observer adds.

The hope rather than expectation is that the appointment of Watmore will bring in a new era. It clearly signifies a major change in approach by the government. Where Pinder had a civil service background – albeit as a departmental IT director and with private sector experience – Watmore has left a very senior position in the private sector, as UK managing director of Accenture.

Watmore has already demonstrated his capacity to handle Whitehall and Westminster. Brought before the Commons’ Public Accounts Committee five years ago he put on a display of almost outrageous chutzpah answering questions on the failures of the National Insurance Recording System (NIRS II) contract held by Andersen Consulting (as Accenture was then called).

Yet being a hard-hitting outsider does not guarantee success. Sure, the job title has changed and Watmore will not have to sell e-business to the private sector. But he faces many of the same obstacles as his predecessor. Like Pinder, he will have no executive authority, but unlike him he will formally be head of the IT profession in government. Also, his unit’s role will be comparable to that of the Office of Government Commerce – with which he will be expected to work closely – in intervening in all government departments.

Part of Watmore’s job description is to produce strategy studies for the prime minister, the Treasury and the Cabinet Office. He will be expected to adopt a more ‘in your face’ directive role in departments than Pinder had: more the ‘enforcer’ than the ‘influencer’. While the prime minister and the chancellor believe this will give Watmore the clout and effectiveness that Sir Peter Gershon had when he ran the OGC, critics are unconvinced.

Yet Watmore would not have taken the job if he thought there was a likelihood of marginalisation. On his appointment he said: ‘The change to the e-Government Unit represents a development from the original e-envoy’s task of "getting the UK on-line", to ensuring that the government capitalises on the potential of ICT to both transform service delivery and achieve a step change in operational efficiency across the public sector.’

The need for a ‘step change’ is undoubted. While the promise for all services to be deliverable electronically by the end of next year remains, it has become less significant than getting ‘priority services’ on-line and fully functioning by then.

Most importantly, ministers are dependent on vastly improved IT infrastructures to implement the NHS Patient Choice agenda and to generate the £20bn of savings offered by Gershon’s efficiency review. The news on both fronts is not good.

Richard Granger has had a tough task since his appointment as NHS IT director two years ago, and it is hard to say how successful he has been. When officials are asked about progress on electronic patient records – one of the most important elements of Granger’s IT programme – they talk about ‘software being tested’ and analysis being conducted of compatibility with legacy systems. If this sounds less than wholeheartedly optimistic, outsiders think the caution is well founded. One close observer comments: ‘The Department of Health is not as far forward as it thinks it is.’

Karen Swindon, head of forecasting at e-government researchers Kable, is equally doubtful. ‘I think the NHS is ignoring the whole issue of e-government,’ she says. Swindon believes it will take years before the impact of Granger’s work is felt across the NHS. ‘There will be some early benefits from e-booking – but that is just one element,’ she adds.

There are dangerous risks here not just for patients’ choice, but also for the efficiency savings targeted by Gershon. It might be unfair and premature to conclude that his proposals are already unravelling – but only if the originally leaked suggestions were misunderstood.

Much of Gershon’s savings were to be achieved through back-office synergies, yet the logic of this seems flawed. He had already put in place an improved framework for IT procurement in a previous report. To avoid repetitions of the great government IT disasters – such as NIRS II, the Libra IT project for magistrates’ courts and a string of others – he proposed two major changes. One was to move from the Private Finance Initiative to a more traditional procurement approach. The other was to reduce dependence on ‘mega-contracts’, with grand designs, even grander objectives, long lead times and constantly changing political environments. Instead, there was to be more reliance on smaller-scale IT systems, which could data share.

This latter move means that local authorities now expect to rely on their existing databases for housing benefits assessment, for example, rather than for all councils to share a single dedicated IT system, as is expected to emerge from the Gershon efficiency review. And yet we are still awaiting common standards for IT systems across the public sector and protocols for who can access shared databases and for what purposes. Where, then, do the massive cost savings come from?

That is a question the Treasury is assertively asking the ODPM. Having put large sums into electronic service delivery for local government, the Treasury says it is payback time. Local government, in turn, argues that the concept of investment necessarily turning into long-term revenue savings was always misguided.

But if the benefits are not obvious in terms of cost reductions, local government can at least claim significant progress in the quality of on-line services. According to the latest Socitm (Society of Information Technology Management) analysis, just 23 local authority websites achieved the highest rating of functionality. Many more, though, are in the process of major redesigns that will improve this.

Nicholas Le Seelleur, director of web analysts Business2www, says that over the past 18 months local authorities have reduced their website problems by 60%. He is in no doubt that ‘local government is much better than central government’ in terms of websites. While a few central government departments are good, he says, such as the Child Support Agency and UK Sport, ‘95% are a bit of a disaster’. Many, including the Inland Revenue, the Department of Trade and Industry and the Treasury, have web pages that are not compliant with the government’s own data standards.

And, Le Seelleur adds: ‘Sites that really matter to people are still bad.’ These include those of the Department for Work and Pensions, the Jobcentre Plus and the Learning and Skills Development Agency. Problems include links that encounter error messages and pages that do not comply with the accessibility requirements of the Disability Discrimination Act.

Socitm’s own recent evaluation of central government websites was similarly critical. And a report last month from the Public Accounts Committee concluded that government departments have not used their IT systems enough to make it easier for individuals to make contact with government.

While local government, at least, has been making great strides, there is acceptance at the ODPM that, in line with the national picture, more emphasis should be placed on putting the most important services on-line than on all services being electronically deliverable. The ODPM guidance on this, negotiated with the Local Government Association, talks of ‘assisting local government to achieve 100% capability in electronic delivery of priority services by 2005, in ways that customers will use’. Priority services are defined as: raising school standards; improving the quality of life for children, young people, families at risk and the elderly; promoting healthier communities; transforming local environments; meeting local transport needs; and promoting local economies.

According to a recent survey by mobile phone company O2, local authorities, including the London boroughs of Westminster and Lewisham, are pathfinders in using mobile technologies. The public sector is generally more advanced than business, with much higher uses of personal digital assistants and smart phones and greater integration of mobile technologies into IT strategies.

John Thornton, the director of e-government at the Improvement and Development Agency, endorses this perception. He cites Halton Borough Council’s ‘benefits bus’, which takes case workers to visit claimants at their homes, allowing them to complete forms on a laptop and sign their applications there and then. This increases take-up, assists legitimate claimants and reduces fraud.

Thornton reports a much-improved link between local authority pilot projects such as Halton’s and implementation elsewhere. He gives as another example the development of new ‘middleware’ – the software that connects back office and front office – by a pioneering group of councils, which is now being made available free to all local authorities. The potential gains of this LGOL-Net – Local Government On-line Network – are savings of millions of pounds, along with much better, more integrated, services for citizens.

But, says Thornton, the issues now are of cultures, structures and politics, not technology. It is possible for various public sector databases to communicate with each other, to be accessed across boundaries, even to be updated by partner agencies. That is no longer a technical barrier. Getting the protocols into place to make these systems work is another matter entirely.

This reality is most starkly felt in the health and social services spheres. While officials are tight-lipped on the problems, it is clear that things are proving difficult. Granger told doctors last month that he was willing to re-examine the question of whether patients should opt in or out of the electronic record system, having previously said that the system would have an opt-out. The equally vexed question of who is to be permitted access to which records is one that the Department of Health’s National Programme for IT has not answered.

And if that is a vexed question, what can be said about the relationship between the health and social services databases? There is still general vagueness about how the new child protection database will work. Although the child protection register will identify children through the NHS unique identifiers, it will not be based on the NHS IT infrastructure. Nor is it likely that there will be a single national database.

Andrew Cozens, president of the Association of director of Social Services and director of social services at Leicester City Council, says he expects local authorities to group together to operate child protection registers based on police authority boundaries. However, he thinks there is ‘a missed opportunity’ in not providing a single national database and believes there is a chance that children at risk could again fall through the net as they are moved between regions. Cozens also says that the issue of access authorisation remains unresolved.

The more general question of the scope of IT connectivity between NHS and social services databases ‘is a very interesting debate’, says Cozens. This could assist the trend towards more primary health care practice nurses booking social services on behalf of patients. But it would be wrong to assume that IT systems are equally central in both service activities.

Cozens believes that because social services are moving towards ‘personalisation’ and ‘micro-procurement’ – the individual using direct payments to commission the exact services they want – IT systems are almost irrelevant. This is also why further social services procurement reform cannot be assumed to save money – there will be no economies of scale available.

The move to smaller-scale, localised procurement conflicts with the Gershon agenda. This is true not just with social services but for other aspects of the New Localism project. For example, the demand for schools to hold on to devolved spending is reportedly causing strains between the Treasury and the Department for Education and Skills.

Cozens also suggests that social services might mimic the tax and benefits systems. Needs assessments currently conducted by social services might be replaced with cheaper ‘self-assessment’, as per our tax returns, and undertaken on-line.

So far then, the overall e-government landscape is of varying performance, with the greatest weaknesses displayed in Whitehall. But it is a complex picture. And when a government offers public service ‘consumers’ the concepts of personalisation and choice, then this complexity is inevitable.

Whether these concepts should be endorsed is a political judgement, but it would be naive to believe they can be achieved without a financial cost. Perhaps the most relevant question hanging over public sector reform is whether its advocates in the Prime Minister’s Office and the Treasury have recognised the conflict between this agenda and the cost-cutting launched by Gershon. We await the answer.