It’s only your money going down the drain

Published in the Daily Mail (September 24th)

The scandal is a parable for all that is wrong with government: a tale of such colossal arrogance, incompetence and waste that  the ministers responsible should be shamed, the senior civil servants sacked, and the contractors forced to repay billions plundered from taxpayers.

But there has been no public outcry over the scandal of the £12 billion NHS computer scheme that was scrapped this week. No howls of anger at the latest botched and bungled technology project. No impassioned debates at party conferences over the grotesque failures that are costing the country a fortune.

Across Whitehall, mind-boggling sums of taxpayers’ money have been poured down the drain on computers that don’t work, machinery that fails to function, weapons that are unable to fire, and aircraft that never fly.

Yet our politicians prefer to malign the media and bicker over new taxes to impose on voters and businesses rather than confront their own shortcomings that allow such abuses to continue.

It is deeply offensive to allow such a state of affairs to carry on in these days of austerity, when jobs and vital services are at stake, and not to learn the lessons from this latest in the long line of government procurement scandals.

The idea of a centralised computer system for the NHS was conceived after an excited Tony Blair met Microsoft tycoon Bill Gates ten years ago. It was created to meet an electoral timetable by government ministers who, one insider later admitted, wanted to ‘sound sexy’.

Launching the world’s biggest civilian information technology project, Mr Blair proclaimed a brave new world, with hospital admissions booked online and the indecipherable handwriting of doctors banished into the Luddite past.

‘The possibilities are enormous if we can get this right,’ he said. No mention of potential downsides. No discussions with the doctors for whom it was designed. And no surprise when the vainglorious venture turned — like so many of Labour’s spendthrift projects — into a disaster.

Four years after it should have been finished, we have spent £6.4 billion — or £300 for every household — on an incomplete patchwork of incompatible systems. The cash that bled out of Whitehall’s coffers is enough to pay 30,000 nurses for a decade, or build half a dozen new hospitals.

The House of Commons’ Public Accounts Committee issued its latest damning report last month. It revealed two companies were paid £1.8 billion for the project. But one failed to deliver the products ordered, while the other, BT, is being paid £9 million to install systems for the NHS while charging £2 million for the same systems elsewhere.

The word ‘scandal’ is overused. This is, however, a true scandal. But so casual is the attitude to other people’s money in parts of the public sector that auditors found government officials paying ten times market rates for laptops.

This lack of responsibility is a key difference between public and private sectors. ‘If I had people spending £3,500 on laptops, I’d haul them in and discipline them,’ said the head of one leading technology company. ‘There’s not enough outrage over these things in government.’

Instead, former Labour Health Secretary Patricia Hewitt flits from overseeing the hopeless NHS computer project to a highly-paid directorship at BT. Do we laugh or cry?

The NHS computer fiasco is the biggest and most brazen example of Whitehall waste. Yet it is far from the only one, as we learned again last week. The Public Accounts Committee described a plan to create a network of regional fire stations as a ‘complete failure’ that cost taxpayers at least £469 million. The project was ‘flawed from the outset’ and suffered ‘extraordinary failure of leadership’.

The replacement of 46 local control rooms for England’s fire services with nine regional centres does not sound a task beyond a medium-sized business. It proved, however, beyond the abilities of the British government. Eight of the purpose-built centres are still empty, costing £4 million each month to maintain.

Needless to say, no one was held to account, and the careers of most of those involved carried on as if nothing had gone wrong, concluded the report. 

When questioned, John Prescott, who oversaw the scheme’s conception in 2004, blamed everyone but himself, claiming to have been kept in the dark by civil servants as costs quadrupled. ‘We can’t be hands-on with everything,’ he bleated — although one might have assumed an ability to direct a department is why Cabinet ministers are paid annual salaries in the region of £150,000.

Meanwhile, our bumbling former deputy prime minister was elevated, on his well-padded pension, to the pampered retirement home for failed politicians known as the House of Lords. Lord Prescott’s unedifying display demonstrated his unsuitability to run a burger bar, let alone oversee such a crucial project.

Meanwhile, in the typical Whitehall way, the mandarin with ultimate responsibility was knighted and promoted.

Many of the worst cases of waste happened under Labour, as state spending ballooned out of control. But for all their talk of action, the Coalition has done little to rectify the problems beyond insisting tender documents are placed online.

Despite evidence to the contrary, there remains a belief inside government that big is always better — what one Downing Street insider blamed on ‘the demented Treasury mentality’. This is why it seems every government purchase involving computers goes wrong — and we spend £16 billion a year.

And the reason is simple. Ministers and civil servants — often inexperienced outside the political arena — swallow dreams sold by snake-oil salesmen promising to transform public services, and order complex bespoke systems. Meanwhile, contractors know bills still get paid when these grandiose projects flounder.

Typical was the catastrophe over ‘rural payments’ when the government bungled the handout of £1.5 billion of agriculture grants.

Computer flaws were blamed for a fiasco that led to late payments and pushed some farmers to the brink of bankruptcy. The £350 million system had more than 100 well-paid consultants working on it, yet only a comparatively small number of farmers were involved. Auditors said the figures could have just been recorded on a spreadsheet.

Elsewhere, nearly twice that sum is being spent on a system monitoring what happens to people tested over incapacity benefits. ‘It’s just a database,’ one expert told a shocked ministerial aide. ‘I could have built that for under £1 million.’

Such follies can be stopped, especially with the cost of technology falling. First, ministers should scale down ambitions and choose systems shown to work elsewhere. Second, they must open up competition to new contractors: it is estimated the six biggest firms win nearly four-fifths of contracts, despite often-lamentable track records.

And, third, technicians and contractors should make more use of open-source software and open standards, which allows systems made by rival — and smaller — manufacturers to work together.

Using such software, Martha Lane Fox and a small group of geeks built —which will eventually replace 700 government websites with one personalised portal — in under three months. It cost less to make than the price of one government tender process.

Even worse than the computer failures are the procurement activities of the Ministry of Defence, with its bloated budgets and lax financial controls. Here, too, there have been worrying close relationships between ministers, civil servants and a handful of private firms, impervious to the immorality of the immense sums of taxpayers’ money being squandered.

One government adviser says the close links between civil servants and key contractors are corrupt. He says: ‘It may not involve money changing hands in brown paper bags, but it is a form of corruption when the civil servants taking decisions are dealing with firms they plan to join as soon as they leave.’

A classic example of MoD waste was the £2.4 billion contract to supply Bowman radios — a 25-year saga of delays and cost overruns. The radio was designed to link battlefield troops in a secure system, but was too heavy, too slow and too complicated. Soldiers say the iPhone is more effective.

Then there are the rifles that could not be used properly by left-handers, and the £259 million helicopters that could not fly at night or when it was cloudy. Truly, the stuff of farce.

One defence source told me of a simple piece of high-tech equipment used all over the world. It was recently bought off-the-shelf by the Dutch government after a three-month tender process, relying on a two-page document and delivered three months later. In Britain, after nine years and a  700-page tender document, it has still not been delivered — a delay that is risking the lives of service personnel.

The source said: ‘What should have been a simple purchase failed because the project was managed by incompetent, technically-unqualified civil servants who allowed over-complex procurement procedures to derail the project.’

Meanwhile, a Labour Party defence review last week conceded the party failed to prevent over-spending while in government. Unfortunately — although not unsurprisingly, given it was overseen by an admiral and two defence industry figures — the report offered expensive, protectionist and muddle-headed solutions.

It demonstrated how politicians on the Left and Right favour the adoption of outmoded industrial policies under the guise of defence spending.

Again, the solution is attainable. Politicians and civil servants must accept their fallibility, scale down ambitions and stop falling for the sales patter of self-interested firms by buying more off-the-shelf weaponry and technology. Then we can spend less on suits and more on soldiers.

For while our Armed Forces struggle to meet Britain’s military needs, with an estimated 100,000 serving soldiers having to cope with often inadequate equipment, there are about 10,000 people employed in defence procurement. Many spend their time calculating defence requirements by playing war games and trying to predict conflicts in the future. Invariably, the future proves them wrong.

With our Armed Forces pressed to the limit, and other public services squeezed, it is unacceptable for politicians to behave like intoxicated lottery winners, squandering vast sums of taxpayers’ money on these vanity projects.

Would the directors of any private business survive for one moment if they made such repeated and massive errors of judgment? Yet in Whitehall nobody cares. It’s only other people’s money, after all.

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