Labour's worst IT disasters

Why repeated mistakes have cost the taxpayer billions

Why repeated mistakes have cost the taxpayer billions

Point to almost any Whitehall department and you can find an IT project that promised savings and efficiencies but delivered wasted money and delays.

Labour's track record on bringing home major new IT systems is littered with messy and expensive failures - from the Rural Payment's Agency Single Payment Scheme (RPA SPS) system, which delayed the payment of £1.5bn of subsidy payments to British farmers, to the Department for Transport's shared services centre, a project intended to save £57m that will cost £81m to complete.

The bill to the taxpayer for these overspends runs into hundreds of millions and the delays will see projects delivered tens of years late.

Anthony Miller, managing partner at analyst house TechMarketView, has watched numerous government IT projects fall into disarray.

"Labour came into power at the height of the dot-com boom and you could argue they were a victim of the tech mania that was in full swing by the end of the 90s," he told

Politicians' need to promise big results within the four-year election cycle often leads to "fundamental flaws" in the project design, Miller said, citing the National Programme for IT (NPfIT), the Department of Health's £12.7bn project to replace an ageing patchwork of 5,000 computer systems used by the NHS in England.

"Announcements are made about when projects will be ready, with very little consultation over whether it is technically feasible," Miller said.

As a member of the parliamentary spending watchdog, the Public Accounts Committee (PAC), Richard Bacon has seen the damage that naïve political aspirations can wreak on IT projects.

Last year the Public Accounts Committee held government to account for overspend and delays on a variety of IT projects, including the NPfIT, the MoD's £7.1bn Defence Information Infrastructure and the Department for Transport Shared Services Centre.

"The reason why these projects go wrong are commonplace - they are often banal in the extreme - and have been repeated many, many times," Bacon said.

"They include not talking to people who will use the systems before starting on a project.

"There is also often a failure to complete the testing on many projects because a project is being driven by a politically inspired deadline that bears no resemblance to any technical problems that might need to be overcome.

"You will also find that the government often goes for complicated, bespoke solutions when off-the-shelf components would work much better."

There are reams of reports highlighting these common pitfalls, produced by the PAC and the Office of Government Commerce's Gateway Reviews. However Bacon says that, to date, there is scant evidence that the litany of recommendations such reports include have any effect on the way government approaches future projects.

"The vexing thing about it is that the solutions are not difficult to identify but the failings continue to occur," he said.

"The real question is why is there so little, if any of a learning curve, when it comes to the projects."

TechMarketView's Miller says Labour and future administrations need to learn how to better manage the tension between political desires and technical demands of major IT projects if the government's track record is ever to improve.

"The supplier wants to make money but the government wants to win votes. It is managing the gap between political grandstanding and the pragmatics of building the solution," he said.

"Ultimately any government that undertakes major projects has to balance the political with the technological win and unfortunately for us it is the taxpayer that is left playing piggy in the middle."

Over the next eight pages takes a look at some of the biggest IT disasters that have dogged the Labour administration and the factors that contributed to their failure

National Identity Scheme

The government's vision for the National Identity Scheme is a biometric ID card able to verify a citizen's identity thanks to information - the cardholder's biographic information, their photograph and a scan of two of their fingerprints - stored on the card's embedded microchip, which can be verified against information held in a central database called the National Identity Register.

Since its inception in 2003, the £5bn scheme has had a chequered history.

As the budget for the cards began to spiral - it was initially projected to be £3bn - its scope began to dwindle.

Originally touted by the government as a way to help fight terrorism, the project is now being sold chiefly as a way for citizens to prove their identities for commercial transactions or when travelling in Europe - retailers, however, remain unconvinced of the necessity for the scheme.

Home Secretary Alan Johnson also dealt what was perceived to be a major blow to the project by announcing in July that the cards would never be compulsory for UK citizens and scaling back plans to introduce cards for airport workers.

Despite these setbacks, the government is pushing ahead with the scheme, with £81.5m spent on the National Identity Scheme in the year to April 2009 and £12.4m on the scheme to provide cards for airport workers and begin a voluntary trial of the cards in the north west.

The Tories say they will scrap the scheme if elected this year but even if the scheme does go ahead the government has got a lot of work to do to convince UK citizens to take up the cards in sufficient numbers.

Doubts have been expressed by MPs and academics over how many people will be willing to pay £30 to have an ID card, particularly as failing to provide up to date information on ID cards can carry a fine of up to £1,000.

The government said it would save money by getting outside organisations to carry out enrolment for the cards and is in talks with the Post Office and other high street outlets about people taking scans of their fingerprints and facial photograph for the cards.

A separate scheme to provide ID cards for foreign nationals, run by the UK Border Agency, has also been criticised for the failure to roll out any electronic readers for the cards' microchips until October last year.

Department of Health - National Programme for IT

The £12.7bn project to modernise 5,000 computer systems used by the NHS has been marred by the poor performance of a project to create electronic medical records.

The records project, known as the Care Record Service (CRS), is running four years late and key suppliers were given until November 2009 to show they could increase the speed of the rollout by the Department of Health (DoH) CIO Christine Connelly. The DoH is currently assessing whether suppliers have made significant progress in rolling out CRS computer systems.

There has been some recent progress, with a new CRS system going live at 31 community health services in north east Manchester in November last year and five health authorities covering an area half the size of England planning to upload electronic medical records to a central database this year.

During the lifetime of the CRS project two of the suppliers for the contract, Accenture and Fujitsu, walked away - with Fujitsu claiming it was unable to come to a satisfactory agreement with the NHS over what the systems should deliver.

A key problem that affected the CRS project was the failure of the NHS technical agency, Connecting for Health, to engage with clinicians over what they wanted from the project, something that was identified in the Office of Government Commerce's Gateway Review of the National Programme for IT in 2004.

Later Office of Government Commerce reviews of the rollout of electronic medical records found bad feeling towards the project among clinicians had been compounded by technical difficulties.

These included suppliers missing deadlines for rollouts of patient administration systems (Pas) and delays in the deployment of the Spine central database, which limited the tasks the Pas could be used for.

Department for Transport - Shared Services Centre

One of Labour's most striking examples of an IT project gone awry was the DfT's Shared Services Centre, designed to provide human resources, payroll and finance support services to the DfT and its agencies.

Original estimates expected the project would save the department £57m - however, it's now estimated the scheme will actually end up costing £81m during its lifetime.

A report into the centre by the parliamentary spending watchdog the Public Accounts Committee (PAC) in December 2008 found that the project had failed on three counts: "delay in introducing planned developments", "increased cost" and "providing poorer services".

Speaking at the time Edward Leigh MP, chairman of the PAC, said: "The DfT planned and implemented its shared corporate services project with stupendous incompetence. This is one of the worst cases of project management seen by this committee."

Department for Justice - National Offender Management Information System (C-Nomis)

Originally C-Nomis was designed to allow the prisons and the probation service to share offender management information.

The plan was abandoned in 2007 - despite £155m already having been spent on the system - when projected costs more than doubled to £690m. Edward Leigh, chairman of the Public Accounts Committee said in November last year that the committee was surprised by the extent of the failure of the project.

Phil Wheatley, director general of the National Offender Management Service told in June last year that the idea of sharing all prisoner case management information between prisons and the probation service "did not make sense" and had been costed at a "ridiculous" price.

A scaled back version of C-Nomis - which will only share information between prisons - is now set to be rolled out to all prisons in the UK by next year at a cost of £513m.

Meanwhile, the probation service will rely on its own Delius and Crams systems to share information between probation service areas. A bridging system to allow limited information sharing between the probation and prison service is also expected to be in place by 2011.

Ministry of Defence - Defence Information Infrastructure

The Defence Information Infrastructure (DII) project is intended to replace hundreds of legacy computer systems with a single information infrastructure serving the army, navy, airforce and central MoD command.

The EDS-led Atlas consortium won the contract to design, install and run the DII back in 2005 and when complete, the system should support 150,000 terminals and 300,000 users at more than 2,000 sites, as well as troops and Royal Navy ships.

However, the 10-year project has suffered budget blowouts and delays - it's at least £182m over budget and 18 months late, while 62,800 terminals which should have been installed by the end of July 2007 weren't in place until February 2009.

According to a 2009 report into the project by parliamentary spending watchdog the Public Accounts Committee the project was held up by problems with software delivery and a failure to properly assess the buildings where the terminals would be installed - many of which were found to contain asbestos.

The delays also meant the MoD was forced to rely on legacy systems for longer than intended, leading to an increased risk of system failure, according to the PAC report.

Rural Payments Agency - Single Payment Scheme system

Following a 2003 reform of the way that EU Common Agricultural Policy subsidies are handed out, the UK's Rural Payments Agency created the Single Payment Scheme (SPS).

The SPS was supposed to map farmers' land and assign payments. However, problems with the IT systems used to administer the scheme meant that by the end of the 2005/06 financial year, only 15 per cent of the £1.5bn of subsidies intended for British farmers were handed out.

A 2007 report into the SPS by Whitehall spending watchdog the Public Accounts Committee blamed the failures on bad decision-making, poor planning, incomplete testing of IT systems, confused lines of responsibility and a failure by the management team to face up to the unfolding crisis.

The PAC found that implementation of the project started before the final specification and regulations for the subsidy scheme were agreed by the European Commission.

This meant the RPA had to make 23 substantial changes to the computer system to take account of the final policy and regulatory revisions.

The failure to properly test the system also meant the agency underestimated the level of work in populating the database with mapping data for farms in England and Wales.

A Public Accounts Committee report in December 2009 found that the RPA had spent £350m on IT systems used to administer the SPS, which it said were "at risk of becoming obsolete" and held information that was "riddled with errors".

Foreign and Commonwealth Office - Prism

The Prism IT project to simplify systems used by the Foreign and Commonwealth Office has been halted at least once, is now one year behind schedule and will cost £35m more than originally intended.

The project, which got underway in 2002, is designed to integrate separate finance, payroll, personnel and procurement systems in more than 200 FCO offices worldwide.

It proved unpopular with FCO staff, one of whom described it in the FCO's 2003/4 annual report: "In the FCO's long history of ineptly implemented IT initiatives, Prism is the most badly-designed, ill-considered one of the lot."

Contractor Capgemini halted work on the Prism project in 2005 pending a report by senior diplomat Norman Ling into the problems with the rollout.

"If the risks were understated then the benefits were consistently exaggerated. The promised cashable savings were never likely to be realised," the Ling report, published in 2005, said.

The project was restarted in 2006, but its original £53.8m budget has since ballooned to a current projected cost of £63.2m, while the addition of new functionality not included in the original Prism contract will cost the FCO a further £25.3m.

The project, due to be completed by 2009, is now scheduled to be finished this year.

Cabinet Office - Scope

The Scope project was designed to provide a secure comms network between Whitehall departments, law enforcement and security agencies.

While the first phase of the project - to allow security agencies to share intelligence - went live successfully in 2007, the second phase was shuttered in 2008 at a cost of £24.4m.

According to Cabinet Office's annual report for 2008/09, the second phase was shut down after the failure of the main supplier to "meet key contractual milestones".

The Treasury agreed to write off the £24.4m spent on the project and Tessa Jowell, the minister for the Cabinet Office, told parliament last year that the government aimed to recover costs from its supplier.


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