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back to article MPs slam government's 'obscene' IT spend

An all-party committee of MPs has found that successive governments' over-reliance on big IT companies and poor in-house skills, has led to a "perverse situation" in which governments have wasted "obscene" amounts of public money. In its report titled Government and IT – a recipe for rip-offs: time for a new approach, the public …

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FAIL

Does anyone remember...

CCTA? That was the Government's own internal IT consultancy, which ran gov. projects in the 1980s. They were generally delivered well.

The industry lobbied to close CCTA down, and managed it around 2000. After that, projects were passed out to industry, and became uncontrollable....

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I remember it well.

Not only did they do a good job, they also had the good people to do the job with - one of the problems with current government IT. I cannot count the number of times I had to dig so-called "experts" out of their self created problems..

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WTF?

Disappointed

I came here after hearing the report on the BBC, hoping for more insight and depth as is customary of El Reg. Instead we get a reprint from some Grauniad hack. I trust this is only a holding piece while you scribe something a little more authoritative?

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For a change

Pretty much all of the comment below is more informed than usual, and certainly the politicians. I would bet that there are some old contracts where a PC is expensive, but when you consider what happens to a basic PC, assuming a one off, it's not that surprising, TCO costs come out to £3500.

1. Raise order on IT provider

2. IT Provider orders PC from its supplier.

3. PC delivered to central build facility

4a. Build facility discovers Dell have changed the spec and a new build is required so the PC is built by hand and then imaged for the next.

4b. PC is built with standard image.

5. PC is sent from central build to site IT, which could be the other end of the country, but you only charge the same.

6. On site IT install the PC check it works and take away the old PC

7. Old PC cent to central IT where hard disk and memory are removed, Carcass sent for recycling, hard disk and memory are wiped, and either reused or securely disposed of.

Note that a good many PCs in government are now delivered with encrypted hard drives which has to be done after the machine is built and takes several hours. They may also have removable hard drives. The PC cost may also include all the network infrastructure costs on the site, and the WAN. The WAN may well require expensive Crypto units, or even a dedicated network, which again adds to the cost. This happens because some departments like a unitary, per user cost, and if you have offices all over the place supplier have to factor in deliveries from Shetland to the Scillies.

Oh, and most of the government contracts I have worked on have open book accounting with fixed margins which are currently running at 3 - 5% for this kind of stuff, so the PC itself is usually cheaper than you could buy in Tesco, it's the configuration & support that pushes the cost up.

A better comparison would be £500 PC/Monitor + Windows 7 Pro + Office Std + Home Router + 3 Years Broadband + Extended Warranty + Home Service from the techguys (TM).

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Ha!

I used to work for a bussiness unit supplier schools with IT equipment in Norfolk.

The old PC was disposed of via a recycyling firm who took them away for free. The hard drive was taken out first and disposed of in-house with a secure wipe followed by a hammer.

The new PC was bought from Dell and delivered to site. A technican would go out and imagine on site. For large install we would ship an image disc to Dell to install prior to going out or would deliver to base, image then deliver alongside the technican.

Of course, now my old company has been taken in-house by the county council all this has changed.Central managment software has been replaced with a collection of partly working vb scripts, curent OS builds have reverted to XP/Vista from Win7. Procurement has a 3 month lead time (paperwork) and imaging is now done from a USB attached harddrive, one at a time.

£3500 is £2500 worth of inefficiency added to £1000 worth of equipment.

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JC_

Seems Extreme

£3,500 would be absurd for a typical desktop PC, but what's the bet that this is the most extreme example that could be found? It may well include the cost of the service contract, too. Buy a quality workstation with a 4hr repair time and it won't be cheap.

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Stop

Average

£3500 is the average price, and even if it includes a support contract with a 4 hour turn round it is crazy - you'd be better of buying cheaper and buying PCs and keeping them as spares. "Quality" is not a word you associate with the average PC company - when did you last look at something put out by Dell or HP and say "that's a quality bit of kit"?

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Trollface

Viglen Ltd

Call Sir Sugar in and tell him "you're fired!"

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Average

£3500 is the average for "some departments".

Would need to see a full breakdown of that price to know how insane it really is.

£3500 for TCO over 3 years with software and services is not too bad, £3500 capital spend for a CAD workstation or similar might be reasonable too.

Suspect it isn't anything like that but I'm not going to start the slagging even on the say so of something so trustworthy as a British newspaper.

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JC_

@Anonymous Coward

A mid-range workstation costs over a grand and it doesn't take much to go higher. Add in the support contract and software and £3,500 is easy to reach.

As I said, £3,500 would be absurd for an average desktop. But it's obvious that in an organisation as big as the UK government there will some users who require more than the average desktop. Do ya think that maybe £3,500 was cherry-picked to get some headlines?

Dell & HP workstations are actually decent quality, in my experience. YMMV.

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WTF?

Spares?

So you buy a lot of spares... will they be hot spares? Or will you need to provision them? And how about all that data on the machine it is supposed to replace?

Unless you've locked the machine down completely and force the users to use the network, you will still need to deal with the data that comes from the hard-drive of the duff machine.

Granted, if the drive is duff, you will need data recovery which can be costly, especially if it needs to be a rush job.

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Rough guess..

10000 to 1? More..

Not a bet I'd touch.

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Devil

£3,500

I'm betting this is the cost for a PC configured with the software that $CivilServant needs to get on with their job, not simply the cost of a PC in a similar state to that of one you would order from Dell or pick up in Tesco

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Devil

Still seems high ...

Assuming a bulk-buy mid-range PC costs £500 - what software can really be worth £3000? SAP seat licenses or CAD software, but how many people would need that? I can see maintenance and software costing something over the lifespan of the PC, but £3000 still sounds like a bit of a rip-off to me.

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Mushroom

I think you nailed it.

SAP.

If you ever find there's a massive budget pouring out of IT and nobody will say where it's going, SAP. It's always fucking SAP. Which is, as everyone who had ever actually tried to work with it knows, shit anyway.

SAP salesmen must have the best cocaine and hookers on the planet. There is literally no other explanation.

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Mushroom

useless parasites

> the software that $CivilServant needs to get on with their job

what would that be exactly?

1) pension calculator

2) 20 year countdown timer

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SAP

Yes, SAP; it explains everything...

One department does not know what another is doing.

The system always seems to be "down" or "running very slowly today for some reason".

Civil servants seem to be unhappy.

The systems are always late, and massively overspent.

Someone has to look up something about you and write it down on a piece of paper, only to type it in again 5 seconds later.

...

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> risk aversion

Bearing in mind the number of central government big projects that go toes up or massively overspend you can't blame the b'crats too much if they are a bit cycnical when someone says , "hey we can port the system to this, it will be really easy and save you money in the long run."

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Boffin

risk aversion

Porting any system to a new platform is a risk, and all organisations are risk adverse when it comes to changing platforms, new technology is only adopted when a new business requirement cannot be fulfilled on the existing technology base. Organisations will also stick with its existing technology, its better to have a known cost and have predictable budget requirements than to start experimenting with new technology

I am aware of at least one big bank where one of the key application suites is written in mainframe assembler. The company is so risk adverse that it will not even consider moving from assembler to Cobol!! And using any sort of 'real' database is a complete no-no.

The two golden rule of IT support are:

Rule 1: If it’s not broken, don't fix it

Rule 2: in all other cases, see rule 1

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Usual government assumption

Having had the misfortune to work on government contracts in the past, it's no surprise that they go over budget.

Every time a spec is drawn up and agreed the poor buggers (who live in the real world) start to build the system.

Unfortunately just as a slightly usable system starts to emerge the customer (government dept) decides that something almost (but not quite entirely) unrelated to the original spec is required.

A new spec is agreed.

And so development hell is entered, the customer constantly changes what they want, the IT company is afraid to say 'no more changes' and the people who know what they are doing leave or become apathetic.

The NHS system was a prime example where it went from one system to almost every health trust basically being given the ability to change the systems spec and the right to veto almost everything

The set-aside programme is also a prime example of the civil service not having a fucking clue (even Radio 4 did a documentary on that abortion)

Hence the IT outsourcing company's end up adding huge contingency budgets for the inevitable lack of maturity within government departments.

No doubt the £3500 PC also had to be in a particular shade of lavender to cut down on the number of stress days that dept was clocking up

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Yes, that must be annoying and it clearly isn't efficient

But on the other hand the money is plentiful and only flows in one direction.

Don't see a lot of private sector companies spurning the cash teat.

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That's called ...

... Moving the Goal Posts.

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Mushroom

To be fair

They also take 7 to 10 times longer to make a decision

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Yeah

the money flows out of my bloody pocket into the government coffers, to be misspent.

TBH from my experience getting a government contract isn't usually worth the trouble as the whims of both the civil service and the government of the day coupled with late payment adds up to be more trouble than it's worth for the people who actually do the work, after all it's not like writing a sine scroller on the Amiga it's considerably bigger than that.

As for why company's do take on these contracts, my theory is that those who are involved in the bidding and initial specs are long gone (they usually stay just long enough to collect their bonus for winning the contract)

The same usually goes for the top management, by the time it all turns to shit they're either in another company or acting as a government advisor.

Step one should be for the government department to know what they actually want the system to do, the second step should be for the company to not permit any changes in the agreed specification (without the new costings being agreed)

Pardon the cynicism

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Silver badge

Point five

publish all the connections; business, financial, nepotistic or otherwise between the decision makers and the IT suppliers.

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Coat

Time frame

With HMG they take so long to go through all this tendering process that by the time the job starts the equipment is virtually obselete and so you're paying over the odds for the hardware.

Network connections? Not sure if they require Token Ring or not.

Must dash, there's something coming in on the Telex machine.....

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FAIL

Agree

I ordered a new computer in March last year, after 9 months in change management hell, It's still on my desk waiting for IT to put the software i need to do my job properly on it.

It would take me about an hour to do it all, but i've got to wait for an IT engineer to do it.

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Facepalm

Anybody could have told them that it wouldn't be cheaper

First they say outsource to save cash, and then they need to do a report to find that it doesn't save cash, but instead costs more than doing it inhouse. *facepalm*

I look forward to all those IT Support jobs that were outsourced from governement and NHS to private companies returning to where the best value, and control of the cash, really is.

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Unhappy

No chance

one can dream, but who sends $$$$ to political parries to fund the electoral dis-information campaigns? You also have the mass ignorant idea that only private sector can do anything efficiently.

Not true of course. IMNSHO and experience, well run public sector agencies can run rings around the process oriented, overstaffed and over-managed multi-nationals.

The problem is hanging onto good managers in the public sector. They get seriously punished for success. Private and public sectors seem to reward failure of managers though.

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Meh

Sounds like...

the Government is only about 5 years behind commercial industry in IT approaches Now.

CFO's and CEOs started to wake up to the expense of IT about 5 years ago; CIOs felt the pinch.

Not before time, I'd say.

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404
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Facepalm

What?

You mean outsourcing doesn't save money? Oh Horrors!

Seems to me the problem is two-fold, any government agency created grows exponentially with bureaucrats and deadweight over time, including IT. They get so large it appears outsourcing in the answer to the damnfools we elect to office - which is true. Then they outsource to various IT companies which initially could save money, but the devil is in the details where projects go overbudget and part of the spend goes back to the various guvmint idjits' reelection funds (or just personal retirement funds) to keep that company at the government tit.

If you have been around a while and observed the process, it just keeps rinsing and repeating. Neva, eva, gonna stop until the people demand responsibility from government to be lean and mean. Sigh... but there again there are so many of the 'little people' on the government tit, this isn't going to change because they will keep electing the same people that will keep *them* on the government tit.

And THATS not going to change until everyone is held responsible for their actions or big mean ass aliens come that happen to find humans delicious. Only then it seems we will find the the real meaning of life - that we all need to stick together and quit screwing each other to the wall or all hang (be eaten) separately.

Just saying.

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£3500 per annum is the going rate

For a fully supported MsDross desktop.

That includes all licences support contracts hardware office level servers etc etc.

On top of that is the centralised application costs..big oracle DB stuff one presumes.

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So who gets sacked...

...for procurement incompetence.

Thought so.

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Holmes

Outsourcing *is* cheaper

Its a simple equation - you write down what you think you need and get a price for that. Trouble is is that you've only managed to remember half of the stuff that actually needs doing now, havent thought about what needs doing tommorow and havent spotted that your own civil service project managers have been over rating the speed at which it migt happen. So on paper, it *looks* cheaper than having a pile of your own staff sitting around with thumbs up their backsides.

The company providing the outsourcing knows this and in fact probably is only making a profit based on your mistakes which result in the variations to the contract.

Thats a legitimate method of making profit, its not unique to government IT contracts nor even IT itself.

Anyway, are any of us surprised that a report from MPs on IT is inaccurate with emphasis on the wrong places? Afterall, thats the cause the of problem in the first place!

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The other reason...

...that outsourcing is cheaper is that the external companies don't have the huge bureaucratic overhead that exists in the (un)civil service. An IT company with 200 employees would get by with 5 – 10 manager level positions, how many civil servants would it take to manage 200 people?????

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Flame

7-10x *more*

Not just a *little* more expensive.

7-10x more.

I like the title of the report but *boy* did it take a long time to work out *that* bit of (what It'd like to think of as) "Common " sense.

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Silver badge

Oligopoly

Large IT companies welcome government contracts because they are a license to print money. After all, the government's budget is virtually infinite, and it does not manage suppliers anything like as tightly as a private customer. The government is an ideal customer: poorly organised, careless of funds and very very rich.

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Anonymous Coward

But we've seen all this before ...

It's been going on for 20 years now, why is this a surprise? When the Inland Revenue's IT function was privatised in the early 90's there were 1800 staff delivering the entire service. Now there are over 3000 just managing the contract, let alone all the bodies employer by Capgemini, Fujitsu, BT, G4S, Johnson Controls and assorted other subcontractors. While I appreciate that there is a lot more being delivered these days, that's one hell of a lot a management overhead and profit margins to bolt onto what is still the same job.

AC because I'm still in the middle of it, despairing.

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Meh

"Socialistic organizations, ruderless and without profit/loss calculations"

As the saying goes,

In the private sector, if your project fails, you go out of business.

In the public sector, if your project fails, you get more money.

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Modification

If you're a private sector business providing a service to the public sector, see "In the public sector...", and tack on 10% for consultancy fees.

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Anonymous Coward

Sounds like they need...

...some ITIL training.

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Mushroom

OI OI OI -- the Bean Counters and cross-chargers are the cost

Suppliers are held hostage to very low / aggressive pricing in bids to the gubmnt. If a £500 item is on the books at £3,500, then someone SOMEWHERE is sucking the life out of us the taxpayers. Having responded on enough RFP's and quotes, you are either held hostage to the lowest possible charge &/OR to a MSP who has a global discount agreement to your company.

Someone's cooking the books -- plain and simple. Wash, Spin and Repeat!

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Childcatcher

so..

mate of mine, a machinist, not much to look at neither`s Sister works in local council. apparently the law states the local council must provide homes for homeless?? anyhows, that what he does now and apparently he`s a million pounds to the good...

same gig here methinks?

have to be the childcatcher, he homes the homeless eh?

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WTF?

It all comes down to risk

Government departments and agencies don't like risk. They insist on everything being done 'properly' - they are especially paranoid about security and system availability. This adds massive cost across the board.

If they want some hacked together cheap stuff with no security and no backup solution (and I'm assuming they don't) then they would pay a lot less.

I'm not aware of big IT suppliers having rate cards for governments that are 7 to 10 times higher than rate cards for commercial enterprises.

Someone needs to more properly look at what the suppliers are being asked to supply at the same time they are considering how much it costs.

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Flame

Government departments and agencies don't like risk...

...but are incapable of evaluating risk properly. Tell them that the patching on their servers is 2 years out of date and full of security holes, and they'll still resist patching (even out of service hours, which does NOT count as downtime!) Plus the poor sod doing the patching is charged with making sure every crappy app works after the patching, rather than all "stakeholders" agreeing the work must be done and committing to support it.

Bitter, moi? I agree with your comment in general, but it sounds a bit like a defence of civil service practices.

(Read the sub-text on the flames icon and you'll see why I picked it!)

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Holmes

Plenty of reasons....

I've worked both sides of the table here, and have seen plenty of reasons for escalated costs that can be both the governments and suppliers fault.

1. All the best staff "outsourced", the remaining rump tending to be some senior manager's drinking partner rather than the best person for the job

2. Contracts missing normal BAU stuff, that can then be charged as extras

3. Things in contracts not being true like for like e.g. what hell desk calls can be charged for - in house they usually don't even log a suggestion to reboot, outsourced seem to charge for answering a query on when the network will be back up!

4. Government going for the cheapest option, not properly bothering to check what is/isn't included

5. Scope creep, and the failure to carry out proper change control & cost benefit analysis of proposed changes

6. The assumption that if someone costs more, they automatically they know more about any subject than a cheaper person e.g. £1500 a day Accenture consultant MUST know more than a £450 a day contractor, who knows more than anyone permanent in-house

7. Crappy in-house legal services. I've known projects where they've had to employ outside specialists at vast expense just to check the contract is OK

8. Consultancies and out-sourcing companies managing to charge staff to a government project, when in fact they spent the majority of their time working on other things like bids.

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@Corrine

"6. The assumption that if someone costs more, they automatically they know more about any subject than a cheaper person e.g. £1500 a day Accenture consultant MUST know more than a £450 a day contractor, who knows more than anyone permanent in-house"

Not quite. Each fulfills a different need. It is Accenture who receive the 1500 of course, not the consultant. He is on a salary of about 50k and has about 7 to 10 years of experience. The equivalent in-house guy will be paid about 45k, but will cost his employers up to twice that because of overheads. Also when the project is done, they must keep paying him forever. The contractor, who in theory should have better experience than both, will cost about 100k per annum, but after 6 months they wave him goodbye. Hence getting a body for 6 months can cost you 250k (consultant), 50k (contractor) or 100k+ (employee).

"...some senior managers drinking partner..." - love it.

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Anonymous Coward

However:

"He is on a salary of about 50k and has about 7 to 10 years of experience"

Or with about equal probability, has six months experience, depending on whether the consultancy is in a growth phase or not.

And of course, unlike in the commercial world, a client middle-manager has about zero chance of success in getting a sub-competent consultant swapped out for someone who knows what they're doing.

Because while the senior managers old-drinking-buddy might still have a civil-service job, his new-drinking-buddy is the consultancy account manager who's bonus depends in part on how many graduates he can deploy.

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Meh

misleading but some truth

rate cards 7-10 times higher - absolute rubbish.

£3500 for PC, people above have correctly nailed most of those reasons, that is the cost an outsourced supplier will charge for per user for full service - equipment, software, access to all major systems, support, running the core systems, backup etc in a secure environment i.e. IL3 and above. So it will be a per seat cost and yes the person will have a PC and yes the contract may word it like that, but it will be a hell of a lot more. Nicely skewed authors and the hack of course.

BUT, points 3 and 4 in the report are v v valid. Yes make the projects more agile so they deliver faster and then evolve as they need to. Yes make procurement a shedload easier so the best supplier gets the work, not just the ones that understand the procurement system and can afford the bidding process.

But to do this government would have to stop being so risk averse, get rid of the blame culture and do less consultation and more decision making. Could any of you really imagine that happening???

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