UK public sector could save £20B by swerving mega-projects and more, claims chief auditor The UK’s chief auditor has claimed the government could save at least £20 billion by modernizing IT systems and other measures. Along with modernizing legacy systems and improving technology procurement, Gareth Davies, head of the National Audit Office, said tackling fraud and getting a grip on failing mega-projects would also …
This might be a ridiculous idea, but rather than a bunch of generalist civil servants and politicians negotiating with an IT supplier, how about involving people who know the technology and people who know what the problems are to be solved by the technology.
I have seen outsourcing work quite well when there isn't a pressure to deliver $mega_system but rather to implement what the end users need. Actually that's been a recurring theme in my career: lots of expert user involvement correlates with success and little or no involvement correlates with delivering a pile of expensive crap. Oh, and the purchaser has their own IT involved in design assurance and all that
"how about involving people who know the technology"
But where are these people? Certainly not in ministerial office and probably fairly fe in ministerial offices. Long term dependence on outsourcing is liable to end up in a lack of the knowledge to manage the outsourcing effectively.
But where are these people? Certainly not in ministerial office and probably fairly fe[w] in ministerial offices. Long term dependence on outsourcing is liable to end up in a lack of the knowledge to manage the outsourcing effectively.
This was the warning given in the early 90s when the government decided that slimming down the Civil Service was the path to victory and that it would be far more cost effective to just buy in the services of consultants on a per project basis. The loss of the specialist expertise of those made redundant was duly proclaimed a triumph of cutting out waste, and the fact that Permanent Secretaries would no longer have in-house experts they knew and trusted to advise on defining a project's scope and with the ability to hold private partners to account was glossed over in favour of chucking huge sums of money at consultants who eventually came to tell the government what the industry that had captured them wanted the government to hear.
Now here we are.
I remember similar events. But neither your subjective recall nor mine necessarily fully and accurately describes the situation. The reason why I said that money ended up being wasted on consultants was because that was the conclusion of multiple Select Committees over three decades. If you remain convinced that your memory trumps their published analyses, feel free to climb the Elizabeth Tower and balance on one leg on top of the spire whilst crowing your irrefutable convictions to the Great British Public. Or you could just stop and think about what you said and why you felt the need to say it.
An actual expert who reviewed source code for the Horizon system claimed that some of it indicated the 'programmer' had no understanding of how to write code and the code showed no understanding of even basic arithmetical operations. He was, of course, ignored by the Post Office and Fujitsu. I heard this on one of the BBC Radio 4 series on the Horizon scandal, should be somewhere in the BBC iPlayer archive, and is currently (as of 20230117) broadcast at 09:15 weekday mornings.
One of the things I find surprising after reading that report was that as the reports of discrepancies in the sub-post office accounts began to surface no-one seemed to connect back to the earlier problems. It's unlikely that a system described with so many problems suddenly achieved nirvana in such a relatively short period of time. One would have thought that as the complaints from the pilot field program began to surface the program managers would have started to question what was happening.
I suspect that there was "a lot of pressure" from the top down that this system "must work". What remains to come out from the enquiry and criminal investigations is exactly how much of the "it's a crock of s**t and stinks to high heaven" made it to the top before being translated into "it promotes growth and is very powerful such that none may abide it's strength".
I think we've all seen cultures where no-one dare tell the truth upwards, so at each level it gets watered down.
Because you need the management for that, that aren't self-serving. We've moved to a new housing system that was managed by a fuck whit with no IT knowledge. But because he's an arse licker and the rest above are also incompetent he gets away with it. Its currently a shit show, worse than the other system in some respects and quite broken in others. He's palming all the problems off on others that are already overworked instead of dealing with it himself.
I realise the joke, but you need auditors even if the contractors are paragons of virtue and highly competent.
In my line of work at the moment I'm effectively auditing documents created by skilled people intent on getting them right. Even so, I'm still finding errors - just not the massive "how did that get past proofreading" errors you might expect from throwing an infinite number of monkeys at the job.
I did some consultancy for HMRC. The officers I met were all hardworking, but complained that the outsourcing contract meant that if they wanted to move a desk in their office, the contractor would charge them over £400 for moving the IT equipment. This is a few years ago now, so I expect the cost has since risen.
"No I think you made a logical mistake. Not paying more tax than legally due does not make you bad."
True, but what I think the Audit Office guy was getting at was the legal loopholes used to tax avoidance need to be addressed. Transfer pricing and the like, IP licencing of brand names through off-shore subsidiaries so the actual sales side shows no profits etc. Legal, but generally only available to large companies with teams of accountants and tax specialists giving them unfair advantages over those who can't afford to avoid taxes in those creative ways, hence the linking of illegal tax evasion and legal tax avoidance in the comments. Both need to be addressed.
@John Brown (no body)
"hence the linking of illegal tax evasion and legal tax avoidance in the comments. Both need to be addressed."
I get that, but the unfortunate linking of tax evasion and tax avoidance, and the push to make people think tax avoidance is bad, is something that needs to be corrected for a very dangerous reason. When people start mistaking tax avoidance for tax evasion or assuming its nefarious, they unknowingly support theft by the government. Outright stealing by the monopoly mafia who forever want more money.
Disliking loopholes and wanting the government to address them is one thing (not helped by the over complicated tax laws), and tax evasion is already illegal. But when they argue against tax avoidance they dont seem to realise they are arguing against themselves not paying more tax. I am having to explain this further down to Rich 11, and I dont blame him for not knowing but I am guessing nobody explained even an ISA is tax avoidance.
"Naïve or just an apologist? Hard to tell."
Neither. He's just stating the fact, which is that it's a legal definition. There was a legal judgement long ago which stated that no man was obliged to organise his affairs to maximise the tax he had to pay. That you aren't aware of that does not make Codejunky either an apologist or naive.
@Roj Blake
"Tax avoidance is legal, yes. However, very often it's achieved through exploiting loopholes in the system. Tax revenue can be increased by closing those loopholes."
Exploiting not meeting the criteria to have money taken off you by the laws? We can close loopholes by having a flat tax without adjustments. Scrap ISA's and no capital gains on your primary residence etc. No progressive tax bands etc. No tax breaks on pensions etc.
Exploiting the law by not breaking it is generally considered a good thing.
The biggest source of avoidance - and loophole is probably the wrong word for it - is the entire way that international taxation works. For multi-national corporations there's a world-wide competitive market in corporation tax.
A country with a relatively small real economy can offer a better price in the form of lower corporation tax if, by doing so, it can get a few large multi-nationals to be head-quartered there for tax purposes. By their size, even at a lower tax rate, they will contribute sufficient to the smaller economy and, as a bonus, local businesses are also enjoying the lower tax which can help them be more competitive selling abroad.
In short, if you're a multi-national you can arranged to be taxed in Ireland on profits made on the business conducted in the UK. It's perfectly legal, it's not a result of some quirk of UK tax legislation but of the freedom to do that and the disparity in tax rates. Sorting it out would require international agreements and those smaller nations who benefit are in no hurry to agree.
Not that I'm explaining this to you, Codejunky, as I'm sure you're as well aware of that as I, but there's always an element of the commentariat which isn't.
In short, if you're a multi-national you can arranged to be taxed in Ireland on profits made on the business conducted in the UK. It's perfectly legal, it's not a result of some quirk of UK tax legislation but of the freedom to do that and the disparity in tax rates. Sorting it out would require international agreements and those smaller nations who benefit are in no hurry to agree.
Not quite. UK has diverted profit tax, that is higher than corporation tax to stop this. However, the problem is this tax is very much discretionary. HMRC like to chase smaller businesses that do this, but leaves the big ones free to avoid paying tax as they please, so big corporations can keep their unfair advantage and civil servants always have welcoming arms if they decide to move to private sector.
Tax avoidance is legal but not moral. Doing the things that tax rules are there to promote (saving for a pension for example) are avoiding tax but are not "tax avoidance" but "tax planning". Avoidance is using laws in a way that they were not intended to be used, hence is using a loophole.
Big businesses can normally get away with calling their brand whatever value they fancy to avoid paying tax - register your brand name in the lowest tax location and then claim that your UK sales are due to the use of this expensive brand name.
The best way to solve this is to drag tax avoiding brands through the mud, thus decreasing the amount they can claim their brand is worth.
register your brand name in the lowest tax location and then claim that your UK sales are due to the use of this expensive brand name.
That is going to work until your accounts get audited. Problem is HMRC doesn't look under the covers of big corporations, so they can get away with these kind of schemes.
The best way to solve this is to drag tax avoiding brands through the mud, thus decreasing the amount they can claim their brand is worth.
There is no political will to solve this. Too much money at stake and nobody wants to lose donations, privileges and other benefits these corporations can afford.
@matjaggard
"Tax avoidance is legal but not moral."
That is a problematic statement though. Who owns your private property? Who owns your hard work? Who owns your time, effort, resources? Of course by the idea of it being yours means the government isnt due more than they are legally due. And it is the government who set the rules.
On the other hand if you are a slave who owns nothing then yes the gov can set rules of what to take but then steal more because they decide to.
Which is moral? But more importantly morality is very flexible to whoever is claiming morality so surely following a clear set of rules would be moral?
Umm, sorry about this, but the philosophy of taxation has been debated for thousands of years. (Julius Caesar was assassinated primarily because he wanted to tax the rich landowners more.). Whilst I have the greatest respect for the Register's commentarians, I doubt we will come to a solution on which everyone agrees. Although as the rich have increased 'their' wealth by over. trillion dollars since Covid, and the poor have seen there wealth decrease by about 1% in the same time, taxing the rich more does seem to me, personally, to be equitable. (Now I must just get on to my pension funds and make sure it is all in tax havens.)
"Avoidance is using laws in a way that they were not intended to be used, hence is using a loophole."
It's one of those irregular verbs, isn't it?
I am using an exception in the way the government intended.
You are using the exception in circumstances which need some clarification.
He is avoiding tax by using a loophole.
The legislation is what the Act or Regulation actually says, not an unstated intention.
There is a difference between (international) corporate tax avoidance and the level of tax avoidance you and I can get up to on our "serfs" income... Even someone like Rees-Mogg, is probably quite limited to the level of tax avoidance he can avail himself of.
I suspect what many are reacting to is the "taking the p*ss" use of tax avoidances, mainly by international companies to proactively avoid paying taxes and avoiding investing in the business, whilst holding the begging bowl out to government.
>Exploiting the law by not breaking it is generally considered a good thing.
Many tax laws can be bent, how far is a matter of opinion...
《Tax avoidance is legal, yes. However, very often it's achieved through exploiting loopholes in the system. Tax revenue can be increased by closing those loopholes.》
Australia has the gem that is the "General Anti-avoidance Rules" in her taxation legislation which prohibits any arrangement whose sole or overarching purpose is to avoid (minimize.?) tax.
I don't know about other jurisdictions but I assume others have something similar. I was rather amused by this approach when I first heard of it.
Fairly certain the UK does not have anything at all like that - otherwise former PM David Cameron would not have been able to inherit £2million for his father 'tax free' because it was in an offshore tax haven. (Yes, that is the same David Cameron who worked for lobbying for the financial company Greensil that went bankrupt and he refuses to say how much he was paid, oh and he imposed austerity on the UK when 'in power' too.)
Tax avoidance is acting legally. Its following the law and being a good person.
Tax avoidance is the act of structuring your affairs in such a way, however convoluted, that tax liability is minimised. It stays within the letter of the law by not doing anything explicitly illegal, but it can and frequently does involve exploiting rules designed for one circumstance being made to apply in an artificially created situation that would not normally be part of standard business practice. Given that the explicit intent is to avoid paying tax, the person doing so is definitionally not being a good person.
@Rich 11
"Tax avoidance is the act of structuring your affairs in such a way, however convoluted, that tax liability is minimised."
Aka not paying more than you should.
"Given that the explicit intent is to avoid paying tax, the person doing so is definitionally not being a good person."
Almost nobody chooses to pay more than the legal amount they should pay. People can legally choose to give money to the gov and almost nobody does. That is tax avoidance. An ISA is tax avoidance. Not working to earn more pushing you into a higher tax band is tax avoidance. If you dont own your time, effort and resources then you are a bad person not giving the government what they are not due. But otherwise the gov has no claim over your private property.
> People can legally choose to give money to the gov and almost nobody does.
Depends…
> Not working to earn more pushing you into a higher tax band is tax avoidance.
Lack of imagination…
I’ve known people who have donated their entire (HRT) net income to charity, the charity got the base rate tax (25%) and HMRC returned the additional higher rate tax paid (15%).
Similar arrangements could be made with respect to pension contributions, another instance where HMRC returned the HRT delta to the taxpayer…
So in some respects (and yes I agree it’s a little distorted) if you aren’t arranging your affairs in a tax efficient way you are choosing to give money to the gov….
Your pig ignorance is showing.
An ISA isn't tax avoidance: it's one of the special rules that successive governments have implemented and continued to support in order to encourage personal long-term saving. If its avowed intent were to be subverted by some unscrupulous entity in order to avoid paying employer contributions on national insurance or to manipulate income tax boundaries, that would be tax avoidance.
Fucking grow up! Tax dodgers are not heroes. They are selfish shitstains thieving from the rest of us who want essential services like roads and environmental protection and government and emergency services to be functional as a reasonable shared outlay. If you want to declare yourself as not part of a reasonable society, as a grifter and a cheat, please stand up and do so. I know of a sewage tank I'd like to drop you into.
@Rich 11
"An ISA isn't tax avoidance"
Very quick google search this is the text at the top of the screen- "ISA stands for Individual Savings Account. The main difference between an ISA and any other savings account is that it offers tax-free interest payments.". The emphasis is mine. It is about being tax efficient. You said- "to encourage personal long-term saving" which is achieved by offering tax avoidance.
"If its avowed intent were to be subverted by some unscrupulous entity in order to avoid paying employer contributions on national insurance or to manipulate income tax boundaries, that would be tax avoidance."
No. Subversion is not required and how far can you intentionally follow the legal rules before its claimed to be subversion? Note the crooks that are in government who actually write these rules.
"Tax dodgers are not heroes."
At no point did I say they were. Just ordinary people. Your rant seems confused. The gov can spend all the money it takes and more (look at the national debt/deficits) just like ordinary people. That is why there are rules about what they can take, because they would take all and demand more. But private property exists here
>” If its avowed intent were to be subverted by some unscrupulous entity in order to avoid paying employer contributions on national insurance or to manipulate income tax boundaries, that would be tax avoidance.”
Nothing wrong with this.
However, focusing on the grey line between illegal tax evasion and legal tax avoidance, HMRC themselves are guilty of muddying the waters.
Currently, employee pension contributions are only free of PAYE, not NI with both employers and employees NI being due. However, if you take a salary sacrifice and switch to a more tax efficient arrangement, namely an employer only contributory scheme, there is no NI due. HMRC want this type of switch to be perceived as tax evasion, but noncontributory is okay if that was the arrangement on the day an employee joined a company…
Similar attitudes in HMRC have driven their push against contractors, who they likewise want the public to regard their ability to use the legal tax avoidances the Ltd wrapper permits as illegal ie. Tax evasion.
"Given that the explicit intent is to avoid paying tax, the person doing so is definitionally not being a good person."
Back in the days when I was a civil servant and doing a certain amount of travelling it seemed that every expense claim violated some or other restriction that the IR had thrown up. If I'd had a witness summons to attend court as a private individual I'd have claimed my expenses from the court. As I was attending as part of my employment it seemed I was expected to subsidise my job. Was whoever was behind that being a good person?
Later, in my final years as a permie I kept getting tax forms to fill in, being assured that if I updated their information I might be able to pay less tax. I always ended up paying more. Three years into being freelance they decided to hold some sort of investigation. By now i had an accountant and turned the whole thing over to him - at the cost of extra accountancy fees of course. The outcome was that the last three years were perfectly correct but because an investigation extends over six years it went back into the permie period. The outcome of that was that I was owed a considerable rebate because, based on those forms, I'd been substantially over-taxed. If they hadn't made the mistake (from thair PoV) of launching the investigation this would never have come to light. Were those responsible for those permie taxes being good people?
The IR and their successors HMRC have made the tax system adversarial. They will attempt to maximise an individual's tax beyond what is due. Any morality has been removed by them. You shouldn't look at it as a matter of good and evil. It's simply a matter of individuals looking after their own rights when confronted by a sate that just doesn't care.
I have a cousin-in-law who used to work for the IR. He took very early retirement due to ill-health which he said was due to the stress of what he was required to do.
An interesting contribution, and no doubt frustrating in trying to deal with all that convoluted paperwork, but your experience does not address my clear qualifier of 'explicit intent'. I think you are very well aware that there are people who are tax cheats and that there are people who are victims of bureaucracy and a particular government's preference for going after the small and simple cases rather than the large and complex cases.
They could save even more by scrapping IR35 that prevents small and medium business from running and artificially inflates costs by added bureaucracy, limited competition and by freeing the salary bands in public sector to reflect the market.
The current corrupt government (and previous ones) keep salary bands below market rate to ensure departments cannot hire competent workers in-house and they have to seek external suppliers (then pay market rate wage and consultancy mark up and other overheads).
This is just a massive gravy train and it is a shame NCA and SFO have not investigated how IR35 came (especially changes made by Sunak and co) about and their effect on funnelling tax payer money to big corporations. The behaviour of HMRC and Treasury in that regard bears a lot of similarities to Post Office scandal, except there are magnitude more victims.
Add to that Home Office participation where they give skilled worker and intra company visas like confetti so that big consultancies can bring in overseas workers way below market rate and further increase their profits at the expense of British business.
They could save even more by scrapping IR35 that prevents small and medium business from running and artificially inflates costs by added bureaucracy, limited competition and by freeing the salary bands in public sector to reflect the market IT workers from dodging paying tax and NI.
FTFY.
Spoken like someone with a massive (and uninformed) chip on their shoulder.
Under IR-35, as a contractor I was still paying significantly more tax than the permanent staff I worked alongside. If you find that unfair, you are legally allowed to volunteer additional money to HMRC if you like. Somehow I doubt you will.
As it is, the IR-35 rules do not prevent those who wish to abuse the system from continuing to abuse the system. In addition, those who are "prevented from dodging paying tax" now see a roughly equivalent amount of money diverted to agency profits - so absolutely no-one is winning out on that one. And the costs for companies that want a flexible, specialist workforce has gone up. You can thank IR-35 in part for inflation, and company layoffs.
But, strangely you choose to believe the current government when they claim the system is now somehow "more fair"? Really?
The "tax dodge" is a vehicle Treasury and HMRC is using to mislead about what IR35 is, because it resonates with the public but actual reason why this has been implemented is to prevent good developers from leaving big consultancies and starting their own good developers ltd and creating competition. Plus it has created a whole host of unintended consequences that are crippling the economy.
It is probably the most corrupt piece of legislation there is today in its current form.
... you are legally allowed to volunteer additional money to HMRC if you like ...
Hmmm. I recall a story about an MP who had been making rather free with their tax affairs - definitely one of the darker shades of grey. To try and spin it they declared that they were making a payment to HMRC. However, when the story was followed up it transpired that HMRC would simply consider that as a payment on account and use it to offset the MPs next tax bill.
So things are not always as they might first seem.
(And as an aside, HMG and HMRC, have a habit of making things "complicated" to dissuade people from claiming what they are entitled to. So some people opt to miss out because the personal cost of getting all your dues is more than it is worth).
I remember giving up trying to claim the Pandemic/WfH allowance for office equipment after the 4th or 5th not-quite-in-agreement gov.uk web page telling me how simple it was.
And further back, we gave up trying to get tax relief on childcare because step one was, effectively, "specify how much you'll spend on childcare in the next year - no conferring!"
Rather than trying to go the whole hog with far reaching projects, the government needs to learn how to "bacon slice" useful systems into existence - delivering piecemeal improvements and functionality that work together, rather than fat, inflexible monoliths that committees and architecture astronauts have spent years planning.
It still impresses me that when you put a sufficiently large number of people on a project (or, likely, a "program"), how little they can achieve. I'm sure many have heard the old joke about the team leader being called into the boardroom and asked for an estimate on a new thing. "How long will it take if I give you five programmers?" "One year" "What if we gave you 20 programmers?" "Two years" "What if we gave you 100 programmers?" "It will never be finished"
It's coming up to 50 years since Fred Brooks wrote TMMM and we haven't learned a damned thing.
>It's coming up to 50 years since Fred Brooks wrote TMMM and we haven't learned a damned thing.
Based on the post-war reconstruction of Japan - they read the western business text books and applied what they learnt...
I suspect the Chinese and others have read and are applying TMMM...
"It's coming up to 50 years since Fred Brooks wrote TMMM and we haven't learned a damned thing."
It depends on who "we" is.
One of the problems he wrestled with was how do you organise the efforts of the many but take advantage of the overall vision of a single individual. ISTM that the FOSS community has worked out one solution: the maintainer. The maintainer provides the overall vision and decides whether a contribution meets the standards, should be sent back for rework or even whether it fits in with the whole at all. In effect the role combines QC with that of architect, shaping development in the long term.
It might need some modification in a commercial environment in that there would also need to be more planning as to what needs to be developed but I wonder if any development teams have adopted the overall principle.
The trouble with that is you get a whole load of disparate systems each doing their own thing reasonably well, but incompatible with the others when interaction is required. What you actually need is competent people who know what they are doing and are allowed to get on with it. Yes, I know, and pigs will fly...
Ooh well, time for my medication
Only if it's done as a set of piecemeal systems.
It's entirely possible to create systems in stages - typically get the core functions running, and working outwards to encompass the less and less core functions. However, that can be problematic if it means keeping two systems running where there has to be a significant overlap - e.g. where the old system relies on stuff that's now in the core function of the new system. As usual, it's a problem of "I wouldn't start from here" - but short of shutting down government for a while, the old systems are there and it's hard to bring in a replacement if you need to effectively integrate a new part-system with the old system (the provider of the old system will typically cripple you in bespoke work costs to start with).
I've seen these kind of arguments before: we can save $20 billion on software by spending $20 billion on building new crap software.
Some airlines claim they need more frequent flights (including during the night) to financially support their transition to becoming a sustainable industry. All of this is complete BS.
I would support the government publishing functional documents on needed software and paying open-source developers to build these systems. The source code would then be published on a government GitHub clone.
Just remembered a story about one of the major US car manufacturers. Big board meeting with accountants, executives etc. Anyway, the accountants identified that certain factories were losing money, so recommended they be shut down. Until someone piped up "Hey! Why don't we close all the factories then we won't lose any money!"
If they move from mega projects to smaller projects it'll still be implemented by massive lacklustre consultancies so that all involved can receive their bungs. Costs are then more likely to go up..
Target smaller companies, insist on a third party source control audit by another smaller company whilst the project is still in development, have a clause that if the project is not sufficiently maintainable or flexible there are severe penalties.
He added that a scheme designed to save the health system money may also have made selling branded drugs less attractive in the country.
And that's a difficult vicious circle to break - we're stuck with big projects, procurement is geared up to them, smaller players can't easily/at-all compete, hence we're stuck with big projects from big players.
Add in stiff penalties, and smaller companies will simply look at it and see the existential threat to the business existing in a few years time. But at government scale, even small projects are "big", so I don't really see much change happening in the small business end.
I worked for government dept in IT back in the early 1990s, it was my first proper IT job as a DBA sysadmin on ICL kit. A simple project to replace a database and 50 dumb terminals with newer IBM kit, it took 2 years, was double the budget, had 2 complete rewrites and still wasn't working when I left to go work in the private sector.
I'm on the brink of retirement now, I can see goverment IT project procurement ain't changed in 30 years so it ain't gonna change in my lifetime, I know that!
If we think about the average big government project, it's interesting to consider how much it would cost to in-source. Supposing the government decided to spend a billion a year across all IT projects, for that they could hire literally thousands of engineers at £100k per year and still have lots of money left over for hosting and physical infrastructure.
They might not need that many engineers, in which case they could save money.
Sure they would need managers and project management and the rest, but still, it doesn't feel unrealistic.
The truth is that back in the eighties when they said "the private sector is more efficient" they were really looking at projects run at smaller scale in private sector settings. When private and public sector organisations are about the same size they have a similar level of efficiency, perhaps the private sector gets slightly better people by paying more (which the civil service could do if allowed) but it loses value-for-money by having to hand off half the cash they get to shareholders. Meanwhile insourced projects get a lot of advantages - in-house ownership, expertise and ideally the opportunity to open-source tools so the wider community can benefit. A big opportunity for win-win situations, perhaps win-win-win if one also considers all the wealthy tory donors losing out as their shares in Capita become less profitable.
The private sector is only more efficient if you ignore the failures. The private sector achieves this by letting failure wipe out the organisation responsible (*). That moves the centre of gravity towards more effective (for now) organisations. It isn't that they have secret knowledge of how to do it. It's simply that they can make the stats (of the survivors) look good by wielding an axe.
You can't do that with your own country.
(* This assumes there has been no regulatory capture, resulting in organisations being deemed too big to fail.)
"The truth is that back in the eighties when they said "the private sector is more efficient" they were really looking at projects run at smaller scale in private sector settings. When private and public sector organisations are about the same size they have a similar level of efficiency....."
So true. I've worked for three decades in a range of private sector operations, and I'm now a civil servant. The levels of efficiency/incompetence I encounter in the civil service are similar to those in large corporations. The public sector does of course have an albatross round its neck, in the form of an executive branch (politicians, that is) that interferes, make too many poor quality decisions, and over recent years has featured some utter charlatans and thieves. But that can still happen in the private sector - I worked for a large software company that went bust under directorial fraud. Some may say that bankruptcy cures this problem, but it doesn't. The company may go, but fraudsters move on to see what ill gotten gains can be found elsewhere, and the incompetent executives of this world seem to invariably cruise on to some cushy new gig. I can speak to examples of both of those, sadly not in public.
"So true. I've worked for three decades in a range of private sector operations, and I'm now a civil servant. The levels of efficiency/incompetence I encounter in the civil service are similar to those in large corporations. The public sector does of course have an albatross round its neck, in the form of an executive branch (politicians, that is)"
As do private companies. They are called "vice presidents"
I would dispute the “Private sector is more efficient” claim.
My personal experience of over budget, reduced scope, or cancelled programs is quite extensive.
The private sector has the luxury of redefining “success”. In extreme cases cancelled projects are presented as “We have successfully reduced the IT budget via an aggressive cost cutting program”.
Big projects mostly fail, it’s just a fact of life.
Incidentally government IT has had quite a few successful projects. The DVLC is still running a forty year old system with no need for replacement. NORAD in the 1950s not only kept the west safe from Soviet nuclear attack it pushed the boundries of what was possible with hardware and software.
Incidentally government IT has had quite a few successful projects. The DVLC is still running a forty year old system with no need for replacement.
This is precisely the sort of stuff they want to replace. "Legacy systems" is such a give-away, it's the scary catch-phrase for anything that's just been quietly doing its job and minding its own business for decades without ever making the headlines, and it makes the usual suspects unhappy because it's a wasted opportunity to bilk someone for expensive crapware that never works.
it's the scary catch-phrase for anything that's just been quietly doing its job and minding its own business for decades
This is the irony of Cyber Essentials: "you can't have anything on your network that isn't supported by the manufacturer" - unless you are a Government department, running 'legacy code' on 'legacy devices' that actually still work..
Or indeed any Government department.. especially those with outsourced IT (which, AFAIK is all of them)
The truth is that back in the eighties when they said "the private sector is more efficient" they were really looking at projects run at smaller scale in private sector settings
The inescapable fact is that outsourcing is *always* going to cost more:
A project requires X in people costs and Y in hardware costs when done in-house (where X may include an amount of recruitment and training).
The same project outsourced will cost X in people costs and Y in hardware costs plus Z in outsourcer profit margins. Any slim down in X due to 'synergies' is more than going to be swallowed up in the Z costs.
Also it has hidden costs - no in-house knowledge of how the system works, making you dependent on the outsourcer and then a huge pain when you (eventually) kick them out. We even had one outsourcer try to take their system with them "because it used their IP" - having forgotten that the contract terms specifically stated that any work they did on our behalf remains our property and they grant us a permanent, non-removable license for any of their IP used in the system. The hardest part was watching the system fall over when it could no longer reach their management system.. (which broke the terms of the contract - it was supposed to be stand-alone and fully managable from within our network but obviously the contract devs they got in hadn't bothered to read the project spec and just re-used the management module from another project that hadn't had that stipulation).
At the last outsourcer change we brought a bunch of functions back in-house. As far as I can tell, the only outsource contract that makes sense (other than network provision) is Service Desk - especially if the business wants it to be 24 hours but won't fund the staff to enable that in-house.
I've yet to see a good outsourced service desk though - most of them have a really high turnover rate which means, given that most of them don't actually seem to train their staff, more work for internal staff.
@CrazyOldCatMan
"The inescapable fact is that outsourcing is *always* going to cost more:"
Just to be 'that guy' but I outsource the growing of food, generation of electricity, making of clothes, construction of my house/car and pretty much all my items. A previous business I worked for made stuff but outsourced delivery which would have been impossible for the business to provide.
Not to say sometimes outsourcing costs more, but for the majority of our civilisation outsourcing works
While that's true, we're discussing a different scale.
At the sort of scale of gov. projects, it would be completely feasible to insource. What CrazyOldCatMan missed off the list was that as well as adding the outsource provider's profit margin, you also have to add your own overhead for managing the project. One of the reasons many outsource projects fail is that the organisation offloading something is management doing so with the belief that it's as simple as paying Z to do something that you used to do in-house and ignoring that you have to manage it.
But to insource at government scale would need a considerable shift in in-house capability and processes. Another catch 22 - because this has mostly been outsourced, there aren't the in house skills (including good management), and it's hard to build them up without the work for the people to do, and you can't insource and create the work until you have those people and processes in place.
But it's not all doom and gloom. There are government projects that work, even very big ones. Can't say any more, but I'm a tiny cog in a very large government project that is held up as an example of how to do things - though even we are suffering from the pressures caused by political delays [some time ago] in deciding the scope or even whether to go ahead, and it's going to be hard work to hit our deadlines which are quite hard given that there's equipment involved which is already past it's planned lifetime in the currently in use system.
says it all: "Despite Davies' claims, it's important to note that the government has been here before. In 2017, The Register revealed how the plans to overhaul £6 billion ($7.58 billion) in large IT contracts expiring within the next three years have fallen by the wayside. "
I also note that while Davies was reported as having said HMG could save £20billion, he was not reported as indicating how much it could waste if things went badly. They really do need to stop using 'consultants' with a financial interest in prolonging things indefinitely to run IT procurements, and get in people who will do a proper job of telling the customer when they need a pause to work out what they actually want.
For instance, the initial idea behind the UK's Universal Credit was sensible - create a single system which could handle all of the main benefits so that a claimant only had to go through it all once, and they would get what support they deserved*. But the problem was that the Treasury decided it was a wonderful opportunity to save money on benefits (rather than on making claiming benefits more efficient). And they also decided that claimants, most of whom worked to a weekly budget had to wait 5 weeks for the first payment, when they rarely had two weeks' worth of money, so had to borrow or get an advance, which had to be repaid. Coupled with Cameron and Osborn's 'austerity' policy (based on a flawed analysis of the effects of government debt) it has been a disaster for millions of people.
I wonder if the Comptroller and Auditor General has ever himself managed a major IT procurement in person.
*For whatever definition of 'deserve' the current government decides.
As Chairman of this progress meeting I now call on our suppliers Project Director to report on project progress.
Capitsu: "We've started our planned activities. There are some questions that may require Variation Notices to be signed off."
Chair: "So, it's all going to schedule?"
Capitsu: "There's no recorded delays and activities are in progress."
This story comes out every few years and has done for 20yr+
Might be true except the public sector has outsourced everyone who could assess such procurement properly or lost them due to low salaries.
So your Fushitsus and Crapitas come in with shiny suits and big words then sell expensive shit to executives that can't wipe their own arses without 3 sets of consultants.
No chance this will change until the gravy train rewards good work not just backhanders.
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