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By Nick Heath, 17 August 2009 11:45

COMMENT

Government spends loads of cash on IT with few returns. Nick Heath looks at what could be done to improve those results.

As the organisers of Michael Jackson's multimillion-pound comeback gigs could tell you: spending money doesn't always guarantee results.

It's a hard lesson to learn - particularly for the UK taxpayer - who has seen the government throw increasingly large sums of money at public sector IT and then watched as civil service productivity has slumped.

Spending on public sector IT has grown to more than £16bn in 2007/08, according to the government's recent Operational Efficiency Programme (OEP) reports.

Yet over the same period the Office of National Statistics found that the productivity of the public sector - the quality and quantity of the sector's total output versus the resources put in - has shrunk by an average of 0.3 per cent each year.

So - shocker - it appears that blindly shovelling money into upgrading and maintaining systems in a Whitehall department or local authority doesn't translate into shiny new services.

While government is happy to spend money on new IT, there are constant reminders that it doesn't understand how it is spending it. Whitehall and the wider public sector needs to start counting how every penny is spent and build ways of capturing this information into every IT project.

The confusion over how money is being spent on public sector IT was pinpointed by former Logica CEO Dr Martin Read in his report for the OEP, in which he said there was "a lack of detailed understanding of how much different elements of the public sector spend on IT".

This uncertainty over spending levels must play a part in the government IT budgets which are spiralling out of control more often than a city banker's bar tab. Take for example the £7.2bn Defence Information Infrastructure or the £513m National Offender Management Information Service.

As outlined in the OEP report, Read aims to cut £3.2bn from the annual public sector IT costs. To do this he'll turn the spotlight onto the dark corners of Whitehall departments to find out exactly how they are burning through our billions and identify where money could be saved.

He recommended: "Management information on public sector IT spend (both internal organisational spend and spend on third party goods and services) should be fully integrated into departmental processes and should be collected on a regular, consistent, auditable and transparent basis to allow for robust comparisons, following the principles set out in the recommendations for back office."

Though these steps may help, the productivity slump stems not only from projects sailing blind but also from being left rudderless after the captain jumps ship. Read said in his OEP recommendations of major government IT projects: "There has been a high level of turnover of Senior Responsible Officers (SROs) on these projects, which has been linked to project failure."

Parliamentary watchdog the Public Accounts Committee has also uncovered instances of IT projects left rudderless by leadership changes. For instance, the Ministry of Defence failed to appoint a senior responsible owner - a move which it said contributed to the late delivery of a £2.4bn project to provide Bowman digital radios to troops.

With such systemic failures of project management at the heart of local and central government, is it any wonder that IT projects are so frequently haemorrhaging money?

In his blog, government CIO John Suffolk echoes Read's calls for increased oversight. He says the public sector needs to be engaged in "a continuous process of ensuring that what is being invested in is still appropriate and indeed the investment will deliver the expected benefits".

Suffolk does point out that, according to the OEP reports, the £16bn spent on public sector IT is only 4.6 per cent of total public sector spending. This is below an average of 5.9 per cent for governments across the world, according to analyst house Gartner. Suffolk adds that the £16bn is not centrally controlled but is allocated across thousands of separate public sector bodies, each running their own projects.

Surely it is not a simple or inexpensive task to build mechanisms for measuring spend on projects made up of scores of civil servants and private sector contractors.

And we must question how thoroughly the Office of National Statistics measured public sector productivity, given the difficulty of accurately capturing less tangible benefits, such as improved quality of life.

But without a clear picture as to where the money is being blown, it is inevitable that government IT projects will continue to bust their budgets and struggle to identify areas where future savings can be made.

By retaining the same managers for the lifetime of a project and keeping a close eye on the cost, government could gain a better understanding of why it spent £16bn on public sector IT last year, and what it actually got back.

True, you can't guarantee results just by throwing money at a project. But we must do whatever we can to up the chances of a good return.