Analysis: Can the public sector attract IT high-flyers?

The lack of senior IT management experience within the civil service has been cited by many a National Audit Office report as the reason for the series of high-profile government IT failures over the past two decades.

One of the key reasons for this is that the IT profession and career ladder within the civil service was virtually wiped out by the wholesale outsourcing of central government departmental IT to the big services and consulting companies in the late 1980s and 1990s.

Much of the talent within the public sector quickly fled to the private sector while the career ladder for developing IT talent internally within the civil service disappeared.

Public sector pay scales have been another reason why government has been unable to compete with the fat pay packets on offer in the private sector for the calibre of people needed to run major transformational business and IT projects costing billions of pounds of taxpayers' money.

The Labour government has attempted to combat this with increases to the maximum salaries on offer to the highest paid civil servants - permanent secretaries - and has succeeded in luring a number of high-profile figures from the private sector.

Richard Granger, charged with running the procurement and delivery of the £6.2bn Connecting for Health NHS IT modernisation project was rumoured to have been lured from his position as partner at Deloitte Consulting by a £250,000 salary that made him the highest paid civil servant at the time of his appointment in October 2002.

The Department for Health has so far blocked a request made by silicon.com under the Freedom of Information Act for details of Granger's salary, bonuses and expenses, saying it could infringe his rights under the Data Protection Act. (For more on this click here.)

Ian Watmore left his position as UK managing director of Accenture to become the first government-wide CIO in 2004 and was last year promoted to his current permanent secretary role at the Cabinet Office as head of Blair's delivery unit.

The latest civil service salary report shows Watmore's pay band is £185,000 to £189,999 although the official pay review body has recommended increasing the upper salary limit for permanent secretaries to £264,250. Bonus awards of between four per cent and 11.4 per cent of salary were also paid to permanent secretaries last year.

Not exactly a salary that will leave Watmore struggling as pay day draws near but undoubtedly not as much as he would have been picking up at Accenture. Speaking in a silicon.com interview last year Watmore said: "I didn't exactly take this job for the pay. I did it because I thought it was the best job in my industry... You've got that brilliant mixture of challenge between being in difficult projects and programmes which, if you have a masochistic streak like me, you like doing."

Recent adverts for Whitehall IT jobs show that salaries in excess of £100,000 are on offer for positions such as CTO of the Criminal Justice IT system and CIO at the Department for Environment, Food and Rural Affairs. Even so that doesn't come close to some of the top IT salaries out in the private sector with the CIOs at the Royal Mail and Tesco both picking up more than £1m each last year.

Philip Virgo, strategic advisor at the Institute for the Management of Information Systems (Imis), said that once pensions are factored in the public sector actually pays better than the private sector except for the major financial services companies and multinationals.

But according to Virgo the problem for government is recruiting the small number of managers from the private sector capable of running the kind of major change programmes that obsess UK politicians.

He said: "And few are willing to risk their reputations on grandiose programmes that are unlikely to succeed, whatever the nominal salary."

Others are highly critical of the influence and power wielded by the big private sector consultancies within government. David Craig, ex-IT consultant and author of Plundering the Public Sector, argues government policy is now effectively run by consultancies who are lining their pockets with taxpayers' money.

He told silicon.com: "All policy is now designed and implemented by consultants. The result will be £70bn of taxpayers' money siphoned off to the consultants at a 50 per cent profit margin."

According to Craig there is a "revolving door" that sees private sector consultants take up highly paid and influential positions within Whitehall, then use the kudos of their connections to take up lucrative advisory positions back in the private sector when they leave.

He claims visionary leadership from people of the calibre of Lord Browne, chairman of BP, is needed to genuinely transform the public sector.

But Imis' Virgo says the public sector needs to operate within its means. "The solution is to limit public sector ambition to that which can be reliably delivered given the human beings available and rebuild the available UK skills base, including user management and information systems - because technology is rarely the problem," he said.