Back in August 2012, Audit Scotland published a report titled Managing ICT contracts on the management of information and communication technology programmes within Scottish Government and central government bodies. A number of recommendations were made in that report and Audit Scotland recently published a new report charting the progress that has been made since 2012.
What is Audit Scotland?
Audit Scotland is a statutory body which was set up in 2000 – it provides services to the Auditor General for Scotland and the Accounts Commission for Scotland. The report prepared by Audit Scotland is for the Auditor General for Scotland who examines how public bodies spend public money.
Why is the report important?
The report provides a useful insight into Audit Scotland’s thoughts on the ICT contract processes within Scottish Government and central government bodies, and its recommendations are likely to form part of the future management of ICT contracts (where they have not already). The report returned to three ICT programmes that formed part of the August 2012 report and contains reviews in the form of case studies of a number of other central government ICT programmes.
What are the key findings of the report?
The Auditor General for Scotland, Caroline Gardner, states that: ‘When managed effectively, ICT programmes have the power to transform public service, and make a real positive difference to people’s lives…While steps have been taken to improve, and overcome obstacles such as the shortage of ICT skills in the pubic sector, today’s report shows that significant progress is still needed.‘
The report makes a number of key findings and recommendations.
Spend
Scottish central government spend on ICT-related goods and services has increased by more than 15% between 2011/12 and 2013/14, reflecting the move to digital public services.
Strategic oversight
In August 2012, Audit Scotland made a number of recommendations for the Scottish Government to improve its strategic oversight and support of central government ICT programmes.
The Digital Public Services Strategy Assurance Board has responsibility for the Scottish Government’s digital strategy. It is supported in its role by two boards. The Strategic Corporate Services Board (SCSB) has responsibility for governance and oversight of central government digital strategy. The Information Systems Investment Board (ISIB) oversees the ICT assurance framework.
Although the Scottish Government’s Digital Directorate introduced new assurance and oversight arrangements through an ICT assurance framework in 2013, the framework was not clear enough to allow the Scottish Government to fulfil its oversight role.
A revised framework was introduced in April 2015 which provides clearer instructions and guidance. The Office of the Chief Information Officer (OCIA) was created in February 2015 by the Scottish Government to assist with the framework and support ISIB.
Independent assurance processes have been improved.
Audit Scotland has recommended that the Scottish Government should:
- promote the updated ICT assurance framework within central government and provide guidance on how it should be used;
- ensure that the roles and responsibilities of SCSB, ISIB and OCIA are clearly understood ;
- oversee ICT programmes more robustly;
- ensure that the ISIB and central government bodies consider ICT programmes not just in monetary terms but in terms of their wider impact;
- implement the updated assurance framework effectively; and
- improve the management of ICT programmes by sharing lessons learned more widely.
Audit Scotland has recommended that central government bodies should:
- comply with the ICT assurance framework and work with the ISIB and the OCIA throughout a project;
- calculate the ‘full-life cost’ of a programme and assess the risk of the programme to the organisation in order to select the most appropriate assurance processes; and
- share and learn lessons from other ICT programmes.
Addressing skills gaps and shortages
Public bodies still encounter difficulties in identifying, recruiting and retaining staff with the range of skills required to manage ICT programmes.
The Scottish Government recognises this as a significant recurring problem and is developing a new approach that pools and shares resources in a central government Digital Transformation Service.
Governance and operational arrangements are yet to be finalised and Audit Scotland notes that this is an ambitious project.
Audit Scotland has recommended that:
- the Scottish Government should have clear plans and sufficient resources to ensure that the Digital Transformation Service can meet its objectives; and
- central government bodies should conduct a robust skills assessment before beginning an ICT programme and work with the Scottish Government to plug any gaps.
Managing programmes
Some central government bodies can demonstrate good processes for managing aspects of their ICT programmes.
Other bodies did not have processes in place to define benefits clearly, collect baseline information from the start of the programme, or invest in contract and supplier management throughout the project lifecycle.
Some bodies are using programme management techniques without the necessary skills and experience (although such bodies have since trained their staff in this technique).
Audit Scotland has recommended that central government bodies should:
- define benefits clearly at the outset and monitor and measure them throughout the project;
- ensure that their personnel have the necessary skills and understanding of the relevant project management technique; and
- ensure they have the right contract and supplier management skills to negotiate, monitor and mange the contract throughout the programme’s lifecycle.
Case studies
The report discusses a number of Scottish Government ICT contracts that were reviewed by Audit Scotland and form the basis of the report’s findings. These provide a useful insight into the operation of Scottish Government bodies in this area. Outlined below are some of the key cases discussed.
Scottish Government Common Agricultural Policy Futures Programme
This involved a large-scale ICT-enabled programme to implement a new Common Agricultural Policy.
Audit Scotland had found that the programme was employing a large volume of staff on short-term contracts and fixed-term appointments, and that the programme had to fill key senior programme management roles using fixed term appointments.
Audit Scotland noted that this brought a significant risk to the programme as the appointments are due to expire before the programme is completed, and outlined that the programme was considering succession planning arrangements and knowledge transfer.
This is perhaps one of the programmes that led to Audit Scotland’s recommendation in relation to the pooling of resources in a central government Digital Transformation Service (see above).
Police Scotland – i6 System
This system is designed to improve how Police Scotland records, manages and analyses information, and is being developed by an external advisor.
A contract disagreement with the supplier arose in 2013/2014 over whether the supplier’s product met Police Scotland’s contractual requirements. Audit Scotland found that Police Scotland’s good understanding of its user requirements and the contract allowed it to work with the supplier to ensure that the original requirements were met within the fixed price of the contract. A contract variation agreement was put in place to ensure that the requirements were met without any additional sums being payable by Police Scotland.
This positive outcome for Police Scotland was assisted by the fact that it recognised that investment in specialised skills (such as experienced contract managers, supplier managers and legal and financial experts) would help manage the contract and ensure successful delivery of the programme by holding the supplier to account. It was also found by Audit Scotland that the ability of Police Scotland to hold the supplier to account was further assisted by Police Scotland’s use of experienced board members, programme managers and effective governance structures.
Given the positive findings of this case study, suppliers should continue to expect to be subject to rigorous contract management and governance provisions in their contracts with public sector bodies in Scotland.
Scottish Housing Regulator / Registers of Scotland – use of Agile model
Audit Scotland discusses the use by some government bodies of the Agile model, which is a relatively new project management technique in the public sector (see Susan Atkinson’s article for details here). In brief, Agile is a flexible, incremental approach where teams work in short bursts, called sprints, on small-scale launches of a functioning product.
The Scottish Housing Regulator was outlined as one case study where the Agile model had worked well for some phases of a project. Audit Scotland found that an Agile approach removed the delay in documenting detailed specifications and reduced the time and cost to deliver future work.
Audit Scotland noted that because the model is new it is unlikely that bodies will have used and fully understood the methodology (it was also equally important that where outsourcing some of an ICT programme bodies know-how Agile project management works if the relevant contractor is using it).
Audit Scotland found that Registers of Scotland had limited experience of dealing with the methodology of the Agile model, including dealing with contractors using Agile in its Land Registration Act 2012 implementation project. This resulted in Registers of Scotland taking a number of actions to ensure an Agile approach was successful (such as both internal staff and contractors participating in an ongoing Agile training programme, and recruitment of an Agile coach).
Given the focus of Audit Scotland on the Agile model and its findings of the positive use of the model in the case of the Scottish Housing Regulator, this is a model with which suppliers and those involved in Scottish central government ICT contracts would do well to familiarise themselves.
Thoughts…
The Scottish Government’s digital strategy as outlined in September 2012 made it clear that the public sector is expected to deliver all services online where feasible, and the increased spend on ICT-related goods and services set out in the report reflects this strategy. Some of the actions coming out of the 2012 report are still in a development stage, and it will be interesting to see how these grow (for example, the pooling of resources into the Digital Transformation Service). What is clear is that, in an era of austerity, ICT programmes are under the spotlight and public bodies are likely to be focusing on the terms of ICT managed contracts more than ever – something that suppliers would do well to note.
The Auditor General’s report Managing ICT contracts in central government: An update can be found at http://www.audit-scotland.gov.uk/docs/central/2015/nr_150618_ict_contracts.pdf.
David Gourlay is a Partner at MacRoberts LLP. He advises on intellectual property, information technology and information management law and all types of commercial contracts.
Susan Robertson is a Senior Solicitor at MacRoberts LLP. She has significant experience in advising on outsourcing arrangements and IT procurement in the public sector.
