Whitehall focus Pigs ear of a payment system slated

19 Oct 06
Whitehall's autonomous agency model came under fire this week when auditors blamed a massive failure in European Union payments to farmers on senior civil servants' reluctance to challenge the body implementing the scheme.

20 October 2006

Whitehall's autonomous agency model came under fire this week when auditors blamed a massive failure in European Union payments to farmers on senior civil servants' reluctance to challenge the body implementing the scheme.

Philip Gibby, a National Audit Office director, told Public Finance that senior staff at the Department for Environment, Food and Rural Affairs were 'acutely aware' of problems with a new £1.5bn IT payment programme at its Rural Payments Agency. But they failed to act because 'they felt they couldn't interfere'.

Gibby also raised questions about the effectiveness of the Office of Government Commerce's 'gateway review' assessment of new Whitehall projects.

His study revealed that the OGC had serious concerns about the new Single Payment System in the run-up to its introduction, giving it a 'red light' in 35 out of 48 reviews.

One OGC assessment, less than nine months before the system came into effect, warned that the programme was 'in considerable difficulty', yet the RPA and Defra ignored this.

What followed was a disaster described this week by Public Accounts Committee chair Edward Leigh as a 'pig's ear' of a project that 'should be recorded in the civil service textbook – as an example of what not to do' with a major IT overhaul.

The SPS was set up to replace 11 EU legacy payment systems to farmers. England committed itself to making 96% of payments to 116,000 farmers by April 2006. However, the hasty implementation of a flawed IT system, operated by contractor Accenture, meant that payments were delayed.

This caused distress to a 'significant minority' of farmers and a loss of confidence in the RPA, said the NAO study, published on October 18. By March 2006, just 27% of payments had been made.

IT woes combined with staff shortages caused by the Gershon efficiency review targets left a glaring skills shortage at the RPA. The agency was forced to draft in hundreds of temporary staff and managed to make 95% of payments by June 2006.

However, hundreds of payments were made incorrectly. An NAO assessment revealed 34 overpayments (9.4%) and 79 underpayments (21.8%) from a sample of 363 claims. The EU is likely to 'disallow' many payments, leaving UK taxpayers to foot the bill.

The RPA estimated that the new system would save Defra £164m over four years. But the problems at the agency mean that figure has now been revised to just £7.5m. Implementation costs rose from an estimated £76m to £122m.

Indicating that the lessons from previous Whitehall debacles had not been learned, Gibby said: 'I was leafing through a copy of a previous report we did on problems at the Passport Agency a few years ago and the extent of the difficulties are remarkably similar.'

RPA chief executive Johnston McNeil was removed from his post when the extent of the problems emerged, but Defra is still paying his annual £114,000 salary.

Nuclear staff attack secrecy and U-turns over BNFL sale

Whitehall's nuclear scientists have accused the government-owned company operating four of the UK's nuclear reactors of turning its proposed sale into a secretive 'farce'.

The Prospect trade union, which represents 15,000 nuclear staff, this week told Public Finance that the government must quickly decide how it wants to sell British Nuclear Fuels Limited and its British Nuclear Group clean-up work — partially to prevent a loss of scarce expertise.

Prospect has accused the BNFL board of regular U-turns over how the company should be broken up. It claimed that the 'openness and transparency we were promised [over the sale] bears no relation to the secretive process taking place'.

BNFL owns four of the UK's 12 nuclear plants and other facilities and services at sites such as Sellafield.

The state-owned company has long proposed a sale, but ministers, board members and civil servants have not agreed whether the entire business should be sold, or broken up with services opened to global competition.

BNFL's board initially backed one 'wholesale' option, with the firm's Project Services team being sold and the rest of the BNG, including the reactors, sold later. Project Services units compete for contracts to decommission and clean up sites.

However, more recently the BNFL board indicated it could sell the reactors at the same time as their staff expertise.

A Prospect briefing, handed to Trade and Industry Secretary Alistair Darling, who will make the final decision shortly, says the volte-face has caused uncertainty over jobs and the government's commitment to investing in nuclear skills.

'We are… concerned by the constant change of policy by BNFL and to a lesser extent the Nuclear Decommissioning Agency. The workforce view is one of a lack of leadership and distrust. To put it mildly this is nothing short of a farce,' it states.

PFoct2006

Did you enjoy this article?

AddToAny

Top