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Secretary of State
BA/POCL AUTOMATION PROJECT
From:
Date:
Copies:
Sarah Graham PFD Sp Proj
10 December 1998
MoS
PSC (AE)
PSC (ST)
PSL
Special Advisor
Permanent Secretary
Peter Mathison CE/BA
Marilynne Morgan SOL
Jonathon Tross DCM
Paul Gray PG
Pete Sharkey ACE/ITSA
Stephen Hickey PFD
George McCorkell BA Proj Dir
Martin Sixsmith INF
Ron Powell SOL ofr
Peter Crahan CAPS
Craig Lewis BA/CAPS
Pat Kelsey BA/Contracts
PFD Sp Proj Team
Hamish Sandison Bird & Bird
Issue: Suggested letter for you to send to the Chief Secretary and colleagues, giving
initial reactions to the ICL proposals.
Timing: If you decide to send a letter, you will wish it to reach colleagues for the
weekend,
1. I attach a draft for your consideration, as discussed at our meeting this morning.
2. The meeting with officials from other departments and the Post Office this morning
did not throw up any new information which might suggest you need not after all send such
a letter.
MRS SARAH GRAHAM
PFD Special Projects
The Adelphi
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TAS IS/IT WORK STRAND
1. This note gives a brief account of the current status of the IS/IT Work
Stand of the ASP.
2. The context for TAS IS/IT has been set by a positioning paper on [S/IT
strategy. This is not a signed-off strategy - questions about the future
business vision of TAS need to be firmed up and the positioning paper
needs to take further account of DSS corporate IS/IT strategy. The former
task awaits the arrival of the CE; Steve Willis from ITSA is helping with the
latter.
3. The ‘IS Tactical Plan' and ‘Tactical Plan Business Case’ set out the full
range of IT developments over the next 12-18 months across all ITS
systems. This remains in draft, but the first draft was welcomed by ITSA
as "excellent", the business case seems satisfactory to the DMA QA team
and these documents form a sound basis for detailed plans.
4. Not all the proposed system developments are critical to the process
changes required for DMA go-live. Some are changes to support systems -
e.g. the Central Database will help to support claims processing by
providing TAS with the ability to change letters and business rules but the
precise date of introduction is non-critical. The current Bristol Claims
Database is not Y2K compliant and not suitable for upgrade to cope with
DMA requirements for panel members fees and expenses. Even when
releases are critical to DMA go-live not all need cluster around the 1 June
deadline. DMA Phase 3 contains housekeeping measures (e.g. easier
deletion of cases from the GAPs system) and will be introduced after 1
June. DMA Phase 1 contains the IT changes to support process changes
for DMA being introduced prior to 1 June (case codes; new registration
procedures).
5. Detailed plans for IS/IT implementation have been agreed with the supplier,
SEMA. All involved in the delivery are confident planned delivery dates are
viable. There is certainly a wide enough window for IT development - the
entire ITS GAPs system took 6 months from design to implementation.
DMA involves some comparatively minor changes to that system. At
present, a business study for DMA Phase 2 is underway in SEMA. A
contract will shortly be signed for DMA Phase 1.
6. Finally, should dates be missed, detailed contingency plans are being drawn
up for clerical work-arounds for CSA cases and BA pathfinder benefits, on
the basis of the existing GAPs system. The aim of the project is, of course,
to ensure that these contingency plans remain on the shelf!
7. There are of course risks: for historical reasons, GAPs is written in
Informix, a language in which programming resources are scarce {we are
effectively in competition for the services of our supplier); and as Project
Manager, I will certainly feel happier when the DMA Phase 2 Business
Study is completed (in January} and contracts there too are on the verge of
signature.
8. At present I would rate the IS/IT risks to the ASP as no higher than
medium. Both the ITS Project Office and the HQ Project Support Team wil!
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BA/POCL AUTOMATION PROJECT: LETTER FROM SECRETARY OF STATE
TO CHIEF SECRETARY OF THE TREASURY AND OTHER COLLEAGUES
1. Keith Todd has written to me with a copy of the letter he sent you last night, setting
out ICL’s final offer in response to your letter of 20 November. I understand that this letter
constitutes the essential components of the proposed offer, on which ICL are not prepared
to move further; and that this letter is underpinned by 3 supporting papers on acceptance
testing, funding, and commercial proposals (ie. pricing etc) on which they say they are
willing to negotiate the detail.
2. In preparation for our meeting on Monday, you and colleagues may find it helpful to
have my initial reactions to the proposals as I understand them.
3. The main element of the ICL offer which appears to be new, is Fujitsu "support" for
the £600 million that may be needed to fund the project over its life. If this is to be of
value, Fujitsu must be prepared to give a firm guarantee that can be legally enforceable.
Anything less would leave the Government very vulnerable should the project fail for
whatever reason. I would certainly want to be clear about the nature of the Fujitsu
commitment when making our decision on Monday. We would also need to establish more
clearly what the implications of this support would be for the level of risk now being
accepted by ICL under this proposal.
4. Secondly, this revised ICL offer does not make any significant change to the 9
November proposals, which we rejected, in the overall balance of expenditure on the project
between the public sector and ICL: ICL are still taking a paper loss of around £100 million,
and the NPV of the public sector’s additional payments to ICL remain around £230 million -
more than £100 million more than was offered under Corbett. On these criteria, I cannot
see that their final offer represents a significant move towards the public sector position.
5. On the specific conditions that the proposals seem to involve, I could not agree to the
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- other risks in Section 1 of the attached report are for Programme Board
information.
Finally, the Programme Board is asked to note the addition of a new risk to the
register - on IIDB decision-taking. This is now categorised as a medium risk
following action by the BA to firm up implementation plans in response to
concerns about the viability of implementing DMA a difficult and complex benefit
to the proposed timetable. A further stocktaking meeting on this issue has been
set for 26 January and working level groups set up to take forward the
implementation for these benefits.
DMA Programme Office
11 December 1998
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proposed approach to "acceptance testing". ICL persist in asking for acceptance on the basis
of a laboratory test of the systems, as opposed to a live trial - particularly important when
for our customers it is the service that is the crucial end product. In fact, the approach being
suggested by ICL is almost exactly that followed under the NIRS2 project, where the system
was fully accepted in a test environment, but did not work in the field. The history of
NIRS2 tells its own story. In any event, when we are talking about a system which is
affecting around 15 million people, many of whom are dependent on timely and accurate
payment of their benefits for their livelihoods, the political risks are huge if the system is not
tested properly beforehand to make sure it works. This is a risk I am not prepared to take.
6. In discussing on Monday how best to proceed and deciding our route forward, it is
worth noting that the project timetable has slipped yet again. The first milestone to arrive
since the timetable was last reviewed (as recently as October, in the course of the Corbett
discussions) is just about to be missed. There will be knock-on effects on the overall delay
to the project of at least 2-3 months, but in practice likely more, given that by then we begin
to bump up against the Millennium, with the IT priorities that involves. This does not bode
well for the grasp that ICL have of a realistic timetable. The final implementation of the
project now looks unlikely to be achieved before the end of 2001; and by that date we could
already have made significant in-roads into our programme to introduce an ACT-based
system - for example paying up to 50% of our 20 million customers by ACT and bank
accounts, with related administration and programme savings, potentially reaching £200
million.
7. Finally, we should remind ourselves of how much this project has already cost
Government, and the total bill with which we will be faced if we accept the ICL proposals.
My Department alone has estimated its losses to date at more than £300 million: and in
agreeing to consider Option 1 as proposed by Corbett, we are in effect foregoing £800
million savings in the welfare administration bill we could otherwise have achieved over the
next 10 years. ; G RO /
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misconceived appeals: discussion ongoing with CSA to reach final list of
misconceived appeals. An issue of great concern to Welfare Rights groups.
No delay so far caused to other deliverables.
Corporate Guidance Part I. drafting done as far as possible. Some policy
issues still unresolved (where second-tier regs not finalised) but
arrangements in place for final QA early next year.
final draft regulations: decision-making and appeals. See discussion under
"risks" below.
4. Risks and Issues
A full risk register is attached. Risks drawn to the attention of the Programme
Board this month for discussion are set out in Section 1.
Key risks for discussion include:
- position on regulations. The position is that a draft of first-tier regulations
has been issued to Agencies which is final for planning purposes and a joint
draft package on decisions and appeals was discussed by the Ad Hoc
Group on 9 December. A revised timetable has been circulated for
regulations on appeals procedures - we are confident of keeping to this.
Timetables have been prepared for transitional and consequential regs. The
residual risks are: (i) that change requests will emerge between now and
the date that regulations are laid: (ii) that change requests will emerge from
debates in Parliament on the regulations: (iii) that fresh issues will emerge
when full timetables for the work on regulations are issued. The action we
are taking will be (i) to ensure that issues are resolved without the need for
change to baselined Agency plans and process designs; (ii) to ensure a
smooth passage for the regs through the Parliamentary stages; {iii) to issue
full timetables for the regs as rapidly as possible, resolving issues around
the relative timing of our regs and the Bill to transfer CA to IR;
- BA notifications. Norman Haighton/Tony Cooper to update the Board
verbally on progress/state of play - in particular, in relation to progress in
relation to work on clerical notifications building on the work on the
DMA(A) team;
- ITS Backlog Strategy: paper attached from Jane Durkin.
- LCD timetable for recruitment of panel members. LCD have alerted ASPB
to slippage against timetable for recruitment of panel members and have
proposed a revised timetable, discussed at ASPB on 10 December. Board
concerned that revised timetable puts final recruitment of part-time and
new panel members too close to main go-live dates. LCD unable to attend
ASPB meeting, so DMA will pursue the issues through bilateral discussion;
- TAS IT strand: paper attached from William Jordan