Guest Post – lessons ignored led to repeat of rural payments debacle

Rural Payments System Debacle

Farmers keep asking the same question: how was this allowed to happen? Was nothing learned after the Single Payments Scheme debacle?

Rural Payments Agency SPS Report 

The report into The Rural Payments Agency and the implementation of the Single Payment Scheme can be found here:

http://www.publications.parliament.uk/pa/cm200607/cmselect/cmenvfru/107/107i.pdf

Did the SAF project benefit from the lessons learnt back then?

Consider this lesson identified on page 43 regarding 

“the maintenance of good communication with customers to explain problems and provide information on progress with claims.”

Have you experienced good communication? Have problems been explained? Has information been provided regarding the progress with your claims?

Lessons not Learned

However, the real failure to learn is highlighted by the publishing of Spectromax’s record profits. Those profits are clearly linked to two failures to learn the lessons from the Single Payments Scheme:
First, that 

” the discretion and independence given to delivery bodies such as the RPA in implementing such schemes should be commensurate with the risks.” (Page 43)

Secondly that 

“The RPA did not adequately take into account the effects of losing a large number of experienced people. Lord Whitty should have acted at the time to prevent the departure of so many such staff. “ (Page 53).

New Delivery Director

Around October 2014, a few months before the first deadline, a new Delivery Director was introduced. One of his first actions was to have removed a large number of experienced people and replace them with new people provided through the agency that he owns: Spectromax.

Experienced Contractors Let Go

From December 2014 to February 2015 the experienced contractors were systematically replaced by new Spectromax contractors. Every Friday up to 40 contractors and some CGI permanent staff would be told that they were no longer needed on the project and where relevant that their contract was being ended early.

They were told to take their things and leave. They were given no time to finish what they were doing. There was not time to hand over what they had been working on to somebody else.

Spectromax

Then, on the following Monday morning around 40 new contractors would arrive. The majority of them were contracted through just one agency: Spectromax. The agency owned by the new Delivery Director.

For every one of those contractors Spectromax was taking a percentage cut. The exact cut is unknown, but it is likely to be in line with the industry standard rate of 20%.

You can see the impact that this had on Spectromax’s profits here: https://beta.companieshouse.gov.uk/company/08779740/filing-history

4000% Increase in Assets

The abbreviated accounts show assets leaping from £80,749 to £3,479,079 in just one year.

Impact on SAF Project and Rural Economy 

What was the impact on the success of the SAF project? What is the impact on the Scottish rural economy?

Isn’t it obvious that having the Delivery Director’s own company become the sole provider of contractors to a project is a clear conflict of interest? Yet this situation, despite being raised at the highest level, appeared to be given the blessing of all those responsible.

Could nobody see the effects of losing a large number of experienced people? No. Instead the new Delivery Director was praised for cutting costs.

Those who do not learn from history are doomed to repeat it.

Repeat Public Sector IT Failure

Page 6 of the SPS report observes:

“This is not the first time that a major public sector business change or IT project has failed. The Government does not seem to be learning the lessons of previous failures. There is a need for greater expertise within Government in the delivery of such complex and important projects.”

“The debacle also calls into question the quality of the advice from the Office of Government Commerce (OGC) to the Department and the RPA, and what action departments should take in response to the OGC’s reports.”

“The governance arrangements for the project in practice produced blurred responsibility and did not adequately challenge the information coming from those responsible for SPS implementation.”

“There was a need for knowledgeable, independent advice to ministers on the real state of progress.”

No Denying Knowledge

This time those responsible had no excuse for not being aware of what was happening.

Team members did everything they could to make them aware of what was going on. They sent emails, blew whistles, spoke to members of parliament, spoke to reporters and even published satirical articles in a desperate effort to avert the impending disaster.

Wilfully Blind

The management, ministers and agencies to which this was reported did not appear to want to know. They sought to remain willfully blind and attempted to hide behind complex procedures and ineffective audits. In some cases attempts were made to gag the people reporting the concerns and issues.

Will nothing change?

Will nobody learn?

Rewarding Failure

Should failure to deliver be rewarded by the Delivery Director being able to take a cut on every hour of overtime worked?

The advice provided in the wake of the SPS debacle still stands:

Personal Accountability

” A culture where ministers and senior officials can preside over failure of this magnitude and not be held personally accountable creates a serious risk of further failures in public service delivery.

“Accountability should mean that good results are rewarded, but a failure as serious as this of a Department to deliver one of its fundamental functions should result in the removal from post of those to whom the faulty policy design and implementation can be attributed.”

– G

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