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The Government will not produce annual reports on the financial benefits of the new IT system – despite concerns that many of the savings that the £63m system promised will be delayed or not delivered at all.
The Government accepted or partially accepted nine of the 10 recommendations outlined in a report published in April by the Government's spending watchdog – the Comptroller and Auditor General, Lynn Pamment.
In the report, Lynn Pamment found that there had been "insufficient" focus during the course of the project on quantifying its financial benefits and making sure they come to fruition.
The Integrated Technology Solution (ITS) was a project to replace the Government’s disparate finance, HR, inventory and asset management, health and safety and supplier systems and moving them onto cloud-based technology.
The project was initially earmarked to cost £28m in the 2020-23 Government Plan, which increased to £40m in the 2021-24 plan, and then £62.5m in the next one.
£3m in total savings were attributed to the project – but Ms Pamment's April report found that those benefits are now “not expected to begin to be realised until 2026”.
However, the Government have since rejected Ms Pamment's recommendation to "produce annual reports on benefits realisation from closed programmes to allow transparent reporting on long-term benefit realisation".
In the Government's executive response to the report, which was presented to the States Assembly by the Public Accounts Committee last week, they said that "this recommendation cannot be progressed at this time" due to "the current maturity of the organisation, and limited SME resources in this area".
They added that "focus needs to be prioritised on putting foundational steps in place as above in R3 [Recommendation 3] and focus on continued improvements to the quality of business cases".
Pictured: The Comptroller and Auditor General, Lynn Pamment.
Recommendation 3 is to "ensure that the monitoring and communication of benefits realisation is a centralised responsibility that endures beyond the closure of the ITS programme and continues to 2030".
Partially accepting the recommendation, the executive response explains who will be accountable for the realisation of expected benefits, but there are no details about making them public.
However, it adds that "once the ITS programme is complete, a closure report will be prepared", with a target date of January 2024.
In the project's Full Business Case – which provides justification for a project and evaluates its benefit, costs and risks – the projected financial benefits were set at £1.8 million per year from 2024 onwards.
However, the April report found that “formal arrangement for the oversight and governance” of the financial benefits of the project are in fact “unclear” beyond 2023.
The report criticised the fact that the Government does not have a plan to track ITS-related benefits beyond the end of 2026, with the Comptroller and Auditor General explaining that she “would expect the formal monitoring and reporting of benefits to be extended to 2030 if best practice is to be demonstrated”.
The Comptroller and Auditor General's report only examined governance around the ITS project, and its predicted financial benefits. It didn't cover the operational problems experienced since the system went live.
When the system change came into force at the end of last year, around 8,000 outstanding payments totalling £22 million were discovered by the government. ITS "teething issues" also resulted in over 25 local schools requiring additional hands-on assistance to help address concerns about paying pupil's fees through the new system.
Pictured: The ITS system is intended to enable the Government to use modern, cloud-based systems for finance, human resources, procurement, and asset management.
In October 2021, the C&AG issued a previous report which considered the lessons that could be learnt from the implementation of the new taxation revenue management system, and evaluated the design and delivery of the ITS programme up to the end of August 2021.
This report made 16 recommendations for the Government to implement as the ITS programme progressed. The latest report shows that 12 of the 16 recommendations made in the C&AG Report from October 2021 had been implemented with two not implemented, one partially implemented and one where further enhancements could be made.
Lynn Pamment, the Comptroller and Auditor General, explained that the ITS system forms "one part of a significant investment being made by Government in digital modernisation".
She added: “My review has identified some elements of good practice in the way in which the ITS programme has been managed.
“However, there is a need for Government to improve its management of strategic risks in major programmes, to ensure that sufficient specific business-unit level approval of functionality is gained prior to ‘go live’ and to enhance its processes to monitor the realisation of the benefits expected to be delivered over a sufficiently long time-span.”
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