Accountability

SRC Second Policy Letter – amendment 2

My second successful amendment related to the introduction of recognised accounting standards and making T&R to action what they had already been instructed to do. This is a subject I have raised several times in the States and I set out my speech below.

Sir,

I take members back to March 2012 a time when some of us were here and other of us were keeping a close eye on what was going on here. I was in the latter camp and I remember very well when the States resolved to adopt Internationally recognised accounting standards and gave T&R the resources to bring them in.

Whilst for some this might not seem much to get excited about, for me, I saw this as one of the more important decisions of the last States.  BUT I can hear some of you say – that’s cos you’re an Accountant. BUT I would argue that this whole Assembly should get excited about this.

Why? Well, the report of the time makes it very clear. Paragrpah 1.2 states that;

The current accounting model has a number of deficiencies, the most significant of which is the failure to account for our fixed assets that is, our land, buildings and equipment which together are thought to be valued at in excess of £2 billion. Without this ability, neither the ongoing value of those assets nor the true cost of their use by Departments can be properly represented in our accounts. This leads to an opaque picture regarding the true cost of the services we deliver, a lack of focus on driving the best value from these assets and an inability to compare costs and financial performance year on year.

The benefits were stated as falling within 4 broad categories;

  • Accountability
  • Decision making
  • Comparability
  • And; better use of assets

 

In addition, the letter from the previous PAC appended to the report at the time is quite explicit. The accounts exclude the cost and details of assets held by SOG, as well as its contingent liabilities, such as pensions. And it is not just about what is set out in the revenue account or balance sheet, but also the notes to the accounts in order to compliant, which would include analysis of pay costs.

Remember this was a major feature of the Fundamental Spending Review, a spend to save initiative whereby better decisions could be made as a result of more accurate and complete information.

BUT the truth is that debate has happened, the policy letter was approved. It now needs to be actioned.

T&R were expected to report in the annual budgte about progress. Aside from welcoming the project and the move to multi-year budgets, there has been no report. Each year when the accounts have been debated I have stood up and said this could not happen soon enough but given no assurances that it would start any time soon.

 

I appreciate there have been a lot of other things happening, with the FTP and new SCIP process as an example. I am also acutely aware that this is not a simple task and needs suitably qualified and experienced personnel to make it happen.

However, the resources have already been agreed. They were sitting in the Fundeamntal Spending Review Fund but , as members will recall, have now moved to the Transformation and Transition Fund and the fact that they are is explicitly mentioned in paragraph 5.20 of the 2015 budget.

The question is, can we afford to wait? The longer this is delayed the longer we will perpetuate the current situation and, as far as I’m concerned, that is not acceptable. We will in the near future receive the 2014 accounts, great but be aware that these accounts don’t include a proper audit opinion. They do not state that they are true and fair. They can’t as they are not prepared in accordance with recognised accounting standards . All that our auditors can say is that they have been properly prepared in accordance with accounting policies of the States of Guernsey.

By the end of this year, States of Guernsey should have been preparing financial statements that are widely recognised and accepted on island and internationally that will result in making major improvements to information, accountability and basis on which decisions are made.  This is a spend to save initiative that, the longer we leave it the longer we can’t be sure whether or not we are wasting taxpayers’ money and so the sooner it begins in earnest the better.

 

I urge members to support this amendment.

SRC Second Policy Letter – amendment 1

I laid a successful amendment against the policy letter that meant that, instead of delaying a review of the power and resources required by the new Scrutiny Management Committee until its formation in May 2016, that this should be done by the current scrutiny committees. My speech is below.

Sir, Whilst I am the one that is laying this amendment this should very much be seen as a joint amendment with the Chair of the Scrutiny Committee and has been discussed by both PAC and Scrutiny Committees.

Before I begin, I should make it clear that both Committees are grateful to the SRC for taking on board the comments submitted by them and incorporating them into its policy letter.

 

However, members will remember that as a result of the amendment passed last year that the States Review Committee was directed to propose to the States before the introduction of the new committee system ways of strengthening the powers, resources and impartiality of the scrutiny committees and panels”

Whilst I understand the reasoning behind the proposal to wait for the new Scrutiny Management Committee to be formed before consideration of the its powers and resources, I do not believe that this is the most effective way forward .

Proposition 29, as it stands, would require the newly formed SMC to lay a policy letter with recommendations on such areas as;

  • Ability to call/compel witnesses to attend
  • Potential increase in scope of scrutiny to include all non-States bodies which are in recepity of public funds
  • Clearly identifiable responsible persons within each of the new Principal Committees
  • Resources, budgets and expectations of the SMC.

 

The purpose of this amendment is to bring forward the drafting of the policy letter so that it can be laid before this Assembly and a decision made before the end of this term.

Why? Well

I’d like for a moment for us just to take a step back and consider the wider context and the effect that this policy letter will have should it be passed in substantive form.

Let us not delude ourselves here.  There will be significant change that takes place from 1 May next year, not only  in terms of a reduction in Deputies but, probably more importantly, a change in departmental or committee structures and mandates.

Against this background of considerable change, a newly constituted SMC, is expected to determine the resources it will need. Now times of considerable change can be the times of highest risk and therefore a time when we need a scrutiny function focussed on its core role.

Whilst the  SMC will be experiencing the new arrangements, the argument given for it to do the work,  I would argue that, whatever the new structure, the breadth of work will be broadly similar.

Waiting until the next term will mean that, given the time to let Members get their feet under the table, prepare the report and then get it to the States, it is highly unlikely anything will be decided within a year. And that’s before anything that is agreed can be actioned.

 

The present PAC and Scrutiny Committees believe, with the experience they have had over the last 3 years, they are ideally placed to provide the necessary input to such a States’ report. I made it very clear when we debated the first policy letter, the last 3 years have been intensely frustrating with the lack of resources. Our budget has been reduced by 30% over the last 3 years,  placing severe limitations on what we could do and we have even had to go to the Department that we were to scrutinise to request funds to scrutinise them! That really can’t be right. So, when we look at resources and budgets it won’t just be the quantum required, that is just part of the story, but how we obtain those resources and how budgets are developed. What may work for Government Departments may not be right for a Parliamentary Committee.

This isn’t about wanting to take on more work, but we believe we can do it in the timescale and in the most effective and efficient way. We are also conscious how much more important it will be to allow the SMC to hit the ground running. With the reduction in Deputies, the level of political oversight will reduce unless we can beef up the scrutiny function as quickly as possible to compensate.

So on behalf of the future SMC, please support this amendment and let us get moving now.

FTP – end of programme report

The States debated the FTP following it’s closure in October 2014. This followed the PAC’s review as per my earlier post.  My speech during the debate is set out below.

Sir, on behalf of the Public Accounts Committee, I would firstly like to pay tribute to all those across the States of Guernsey who have made significant contributions to the FTP process. Specifically to those individuals on the shop floor of the organisationwho have invested vast amounts of their time and effort in supporting this initiative over the last five years.

As the largest financial programme of this, or any other States, this Public Accounts Committee has been closely monitoring developments. The Committee continues to believe that the core principles of the FTP programme remain sound, as I have stated previously,running a fiscal deficit albeit as a consequence of funding our capital requirements,is not sustainable and the States must seek to return to a balanced budget. The FTP was a significant tool in the quest to achieving this specific aim.

However, the original vision of the fundamental spending review was focused on a cultural transformation throughout the States. Financial change being one of the key areas in the suggested first phase. The requirement for increased financial discipline through a cultural transformation is still needed today,as it was in 2009, and the Committee believes it is even more necessary now, with the increasedexternal scrutiny arising from the multi-million-pound bond issue late last year.

Now, I would firstly like to focus on the financial details of the FTP contained in he report. Members will be aware that the recent report issued by the Public Accounts Committee that analysed nine major projects of the programme that representing 35% of the total claimed savings. In that report the Committee has made a number of specific and broader reaching recommendations, and we welcome the T&R Minister’s public recognition and broad acceptance of the key findings. As such it is not the Committee’s intention to cover these in any detail within this statement, rather just a very brief summary where they directly relate to this report.

We note the Policy Council Report acknowledges the financial rules were not documented,nor widely communicated,at the start of the programme, and the Chief Minister has addressed this today. This led to the level of uncertainty surrounding some of the claimed savings that prevailed afterwards. It is the

Committee’s belief that this was unacceptable for such a major programme, and wishes to emphasise again that it is essential that clearly defined rules are in place before the commencement of similar cross-departmental programmes in the future.

Now the Committee’s position on the inclusion of the £650,000 relating to visiting consultants is well known,and summarised well today by Deputy Gillson, and we note with interest that this figure is now classified within the Policy Council’s Report as an internal transfer. However, similar concerns arise from the effective transfer of costs to Aurigny,as part of the air subsidy project. Whilst not specifically against the contract, the understanding of those within the FTP team was that internal savings were not within the scope of the programme. At the very least they were certainly against the spirit of the rules. Now one of the Committee’s most significant areas of concern is the non-evoking of an advantageous contractual clause,relating to the use of the cost of capital.

Significant capital costs could have been considered when calculating the net savings for a project. The decision not to use this clause to minimise a saving, and by definition the reward fee,does appear at odds with the premise of financial restraints of the FTP.

 

Now moving on to future transformation. The original plan to deliver the 107 initial opportunities through seven work streams can hardly be claimed to have been an overwhelming success, as the Policy Council’s own report acknowledges. Indeed the key focus on a holistic delivery mechanism, and the drive away from silo mentality, may have been compromised in the 2012 re-boot of the programme. The concentration on annual targets for individual Departments resulted in a focus on short term tactical savings rather than truly transformational change.

The three recommendations of the Fundamental Spending Review Phase Two Report were to:

  1. establish a States’ transformation programme,
  2. articulate and communicate a vision for the States of Guernsey and,
  3. three embed a sustainable way of working.

Within the details of the first recommendation the FSR Report states that the financial change programme should be initiated whilst and I quote:

‘The organisational structures are established to enable the integrated transformation programme.’

The T for transformation is an area that still requires further effort. Now one of the key cornerstones of the third recommendation,to embed a sustainable way of working, was the implementation of internationally recognised accounting practices. An area the Committee has constantly championed. While the States resolved in 2012 to phase in resource accounting and budgeting and authorised T&R to use a fundamental spending review fund to enable it to happen. Three years later this has not happened. That is not acceptable, and consequently I will be laying an amendment against the SRC second policy letter,to ensure that under a new Government structure the move towards generally accepted accountancy standards takes place, and I will speak more on that in a couple of weeks’ time.

With regard to next steps,within such a sizable programme as the FTP issues are bound to arise. We would therefore call upon the T&R Minister, and the Chief Minister,to ensure that the lessons learnt from the years of working within the FTP, from the fundamental spending review through to today are acknowledged and embedded within the chosen future direction. In terms of identifying lessons learnt the Policy Council’s end of Programme Report, whilst an extremely useful and informative document is self-reflective by its very own nature, and being largely written by Capita, for which they will have been remunerated. The Public Accounts Committee has actively encouraged Policy Council to agree to undertake further reviews connected to the FTP,and in particular,and probably most importantly, that of the SAP and Shared Transaction Service Centre.

We understand this will commence within the next couple of months and are grateful to the T&R Minister for responding to our request that it is competed by the end of the year. We also welcome the Chief Minister’s statement today that there will be a full closure report on the FTP. Something again the Committee has requested. The Committee will continue to focus on aspects of the FTP Programme where it believes it can add value within the bounds of PAC’s limited resources. The Committee still requires assurance that all identified savings have been pursued to their fullest, those savings made are being appropriately monitored, the legacy of the investment in to the Project Management Office and transfer of skills in the consultants has been successfully embedded in the organisation,and finally that further programmes embrace the need for changed management if cultural transformation is to be truly achieved.

The Chief Minister referred to adjustments being made to savings subsequent to their being banked,it is essential this Assembly continues to be kept informed of these changes.

In conclusion, in terms of financial transformation is the work finished? Well clearly not, and the Chief Minister, give him his due, has made that very clear today. Irrespective of whether savings should have been included in the first place,it is clear than an increased level of ongoing monitoring is required if we are to be assured of their sustainability, and if we are to fully reap the benefits of the significant investment into the Programme. Public Accounts Committee wishes to be assured that ongoing, robust monitoring of the claimed savings will be undertaken, calls upon the Chief Minister to commit to providing detailed performance monitoring through the annual budgeting report.

The management of change and performance within the whole organisation is going to be increasingly important for a truly effective and efficient service provision to the public to be maintained on an ongoing basis. Cultural transformation will be key, but at this stage the Committee is concerned that there is no substantive link to what happens next. The Project Management Office has been disbanded and there does appear to be somewhat of a vacuum. The Committee, and I hope any future Scrutiny Management Committee that supersedes it, will continue to take a keen interest in monitoring developments, as given the high cost of running the Financial Transformation Programme we can only be sure of value for money if you know that what began in 2009 is sustained,and indeed built upon over the next five years and beyond.

FTP – PAC Review

In May 2015 the Public Accounts Committee published its Report into the financial costs and benefits of a sample of major claimed savings within the Financial Transformation Programme (FTP).

 

The PAC acknowledged KPMG’s finding that the savings were largely validated and the chosen Consultant (Capita) was correctly remunerated for the work undertaken. However, it was concerned that KPMG could find no evidence that the relevant financial rules, necessary to determine how savings should be calculated, were fully documented at the start of the FTP. The uncertainty that this caused resulted in the size and nature of the approved savings being potentially open to question.

The PAC was pleased to note that KPMG did acknowledge a number of examples of good practice; most notably the SSD’s Claims Management project. However, evidence of truly transformational change within government was limited. Also of concern were KPMG’s comments on the need for ongoing monitoring. Unless that is done it will not be possible to be certain that the savings banked to date are truly sustainable.

The report from KPMG presented an independent financial analysis of the major projects within the FTP process. The findings confirmed that significant savings had been made but the lack of clarity, caused by the absence of clearly defined and communicated financial rules until late into the Programme, wa and remains a significant concern for the Public Accounts Committee. In addition, the findings raised fundamental questions around the level of genuine transformation that has been achieved.

Links to the reports below. The KPMG report is quite technical and very comprehensive. The PAC covering report is more accessible for those with a non-accounting background.

PAC covering report

KPMG report

Waste Strategy – Question to PSD Minister

In April 2015 the PSD Minister advised the States that the department was not now going to introduce an in-vessel composter due to the costs being prohibitive. I asked the following question of the Minister. His reply is given below. Although the ‘Love Food Hate Waste’ campaign has been very good, I do believe that we need more than UK adverts superimposed on Guernsey to reduce the amount of unnecessary waste. Focus should be on educating people about the fact BOGOFs are not always the bargain they appear to be and to translate the wasted food into monetary values.

Question:

I would like to ask the PSD Minister, in light of this disappointing news and given the high
amount of food waste that comprises waste that is thrown out, what extra initiatives are his
Department planning to undertake to reduce the amount of food waste in the first place?
Answer:
We do have a ‘Love Food, Hate Waste’ campaign which is specifically designed to target food waste. That will be continuing. We will, as the process unfolds, look at other measures that we can to ensure the amount of food waste which arrives in our black bag is minimised as we do with other waste streams as well.

GEL, GP deregulation

I made the following speech in respect of the proposed deregulation of Guernsey Electricity and Guernsey Post, with a strengthening of the shareholder role.

 

Sir, I’ll speak briefly. I support the findings of this report.

I’ve always found it odd that States owned entities should need to be regulated in the way they are. I do appreciate this was considered appropriate a decade and a half ago nearly, but circumstances have changed and we have learnt over that period that applying a model that may fit the commercial sector, probably isn’t the best when dealing with public sector bodies and in many ways, what works for a population of 62m may not be appropriate for one of just over 62,000.

It certatinly doesn’t make sense when some trading entities are regulated and others, like Guernsey Water, are not.

 

BUT, what is important here is the States understanding its role in relation to its trading entities. There was a time when commercialisation was seen as synonymous with privatisation. When these bodies were set up it did appear, at least from the outside, that the States very much took a hands-off position –  let them get on with it. But, this is not a sustainable position to have.

It is for that reason I fully support the desire to strengthen the shareholder role.

Companies are answerable to their shareholders and it is important that the States of Guernsey as the shareholder asks the right questions and holds the management of those companies it owns on behalf of the people of Guernsey, to account.

 

Far  from weakening control over these trading entities, these proposals should lead to greater accountability and at the same time ensure those entities can focus on their strategic objectives, in the longer-term interests of islanders.

I welcome the introduction of key performance indicators and benchmarking. This is something that we should be developing across the States, whether through trading companies or directly in terms of the work done within each department.

Finally, it is my belief that at least one of the non-executive directors should serve as a shareholder representative. This would be standard practice in any company with a dominant shareholder and I would welcome further research into this possibility.

So, I think this is a positive move that reflects changing times and better governance and I will therefore be supporting this report.

States Capital Investment Portfolio

I made the following speech regarding T&R’s proposals for the SCIP at the July 2014 meeting.

Sir, 3 weeks ago we were asked to make a binary choice between executive and committee government and told that the Policy & Resources Committee would just be a co-ordinating Committee, with the States always having the final say. Well, I would like to know just how that fits in with the proposals before us today and the additional powers and resources that we are effectively being asked to provide to the Centre.

 

Just to be clear, I am not commenting on the merits or otherwise of the new model, but I do think Members need to be mindful of the fact that this trend towards delegation of authority and decisions being taken away from this Assembly emphasises the need for a more powerful, better resourced Scrutiny function.

 

Now, from a PAC perspective, this report is broadly welcomed. The concept of a portfolio approach propounded here is sound and is a method widely adopted across many organisations, be they in the public or private sector. In particular, we welcome the understanding of the need to identify and ensure the delivery of project benefits. Further controls of the capital programme – which will see significant public monies being invested – can only be supported by the PAC as we strive for embedding ‘Value for Money’.

 

 

However, there is concern that the cost of doing this appears high. 0.4% may sound small, but when it is a 0.4% of £275m that’s a fair amount – £1.1m to be precise. And that assumes that Category D projects are not included, if they are that would be an extra £400k. It isn’t clear from the report whether that is the case.

 

These concerns prompted my email to the T&R Minister and again I thank his department for the detailed response. We wanted to know what work was included for this considerable sum.

 

 

 

 

 

And what work is included for this? Well, it is quite difficult to see from the report what more is going to be done than is done at the moment. It would appear to us that we will only be getting monitoring reports on the portfolio and general advice on process and business case development. Project management isn’t included as this will be embedded in individual project costs. So, the key question is whether the benefits are worth the £1m extra in staff costs we are being asked to approve today.

A major point is made about the potential savings arising from increased procurement input but that appears to be hard to justify. Can we seriously be expected to have in-house expertise on every type of project? I refer Members to Table 1 on page 1573, which lists current pipeline projects. Look at the diversity of projects listsed – replacement radiology equipment, wastewater outfall and SCFH roof. Does it make sense to build up in-house expertise on everything?

 

SPS – not even mentioned in this report – what are they doing, will they be involved in the future?

The report indicates that in-house expertise could be used to challenge conclusions put forward by those working on the larger capital projects and contracted externally for their domain knowledge. I would question whether he benefits of such an approach would outweigh the costs of the extra staff required.

Awaiting response from T&R re email – will determine  next part of speech. However, we know that they haven’t worked out precisely what they need yet – so;

 

 

 

 

It is evident from the reply I received from T&R that the Department has yet to decide precisely what resources it needs. I find that deeply ironic that the Department to whom all other departments are having to report and produce strategic cases, outline cases and full cases, is the very department that has put little in the way of a case for the money it wants.

Now by having more staff employed at the centre it is implied that project costs will be reduced as external resources currently used won’t be required in the future.

Paragraph 11 on page 1571 states that

“the project assurance reviews have concluded that the projects often do not have access to sufficient experienced and qualified specialist internal resource which leads to an over reliance on external advisers.”

However, given we are told that staff at the centre will not be directly involved in project management or implementation, we do wonder what these people will be doing.

There appears to be some conflict with respect to what these staff are expected to do. On the one hand we are told that they will provide specialist resource to all departments in order to help support the development of business cases, but on the other they will review business cases and will ensure appropriate scrutiny and challenge and ensure value for money.

I would argue that wouldn’t that be for a properly resourced PAC to do? After all, how can you be involved in the business case and provide appropriate scrutiny at the same time? On that front, no mention of whether Post Implementation Reviews will change or not. {Lessons learnt – all departments to see them]

So, in summary, the Committee does believe that the proposals will improve the current project management process but that we are concerned about the costs with the need for a strong independent scrutiny function to ensure we will be getting value for money in the future.

Island Wide Voting

I made the following speech in relation to the requete on Island Wide Voting in July 2014.

Sir, like many here I’ve  always favoured an element of Island Wide Voting. However, I can’t find myself supporting the requete as the system adopted I believe would be completely unworkable and, perversely, less democratic than our present system.

Distributions of manifestos, limited to 700 words will not help the first time candidate, or at least those candidates who have not benefited from a high profile beforehand, whether or not they are sitting Deputies. For me the manifesto was very important, not only in expressing my views but also to give the electorate an idea of who I was. They are, whether we realise it or not, an expression of who we are. By putting a limit on it we are denying freedom of expression which I believe is very dangerous.

 

Paragraph 8 speaks of the labour-intensive and time consuming nature of the current counting system. However, I believe that those people who volunteer do so willingly and do so as they wish to be part of what is an important day for Guernsey.

 

Now, when anyone comments about the difficulty of the electorate to choose between the 80 or more candidates that might appear on a voting form they are told ‘how dare you question the intelligence of the Guernsey voter’. But the ability of any human, wherever they may live,  to choose up to 45 out of 80 people is no small feat. It’s ok for those who have lots of spare time to study every candidate but not those who lead busy lives. It is also more likely to lead to errors and Deputies being elected on less votes than now.

Why errors? Well, think about it. There may be a few Le Pages’s or variation on a theme of Mahe, Poidevin and even a scattering of Joneses, be they sensible or not. How likely is it that, given a list of candidates, however that is produced, that with just the voting form in front of them, mistakes are made? Sorry, human nature as it is,  that will happen.

And who’s going to bother ticking 35, 40, 45 boxes? They won’t. The average number of votes cast in those parishes with 6 places was 4.6% at the last election ie 77% potential number of votes cast. I believe with the system proposed in the requete that it will be significantly lower.

The one thing I liked about the amendment ,was that the Parish system did not disappear. This is why I would not support a full IW system but would be happier with a hybrid variant. We all tend to think on the macro scale when considering the impact of IWV, indeed the requete talks about most issues being Island wide issues.  but certainly for me, a very important and rewarding part of my work, as I am sure it is for others here  is helping individual parishioners with issues that they may have. I know Deputy Hadley spoke about the fact he gets more emails from outside the Parish than within, as do I. But that’s emails.  I find that when someone has a real concern they pick up the phone. Yes some things can be handled by the Douzaines but certainly not all.

The Parish system means people know who represents them and they have 6 or 7 to choose from, which means that issues are effectively divided up and spread more evenly amongst us.  How will that work with Deputies being elected on an Island wide basis?

No, I think if we lose the link to the Parishes Deputies will be perceived as more distant and out of touch than now. And that bothers me.

Now, this debate was delayed to await the outcome of the debate on our system of government. However, we still haven’t agreed what that should be apart from a very basic structure. We don’t know how many Deputies we are likely to have, Committees or Scrutiny function. I therefore think it is too early to make a fundamental change to our electoral system until we have that information.

The fundamental question is, will this requete  make for a more democtratic system than we have now? I hear Deputy Langlois’s comments regarding the advice from the electoral reform society and whilst I still support an element of IWV I believe the system as set out in this requete would cause more problems than it would solve and on that basis I cannot support it.

GFSC Accounts 2013

I made the following speech in relation to the GFSC’s accounts for 2013 in July 2014.

Sir, Over the last 2 years myself and others have made comments in this Assembly about the inexorable rise in costs and fees at the GFSC. Although it has taken time I do believe that the Commission has listened both to the politicians and industry and is now taking steps to control its expenditure.

Credit has to be given for closing the Defined Benefit Scheme. Whilst this won’t ever be popular amongst the Commissions employees, had this not been done, there would be increasing pressure to impose higher fees on an industry which has been closing its Defined Benefit Schemes over the last 20 years. This was a disconnect that was unsustainable.

Now it is apparent that the only real savings for the year under review relate to reduced consultancy fees from 2012. However, I do appreciate from the various meetings that I have attended at the Commission that several changes have been actioned in the last year whose full financial effects will not become apparent until the 2104 accounts are prepared and I therefore think next year will give us a better indication of how things are going, although it looks now that they may be moving in the right direction.

Just as an aside I think it interesting that the Commission has made a profit of £525k last year which would be sufficient to cover the £440k contribution it paid towards the running of the GTA until 2012, a sum now being picked up by the taxpayer.

Finally, Members might like to know that the PAC has been in contact with the GFSC regarding disclosures of senior GFSC staff salary levels and work is ongoing in this area.

Electronic Health and Social Care Records funding – amendment

I laid an amendment on behalf of the Public Accounts Committee seeking independent scrutiny of the decision to provide £650k to the Health and Social Services Department to complete the EHSCR project. The big guns were against us that day, not wanting to be scrutinised. It is funny that members can often be heard saying that the Public Accounts Committee should review something that doesn’t involved them, but when it does, can be very defensive!

Sir,

The Electronic Health and Social Care Records project began in 2006 and since that time there has been no update provided to Members by way of a States report as to how it has been progressing.

The original Billet d’État of December 2006 stated that the cost of purchasing a full EHSCR would be £9.7m over the 10 year life of the contract and that capital costs would be £3.9m, with the balance in terms of maintenance and department’s implementation costs, funded from revenue. Members were advised that the revenue costs would be derived from savings, which were estimated would be around £9.65m.

The project board was to be supported by an implementation team drawn from health and social care professionals under the direction of a project manager and supported by the States ICT Director.

The design and implementation stages were due to be completed by 2009 after which the number of staff involved would be reduced to provide ongoing support for the remainder of the contract term.

The project was sold on the basis that it would improve the way clinical care is delivered in Guernsey whilst also yielding much improved health and social care information to support operational management, the quality of clinical services and strategic planning of future health and social care delivery. It was evident at the time that the systems in place were inadequate and out of date and members were advised that there would be financial and non-financial benefits of implementing the system.

HSSD are now requesting a maximum of £650K, or to be more accurate £600k per paragraph 76 and £650k per the proposition,in order to implement the ePrescribing and Children’s Information database. I suspect there are few here who would question why these modules are needed. Indeed these could be key to releasing benefits both of a financial and non-financial nature.

However, the Committee is very concerned that this Assembly is being asked to delegate authority to T&R to undertake a project assurance review without any independent scrutiny. Indeed we have issues in terms of the proposals generally in relation to the role of T&R so far as overall scrutiny  is concerned and I will highlight these in general debate, for now I will focus on this particular bid.

 

Firstly, I would like to thank HSSD members and staff for the presentation that they gave the other week, which was very informative even if it did raise more questions for me that have resulted in this amendment.

So what are the concerns? Well 3 are of a nature relating to the funding itself;

The first it that at the presentation we were advised that GPs records, a stated benefit in the 2006 report would not happen as the GPs did not want to be part of it. Not only does that mean a key deliverable won’t be achieved, but that should in theory have been some savings in project implementation costs.

Secondly, the 2006 report stated that the project implementation costs would be derived from revenue, whereas we are now being asked to give delegated authority to T&R to take the funds from Capital.

Thirdly, the project according to the 2006 report allowed for a contingency which was included in a figure of around £1.2m, including, confusingly, hardware costs.

Such concerns prompted my email to the T&R Minister recently and I would like to thank his  Department for their detailed response. However, the comments made to do not allay our concerns. In particular, the fact that it is made clear that the project has clearly gone over budget.

Those more seasoned members of this Assembly will recall the implementation of the Social Security Benefits system which took 8 years to complete from 1998 to 2006. It too resulted in a key deliverable not coming to fruition i.e. it only delivered the benefits system not contributions system. The total cost of the project was calculated at £9.232m against a budget of £6.187m. PwC were commissioned by the then PAC to report on the project and they provided 30 recommendations for similar IT projects the vast majority being applicable States wide. One such recommendation related to the fact that all costs of particular projects should be identified at the start and specifically ring fenced.

Now this project commenced before that report was published and before significant  improvements were made to the project management process and which are set out in the report we are debating today, together with the latest proposals to improve it further. And it is already evident from the T&R Department’s response that all costs had not been identified or ring-fenced.

In addition, Members may well be aware of the news from Jersey about a similar project that has gone horribly wrong. My counterpart there is quoted as stating;

It’s intention was to digitise and integrate health and social services patient care records but the programme came up short. Moreover, information given to the States Assembly was so poor that States Members may have had little or no idea that the programme came up short.

Does that sound familiar?

The Chair also stated that 2015 would see its HSSD ask for another £12m to finish the job. If and when that request is made, she urged the States, and I quote, ‘to satisfy themselves that project management standards have improved before allocating any more public money’.

Now members might say, fine but T&R say they are going to do an assurance review, that will be ok then. The Committee would like to point out that T&R have been intimately involved with this project from the start with a number of political members on the Project Board since 2006, as well as having the States ICT Director on the implementation team, to name just 2. It is for this reason that the PAC believes that there should be independent oversight of the project assurance review.

Usually the Committee only gets involved in projects after they have reached practical completion, through the commissioning of Post Implementation Reviews. Indeed, as I mentioned 3 weeks ago we will be producing a report on capital projects arising from the findings of these reviews since 2010 in the next few months.

However, given the above reasons we believe that there are sufficient warning signs that the Committee should take some involvement now. We also believe that Members should know the outcome of the review. Whilst it is encouraging that HSSD are asking for £650k and are stating that this is all they will need to reach completion, given the department’s recent track record in relation to financial management, I do believe we need assurance that this is in fact the case and that they will not be coming back asking for more.

I hope Members see the logic of this amendment. Again, I would say we are not questioning the merits or otherwise of implementing the 2 modules but that this should be done with eyes wide open and with some degree of assurance that what the HSSD says it needs, is in fact the case.

 

 

Repeat that the Committee believes that it would add value in two specific ways: firstly through the independent oversight of the project assurance review and secondly, through making Members aware of the outcome that review and our findings.

No, it is not the intention of PAC to ‘undertake’ the review – we understand that there may be other already established groups within T&R and/or the governance of the Project that will be in a positon to do that.

Rather, PAC should be involved in the scoping of the Review, considering the Report once completed and then making public our findings.

Given the length of this project, the fact that similar projects have not gone to plan, the recent experiences in Jersey and the involvement of T&R throughout the life of the project I believe that independent oversight is essential and hope that Members will support this amendment to enable just that.

 



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