National Audit Office: Lessons from welfare reform programmes, 25th feb

Governance in public sector projects 1 25 February 2015

Governance in public sector projects Lessons from welfare reform programmes

Max Tse, National Audit Office

APM Governance SIG presentation

Governance in public sector projects 2

About us

Yvonne Gallagher

Digital expert

Former CIO in two

govt. departments

Expert in IT, cyber,

business change

Max Tse

Director (VFM)

Work & pensions

Former consultant

and economist

Geraldine Barker

Director, Project

Delivery

Programme expert

Recently VFM

audit director for

transport

Alison Hood

Audit Manager

Programme lead

Expert in project

and programme

management

Some of the (many) people in the NAO interested in governance and programmes


Today’s discussion

Why welfare reform?

Learning lessons from welfare reform programmes

Wider NAO work on programme management and governance



Why welfare reform?




Welfare reform has had some challenges…

Source: NAO, Universal Credit: progress update, December 2014

Combining 6 benefits

into 1 payment

Originally aimed to

complete by 2017

Agile approach

aimed to tackle past

programme failings

Reset in early 2013

Currently twin track

roll-out with revised

completion date


…experienced costly delays…

Source: NAO, Personal Independence Payment: early progress, February 2014

Replacing Disability Living Allowance

with greater assessment of needs

2 contractors (Atos and Capita)

Early development of backlogs

Initial expectation of large savings,

but delays to roll-out and savings

Currently recovering from backlogs

and slowly expanding roll-out


…and exposed failings in contracts

Source: NAO, Contract management of medical services, October 2012

Replacing Incapacity Benefit

with work capability

assessment

Problems with backlogs,

then quality led to Atos

exiting contract

Savings not achieved as

expected


On the other hand some things have gone better

Source: NAO, Child maintenance 2012 scheme: early progress, June 2014

Long history of troubled CM

systems (1993, 2003)

Phased reform with new

system and then introduction

of charging and case closure

Early performance of phase

1 encouraging


Governance has been a focus in welfare reform…

Source: NAO, Child maintenance 2012 scheme: early progress, June 2014, Appendix Three

Comparison of aspects of governance of welfare reforms


…echoing many existing principles of governance

APM’s Directing Change principles


So what have we learnt from recent experience?

NAO work in progress notice



Why welfare reform?




Lessons from implementing welfare reform

The irreducible obligation to

be informed

The centrality of an operating

model perspective

The illusion of control over

specification

The elusive capacity question

The (apparent) paradox of

time

Phasing and learning: redux

The gradualist reactive default

Management information: the

poor cousin

Some lessons from welfare reform (preliminary)


Lesson 1: The irreducible obligation to

be informed

Programme aims need to take account of wider departmental responsibilities and trade-offs. Trying to define

aims too narrowly can lead to unanticipated consequential costs and issues in defining performance criteria.

Directing Change principles include clear differentiation between project and non-project activities (1) and

clearly defined roles, responsibilities and performance criteria for governing the project (3).


Lesson 2: The centrality of an

operating model perspective

Departments must align transformation with overall view of business model, including how people will use

the service, and how sustainable internal processes will be in supporting the service.

Directing Change principles include the need for a coherent relationship between overall business strategy

and portfolio (5).

Universal Credit, predicted channel use Child maintenance, cost sensitivities


Lesson 3: The illusion of control over

specification

Departments are limited in their ability to specify how services will work. They need to understand end users

and delivery partners, as well as the constraints they face in serving wider public objectives.

Directing Change principles include need for engagement with stakeholders to foster trust (12) and clear

relationship with business policies on ethics and sustainability (5).

Changes in minimum service standards

on the Work Programme

Housing Benefit fraud and error

The Department has had to change its

approach to maintaining minimum levels of

service…The Department originally allowed

contractors to set their own minimum service

standards. Contractors set 212 standards and

the Department could not monitor these

effectively…

NAO, The Work Programme, July 2014


Lesson 4: The elusive capacity

question

With programme vacancies, and limited information about portfolio capacity and risk, programmes are

particularly dependent on a small number of senior programme leaders for direction and oversight.

Directing Change principles include need for disciplined governance arrangements and a project sponsor

for each project (4).

High turnover in Universal Credit Stable leadership in child maintenance

SROs since 2010: 6

Programme directors since 2010: 6

Multiple changes in CIO/CTO


Lesson 5: The (apparent) paradox of

time

Programmes struggle with setting specific (but not certain) timetables and being clear about the trade-offs

involved. Departments need to judge risk and make decisions openly throughout a programme.

Directing Change principles include frank internal disclosure of information and progress (11), and relevant

and realistic information supporting decisions (8).

Shift in Universal Credit caseload projections Planned acceleration of PIP savings


Lesson 6: Phasing and learning: redux

Lessons about avoiding ‘big bang’ are widely accepted, but the detail of how to phase implementation or

manage agile development is still challenging, as is the need to recognise learning curves in early stages.

Directing Change principles clear criteria for escalating concerns and risks (10) and realistic information for

authorising decisions (8).

Original phasing profile in PIP Learning curves in the Work Programme


Lesson 7: The gradualist reactive

default

Departments can often react well to shocks in core businesses, and some programmes may be most

comfortable introducing change in a similar reactive or gradualist way. Risks arise in new approaches.

Directing Change principles include need for governance arrangements to be supported by appropriate

cultures (4) and matching competence and resources to delegated authorities (7).

Adjusting FTEs in jobcentres in downturn Impact assessments in Housing Benefit


Lesson 8: Management information:

the poor cousin

Programmes often treat management information as a dimension of flexibility when under pressure, or fail to

set clear requirements for information that is needed. This is compounded by lack of end-to-end oversight.

Directing Change principles include relevant and realistic information (8), clearly defined criteria for reporting

project status and escalating risks (10).

Limited MI at the start of PIP… …and the Work Programme

Management information at the start of the

programme was limited. The Department did not

complete initial work on its new management

information tool in April 2013, as planned,

despite discussing this risk regularly since

January 2013. The Department now expects to

complete all work by the end of 2014. It has

adopted an interim solution …

NAO, Personal Independence Payment:

early progress, February 2014

The IT project to support the Programme was

not fully functional when the Work Programme

was launched…The Department will also not be

able to use its IT support to generate

management information on how many job and

sustainment outcomes the Work Programme, or

individual providers, are delivering until

September 2012 at the earliest.

NAO, The Work Programme, July 2014



Why welfare reform?




We are developing wider work on project and

programme management


Thank you

Max Tse

[email protected]

For all reports mentioned

www.nao.org.uk

mailto:[email protected]

http://www.naoorg.uk/


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at an APM event

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National Audit Office: Lessons from welfare reform programmes, 25th feb