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8 Apr 2003 : Column 246—continued
7.33 pm
The Minister for Rural Affairs and Urban Quality of Life (Alun Michael): I begin by congratulating my hon. Friend on obtaining a debate on what I agree is a most important issue. I regret to say that he is well out of date, and that some of his criticisms relate to the past and not to the present. However, he ended on a positive note. I warmed to that, and suggest that, if my hon. Friend wishes, I could discuss some of the issues raised in the debate with him in the future.
Like my hon. Friend the Member for North-West Leicestershire (David Taylor), my experience before entering the House was in local government, where I was chair of finance. More recently, as a member of the Government, I have seen both good and bad in IT procurement. For that reason, when I took on my present responsibilities, I very strongly questioned the recommendations of officials, and challenged their presumptions. I can tell my hon. Friend that I would have been happy to discuss with him the way in which we have approached the Department's IT strategy over recent months, and I hope that we will be able to discuss the matter in the future. In addition, the hon. Member for Guildford (Sue Doughty), who intervened in my hon. Friend's speech earlier, has spoken to me on a couple of occasions about her concerns on this matter. I think that she well knows the amount of time that I have put in as I have attempted to ensure that the Department gets this matter right. One of the most important issues is indeed that of staff retention. We have demonstrated
a commitment to IT staff working at Guildford until at least April 2007. We have also made a commitment to follow high standards of transfer and a commitment to the training and development of all staff—not only the staff who might be outsourced or retained, but all staff, treating them as individuals. As far as loyalty payments to staff are concerned, there is no business justification for that at the moment because loss rates are low. Incentives include wider career opportunities for many staff working for specialist IT organisations, as well as those retained in the Department.I turn to the four questions that my hon. Friend asked. On the cost of consultants and the question of spend, it would be best if I write to him. I shall touch on his question about core business in a moment. The point of tackling the whole way in which we manage IT in DEFRA is that the Department exists to manage a programme of radical and far-reaching change. My hon. Friend rightly mentioned some of the changes that we are trying to bring about, which include: the concept of sustainable development; balancing economic, social, environmental and conservation issues across a range of aspects of public policy; for the first time, effectively addressing rural economies and communities as part of the mainstream activities of the Department; waste management issues; major shifts in rural land use; and many other issues within the Department's wide portfolio. Delivery of those changes needs to be fully supported by a very broad capability in terms of information technology. There are two strands—first, to get the IT strategy right and, secondly, to get our supply and delivery arrangements right.
The DEFRA IT strategy document sets out how IT will best support DEFRA over the coming years. It is a pragmatic document, not some IT flight of fancy, and it is strongly supported by those delivering services to external and internal customers within the Department. It has been reviewed by one of the most experienced consultants at the Office of Government Commerce, who described it as credible, as having a good level of buy-in and as reflecting a great deal of progress, and who stated that all those factors contribute to a positive sense that the task that DEFRA has set itself is achievable.
The strategy has two key aspects, the first of which is that it involves the delivery of a wide range of new systems. First, we have the big development—worth more than £50 million—of the England rural development programme, and we have the Rural Payments Agency, which deals with EU subsidy payments to 70,000 farmers. Secondly, we have technical developments such as radiological monitoring and the surveillance of animal disease outbreaks. Thirdly, we have the customer livestock and land use registers to provide consistent information. The second key aspect of the strategy is that it involves pragmatic implementation—first, a phased approach and, secondly, extensive use of best practice for IT projects such as using Office of Government Commerce gateway reviews.
That is the context in which the outsourcing programme must be understood. So, why are we doing it? I would say exactly the same as the Permanent Secretary—providing IT is not our core business. As far as DEFRA is concerned, IT is a big business in itself. An immense range of new supply and delivery
arrangements are needed to support the IT strategy. That involves not just small changes to existing services, but the need to establish a new technical infrastructure—not only in IT, but terms of changes to the way in which DEFRA undertakes its business. There are issues of customer relationships, geographical information, science, disease monitoring, payments and management information. Is it wise to run such an ambitious range of work outside one's core business? It is not possible for the Department to be technically expert in everything.
David Taylor: Which came first—the decision to privatise or the IT strategy? If it was the former, that flies in the face of all the potentially successful approaches to IT that I have encountered over decades.
Alun Michael: As far as I am concerned, we have had to grapple with the immense programme of change and the need to get IT that was appropriate to the demands on the Department in relation to its policy objectives. The question then was how best to develop and deliver an IT strategy. That was the order of things. As in all such things, the question of the chicken and the egg arises, because people are looking at how to deliver the policy. However, as far as I am concerned, the first task with officials has been to tease out what the Department needs to do and how we could best ensure that what we did was served by the right IT strategy. Over the period in which we have worked our way through this and into the processes of the gateway strategy, the chickens and eggs have got themselves into order. I believe that we are getting things right.
Outsourcing IT best supports the necessary specialisations that are required in DEFRA. I did not come to that view easily. As I have said, I had many questions about the way in which the Department was approaching its new challenge. People should remember that we addressed these questions immediately after a new Department had come into being through the bringing together of two large sections of previous Government Departments with a set of major new responsibilities. We considered internal restructuring, but that would not give us what we needed because of the complexity of the changes required. We need access to a large pool of experience and talent at the cutting edge of IT.
Our challenge has been to make our strategy a success. Having taken care not to rush the early stages, we are now moving ahead, ensuring that we are building on the needs of the departmental change programme and the IT strategy. Since being given ministerial responsibility, I have taken a personal interest in this. I took the initiative and discussed our options and possible approaches with Peter Gershon, who, as my hon. Friend the Member for North-West Leicestershire said, is the head of the Office of Government Commerce. I did that to ensure that we learned from what had happened elsewhere. My hon. Friend rightly referred to some of Peter Gershon's comments on the way in which experience elsewhere in Whitehall should be learned from. I ensured that we had a gateway zero review before setting out; I visited Guildford and met trade union representatives; I offered opportunities for training; and I upgraded the human resources input to the programme in discussion with our officials. That is
why I am now certain that we are on the right track—as has been confirmed following the Office of Government Commerce gateway three review in March, to which I have already referred.We are now ready to go. We are launching procurement in the Official Journal of the European Union and we expect to award the contract by summer 2004. We are aiming for success through learning lessons, through consulting widely, through drawing on consultancy experience and through managing the risks. We have recently appointed an IT director from the private sector who has led previous outsourcing projects. We are recruiting more key people to the management team. We are looking to use people who have done this before and done it well.
In the light of comments made by my hon. Friend, I want to make it clear that we are not handing over our destiny. The Department is not handing over the direction of IT or selling off the family silver, as my hon. Friend rather suggested that we were. Outsourcing is only a part of what we are doing. We are developing internal skills in the business management of IT; we are developing clearer governance; and we are developing more long-term planning, as in the IT strategy. We are retaining the capability to manage the supplier, and the arrangements for that are being planned now. We are working with all in DEFRA to ensure that we are ready for a new service and that the new service gives the users of IT in the Department what they need.
I must stress that we are not neglecting our staff. We have published our human resources strategy, which defines the values and principles that will ensure that staff are supported and treated fairly. I have made this clear to the staff and I am happy to state it here now: I want us to value every member of staff in DEFRA, whether they are members of staff whose future will be as part of the internal operations—the intelligent customer function—or they are members of staff who will move to a private sector supplier or find themselves elsewhere. That is why we have put such emphasis on the human resources strategy.
Those DEFRA staff who transfer to the new supplier will do so under the Transfer of Undertakings (Protection of Employment) Regulations 1981. Senior officials managing the programme have regularly and
frequently consulted departmental trade union representatives, in particular on issues of concern to staff. Again, the increased emphasis on human resources has allowed us to improve and intensify that work.An extensive and varied training and development programme is under way for staff who are affected by the programme, including a one-to-one counselling programme. That programme is a big undertaking. We have not taken it on lightly and would not be doing this if we did not believe that it was the right way forward for the Department.
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