WRITTEN ON October 31st, 2006 BY William Heath AND STORED IN Uncategorized

Below is the text of the speech I gave at Intellect’s “UK Public-sector markets in 2007 and beyond” event on Monday 30 October 2007.

1. Top-down: the money and the key initiatives

Let’s start with the parameters for the forthcoming zero-based 10-year spending review. These are:

- the effects of demographic change and ageing, notably on health and housing
- effects of globalisation on education and skills
- how technology can serve innovation
- “global uncertainty” and
- climate change & sustainability

Treasury expects 1.9% growth. They want institutional change and system-wide change. The mood is “If we do what we’ve always done, we’ll get what we always got.” They’ve noticed that the successful projects are often small ones.

Ray Shostak who leads the work says they’re ready to think differently and work differently. Let’s pick that comment up as a challenge to which we must respond.

Treasury’s spend review is hard-wired into the Gershon efficiency review and the Cabinet Office’s Transformational Government IT strategy.

OGC’s John Oughton says government will continue to achieve efficiency gains of 2.5% a year based on sharing services and best practice. So our forecast IT market growth of [x%] is not funded out of growth – it’s conditional on IT investment that delivers savings.

On the IT strategy side we expect the Transformational Government annual report 21st Nov, news agenda permitting. The first step in convincing the centre about the IT profession is to stop the huge programme cock-ups.

Government CIO John Suffolk is bullish about evidence of real progress, but others point to slow progress in key areas. We see the delays as an opportunity still to influence and change the potentially problematic course they’re taking on personalisation, biometrics, data sharing, and identity management.

The health of this market depends on an IT strategy that will build and not undermine people’s trust in online services. So John Sufolk and I both take heart from the rate of progress on Transformational Government, but for opposite reasons. We take the view there’s still time to get it right.

2. The verticals – sketches

Barring new wars, health and education are the places to be. Between them we expect 4-5% growth, though budget vagaries and competing priorities are a perennial hazard in health. There’s inspiration in small successes such as Grimethorpe. A depoliticised NHS may yet become a reality, but we don’t yet know who would hold the purse strings.

Education remains fertile ground for fit and dedicated suppliers. There’s investment at every level – schools, further education and higher education. We foresee more competition, joined-up buying of managed services and perhaps the flagship emergence of an independent innovation unit.

We foresee problems with the £300m Childrens Index for sharing data. Practitioners and expert NGOs have been ignored. Children’s commissioner Al Aynslie-Green already has evidence of loss of trust in confidential public services from this sort of careless data sharing. It’s not what children want, and it’s an unfortunate memorial to the short life of Victoria Climbie.

Transport 5% will need a great deal more than the £2.5bn 10-year transport innovator fund to roll out new operations like vehicle tracking and road charging. For this it will have to look to private sector investors.

Local government, growing at 3%, has gone cool on outsourcing but likes strategic partnerships, following good work by BT and Capita in places like Liverpool and Birmingham. I like the Suffolk shared customer-service model, and the transformative effect of asking customers what they want.

Local government is closer to its customers than Whitehall, but still hard to measure. The ring-fenced investment for electronic government is over, and the existing performance assessment regime doesn’t reflect transformational progress. We expect new market entrants, but they’ll need to listen and adapt to succeed.

3. Some horizontal issues

There’s no rule that large projects are guaranteed to fail. The risk of technical and managerial failure is a factor of the size multiplied by the complexity. So if it’s big like a national ID project you want it simple. And if it must be complex, like sensitive handling of the information and resources to do with one’s health, something more intimate seems to us likely to prevail.

A sustainable government IT market will be built on projects that succeed socially.

Projects that don’t do what customers want or don’t work how people work will fail, like the poll tax or the Child Support Agency. You can’t retro-fit prior sensitivity to doctor and patient needs to something like CfH. It would be heroically courageous, in the Yes Minister usage, to roll out tens of millions of ID cards before establishing whether people have any use for them, as the Home Office says it plans to.

Shared services sector reports soon. We foresee growth in the £1bn/year market for shared back-office services, but nothing like what all the aspiring players need in the short term. Longer term sharing front office customer-facing services could be profoundly transformational, to good effect if it’s based on wgat people want.

The spirit of freedom of information requires that project reviews and costs are routinely published across the board. Gateway reviews should go further and check customer involvement at every stage of any large programme: at conception, design, decision, monitoring and feedback. This is key to a healthier market. Only services designed for users with their live involvement carry an acceptable level of risk for suppliers who are also investors.

4. The need to think differently

Tony Blair once said government is the servant not the master. And Joanna Lumley showed us, with characteristic grace, how to address servants who have lost the plot: “Prepare my cell, because I shall not have one. I shall not have an identity card.”

There is, we foresee, significant political and business risk in the attempt to use IT to automate a centralising and hierarchical agenda of control. Companies that get caught up in it risk further reputational damage.

Doug Engelbart, whose pioneering Augment team went to Xerox PARC and ended up at Apple, showed us in his “mother of all demos” 40 years ago that IT accelerates and enriches the chaos through which we all have to navigate. Personal computing and the Internet make us more than we were before; it’s not there to automate our lives and replace human creativity. It’s no substitute for the institutionalised compassion that is the core business of modern civil government.

We’re more than customers wanting choice and service. We’re participating citizens who exercise rights and responsibilities and demand accountability.

It’s too much to ask a small or medium-sized IT supplier to make their large customer – in this case government – behave differently. But it is absolutely to role of market leaders, especially bonded together in an effective and ambitious trade association such as Intellect – to understand what is going on and engage in strategic conversation to get this customer on a path of manageable medium-term business risk. This isn’t just about procurement methods – it’s about underlying intention.

Let’s get this conversation back on track where words mean what they should:

- Efficiency means a visibly intuitively efficient service (not a 2% cut)
- Customer-centric means what people want (not a centre that does everything to everybody and has to know everything about them to get it right)
- a Respect agenda means treating people with dignity and not intruding on the personal sphere of their lives

The transformation we need to see, and of which there are small-scale local examples, is the recognition that trust has to be earned and the rediscovery that public services have the straightforward purpose of serving customers in the communities of the needy and vulnerable.

Public-sector markets make for very decent business as long as officials remember the purpose of public services. For the IT agenda to support that, we will indeed, as Ray Shostak invites us, need to think differently and act differently.

Extra note after the event:

I cut out a few paras to keep it to time.

Richard Holway, who’s in his element in this sort of event and was the leading light in it for many years, spoke about how the corporate IT glory days are over, he’s had a wonderful 40 years and made more money than he dreamed possible, but now the growth and high salaries are elsewhere. The generation he speaks of may indeed have cashed in its chips and good luck to them. But it didn’t finish the job, certainly not in the public sector anyway, where there’s everything still to do and we’re barely beginning to get it right. And in terms of money changing hands my tax bill isnt going down, his certainly isnt, and I dount there’s anyone in the room who expects to pay less Council Tax next year than this.

The analysts’ panel I spoke on was followed by an industry panel that I found far ore impressive: BBC’s Ashley Highfield on BBC Backstage, the digital switchover and youtube; Martin Goodman on Intellect and the public sector, John Woodget from Intel and others.