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Margaret Hodge's book outlines 'mind boggling' UK public sector waste

Civil servants still don't care 'cos its not their cash... except it is

Review It’s impossible to read former bollocker-in-chief Margaret Hodge’s account of being chair of the government's spending watchdog without repeatedly banging your head against the wall.

Hodge presided over the House of Commons’ Public Accounts Committee between 2010-2015, during the coalition government’s austerity programme. From that bird’s eye perspective, she witnessed "mind-boggling waste of taxpayers’ money right across government,” which she documents in her new book Called to Account: How Corporate Bad Behaviour and Government Waste Combine to Cost us Millions.

Sadly for those who triumph hope over experience, there is little to suggest the situation has materially improved.

“We identified an alarming and deep-rooted culture where all too often the responsible officials displayed a nonchalant attitude to spending the hard-earned money we entrust them when we pay our taxes,” she writes.

"They felt no sense of personal responsibility because it was not their own money.”

In what can only be described as a shit-show of waste, Hodge singles out the Ministry of Defence for being “unbelievably awful".

“I recall one memorable hearing, when during around two hours of taking evidence we uncovered £8bn of wasted expenditure, where taxpayers’ money had been spent with absolutely no benefit for the armed services in terms of new equipment and support."

She adds: “It was as if the MoD tore up £8bn worth of banknotes and tossed them into the air, as though they were a shower of confetti.”

IT delivered on time? Don't make us laugh

And of course IT disasters received a special mention. “[If] any official mentioned a new IT project in their evidence to the committee, we would laugh at the idea that this might be introduced on time, within budget and save money.”

During the last 25 years the committee produced 75 reports on IT procurement, Hodge notes three for being particularly abysmal.

Unsurprisingly Labour’s £11.4bn National Programme for IT, which was originally costed at £2.3bn, gets top billing.

The government said it was axing that programme in September 2011 but “in reality, they have remained tied into the contracts with both BT and CSC, contracts that are delivering far less functionality to far fewer sites.”

She also remains sceptical of plans in 2015 to hand the NHS another £1bn for new technology to produce and support integrated care records by 2020. “I simply observe that the ambition has not been moderated and the political and electoral imperatives have dictated the timeframe. It seems like a case of plus ça change."

The second IT programme to attract her teacherly ire were two big Home Office IT projects in 2010, which were subsequently cancelled at a cost of £1bn.

One was for immigration casework system, intended to overhaul the paper-based applications work - much of which is still done by hand. In August 2013 that project was canned at a cost of £347m. “The Home Office has now decided to spend a further £200m on incremental improvements to their IT capability, abandoning the big bang approach. I have no doubt that sum will creep up over time.”

The so-called e-Borders was the second botched Home Office contract, commissioned by the Labour government and cancelled by the coalition after £260m had already been spent. In the process the Home Office had to settle to pay £150m with the supplier Raytheon and £35m on legal fees.

The BBC’s disastrous Digital Media Initiative in 2011, which was written off two years later at a cost of £100m also gets a special mention.

Groundhog Day

Unfortunately Hodge is no less optimistic about a number of "in-flight" projects.

She notes that even if the coalition government’s Universal Credit programme under Iain Duncan Smith finally succeeds, the Department for Work and Pension still have to write off most of the £344m early investment in IT, a figure she says may even rise to around £600m.

But it wasn't entirely a Sisyphean struggle. She perceives the PAC's successes to include its work on tax avoidance, which she believes helped put the subject on the map; stopping government from using premium phone lines; and halting off-payroll arrangements. She reckons 88 per cent of the committee's recommendations were implemented.

"But we had some defeats. We failed to convince the Department for Culture Media and Sport that they should not give BT all of the £2bn of public subsidy for the rollout of broadband to rural areas, which we thought represented extremely poor value for money for the taxpayer. We did not persuade the government to think again about the Work Programme or Universal Credit. We have not stopped PFI.

"Taxpayers’ money continues to be wasted on ill-conceived and badly planned capital projects, IT investments and major reform programmes. We have not secured the reforms to the Civil Service that we thought were necessary to achieve better value.”

Stephen Kelly: 'The human Ken doll'

And what of the major players behind IT reform during this period? Former chief operating officer of the Cabinet Office Stephen Kelly and current Sage chief executive gets a mention, as does Francis Maude.

“[Kelly] was known as the ‘human Ken doll’ by my office and others knew him to be the ‘best friend of Francis Maude, the Minister for the Cabinet Office - one of the few ministers really hated by the Civil Service, perhaps because he was so strongly committed to reform.”

Former head of the Government Digital Service Mike Bracken is named only in passing and former chief technology officer and current digital tsar Liam Maxwell is not mentioned at all.

Of former Cabinet Office minister and current digital policy at the Department for Culture, Media and Sport Matt Hancock - who previously sat on the PAC - Hodge sniffs: "Matt Hancock was not universally popular with his Conservative colleagues on the PAC, but because of his close links with the Conservative Party leadership, he was feared and one could always sense the atmosphere when he entered the room."

Her prescription is a heavy dose of transparency, accountability and training.

“The civil service continues to lack the appropriate skills and expertise required for modern government.” Commercial and IT expertise are particularly wanting as there are “simply not enough civil servants with those skills.”

Hodge’s book lays bare the case for why waste within the public sector badly needs addressing. Unfortunately the evidence suggests it still has a long way to go. ®

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