Q41 Chair: You promised that there would be analysis by recess.
Ian Watmore: Yes, but if you want people to come and look at it I am happy to do that.
Q42 Nick Smith: Mr Watmore, in your introduction you emphasised joined-up-ness, particularly on IT projects. On this Committee we are interested in the development of universal credit and in particular the joint IT project between DWP and HMRC. It is important because it is a major project, it is big-ticket, and it is high-risk. What is your view of progress with this? Is collaboration working? Who will be accountable should it not work?
Ian Watmore: Good questioning there. First of all, my role as an individual is that I sit on the high-level committee that is chaired by the Secretary of State for Work and Pensions that reviews the joint workings of the project with colleagues from HMRC and indeed from DCLG, because there is a local government input to that as well. So the three main Departments are represented and I represent the Cabinet Office around that; so I have a personal role on that. Obviously my team in the Major Projects Authority regards this as the No. 1. With the Olympics now in sight this is the next big project that Government has. It is the biggest thing that is going on and probably the most risky. I think we have governance on this as good as we can do it.
What is my view of how it is going? My view is that thus far they are doing the right things. I think to be able to say that anything is in the bag for something this complicated and this big would be very premature. It is going to take a lot more effort before we get to that point. Am I sitting there saying this is a disaster waiting to happen? No, I am not. I think there are a number of big decisions they have to get right in the coming year. The dependencies, as you rightly point out, are on the real-time information side that the Revenue provide. That in turn requires the software providers of payroll software to change their software so that the information that is provided by employers comes through in the right format. A recent decision was made on how to do that. I was involved in that decision; we took the least risky way to do it. There were some higher-risk options but we chose the least risky way of doing it. That will be now piloted and if it all follows then the software providers will roll out to all employers for April 2013, so that by the time that universal credit goes live this thing will be providing information. That is that side of the equation.
On the DWP side, they have real complexity as to how they will manage from the legacy environment that they have, which I am sad to say is so old that even I was part of the programming team of it in the 1980s; it is still there whirring away. They have got to convert from that to the new environment. They are doing it in the right way: incrementally, using the agile methodology, all of those things, but it is hard and complicated stuff. There are probably several thousand different types of customer that might go through the system, ranging from the regular person who just loses their job to someone who has got a very complicated personal situation and is in and out of work. There is a lot of work to be done. How they roll it out will be critical. Which group of customers do they start with? How do they then bed that system in? How do they then take on the next tranche and gradually roll it out across the four or five years? These are the issues that they are addressing. So far I think they are doing the right things.
Q43 Nick Smith: Thanks for that very full answer. You paint a very complex picture. Have you had to put up new estimates for the costs of this in terms of IT development?
Ian Watmore: Not to my knowledge. I do not have that in my head, but I do not think so.
Q44 Nick Smith: You talked about being on the different boards overseeing the development of the project. I am still not clear who will be accountable should it not work.
Ian Watmore: The Secretary of State for Work and Pensions and the accounting officer for DWP, Robert Devereux, would be the primary accountability for the universal credit because that is their programme and their benefit.
Q45 Nick Smith: For the IT project, this joined-up-ness that you identify in your introduction-
Ian Watmore: It is multiple IT projects. The IT that is DWP's will be DWP's; the IT that is the Revenue's will be the Revenue's. Primarily, I think that because the lead Department is DWP that is where the primary accountability lies. If they feel that the Revenue, for whatever reason, are not able to meet their timescales then it is their programme that will be at risk, not the Revenue's. The Revenue are going faster than they probably otherwise would. I think the lead Department has got to be DWP.
Q46 Chair: And your role? Your accountability?
Ian Watmore: I think in this case the accountability would be to assure, through processes like the Major Projects Authority, and to help where requested; but to assure and help success. For example, if our assurance process said it was all going swimmingly fine and then it was a car crash, obviously DWP would be the primary Department in the dock because it would be their customer base that is damaged, but you would rightly point to us and say, "Your assurance process was obviously weak." I feel that I have, through my team and through Francis, the mandate to call a project in if we think it is going off the rails. If necessary we have the Prime Minister's backing for that. Ultimately if we invoke that at some point then we would expect it to be actioned. If it is not, then I think the assurance process completely breaks down.
Q47 Mr Bacon: Did the universal credit get called in?
Ian Watmore: Not yet. By "called in", what I mean I that it is part of that portfolio so we are reviewing it regularly.
Q48 Mr Bacon: I was just thinking of Mr Pitchford's comment the other day of going back to the drawing board. Was this the one where you went back to the drawing board?
Ian Watmore: I do not know what he said, I was not here.
Mr Bacon: He was talking about projects across Government and in a few cases he said he said you had basically had to go back to the drawing board.
Ian Watmore: Not on this one, definitely not. I think the one he probably had in his head is was e-Borders, where they canned the project, and went back to the beginning. On this one I think they have been very open with us from the beginning. Our assurance processes are working. We recognise it is high risk and there is loads of stuff to do. If it gets to a point where I and David, and indeed then Francis, believe that this thing is no longer going to work we will flag it at the highest levels. I am not going to sit here and say that I will be bulldozed into it by somebody else. If we think it is going wrong we will call it up to the Prime Minister and then we will take the review.
Q49 Nick Smith: One specific point, not an IT one, but one of the things you emphasised the importance of was the real-time recording software. Is all that running well or do you think it is problematic?
Ian Watmore: I think I explained that. In order to get the real-time information in, the primary source of that is to change the payroll software that all employers use. I think there are about 20 companies that 90% of employers use for sending their information into the Revenue on an annual and monthly basis. This is going to be the same software but done on a more regular basis and that is what they have to change.
Amyas Morse: If you do not mind, I will just take us in a slightly different direction. I was just looking over the organisation chart for your office. Perhaps I could ask you both a bit about this. It struck me that in bringing all these groups together, apart from the each one having its individual responsibility, I would expect some logistic benefits.
Ian Watmore: Yes
Amyas Morse: From your point of view, how have you thought about that? How are you going to deliver those? What are your plans for them? May I ask Lord Browne, because you must have seen this many times before, what would you expect from bringing services together and if you wanted to drive them to deliver synergy, how would you go about that? It is just interesting.
Ian Watmore: Just as a flavour, in my own team- this is the team that I have, not the rest of Government-we have reduced the core team from 600 to 380 people in a year, so we have taken 220 people out of 600. We have taken the delivery bodies down from 1,344 to 891 in a year. There is more to go because we announced the closure of the COI last week and that is still in here. I have taken my leadership team down by two Permanent Secretaries, four director generals and five directors. The top management costs of my team have been reduced by 40% in a year. We have come out of all our buildings and moved into the Treasury building; we are now hot desking and using flexible IT. Instead of working in little pockets of teams, everybody is assigned on a flexible basis so that we put people on to projects that then focus on common business products.
Q50 Chair: How big is your team?
Ian Watmore: I just said the core is now 380 people, it was 600.