Q71 Chair: Let me just ask two more questions on it. One is, from what I understand you said, let's say you get up to your £13 billion, all the new rather more fragmented bodies that are responsible for using the taxpayers' pound to deliver services will have to be persuaded rather than instructed to take advantage of your more efficient procurement process. Question two is, if I just take another of one of our recent reports which was on NHS consumables procurement-I do not know if that caught your eye. We found there that there are 61 trusts, 652 different types of surgical gloves, and 1,751 different types of cannula, with one rust buying 177 different types of gloves. That is obviously absurd. Is there anything you will be doing that will cut out that real inefficiency?
Ian Watmore: I could name you similar examples. For example, in paper. You would think A4 paper was pretty standard, but we have hundreds of variants of it that we do not need. By aggregation you can actually reduce the number of lines of business; you can see it all in one place. Then you can say, "We do not need two-thirds of those, you can have any car you like as long as it is black, red or green or something, and not any other shade of colour." That is what we are approaching doing with our commodities. We are saying to the wider public sector, "Come into that deal as well. You will get a better deal." Why would you spend your money on that when you have got your own deficit?
Q72 Chair: So it is voluntary, not compulsory?
Ian Watmore: At the moment yes, because I think the Government's general direction on the wider public sector is actually to devolve power locally.
Q73 Chair: It is tight/loose, and I am trying to find out whether this is tight or loose.
Ian Watmore: For central Government, this is tight. Then I think it is up to the Departments that manage those wider systems to decide with their bodies whether they want to-
Q74 Chair: The surgical gloves and cannula?
Ian Watmore: I will have to get back to you on that, it is not my "Mastermind" specialist subject. The principle is right, that we do not want a large number of lines of items to be procured. The paper one I give you is a good example because if we can actually reduce the number, not only can we do it more cheaply, we can actually do it more ecologically as well because we can get recycled paper.
Q75 Chair: I understand that you are going to get back to me on the gloves and the cannula, but do you see that as tight or loose?
Ian Watmore: I think in the context of this it would have to be loose from a central Government point of view, because that is right in the middle of the health service, and the health service reforms are about devolving responsibility away from the centre. They are more than welcome to join in with our procurement approaches and if we can help them aggregate their spend, then great, we will.
Q76 Mr Bacon: Can I ask you a question on procurement and procurement rules. Plainly, if you could have a Model T Ford printer, say an HP printer, and everybody does not have a special requirement, like the disease control centre at Bury St. Edmunds that needed a huge plotter, got the bog standard black printer with the same cartridge, you would save a lot. You also put, say, for example, HP-as long as they are prepared to come up with a good price-in a really good long-term position because once it is all there, in and running you do not really want to pull it all out. You want to keep the cartridges coming at a very low price. Plainly that presents potential competitive problems and even potentially EU procurement rules problems. How do you get round all of them?
Ian Watmore: Again this is a complicated story, but broadly the thrust is when we have aggregated the spend so that we know what we are going to spend, our approach is to try to break that spend up amongst competing companies including, particularly strongly, SME companies; by specifying what we are then going to buy in a way that makes the SMEs able to participate. Then we are into all sorts of issues around how we change the rules. We are absolutely not in the game of trying to lock into a single company and get a short-term cash gain and then realise that you have locked all that away. We want to get commodities to become commodities, and then get multiple people to be able to provide that. We also want to do what we call spot-buying, which is where we might set a price but when a given Department comes along and says, "I want 100,000 of these", we go into the market and spot-buy and take the best price on the day. We have also got reverse e-auctions, the reverse eBay type of approach. There is a whole variety of tools and techniques. We have just signed a deal with ProcServe to put the marketplace on the web for everybody, so there is a whole variety of things to make sure we do not get into particular problem.
Q77 Mr Bacon: You mentioned earlier, I think you were talking about universal credit and agile. The agile community is saying, "If universal credit is agile, why is it taking up to two years and costing hundreds of millions of pounds?" If you look at the original famous agile manifesto, one of its premises, item 3 is, "Deliver working software frequently, from a couple of weeks to a couple of months, with a preference to the shorter timescale". Is this really agile, or is it just waterfall with a different name on it? Is it true to say that there is a difference of emphasis between you and Francis Maude on what agile really consists in?
Ian Watmore: No, I do not think so. I will give you two answers to that. One is I went to Warrington the other day to visit DWP and they have got-I forget the name of the company, but it has one of the world-leading agile people in. They showed me how they are breaking up the delivery for October 2013 into a large number of two-to-three-week drops of code. What they are trying to do with it is take each customer type and develop the whole solution for that customer type. If you are a very straight forward customer then you start off through this transaction, if you get more complicated you wait for a later transaction. They are then using those deliveries to road test it with real customers. They are getting people in front of it and they are working out some of the problems, and they are iterating round. They are then putting that on the shelf and saying, "When we go live, that is the version for customer type A. Now let's do customer type B." In the end they are aggregating all these little-
Mr Bacon: So it will be like Lego?
Ian Watmore: In effect. In the end when you are going live with one of these national systems, you have to work out which group of customers you are going to impact, how you are going to do it in which geography, and whether that is fair from a proprietary point of view. That is the way you have to build that up. My second point is I have also recruited, for the purposes of advising me and Francis, somebody whose speciality is in the new ways of developing IT, whose specific job will be to come and challenge us over the next year to make absolutely sure that we are adopting-we collectively in Government-the latest thinking. I think that is already happening in DWP.
Q78 Jackie Doyle-Price: I just want to pop back to this question about accountability and ownership. It comes out of the question that Nick was asking about the DWP. There is a real tension here in what you are describing. You had said that you will be prepared to actively call in projects if they look like they are going awry. Equally, you said that Departments will retain ownerships of these projects. I just want to tease out from you just exactly how that will work in practice because we definitely got the message yesterday from the DWP that they were very much beholden to you in terms of how far and how quickly they could move on their projects.
Ian Watmore: I would have to listen to what Robert actually said to know what he was aiming at. The principle as far as universal credit is concerned, is that it is one of the Government's major projects. It is probably the biggest outside of the Olympics in terms of risk, cost and difficulty. Each of the major projects is reviewed regularly and independently by the Major Projects Authority, which reports through me. If the Major Projects Authority-I think you had a briefing from David Pitchford last week-says, "The project cannot go on in the way it is; it will hit the buffers", obviously the first port of call is you talk to the Department about it. If the Department says, "Go away, we are carrying on anyway, it is our project", we escalate straight to the Prime Minister. Then it is up to the Prime Minister.
Q79 Jackie Doyle-Price: Typically, how often would a major project be reviewed?
Ian Watmore: It is almost continuous really because there are so many different strands of the project. You probably have a formal checkpoint every three months or something, but it is almost continuous activity going on checking out different aspects of this.
Q80 Jackie Doyle-Price: If we relate it to a past example that we have looked at in this Committee, for example Mr Bacon's favourite, NPfIT or the M25 extension, how quickly would that have been reined in under this process?
Ian Watmore: That is a good question. I would have hoped that something like the national programme would have been reined in several years ago by this process.