29 There may be a temptation to think that the Payment Card project failed solely because it was large and complex or because it was a pioneer for the Private Finance route. This is not the case. Various factors contributed to the project's failure and their effects are difficult to disentangle. Looking to the lessons that can be learned by Government, important reasons for the project's failure were:
■ divided control. The project was run by two organisations, the Department and Post Office Counters Ltd, with different objectives. Although in theory projects can be run by two or more organisations, in practice this is a recipe for dispute and delay, which is what happened in this case. A key lesson to be learned is that it is usually better to let one purchaser take the lead with proper arrangements for information flow;
■ inadequate time for specifying the requirement and piloting. To save time and money, insufficient work went into specifying the project and for demonstrations by bidders. The result of skimping at the start was vast delay and as it turned out, wasted money. A key lesson is that allowing realistic timescales for early planning and detailed specification will pay dividends in time, cost and quality; and
■ a shared, open approach to risk management across the whole programme was not achieved. A key lesson learned is that contractual obligations must be underpinned by recognition on all sides of the need for openness about risks identified and emerging.
30 Mistakes of this kind are made time and time again. A Report by the Committee of Public Accounts "Improving the Delivery of Government IT Projects" published in January 2000, shows that government has found learning from and applying its previous experience in project management very difficult. And the Government is not alone in encountering problems with such projects. Questions of culture and training arise - here, as with other projects, those with responsibility too often get immersed in details of procurement and negotiation and lose sight of the effects on the wider business. And if there are fundamental flaws in the design of the management of the whole scheme - as here - the impact of this organisational myopia is compounded. In their report, the Committee of Public Accounts called for the training of more skilled project managers and a high degree of professionalism in the definition, negotiation and management of IT contracts to help address this. And a wider perspective must be maintained. Decisions about IT are crucial to the development and success of the business of public bodies, and cannot be treated in isolation from other aspects of their work.
31 A report by the Cabinet Office in May 2000 has produced recommendations for improving the way in which the government approaches and manages major Information Technology projects. These recommendations are summarised in Appendix 5 and in our view should, had they existed and been implemented in the case of this project, have substantially reduced the risk of it failing to meet the Department's requirements. They may alternatively have led to the project not proceeding in the way it did without changes in terms of its scope and planned timetable. There are lessons to be learned from the project for all three parties involved and for the wider IT community. The Department of Social Security told us that they were seeking to apply the good practice recommended in the Cabinet Office Report, in taking forward their major ACCORD programme to provide new computer systems to underpin their business.