Published: 16/01/2003, Volume II3, No. 5838 Page 2 3

The government is praying its Gateway reviews of major projects will prevent any further IT disasters. Michael Cross reports on the latest attempt to deliver successful - and cheaper - public sector procurement

Two names have the power to terrify those responsible for running the NHS national infrastructure plan for IT.

One is Saddam Hussein: a war would shunt the whole project into limbo. The other is Peter Gershon, chief executive of the Office of Government Commerce.He's on our side, but no less dangerous to the NHS's multi-billionpound IT ambitions.

It is nearly three years since Mr Gershon traded his job as chief executive of BAE Systems for a government post and a salary drop of several hundred thousand pounds a year. Insiders say he was the prime minister's personal choice to run the newly created OGC after he reported that the government could save£1bn almost immediately by buying goods and services more efficiently.

OGC says it will have met that target, mainly by negotiating volume discounts for commodities such as water and electricity, by March.Mr Gershon now has his eyes on a more demanding target,£3bn in savings by March 2006.

To get there, OGC is taking a hard look at the way the government runs major projects. It is doing this by subjecting them to a new scrutiny process called Gateway, a series of reviews originally tested on construction and IT projects.

Gateway reviews, carried out by independent experts, scrutinise a project at set stages in its life (see box). Since January 2001, Gateway reviews have been mandatory for all new, high-risk projects involving procurement by civil central government.

Originally the NHS, like the Ministry of Defence, eschewed the Gateway process. But from April, Gateway reviews will be mandatory for all NHS projects judged to be risky - which means anything involving IT. OGC officials who have been negotiating with the NHS stress that risky does not necessarily mean big. 'If you're writing your own software, rather than buying off the shelf, then That is obviously high risk, ' a spokesperson says.

do not panic. OGC officials claim the reviews are there to help projects, not to strangle them.While the findings of individual reviews are secret, OGC will reveal lessons from the 300 or so reviews carried out so far.

The main holes found in IT projects are:

A lack of adequate resources.

Problems relating to the roles and responsibilities of project managers (usually nobody is in charge).

A lack of clear business scope.

A lack of active support from managers and stakeholders.

The recommendations most likely to be made are:

Gate 0: increase the size and the competency of the project team. In many cases, the review has demanded the appointment of a better qualified 'senior responsible owner' to take charge. Break the project up into smaller components.

Gate 1: consider how to measure a project's success - and ensure that all stakeholders agree on these measures.

Gates 2 and 3: consider procurement options apart from the private finance initiative. Break the procurement up into smaller contracts instead of expecting one supplier to deliver everything.

Only invite bids from companies that can name their own senior responsible owner and guarantee that a senior executive will be in charge throughout the project's life.

Gate 4: test the system further and improve staff training before going live.

Gate 5: ensure that senior managers remain closely involved; many large projects run into trouble a year or two after going live.

According to OGC, these lessons are fed to government policy makers, through a supervisory board whose members include all departmental permanent secretaries, as well as to the project under scrutiny.

Mr Gershon says the Gateway process is now viewed as one of the government's most effective weapons in delivering successful public sector procurements and expects the reviews to save at least£500m a year.

John Gieve, permanent secretary at the Home Office, says that Gateway has shown how poorly resourced many government projects were. It has also changed Whitehall culture.

Projects were often led by a committee; they are now more likely to have a single responsible owner.

One of the few senior NHS managers to have been through the process is Philip Hewitson, chief executive of NHS Shared Services.He describes the experience as good. 'We have had two projects reviewed, ' he says. 'The process is slick and highly professional. The only frustration is that It is on top of everything else, not a replacement.'

IT contractors are equally positive. David Fisher, head of public sector strategy at EDS, describes Gateway reviews as 'unalloyed good news'.

When fully applied to the NHS, however, Gateway will face criticism from two directions. First, that it adds another level of bureaucracy to decisionmaking in IT projects. Officials deny this: 'The review is only doing something that the project should be doing anyway, ' says Ian Glenday, Gateway programme director at OGC. Indeed, one sign that a project is going wrong would be that its managers feel they need to spend time preparing for a Gateway review.

Another possible criticism is secrecy. OGC officials say the 'as is' nature of the reviews would not be possible if contractors had to reveal commercial secrets and the National Audit Office will have access 'in the fullness of time.'Whether this will satisfy the House of Commons public accounts committee remains to be seen.

OGC seems determined to preserve Gateway secrecy. It advises departments 'to consider very carefully any requests for the disclosure of these reports if we are not to jeopardise the considerable benefits the Gateway review process has delivered.'

But the statement, on OGC's website, goes on to say: 'This is... to guard against the potential danger of these reports becoming bland and anodyne if a procedure of automatic disclosure is adopted.'

The word 'automatic' seems to leave the way open for some disclosure, especially of Gate 0 and Gate 5 reviews.

The NHS's big infrastructure projects still look set for trouble.The NHS Information Authority was forced to admit last November that the integrated care records services project was being revised after submission to Gate 1 as a draft specification.The problems identified seemed to relate to the project's scale, lack of business case and lack of project management.The Department of Health later announced, with no explanation, that ICRS had passed.

There are also signs that Mr Gershon, no particular fan of IT for its own sake, will be subjecting the new NHS IT budget to even tougher scrutiny than usual.At his landmark speech to the London e-summit in November, prime minister Tony Blair said he had asked Mr Gershon to come up with measures 'to bring forward immediate proposals for further strengthening the successful delivery of IT in government'. In other words, to prevent any further public sector IT disasters. In the mother of battles against government waste, no-one expects Mr Gershon to take any prisoners.

What is Gateway?

The idea of Gateway, according to Ian Glenday, Gateway programme director at the Office of Government Commerce, is that independent reviewers take a quick, hard, but constructive look at projects at critical stages in their development.Each review takes five days at most, carried out by a maximum of four independent experts in project management.

If a project does not pass through the gate, it does not proceed.'This will enable appropriate corrective action to be taken, 'OGC says.

The methodology is borrowed from the private sector, which has a better reputation than government for subjecting projects to 'reality checks'at regular stages in their development.

Unlike most investigations by the Audit Commission and the National Audit Office, Gateway reviews are 'real time'- made when there is a chance of rescuing the project before it goes irrevocably wrong.

Initially, OGC identified five gates in a project's life cycle.These were:

Gate 1: justifying the business case;

Gate 2: approving the procurement method (eg whether to go for the private finance initiative);

Gate 3: approving the contract before signing;

Gate 4: checking that the project is ready to go live;

Gate 5: a post-implementation review, to check that the project is achieving value for money and that its lessons have been learned.

After a few reviews, OGC decided it needed a further test to spot potential white elephants before they had cost the taxpayer a penny.This is Gate 0, a strategic assessment which checks that the project is in line with government policy and that it is technically feasible.

So far, more than 250 projects, worth about£25bn, have come through the Gateway process.About twothirds of projects are 'IT-related', though OGC prefers to avoid the term.More than 300 individual reviews have been carried out, though only a dozen have gone through all the gates.