I've been reading through the National Audit Office report on the FiReControl project, so my esteemed readers don't have to. By my calculations, you have each saved at least 10 points systolic on your blood pressure. If you wish to bank this saving, I recommend you read no further.
First, the basic facts: between 2004 and 2009 the Department for Communities and Local Government managed to piss away a cool £469m while attempting to consolidate 46 regional control centres into 9 super-centres. A good chunk of this money was picked up by the inept sharks at PA Consulting and the useless bags of skin at EADS. They carefully avoided involving the actual users of these centres (the Fire Service personnel) in any meaningful way while designing the systems and software. The initial estimate of £120m for the implementation was out by at least a factor of 5. The Department realised in 2009 that things were going off the rails but had confidence in the ability of EADS to correct course and deliver. This confidence was misplaced. The taxpayer ended up £469m in the hole with only 1 of the 9 centres fully built, and none of the software actually working; £250m spent so far and another £200m+ that has been committed to future spending.
It's a classic example of taking a distributed system that worked reasonably well but could stand improvement, radically altering it by centralising, pulling in outside consulting companies who didn't really know what they were doing and only really cared about billable hours, failing to involve key stakeholders in requirements and design, and spending other people's money on other people. The failure was, in these circumstances, inevitable.
Some highlights of the report:
- there was no framework to assess consultants’ performance until late 2008, despite the fact that consultants and temporary contract staff made up almost half the Department’s project team during this period.
- So the consultants had a billing feeding frenzy without actually needing to produce anything that worked
- In July 2004, the Department estimated that FiReControl would cost £120 million to deliver, but this figure underestimated the costs of the project. The Department did not, for example, include the costs of meeting local and regional implementation work, or the costs of installing equipment in the regional control centres.
- So the cost/benefit calculations looked much rosier than they were. Was this simple oversight, or deliberate omission to make the project look more attractive to ministers?
- The Department appointed four Senior Responsible Owners and three Project Directors before those in post at the time of termination were appointed in 2008. EADS similarly has had three different Chief Executive Officers and four Project Directors since the IT contract was awarded.
- So the most senior people never had any real tie-in to the success of the project
- PA Consulting was contracted to provide consultancy services at a cost of £42 million to the end of March 2011. Its staff held key positions throughout the project, including the Project Manager, one of only two senior members of the team who remained on the project throughout its duration.
- So we know where to point fingers for where much of the money went
- Weaknesses within the contract agreed with EADS limited the options available to the Department.
- The consulting companies are better at negotiation and contracting than Government. Shocker.
- Seventeen of the twenty- seven Fire and Rescue Services that responded to our survey told us that the cancellation of the project had a significant negative operational impact on their service, and twenty-three stated that it had a significant financial impact.
- So they were worse off than if this project had never happened, and note that this financial impact does not appear to be covered in the overall stated loss.
- The Department agreed leases of between 20 and 25 years for each of the regional control centres and, should Fire and Rescue Services or other bodies fail to move in, the Department will continue to be responsible for rent, utilities and facilities management costs for each building over the lifetime of their lease.
- Which is where the future money is going to be spent.
What really grates is that although EADS appears to have been suitably financially penalised, PA Consulting has done very nicely out of it, and no-one at the Department of Communities and Local Government appears to have had their head on a block as a result of this farce. So the most important lesson is that it's absolutely fine to piss away nearly half a billion pounds of taxpayer money through incompetence - your job is perfectly safe.