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Masters of the universe give us a billion-pound computer fiasco

Simon Jenkins

The top shelf of an airport bookstall offers two aids to the male libido. One is sealed inside a plastic bag, the other is free to browse. One is about how to succeed in bed, the other about how to succeed in business. King Greed is as potent as King Sex. And the greed drive is now rampant inside British government.
On Tuesday MPs have a golden opportunity to curb it. They can take one look at the government’s identity card bill and throw it out. The bill itself is an authoritarian twitch, the sort of measure police chiefs and the Home Office keep in their back pocket in the hope of one day finding a home secretary right-wing enough to let it pass.

In Charles Clarke they have found their stooge. He would bring back the rack and cat-o’-nine-tails if he thought it worth a pat from the Daily Mail. Labour MPs are no better. They are pure Weimar. They could not recognise a civil liberty if one hit them in the face.

I have no particular problem with plastic identification. Most respectable citizens carry it. Credit, mobile telecommunication and foreign travel all require it. But the British state is not so vulnerable as remotely to justify a project costed at £6 billion then £10 billion then £15 billion, and now possibly the moon. With its half-hour clearance time and unreliable iris and fingerprint registers the ID project seems way beyond any conceivable value for money.

The ID cards are stupid government, banana republic government, government that tells the taxpayer to eff off. Were this fantastically expensive proposal for anything other than a computer — say rebuilding every secondary school or every prison — it would not survive a minute of Treasury scrutiny. Yet its sponsor, Sir John Gieve, the Home Office boss, is actually in line to run the Treasury. The thing beggars belief.

As long ago as 1997 Computer Weekly estimated that some £5 billion had been lost by Whitehall on botched computer projects. Consultants had found selling computers to ministers was like giving sweets to children. Labour claimed it would stop all this, but it did the opposite. Ministers traded up from candy to cocaine and are now hooked.

The money being wasted subsidising the computer industry far outstrips what used to be wasted on nationalised cars, steel, coal and shipbuilding. Government computers are the new lame ducks. I am told that the NHS project was sold to Tony Blair by a McKinsey team at a meeting in February 2002. The team chief was David Bennett who, intriguingly, was this month appointed Blair’s policy chief at an undisclosed “six-figure salary”.

The NHS computer was supposed to list everyone in the country with their various ailments so any doctor or hospital could treat them “on screen”. Nobody ever asked for this machine, which was supposed to start in 2004. It was a pure top-down sales pitch. The medical establishment pleaded naively that the cost not be met from other health spending. The price soared within a year to £2.3 billion and is now £6.2 billion, with no known delivery date. Every industry expert is screaming at Patricia Hewitt, the health secretary, to cancel it. She has not the guts. It was a “McKinsey project” and her boss dare not be seen wasting billions on his friends, money that might have gone on patient care.

Yet this gullibility is not confined to health. A planned Ministry of Defence computer is budgeted at £4 billion, sold to Geoff Hoon as linking 70,000 desktops in “real-time decision-making with network-enabled capability”. Hoon also spent £195m on consultancy fees for an unbuilt aircraft carrier, under something ironically called “smart procurement”. This is a ministry that cannot equip its troops in Iraq with modern kit and claims “frontline overstretch”.

Last week came the unravelling of the tax credit saga. A Treasury computer’s attempt to recoup some £2 billion in overpayment to the working poor was blamed by Dawn Primarolo, the paymaster-general, on “issues with the IT and the administrative system”.

This buck-passing was untrue. Recouping payments was built into the programme. Gordon Brown’s pet scheme was introduced despite warnings that the repayments problem had scuppered Geoffrey Howe’s identical scheme in the 1980s. Brown trusted the computer to sort it out, as it sorted out tax underpaid by the rich. To his clear surprise the poor, some 2m of them, turned out to be different from the rich. They seldom have spare cash to hand back for previous overpayment, let alone the £500- £1,000 claimed from half of them.

How the scheme came to be passed by Treasury officials and ministers is baffling. Perhaps if they want to know how to work a public service computer they should cross the river and study Ken Livingstone’s London congestion charge. However controversial, the design was kept simple, was delivered on time and was up and running with barely a glitch. The Treasury simply refuses to believe that local government can ever be more efficient than Whitehall.

As for Brown, he never apologises. Last week Tony Blair had to do it for him while he sat glowering on the bench behind.

I realised then that Blair has no intention of standing down soon. If Brown cannot take the rap for his own mistakes, and this was a bad one, he is not yet fit for No 10.

These computer fiascos come on top of similar ones with the Child Support Agency, the Criminal Records Bureau, the Passport Agency, the benefits card, traffic control, the e-university and countless others. All suggest a government in thrall to fee-driven consultants and computer subcontractors. Ten years ago there was Labour fury when the Tory government’s consultancy bill burst through £300m. The Management Consultancies Association now reports the figure at almost £2 billion, 46% up on just a year ago. The biggest Whitehall spender is the Department for International Development, which donates a massive £700m a year not to the world’s poorest but to its richest, international consultancy. The apotheosis of public sector consultancy came last week with McKinsey appointed de facto Purveyor of Policy to Her Majesty’s Government. It takes the place of the cabinet, MPs, the civil service and the Labour party. Thus Sir Michael Barber left Downing Street for McKinsey to advise on “government”, while the firm’s David Bennett moved the other way to head “policy”. Bennett’s duties reportedly included approving the new head of the civil service, as well as doubtless protecting the NHS computer. With him are McKinsey associates Lord Birt, Nick Lovegrove and Adair Turner.

Downing Street claims oddly that they earn no “public” money. So who pays them? If it is McKinsey, which is paid by government, is this not just salary laundering? Were these jobs or contracts properly tendered? Nobody is saying and nobody seems to know.

I can see why McKinsey once boasted in a documentary that its staff were “masters of the universe”, even if none had ever run a whelk stall. It seeks to locate key alumni everywhere that has money to burn. Lovegrove it was who helped Birt fashion the gargantuan BBC apparat, now being expensively dismantled. At Enron McKinsey’s secret loops and “creative destruction” are legendary among consultants, not so much for their bleak outcome as for McKinsey getting clean away from the scene.

Consultancy, as Peter Drucker said, is not a corporate investment but rather a corporate indulgence. It is a perk, a weekend retreat, an executive jet. A boss turns to consultants when he is bored with his colleagues or wants to avoid a simple, tough decision by making it seem complex and intellectual. For Blair, consultants offer flattery and jargon. They promise top-down initiatives that circumvent civil servants, parliament and usually common sense. They are a vain attempt to depoliticise government.

This is really about greed, yet another round in the old game of lifting money from the taxpayer by bamboozling ministers and officials. Computerised government is mostly nonsense. The sums leaching from the Home Office, NHS, MoD and Inland Revenue are grotesque. And who guards them? Nobody. The Treasury, which spent £800m in fees privatising the London Tube, is the softest touch. The National Audit Office is a paper tiger. The Commons public accounts committee is toothless.

These are true Augean stables. MPs could this week start to cleanse them by preventing some £10 billion being blown on ID cards. I bet they funk it.