Government struggles to upgrade legacy IT systems, says PAC chair

Public Accounts Committee (PAC) chair Meg Hillier has issued a report calling for government to upgrade its legacy IT, address the lack of specialist skills and stop making the same mistakes.

The PAC annual report highlights the need for major investment and blames the lack of forward thinking displayed by government for the current situation. In the report, Hillier warns that funds meant for long-term projects are instead being used for day-to-day spending, which has created systemic issues and led to the need for further investment.

One of what Hillier dubbed the “big nasties” – those areas needing the most focus – is the government’s “significant issues with ageing IT systems”. The problem with legacy IT is not specific to one department, but rather seen across government departments.

While the Department for Environment, Food and Rural Affairs (Defra) struggles with 30% of its applications being so old they are no longer supported by their supplier, the Ministry of Defence’s (MoD) aged systems “make even routine tasks like ordering boots complicated”, according to Hillier.

The comment comes following a PAC report in January 2024 highlighting concerns that the ageing and fragmented IT used in the MoD’s inventory management puts frontline forces at significant risk.

The MoD has worked to upgrade its inventory management system for the past 14 years, with a project beginning in 2010 to reduce the number of logistic support systems. So far, the number of systems has been reduced from 250 to 89, but there are still issues around data in particular.

The report also highlights the Department for Work and Pensions’ (DWP) issues with legacy IT, which is having a real impact on people’s lives through the pension scandal where pensioners were underpaid £2.5bn due to errors created by outdated IT systems.

“The lack of functionality in these older systems caused reliance on manual processing and the use of multiple systems to complete tasks. DWP failed to upgrade systems, instead increasing complexity by layering new systems on top of older ones,” the report said.

“Government must find cost-effective ways to upgrade its IT systems, especially considering the high human and monetary cost of errors.”

The cost of failing to upgrading legacy IT is huge, as the cost of simply maintaining the systems is increasing and the loss of “associated specialist skills” is unsustainable, the report said.

The system seems to be incapable of developing institutional learning and memory

“Across government, outdated IT systems and ageing data are a key source of inefficiency and a major constraint to improving and modernising government services. Many of these ‘legacy’ systems were built several decades ago and are now costly to run and risky,” the report said.

Hillier said that as a former government minister, she came to the PAC with a “sound knowledge” of how Whitehall works, how projects are created and how policy is delivered. However, she added that during her time as chair, she has observed the same mistakes happening again and again “and how the system seems to be incapable of developing institutional learning and memory”.

One of the issues, she said, is that the challenges facing Britain require long-term investment and planning, and shouldn’t be “matters of political controversy” but should be dealt with over decades, instead of focusing on quick wins.

“Slow politics is my term for the programmes that require long-term perspectives beyond one Parliament, and that requires long-term spending plans,” she said.

“Most large infrastructure and defence programmes fall into this category. Digital transformation in government is also an area which needs consistent funding and, as this is now resource rather than capital, it is at risk of departmental budget cuts if there is no clear plan to protect it.”

Hillier also cited the HM Courts & Tribunal Service’s justice system transformation programme. Originally, the programme, which started in 2016, was due to be delivered by 2020. With timescales changed several times, the programme is still not complete, and as of July 2023, there was only £120m left to spend of its £1.3bn budget.

“The right technology and working practices in the courts are vital to reducing backlogs and creating a more resilient justice system where citizens have access to justice,” the PAC report said.

Hillier also called on the lack of skills in government to be addressed, to avoid huge risks to the delivery of major projects. She said there is a severe shortage of skills in several sectors, including digital, cyber security and nuclear engineering, with £980m spent on management consultant fees to fill the skills gap across government in 2018/19.

“Many projects and programmes across government are afflicted by delays, inefficiencies and budgetary overruns, often due to a lack of specialist skills amongst officials,” the report said.

Hillier added that although the PAC remains a “robust means to hold the powerful to account”, there is a scrutiny gap in government. As systems become more complex and multifaceted, the job of scruitinising programmes becomes more complex, she said.

“I believe there is a role for pre-project scrutiny – akin to pre-legislative scrutiny. A public airing of the plans for a major programme would shine sunlight on the potential benefits and pitfalls before large sums of money are spent,” she said. “I have offered this to departments, but government has not been keen to adopt this voluntarily.”