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‘It’s almost unrecognisable’: Common Agricultural Policy payments, from disaster area to digital exemplar

Source: Public Sector Executive Dec/Jan 2015

Jo Broomfield is helping to transform the Rural Payments Agency to ensure the massive IT failures of the past decade are not repeated when changes to Common Agricultural Policy payments come in next year. PSE spoke to him, and Steve French of Hitachi Solutions Europe, a key supplier.

In the mid-2000s, the Rural Payments Agency (RPA) became a byword for government IT failure, when it simply failed to cope with distributing Common Agricultural Policy (CAP) payments to farmers accurately or efficiently. It has been recovering ever since.

Major changes are coming to the CAP in 2015, with direct payments via the new ‘Basic Payment Scheme’. Ahead of those changes, Defra has been overhauling its IT systems, determined to avoid the mistakes made when the CAP was last reformed in 2005.

Jo Broomfield, the man in charge of the project, admits (with some understatement) that those previous updates of the RPA’s customer systems were “not a great success”, adding: “The policy changed at the last minute, and the system was not able to respond quickly enough in terms of changes to the functionality.

“Farmers were not getting paid the EU funds that they were entitled to, or they got paid the wrong amounts, and that led to a huge backlog over the last seven years of error correction activity.”

Tightly-coupled case management and finance systems were inflexible and costly to maintain. He said: “We were determined to learn lessons from 2005, and to introduce a flexible system able to respond to changes over at least the next one or two rounds of the CAP.”

No time to waste

The first phase of the new solution has successfully gone live: a new integrated finance and human resources ERP system at the RPA for over 2,000 employees. The system uses Microsoft Dynamics AX technology, the first time a government agency has used that solution, implemented by Hitachi Solutions Europe. The procurement process was speedy: the project started in spring 2013, and Hitachi’s got the contract that summer.

Broomfield explained: “This whole programme is one of the government’s 25 ‘digital exemplars’, which are adopting new methods of approaching IT-enabled transformation of businesses. A key focus of that new thinking was the need to get into building working software quickly, and not become stuck in the procurement process, which within government traditionally can be very long. So we used an existing government framework contract, and we ran that competition to aggressive timescales.

“We didn’t drop the quality threshold in terms of how we assessed the bid, but it was a competitive process off a framework contract.”

Steve French, senior vice president at Hitachi Solutions Europe, explained that the implementation was split into two streams: ‘running costs’, which is now live, and ‘scheme accounting’ , which will deal with all the payments from these EU schemes, and accounts for them, from March 2015.

The split was because the ‘running costs’ element was primarily about speed, whilst scheme accounting had complex integration requirements.

On the success with the running costs implementation, he said: “It was a huge team effort from both sides to get everyone together and do what we did in the time that we did.”

Broomfield said: “Although we’re taking an off-the-shelf product and tailoring it and configuring it, we still try to adopt as much of the agile approach to building this system as possible. It’s been tough: but the fact we did deliver it on time, and it’s been such a success with the users, is testament to the approach we’ve taken.”

The CAP is “one of the most heavily-audited aspects of European fund distribution”, Broomfield added, so ensuring the integrity of this new system is vital. A failure and consequent ‘disallowance penalty’ could cost HM Treasury “many tens of millions of pounds”. “It’s absolutely critical,” Broomfield said.

‘Like working with a private sector client’

The Hitachi contract, worth about £5m for the implementation plus more for the ongoing maintenance and support, is outcomes-based. The supplier is paid only when milestones are successfully achieved. “It works well and incentivises everyone appropriately, in terms of speed and quality,” French said.

The new agile approach being adopted by the government as client “makes it feel remarkably like the private sector, in many ways”, he added. “The public sector is now picking up some of the role that was traditionally done by the large SI [systems integrator], bringing all the streams together. That imposes some new disciplines and requirements upon them, but in this case everyone’s stepped up and it’s worked well.”

The next big challenge is implementing and integrating the scheme accounting module, with everything in place and proven by the start of the EU financial year on 15 October.

Broomfield said: “We’re driven by customer insight, and we’re constantly seeking that insight from those using early versions. We can iterate the development as we go through in response to that user feedback.”

Asked how far the RPA has come in turning around its bad IT reputation, he added: “We’ve come a huge distance and I must pay credit to the RPA’s leadership in the past two to three years. The RPA is almost unrecognisable in performance terms compared to where it was.”

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