The in-sourcing project represented significant change after many years of out-sourced ICT and aligns well with the government’s wider ICT modernisation programme.
Savings were secured and risks were managed to ensure delivery on time, but the Welsh Government has not saved as much as anticipated in the business case and there is scope to improve the tracking of costs and benefits.
In 2017, the Welsh Government decided to move away from an out-sourced ICT model to a largely in-sourced model, starting in January 2019. The business case to in-source ICT services was comprehensive and set out clear objectives, with a mix of financial and non-financial benefits.
To help deliver this change, the Welsh Government researched the needs of its staff, learnt from other organisations and spoke to the UK Government Digital Service for advice.
Savings were a fundamental part of the business case for bringing ICT services in-house. Some £4.9 million in savings were achieved in 2019-20, but not the full £8.1 million anticipated. This shortfall was mainly due to increased software costs and extra costs for contractors as a result of unfilled posts.
In addition to savings, the rollout of 6,000 new laptops by the end of 2019 has been critical in helping staff to work at home during the COVID-19 pandemic. This contributed to a £23,000 reduction in travel costs in 2019-20, with much larger reductions expected in 2020-21. Other non-financial benefits included reduced carbon emissions through less printing and the closure of a data centre.
The number of serious ICT incidents has gradually reduced since the transition to an in-house service, and user satisfaction with ICT services has improved. However, there has been a dip in ICT service desk performance, which is most likely due to understaffing.
Recommendations are centred on improving the tracking of benefits and costs, updating the performance indicators for ICT services, and revisiting staffing levels to ensure the full benefits of this change are realised.
Auditor General, Adrian Crompton said today:
“It is good to be able to report in positive terms on an ICT change programme that has served the Welsh Government well as it has faced the challenge of a different way of working in response to the COVID-19 pandemic. The job is not complete, however, with further action required to secure all of the intended benefits, to address the pressures caused by understaffing, and to ensure lessons are learnt for future projects.”