Auditor applauds Merlin - with reservations

The Wales Audit Office (WAO) has said the Welsh Government's Merlin ICT contract has been successful in delivering core services, but that the costs and overall value for money have not been monitored effectively. In a newly published report , the auditor says the original scope of the contract with Siemens has changed and has gone over budget, but that there have been steady improvements in the relationship between the Welsh Government and the supplier and the ICT services delivered. The contract commenced in April 2004 with budgets of £82m for core services and £138m for resulting projects. Spending over the first seven years exceeded this amount, reaching £270m, attributed largely to organisational changes in Welsh Government that increased the cost of core services. The changes included the mergers of various sponsored bodies into the Welsh Government, its location strategy and its legal separation from the National Assembly for Wales. Subsequently, during 2005-07 it lacked the capacity to act as an intelligent client, but has recovered from this shortcoming and ensured that the core services for itself and the Assembly are reliable. ICT projects using services supplied under the contract have been implemented with varying degrees of success; of the five completed, only two were delivered on time and budget. The report says the Welsh Government has not monitored the costs effectively or consistently managed some of the risks to ensure it gets value for money, due in part to poor quality data and programme managers failing to spend enough time dealing with the relevant businesses. This has prompted the WAO to urge the government to monitor spending on the projects in a way that makes it easier to analyse. It says the Welsh Government and Assembly Commission should also manage key risks in procuring ICT services after the contract comes to an end in 2014. Among the other recommendations is the development of a system to plan and measure the benefits of projects, in line with guidelines from the (now defunct) Office of Government Commerce, and that they should be reported annually. Also, the government and commission should make a yearly decision about whether to jointly procure a new contract for ICT services or to do so individually. Huw Vaughan Thomas, the auditor general for Wales, said: "It is encouraging to see that the quality of services being delivered under the Merlin contract has improved over time. But the Welsh Government needs to strengthen its monitoring of expenditure and the value for money of services being delivered under the contract, and to apply the lessons learnt from this contract in procuring and managing its future ICT services." This article is published by Guardian Professional. For weekly updates of news, debate and best practice on public sector IT, join the Government Computing Network here.