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The £105m website

Rory Cellan-Jones | 09:14 UK time, Wednesday, 7 July 2010

What would it cost to create and run a government website for three years?

How does £105m sound?


Screenshot Business Link site
After we covered a couple of stories about government spending on websites and iPhone apps someone got in touch to suggest we take a look at one particular site, businesslink.gov.uk.

The correspondent said this site, run by Her Majesty's Revenue and Customs (HMRC), had cost £35m a year to build and operate for three years and suggested that it had been poor value, delivered an unsatisfactory service to users and proved technically shaky.

I could not quite believe that figure - it sounds an awful lot of money for one site
but it turns out to be true. Businesslink.gov.uk was among the sites singled out last week by the Cabinet Office as very expensive in terms of cost per visit.

When I went to the lengthy document [941.60KB PDF] in which the Central Office of Information (COI) examined central government websites, I found that £35m staring out from a table.

Only the NHS Choices site, at £21m, comes anywhere close. But it has around six million unique users a month, whereas the Business Link site, which offers all kinds of advice to businesses, has just over a million.

The site is the work of a major outsourcing company called Serco, which has sub-contracted the technology to a little business called BT. So how do the costs break down?

The COI report has some detail - £6.2m on strategy and planning, £4.4m on design and build, £4.7m on hosting and infrastructure, £15.3m on content provision and £4.5m on testing and evaluation. What I can't work out is why that cost is repeated for three years.

But I freely admit my knowledge of website development is sketchy so I consulted a couple of experts. One had helped build a customer support website for a major retailer, to cope with similar traffic to that experienced on the Business Link site. That had been built in-house but a supplier had quoted roughly £1.5m to build it, plus £150,000 in annual running costs.

Then I went to Sean O'Halloran at a firm called Hoop Associates which builds websites, mainly for public sector clients. So what was his reaction to that £35m?

"It's a completely unfathomable number, I can't imagine how that could be spent." Mr O'Halloran had an interesting theory though, he claims that government departments are still locked into a big supplier, technology driven way of thinking when it comes to building websites.

"Most of the big sums go on the technology, which is wrong. They should first work out what they want to deliver, then source the technology." He said that these days there were plenty of cheap or even free sources of technology that did not involve going to big companies, but that civil servants felt more comfortable dealing with the kind of suppliers who have always been involved in major IT projects.

To be fair, the creation of this website was driven by the small business community, which thought that the old Business Link network of offices across the country was a waste of money.

Firms told the government they wanted this service delivered online, and the Federation of Small Business told me its members were pretty happy with the results, though they were not aware of the costs of the site.

HMRC and its supplier Serco also put up a robust defence. HMRC said the businesslink.gov.uk site delivered benefits of over £800m a year to companies - a huge return on the £35m invested. I always wonder how those kind of figures are worked out, in the public or private sector.

Serco also cites that £800m figure and goes on to say that it has continually looked for efficiency savings since winning the contract in 2005, and these have amounted to £44m so far. And it's promising more:

"We recognise the unprecedented fiscal challenges facing the nation and we welcome the opportunity to work with Government to continue to deliver even greater efficiency savings."

Earlier this week we reported on the sums being spent on government iPhone apps - which now look really good value compared with the lavish spending on websites.

But there does seem to be a troublesome culture in the public sector when it comes to using technology, whether it is in Whitehall or across the education system, or in the National Health Service.

It seems to involve deciding that you need the latest thing - a smartphone app, a wireless network for a school, an interactive website for small businesses and then putting the job in the hands of a technology supplier, preferably a big and expensive firm. The complex rules on public procurement make it easier for big established - and expensive - firms to win the contracts.

But another culture is now making its presence felt in Whitehall, the open data movement. It involves releasing the vast amounts of data locked inside government departments and letting anyone who wants to hack it into something useful for nothing. Perhaps, in these straitened times, it's this culture which will now thrive.

Comments

Page 1 of 3

  • Comment number 1.

    HMRC's web site's cost is dwarfed by the extra costs forced upon business and individuals who are forced to use it. And yes, I do mean forced.

    Several great swathes of interaction with HMRC can ONLY be done via the web site. THERE IS NO PAPER ALTERNATIVE.

    The forcing of business to file returns electronically started with the PAYE Annual Returns (and associated documents) initially business were give a financial inducement to participate - now there are several aspects of business and corporate tax (including reporting to Companies House) that can only be done via an absurdly over complex mark up language inline eXtended Business Reporting Language (iXBRL). Try downloading the list of definitions of terms (9.5 mega bytes of the latest partial set). This is crackpot. The idea is just insane.

    Every small UK business is forced to file electronically for all years ending after 31 March 2010 - THERE IS NO PAPER OPTION. There is no way that a simple text editing program can hope to produce a html document with the embedded iXBRL and thee are almost no tested commercial products that can do it. The ONLY way is to use an Adobe Acrobat forms download from Companies House/HMRC that supposedly generates the html file with embedded iXBRL - but this is untested (as of this date) and it only handles a small sub group of company accounts.

    This whole computer system design process is absolutely typical of Government incompetence. Systems are designed and signed off by transitory administrative grade civil servants who move on before they can be held responsible for the system failure. The system is far far too complex. It is typically completely untested. There is never any parallel running of the old system with the new before the new is forced on the hapless public. All of the rational and well understood procedures of information systems design are simply ignored. The consequence is absolutely predictable - gigantic cost overruns, huge economic disruption and administrative failure. Yet our Government carries on with the same back of an envelope acquisition procedures!

    The worst aspect of this current government disaster is that it will cost a couple of billion pounds to implement - not to Government, but too the small business who have to work through this absurd system. It must be stopped now, as this system alone will be responsible for a further deepening of the depression as it will take a couple of billion out of the profits of small British businesses!

  • Comment number 2.

    It may have been expensive, but as someone who has set up a business and run it successfully for the last five years, I have found the site to be an invaluable source of advice and information. I'll be sorry to see it go.

  • Comment number 3.

    Rory wrote:

    "It seems to involve deciding that you need the latest thing - a smartphone app, a wireless network for a school, an interactive website for small businesses and then putting the job in the hands of a technology supplier, preferably a big and expensive firm. The complex rules on public procurement make it easier for big established - and expensive - firms to win the contracts."

    Please give things the proper name - if it looks like corruption that is what it is!

  • Comment number 4.

    I'm the MD of a digital agency and we do the design, development and lots more for one of the UK's largest small business membership organisations. We've probably got about 20% of the content of the Business Link website but it's a lot cleaner, better designed, targeted and navigation is easier. The annual running costs from us are about 0.15% of that paid by Business Link and with the associations costs about 0.23%.

    I'm utterly staggered. Those costs cannot in anyway be justified and need to be investigated for fraud.

  • Comment number 5.

    The only comment I have is having worked for a local authoirty in the past and seeing how wasteful from the inside they were with money and how outside Contractors would 'take them for a ride' in terms of what was delivered for the price paid, I can well imagine that something along those lines has happened here with the Business Link website.

    I've not needed to use the site, but have in the past used many other Govenment websites and compared with commercial sites I often find their navigation and content provided is poor.

  • Comment number 6.

    You're right about the Whitehall culture, Rory. I was a civil servant until a few years ago, and was continually astonished by an apparent institutional commitment to doing things in expensive ways.

    For instance, in 2007 top management formed a committee to consider whether we needed and could afford a "knowledge management" system. I suggested that before doing anything else we should try building our own wiki - which might have done the job at very low cost. That was simply ignored.

    The root of the problem is the civil service's instinctive need for top-down control of everything. Something like a wiki seems to most senior managers to be dangerously subversive. Even if they could be persuaded to try it I think they'd doom it to failure by requiring senior-level advance clearance of everything written on it.

    A very simple move that goes with the grain of that culture, though, would be to send out an order from the centre now that the whole of the UK public sector must abandon the famous "leading" word processing, web browsing, spreadsheet and presentation software (which I think it pays licence subscriptions to use) and move to using Open Office and Mozilla products.

    Longer term, I think the civil service needs to stop preventing and deterring innovation in the way its staff work, and begin encouraging and rewarding it (rather than just talking about doing so).

  • Comment number 7.

    Another website that cost millions to develop and run is transport direct. Why does the government need to spend tens of millions to create and maintain a travel searching website that is overly complicated and usually suggests the cheapest way to travel is to drive. There are plenty of other websites available at simpler urls that are alot easier to use:

    http://www.transportdirect.info/

    My guess would be almost all of the population (99.99%?) doesn't know the site even exists...

  • Comment number 8.

    John of Hendon 1# is referring to the HMCR Tax site which is exactly as he describes it. How much did it cost Rory?

  • Comment number 9.

    How will the sharp contrast between working practices in the civil service and in the private sector ever be addressed? In the absence of a commercial imperative - or even something as simple as the concept of value for money - it is easy to see how decisions to spend taxpayers' money on highly engineered/expensive solutions come about.

  • Comment number 10.

    I was asked to tender for a small project for a government department. It was only a small project of a value of less than £2k.

    I had to fill out a application form that asked all sorts of ridiculous questions not relevant to such a small project. Accreditations were asked for that only the largest organisations could provide. This was the kind of project we sign off with commercial clients each day with no fuss at all.

    Naturally I didn't get the work. The entire process seemed skewed towards procuring the most expensive solution from the largest supplier possible.

    I later found out that the department in question ended up paying nearly 5 times as much for an inferior end result.

  • Comment number 11.

    Surely we need to start auditing the costs for such expensive projects? Find out where the money has been spent, evaluate it's value for money and hold those responsible/accountable if it doesn't appear to be good value to the public.

  • Comment number 12.

    Rory Cellan-Jones.

    "£105m ... I freely admit my knowledge of website development is sketchy so I consulted a couple of experts."

    I would have thought that the BBC with its numerous websites has enough in-house expertise for you to draw comparisons.

    anyway, John_from_Hendon (#3) and Michael Gibson (#4) are spot on in my opinion, it looks like corruption and Her Majesty's Revenue and Customs (HMRC) services ought to be investigated for fraud.

    won't happen though since law enforcement in the UK is equally corrupt.

  • Comment number 13.

    @John_From_Hendon
    "Please give things the proper name - if it looks like corruption that is what it is!"

    While there might, or might not, be courruption on the part of suppliers, the core problemn Rory's talking about is a government (especially NuLab) idea about spending big money on big ideas always being best. Quick and cheap wins don't get considered. Hubris might be the word he's looking for,

    It's exactly the same logic that lead them to order the demolition and reconstruction of every school in the country, noy just the ones with leaky roofs and outside toilet blocks.

  • Comment number 14.

    One of the criticisms made of the last government was the way progress was measured in terms of money invested instead of outcomes. And if your performance is based on how much money you've spent it's very easy to see how you end up with expensive debacles like this.

    The current government has certainly said a lot of the right words about opening data, limiting the size of IT contracts and focusing open standards and interoperability. I shall reserve judgement on the current lot until a few years have passed to see if it has actually resulted in a change of approach on the ground.

    It would be interesting to find out how much it cost to develop and roll out the YourFreedom website? Perhaps Rory could put his journalistic skills towards finding out? I suspect it's a much more reasonable figure, no doubt helped by being built on top of the Open Source Plone CMS system. Sure it's had a few scaling issues following launch but they seem to have been fixed quite quickly.

    For what it's worth I've met a number of civil servants who do seem to get it. However the culture does seem to involve a lot meetings to discuss strategy and get sign of from key stakeholders which must stifle the "just try it" mentality I'm so used to in the private sector.

  • Comment number 15.

    "benfits of over 800m?"

    Sorry, that is the sort of complete rubbish that companies come out with to justify a complete rip off.

    I would love to see a break-down of those benefits in real terms - and as a tax payer, I would say I have a legal right to that break down.

    HMRC and its supplier would HAVE to prove:

    • Money has been directly received by companies that adds up to or contributes to that figure.

    • Companies had directly saved that amount of money that they would otherwise HAVE to have spent.

    • Companies can show a demonstrable cash benefit from using the facilities of the website

    • The calculation of 800 million is based on direct evidence of COST benefits, and has not been estimated or guessed.

    • The tax payer as a whole has benefited from this website in a Direct way and not in some political/philosophical way.



    First, a Doctors website worth 30,000 according to industry experts, but cost 6 million and now this website.

    Is there no end to the stupidity of government purchasing or the sheer crookery of large IT supply companies?

    If they are looking for savings in Whitehall departments, may I suggest the sacking all the Whitehall mandarins that told Ministers that this was a good way of spending money?

    And I mean sacking, not redundancies.

    Followed by suing the IT company for ripping the tax payer off.

  • Comment number 16.

    Rory, out of interest how much does bbc.co.uk cost to run for 3 years?

  • Comment number 17.

    I love how Serco/Government defends the amount spent based on a percentage of money saved or value of return. Rather than explaining how much it costs to build and host a website like this.

    I ran into it so many times as a SMB company, it's hilarious. The problem being that the savvy of the people buying the website tend not to have the first clue about what they are buying. In the same way as you'd probably not just by any car you hadn't at least investigated yourself... you wouldn't buy a website unless you were convinced of what you were buying.

    The other problems are the 'rules' placed on Government, and large public organisations (including the BBC), on procurement processes.

    As a small business, pitching for work to build websites for local councils requires that you jump through a number of hoops ... and even then you can't pitch for projects that would be over a certainly value (I think it used to be about £140k) unless you were part of the EU Procurement process - as the council would have to tender the work through that process. There were also strict rules, depending on the projects, about how various liability insurances you had, or that the value of the project couldn't be given to a company with a turnover less than the project value. This is the same for government work, and I believe for BBC procurement of bigger projects.

    These processes meant that SMBs who could easily provide these solutions would loose out to the big 'consulting firms'. In the case of EU Procurement processes you'd also be up against companies across the EU states.

    In the end, I'd only ever see large firms charging insane amounts of money for what is fairly straightforward.

    Certainly - Procurement departments need to be more savvy about buying technology solutions - you wouldn't want someone who buys stationery for your organisation to make a decision about buying a website.

    The other thing I'd ask - given the current economic problems in our own country, shouldn't we consider closing EU Procurement. Or at least prioritising local impact on economy during procurement phases.

  • Comment number 18.

    That's a ridiculous amount of money to spend on that site. Clearly the contractors take as much as they can get and management have no clue of the real costs involved.

    Also the fact the it was outsourced to Serco, who then outsourced it to BT means that both companies obviously had to add their fee to make some money. Why not outsource directly to BT anyway?

    There needs to be a fairer way for companies to bid on government contracts. I'm pretty sure that I could build the website for way less than £105m!

  • Comment number 19.

    7. At 10:45am on 07 Jul 2010, JonAlb wrote:

    http://www.transportdirect.info/
    ------------------------------------------
    I had not heard of this site. It seems that it does perform a useful function for journeys one is not familiar with. I tried a few random ones and it showed me bus companies I had never heard of so a good resource for public transport.

    Terrible look, but then it is functionality that matters and it worked!

  • Comment number 20.

    @6 - quite agree. There seems to be either gross ignorance or outright fear and hostility to the use of Open Source software.
    I think this is down to the perception that OS software doesn't come with a 'person at the end of the phone' helpdesk that can be shouted at if something goes wrong, or a massively complex contract for supply that can be argued over when something big goes wrong.
    I recall a comment made to me a little while ago about 'some bit of freebie software'. It was an OS messaging board, far more popular than the system it had replaced, which would have cost several thousands to upgrade to!

    So, if that civil service mindset could be opened a little to smarter and more innovative thinking, a small fortune could be saved at a stroke!

  • Comment number 21.

    10. At 10:53am on 07 Jul 2010, chinnyhill10 wrote:
    I was asked to tender for a small project for a government department. It was only a small project of a value of less than £2k.

    I had to fill out a application form that asked all sorts of ridiculous questions not relevant to such a small project. Accreditations were asked for that only the largest organisations could provide. This was the kind of project we sign off with commercial clients each day with no fuss at all.
    ----------------------------------------
    The site Supply2.gov.uk is meant to help with "smaller" contracts but is in itself over bureaucratic and even worse you have to pay to get useless leads!

  • Comment number 22.

    10. At 10:53am on 07 Jul 2010, chinnyhill10

    Try being a new small supplier to the BBC. It has the same civil service mindset.

  • Comment number 23.

    Your article seems to ignore the fact that one of the main reasons for the construction of this website was (as part of the Transformational Government programme) to focus content and services for business on a single website, rather than on the multitude of websites across government. There will be cost savings in the long term. This site will make it easier for businesses to do business with government. Yes, it has its flaws but it will benefit the user. It is expensive, but as some respondents have pointed it out it is meant to replace the vast number of paper-based services. I think the consultants you spoke to know very little about the Transformational Government programme, and how complex the operation is from a technical and content migration perspective.

  • Comment number 24.

    @7 indeed, I had no idea that site existed. Maybe they should have spent some more of their budget on SEO!

    Back on topic though, I am a web developer and to spend £4.4million on the design and development seems insane, especially in this example. I will suspect less than 1% went on design seeing as it is so bad.

    It would make sense the site would be expensive to the sheer scale of the content, and all the processes involved in publishing it, but a simple CMS system would have cost more up front but saved millions in later development stages, which seems to be the case here. (I assume every time content was added, they had to pay a developer to add it statically to a new page, which is an extremely unmanageable and old fashioned way of doing things.)

  • Comment number 25.

    Maybe not as exciting to read (and write?) about as the latest tech innovation, but still interesting and much appreciated. What a difference a change of government can make.

  • Comment number 26.

    The concept of massively overspending on web projects isn't confined to the public sector. We often see private sector clients who migrate from a £150k solution onto a £3m solution, with no net benefit, massive delays and soaring costs.

    As you correctly state in your post, there is an assumption that paying more brings bigger benefits.

    How on earth you reach figures like £4.5m for DESIGN (that's about 5,000 man days at average agency rates) and £4.7m for HOSTING (average cost with a top hosting company is about £500 a month, so that means they must be running about 9,000 servers).

    These people are being conned because they're parachuted into a job which they know nothing about. My company could have built the Business Link website for about £200k with proportionally lower maintenance costs, but sadly people think that if they pay more they get more. And it's the taxpayer who foots the bill.

  • Comment number 27.

    I build websites, and I know that getting a good, robust website that serves a wide range of needs is expensive. But even so, these costs are staggering. Like one of the people you quote, I just don't even see how that money *could* be spent.

    The problem is exactly as you state it, and it's not confined to government, not the public sector.

    I've worked in both public and private sector, and management in both cases doesn't feel comfortable using open source or small suppliers. Even if it means getting an inferior product that doesn't fit their needs, both public and large private sector instinctively go to big, expensive suppliers.

    I suspect that it is because the people making the decisions just don't understand technology or the web, and they are scared of things going wrong. They need in-house experts, and they need to listen to these people.

  • Comment number 28.

    Interesting article. Business link is not the only website with huge development costs, many others in this report have crazy ratios of development to hosting expenditure for tiny sites!

    I wrote a report on possible government savings by moving to the much talked about "cloud" for their web hosting, and the potential savings are quite startling.

    Have a look: http://catn.com/2010/06/30/does-the-uk-government-get-value-for-money/

  • Comment number 29.

    Fraud - simple as!

  • Comment number 30.

    Just with reference to the earlier comment about open source software, the White House recently built their website in open source. The cost? About $18m.

    Ultimately all you're saving by going open source is the license fee, which in the scheme of things is nothing compared to the implementation costs, which you still need to get a supplier to do.

  • Comment number 31.

    I am an IT professional who has just managed the successful delivery of a website that can cope with 10m+ users vut cost my company less than £1m to deliver.

    Please everyone write to Nick Clegg and co. http://yourfreedom.hmg.gov.uk

    I did one (link below) but feel free to do your own but we must all capmpaign for this as the government is having the wool pulled over its eyes

    http://yourfreedom.hmg.gov.uk/cutting-business-and-third-sector-regulations/change-the-way-in-which-public-sector-it-projects-are-handled-1/

  • Comment number 32.

    I actually felt compelled to sign up to the BBC website to comment on this article.

    I'm the managing director of a web development agency, which specialises more so with high street retailers, but the principles and technology are all very similar. Out of all of these figures, the one that I just find truly astonishing is the hosting charge of £4.7m a year. If the website is receiving around 1m unique visitors a month, that is not far off some of our clients, and their hosting bills are significantly less than 1% of that cost.

    I now only find it almost disrespectful on a professional level, but as a tax payer it's criminal. I would love to be a so-called consultant to these government departments to reduce their costs

  • Comment number 33.

    This is Typical of public sector spending, the fact that they outsourced this is the key to why it cost so much. Companies like Serco use these government contracts as a license to print money.

    The NHS is guilty of the same practices, they outsource projects to consulting agencies that charge millions of pounds a year to chair unproductive meetings for test schemes that never get off the ground. This is something that needs serious investigation and these practices need to change, the savings from dealing with this kind of waste would be massive.

  • Comment number 34.

    Like a few other posters I work in an Ad Agency where amongst other things we produce websites. £4.4m on design - you are having a laugh, that is not design, plus the other costs involved just don't stack up. We worked out about £100,000 per year to run/maintain, about £800,000 for the other bits. Why set up costs etc are added year on year is a complete mystery. As a company we have given up going for any form of central/local govt tenders - it is a nightmare and a complete waste of time.

  • Comment number 35.

    As someone who has worked on every side of govt. procurement, I can see why this happened. You could sum it up in a phrase I first heard at the BBC, "no one ever got fired for choosing Microsoft." Civil servants are not rewarded for or expected to produce innovation or foster risk, but they are punished for failure to deliver. It is therefore perfectly rational to commit to the most expensive solution if it is delivered by the least risky supplier. You don't get much more blue chip than Serco and BT.

    Just look at how much flack the poor civil servant can get if they spend £10k on an innovative mobile project! In other words, silly stories like the iPhone apps one are actually contributing to a culture that blows millions on 'safe' projects like Businesslink.

    If we want better procurement, we are going to have to change the culture of the civil service and make it rational to choose more cost-effective solutions - and accept the increased risks. This also means we are going to have to be more responsible in our reporting...

  • Comment number 36.

    I have worked in 20+ public sector organisations as an IT consultant independantly and for big firms. The problems of waste and inefficentcy are not accross the board. For example The Treasury, National Blood Service and various NHS trusts have been very dynamic and impressive. Clever people with good management.

    I have seen the opposite more often though. The consultants themselves usually work hard to provide a good product or services but are weighed down by procedures that just dont work in the 21st century and probably didnt ever work. A civil servant can usually delay any project that threatens their position using these delaying tactics until the project is cancelled or they are reassigned.

    Prefered suppliers are chosen often at random, a check box mentality can exist where the public sector manager doesnt care about the actual service just if his check boxes are ticked. Even worse I have on many occasions identified better, cheaper ways of doing things and almost universally they are rejected becuase of either a procedure in the way (these area usually unchangeable) or someone would have to admit they were wasting millions on something for years and hadn't even attempted to look at costs properly.

    Large government departments always want to spend every penny they recieve because if they make a saving this will A). be removed from thier budget next year and B). they will be critised becuase they made a poor forecast. I have even seen memos from senior whitehall officals demanding more money be spent to prevent an underspend so that the department can be more efficent! Perhaps spending less might be a good first step.

    If you put a civil servant in a job:
    -Move them on every three years.
    -Make it impossible to get rid of them.
    -Move them on if they try and do a good job because they rock the boat.
    -Give them a strong incentive to spend every penny they recieve.
    -Employ no technical experts yourself so you have no idea what is possible or if the big IT firms are being competitive.
    -Prevent small firms from being able to bid.
    -Create procedures to prevent things happening with lots of people who know nothing about what is being delivered.
    -Enforce complex security rules which are totally ineffective and ignore problems with those rules.

    You get... alot of wasted money. I'm a socailist, it doesnt have to be like this, put some small business people in charge and watch the waste vanish.

  • Comment number 37.

    I find this article really frustrating because i agree with your point but not your example.

    You are right Government departments (inc Civil Service and local governemnt) are too quick to out source and spend (waste) large amounts of Money on outdated or uneeded technologies.

    What you have failed to consider in your article is that as the business link web site is developed into the central point of contact between businesses and governemnt all of the seperate web sites are being closed down. Once they are all moved over then they will be only one web site not the hundreds that there are now. Thus making Savings

    It also seems to have recieved favourable feed back from users.

    Lets not bash things til we know all the details as that really gets us nowhere.

  • Comment number 38.

    #34 (and others) "... As a company we have given up going for any form of central/local govt tenders - it is a nightmare and a complete waste of time."

    Maybe that's why they pay so much for a website - £0.5M for the site, the remaining £104.5M to cover the cost the supplier faced in tendering?

  • Comment number 39.

    #6 Complains "The root of the problem is the civil service's instinctive need for top-down control of everything. " It isn't the Civil Service (CS) running this - my travel claims (usually anywhere between £15-£98) now need to be signed off by a Director, at this Government's insistence. I fill in the form, it's checked in-house, sent to the Director, then to payment agency who check it again - so how much does that cost to authorise my £37 return to London? I can't find anyone in our department who thinks this system is a good thing.

    #20 states "gross ignorance or outright fear and hostility to the use of Open Source software.I think this is down to the perception that OS software doesn't come with a 'person at the end of the phone' helpdesk".

    No - again it is down to Government interference. I can't even use a USB stick in case I introduce a virus, which (might) then spread throughout other attached government department systems. There are many of us in the CS who have been banging our heads against the wall for years about introducing Open Source software, but there is no way any Government will allow anything that might been seen to be risky.

    Finally, I also find #22's comments offensive. There are dozens of brilliant and innovative minds in the CS who, if treated as a resource instead of an enemy by the current Government, could help get the UK back on course. The financial crisis is NOT the fault of the CS, it is banks and unregulated institutions who effectively stole the country's wealth over decades (and are often still in those same overpaid posts)and were allowed to by career politicians.

  • Comment number 40.

    Absolutely mind-boggling! £6.2 million on planning and strategy. Where did they do this planning, on the space shuttle? I would have been shocked had is cost £1 million but this is completely insane!

  • Comment number 41.

    So many commenters, me too, bemoan where we have got to. R C-J and others need to home in on just exactly what mechanisms can be deployed by this mature democracy to both stop the present culture in its tracks and present remedies for past (fraudulent?) excesses.

  • Comment number 42.

    Serco eh? Probably just a coincidence that a contract they provided for my employer promised savings and ended up costing us twice as much.

  • Comment number 43.

    Rory, this story makes your "Outraged of Tunbridge Wells" article about iPhone apps look rather petty now, doesn't it? A case of straining at a gnat and swallowing a camel?

  • Comment number 44.

    Kit Green wrote:

    Try being a new small supplier to the BBC. It has the same civil service mindset.

    A few years ago a sound studio I worked at got the contract to do some programmes for Broadcasting house.

    To our amazement the BBC sent someone round to check that our mains electricity supply was to BBC safety standards and to look round the building to make sure we didn't have any loose cables lying around.

    We had to point out that we were a private company and this was a private building and the Beeb did not get to poke around in our basement!

    They were a client just like all the rest of our clients.

  • Comment number 45.

    When developing systems with/for large companies, a large part of the cost is usually incurred because they have no concept of design and build and will not be guided. They often don't really know what they want. That's fine, because a professional designer knows how to guide and communicate. The problems start when different departments think they know what they want, but want different things with different priorities. They then make changes to specs that have already been signed-off but no senior person will take responsibility. That is invariably very expensive, but has happened in most large-scale projects that I've been involved with (variously as a designer/developer/project manager).
    One noteable exception was a large water utility that had a small, specialist department that understood development methodologies and the business, and had the authority to take binding(ish) decisions.
    I still don't understand the costs you have reported. Somebody really ought to take a closer look at what was going on there. Apologies to system designers and developers, to whom all this will be old news.

  • Comment number 46.

    About 4 years ago there was a review of civil service staffing levels the up shot being the civil service was over staffed 30% and that 30% must go. And the term adopted to deal with troublesome 1 in 3ish in HM Revenue and Customs was ‘natural wastage’, meaning a recruitment freeze plus retirements and leavers equals 30%.
    So the people who were due to retire retired the leavers left and no new blood replaced them. Of those who left, many were from the graduate recruitment scheme run by HMRC, their opinion being what is the point in staying in the stagnating pool or what was classed a the ‘younger’ staff or under 30’s who saw their future elsewhere.

    Then the government asks them to make the businesslink website. Who is going to do it? Clever young people that who, by which time they had left. Okay young people, most of them had gone too. People then, with 30% fewer people doing the same amount of work there wasn’t anyone. Contractors? Yep 130 million please. Sure no problem.

    You see to the Civil service it’s okay because a) the website has been done and b) staffing has been cut by 30%. It’s called spend to save.

    There are due to be more cuts in the Civil service, I wonder how much these saving will cost us?

  • Comment number 47.

    #39. Maxmet wrote:

    "There are many of us in the CS who have been banging our heads against the wall for years about introducing Open Source software, but there is no way any Government will allow anything that might been seen to be risky."

    'Lions led by donkeys'

    You are, I think, quite correct in identifying an almost complete lack of any basis of understanding of information systems analysis in the senior grades of the civil service. This is a structural problem with the civil service. I have been pursuing this particular fox for decades, but the enemies system of defence is formidable - the only glaring hole is of course the multitude of IT disasters and exemplars of 'how not to do it' that continue to be inflicted upon a long suffering Nation.

    My (draconian) solutions include limited tenure as a senior civil servant and firing Permanent Secretaries for incompetence on a regular basis. In general: the senior ranks need to be decimated (in the actual Roman sense) every year. Further those responsible for the approval and introduction of changes to or new IT systems MUST be members of an appropriate professional society that has an enforceable code of professional conduct. This should also be true for all sub-contractors.

    We can no longer put up with gross amateurism in high places. It must not longer be acceptable fro any civil servant to say I know nothing about what I am in change of - I just lead and do leadership. As much as I would have liked myself to have done Greats at Oxford, unless it has been followed by information engineering and economic and accountancy qualifications and related professional qualifications it is simply completely unacceptable for such a person to lead a government department. We can not afford amateurs.

  • Comment number 48.

    "The COI report has some detail - £6.2m on strategy and planning, £4.4m on design and build, £4.7m on hosting and infrastructure, £15.3m on content provision and £4.5m on testing and evaluation. What I can't work out is why that cost is repeated for three years. "

    I suggest, Rory, that nor can anyone, save the crooks who prepare the bills and the morons who sign them off. £6.2m on strategy and planning REPEATED every year?

    I sincerely hope this story is followed up by you and others in the BBC with vigour and tenacity, until there are some satisfactory answers. This is completely scandalous, and as others have said, it may well be fraudulent.

  • Comment number 49.

    I will add that I've often been astonished by some of the expensive systems I've seen that could have been developed just as effectively and at 100th the cost on a few spreadsheets. Some of them would even have looked better.

  • Comment number 50.

    Steve London wrote:

    The concept of massively overspending on web projects isn't confined to the public sector. We often see private sector clients who migrate from a £150k solution onto a £3m solution, with no net benefit, massive delays and soaring costs.

    I remember a Sysadmin friend of mine was asked to evaluate a piece of network admin software for their intranet that would cost his company 25,000 pounds, or there abouts. (I think it was a monitoring system or similar)

    He had a quick look at the features, opened Notepad and scribbled a 30 line Perl script to run on the servers. It did exactly the same thing and took him about 20 minutes including testing.

    A few years later and his Perl script is still running and doing the job. Everyone has forgotten the name of the company who was trying to sell the £25,000 solution.

  • Comment number 51.

    I'm just wondering how long it's going to take for the OpenSource (OS) advocates to realise that the site in question was probably built with OS technology :D

    @Alex #14

    > Sure it's had a few scaling issues following launch

    So you're saying that code someone wrote in their bedroom buckled when put under load...wow, hooda funk? It also gave me an error when I first looked at it, inviting me to try again later. F5 solved the problem, but it's not great, is it?

    And when your OS solution fails quite terminally and there is no formal support in place beyond someone shrugging their shoulders and asking you to read your license agreement, then what do you do? What, me worry?

    Semi-facetious remarks aside, OS solutions could bring a £1,000,000 project down to maybe £960,000 or a £10,000,000 project down to £9,960,000 which isn't much of an impact really, however the development times may well increase due to less sleek interfaces, support and features...not only eating up your trivial cost saving but ending up with you spending even more in total. If you actually understood the processes involved in these kinds of sites you'd realise that OS solutions wouldn't really touch the sides.

  • Comment number 52.

    What I’ve seen in both private and public sectors is a complete disconnect between those that make decisions and sign the contracts and – to be blunt – those that know about technology; often more lowly staff, who if consulted could have pointed out pitfalls in advance. (And who often then have to make the best of a bad job when it comes to implementation.)

    Too often the suppliers throw lots of impressive sounding jargon around and the directors & managers (who often know virtually nothing about technology) are impressed and sign on the dotted line, little realising that they’ve just been ‘had’ in some way.

    “£6.2m on strategy and planning, £4.4m on design and build, £4.7m on hosting and infrastructure, £15.3m on content provision and £4.5m on testing and evaluation. What I can't work out is why that cost is repeated for three years.”

    I also can’t see any good reason why costs Rory quoted above, most of which (strategy and planning; design and build; testing and evaluation etc) are for the initial start-up are then repeated [exactly] for two years; unless it seemed as good way as any for the suppliers to line their pockets.

    I’d be interested to see if the suppliers could justify those costs; and if they couldn’t isn’t there a case that this should be considered fraudulent behaviour?

  • Comment number 53.

    Post 35 by Damian at 12.24pm hits the nail squarely on the head. The culture within civil service/ex-public sector organisations (e.g many utility companies) does not encourage risk taking decisions where the objective is to deliver a solution more cheaply.

    Hence the quote of nobody gets fired for buying IBM/Microsoft or Serco/BT !! This is exacerbated by the complete technical ignorance of most senior business managers so why innovate at personal risk when the default choice will save a career even if it goes badly wrong or costs a fortune.

    Agree about the reporting of the iphone apps story, hardly a top 10 scandal in the pantheon of UK government IT project failures. More of a low cost attempt to engage the public albeit with a bespoke but v.popular platform.

  • Comment number 54.

    @danixd #24

    > I assume every time content was added, they had to pay a
    > developer to add it statically to a new page, which is an
    > extremely unmanageable and old fashioned way of doing things.

    You know what they say about never assuming ;)

  • Comment number 55.

    I'm sure few of us will be surprised at the comments above concerning wasteful spending by central and local government, quangos etc. although I for one am a little breathless at the sheer amount of money that can be spent on a single website (and what could be done with that money elsewhere - not least by the people that earned it in the first place).

    However, with such incontrovertible evidence of waste on a massive scale, should we not be pressing the new government to do the right thing by for example setting up a new government department, charged with scrutinising all significant government contracts before they are signed, with a view to preventing such waste before it happens?

  • Comment number 56.

    Hey, its government/taxpayer funded, like much of public taxpayer expenditure to private business I believe it is knee deep in fraud and neck deep in incompetance.

    Business Link is just one TINY part of the whole, how about NHS systems, how about the building of schools/hospitals or roads.

    I just cannot believe that fraud is NOT a significant part of excessive costs of so much of public expenditure. Much of it will be hidden within legal allowances/behaviours, but for so many government expenditure programmes to be so attrociously overpriced for actual worth/value/outcomes, is no better than the WORST corruption in the worst African states.

  • Comment number 57.

    Don't understand why both my posts are still not moderated? Nothing even slightly contraversial, no links... What on earth is the problem?

  • Comment number 58.

    This is scandalous, so thank you for writing about it Rory. I hope you'll be making a bigger thing of it that just writing about it on this blog.

    There is absolutely no justification for a website to cost that much. Clearly, Serco have been ripping off the taxpayer on a grand scale.

    The problem, I fear, is that government has such a complicated procurement process that contracts are not awarded to the best bidder: the best bidders are probably put off by the procurement process. The contracts are awarded to the companies who know how to manage the procurement process, something in which Serco, as a major supplier to the government, no doubt has considerable expertise.

    I have no doubt that there must be hundreds of SMEs out there who could have put together just as good a website (or more likely a better one) for a fraction of the cost, if only the way government awards contracts weren't so ludicrously loaded against them.

  • Comment number 59.

    Whilst the costs do seem astronomical, I would suspect that the bulk of the costs are not on technology as several people above have indicated, but on human beings. Hosting costs in traditional data centres are considerably higher than the £500/month quoted in #26 for a managed service with anything above 99% uptime, and if you add in things like DR (Disaster Recovery) the costs will escalate very rapidly.

    In terms of strategy and design, again, it's about people and process, not technology. On a project with a high level of governance and a lot of stakeholders projects consume enormous amounts of time - lots of people, in lots of meetings, writing lots of documentation. This is where the money goes.

    In terms of OSS and the Microsoft bashers - #51 is spot-on - it's ridiculous to suggest that using "free" software would reduce the costs by anything more than a small percentage, and anyone who denies this simply hasn't built a website on this scale.

    Yes, the costs are too high, and yes, a lot of the costs should have been year one costs only (design, strategy, pre-launch testing), but websites that are required to conform to extreme constraints (SLAs on uptime, accessibility etc.) are very, very expensive to run. The easiest way to reduce costs would be to say that the website doesn't need to be up all the time, that it doesn't need to be accessible, it doesn't need to conform to Government data security standards (which it doesn't - it's all public information), and most importantly of all, it doesn't need every change to be signed off by committee.

    £105m is ridiculous, but if you'd said £10m to build and £5m year on year to support / maintain I would not have been surprised.

  • Comment number 60.

    And don't even start talking about the waste regarding contracting & the MoD!

  • Comment number 61.

    Rory,

    Speaking as someone who thought the expenses scandal was an absurd red herring**, I am convinced of the need to remove corruption, root and branch, from Government. Our Civil Service is one of the things our nation can be proud of, so the stakes involved are much higher than just money lost, or the nailing of miscreants.
    Previous contributors are reasonable to suspect fraud, and the country would be done a disservice if this were not investigated.
    Do you know how interested citizens would go about calling for an investigation please ?

    ** This bit is a qualification of a tangential point, and not essential to the thread:
    I agree that our Politicians must act, and be seen to act, morally. Half my family is Italian, so it was gratifying to see the public revulsion which met the Telegraph's revelations, as I know that in Italy there would have been apathetic acceptance of the inevitable. However, it should be viewed in the light of the combination of misguided convention, poor bureaucracy, and the deliberate use of creative accounting in expenses as a way to compensate for politically valuable low Salary rises for MP's. The interests of the more vulnerable sections of society would be better served by a system which paid a higher salary to MP's, lest the proportion of etonians and lawyers representing us gets even worse.

  • Comment number 62.

    perhaps we should cut to the chase - Business Link from the top down is not fit for purpose and never has been.
    Try asking for business advice and listen to the guff that pours forth.
    The people who have contributed to these posts could sit in a room and knock this site together in a week at most.
    They could also provide more business advice than the so called advisers ever could because, guess what, the majority of BL advisers have never ran businesses.

  • Comment number 63.

    While the costs do sound excessive, I do understand how they can build up on complex projects. I work for a large private sector organisation and the amount of people it is deemed necessary to run a large project is sometimes unbelievable.

    There are Program Managers, Project Managers, Test Managers, Risk Managers, Implementation Managers, Test Leads, Test Analysts, Business Analysts, Tech leads etc etc. Once you put them all in a room for a days workshop there's £10k spent already, and at the end of it you probably have more questions than answers!

  • Comment number 64.

    I am a freelance web designer/developer and after carefully looking at the website I felt physically sick that they can justify spending that much. How on gods earth does it cost £6.2m on strategy and planning? Let's presume we had ten people each on 60K per year which is being incredulously generous we don't even get close to half of £6.2m over three years, it works out at £1.8m. As I said 10 very well paid professionals for strategy and planning is extremely generous because realistically the job could likely be done by 4-5 people on 40k PA which equals between 480k and 600k for three years. Now lets look at the costs of tools and equipment needed for strategy and planning, in fact lets not waste our time, lets just give an extreme over estimate for tools and equipment, lets say £500k PA which is really off the scale as a grossly high estimate, that equals £1.5m over 3 years and gives us a grand total of £3.3m. A massive £2.9 million pounds less and I was really being OTT with the numbers. In reality if I was hired to oversee strategy and planning, I would quote about £1 million and still have change at the end of three years.

    Now moving onto build and design. A team of five designers could easily complete a project of this scale within a year. A year is just another over estimate. Each of these designers would be highly qualified in a wide area of design from colour psychology to current trends. If I was the dream boss of these five top end designers I would pay them each £55k PA (Thats £825k for 3 years work) Next would be the programmers/developers, again, a crack team of five programmers would be more than enough for this project. I 100% convinced that I could find five highly qualified programmers for the same price as the design team but for arguments sake lets add another £10k to their wages, just to be generous, after all the government seem to do this. This would mean to hire the programmers and designers for three years would total: £1.8 million. (I just want to point out one other concern, I reckon all these guys would only have to work part-time to meet their deadlines) Lets not forget computer equipment and software for the project because we have to buy all brand new because designers and programmers don't have computers. so 10 top end computers (2 each) would equal £30k, 10 versions the of Adobe suite of tools (industry web design and development tools) would equal £12-£15k. And still I promise, not one single price I've give yet has been a truely accurate cost, I have totally exaggerated every price. Now lets just add a million onto the design and build just to cover other things like petty cash and cakes, the final grand total for design and build would be: £2.8 ish Million. A whopping £1.6million less than their £4.4m on design and build.

    Now you could buy a whole room in a server farm for a million but because it's government information they'll need all their own hosting equipment and infrastructure. For this, £2.5 million is OTT. Not the massive £4.7 million they've actually spent.
    Anyway I've made my point and I'm going to end there because if I go into the real costs of things like content provisions and testing and evaluations, I'll start to get angry.

    My conclusion to this is one where I would naturally swear but I'll be dignified and say someone's stealing money. Really, there is only two possible reasons this massively high cost could have came about. First, someone either had a dodgy calculator when adding up all the invoices or second this website has been used as a way for someone to make a lot of money at all the tax-payers expense. In a recession, he/she should be ashamed of themselves.

  • Comment number 65.

    There is a general problem with IT here, that almost all large organisations don't do big projects well. It is not restricted to the public sector, try checking out what RBS will be spending on IT this year.

    The problems are often caused by
    a) poor cost justification, using arbitrary figures , and over-weighting the "people cost" when it comes to benefits, then not counting the cost of people involved in the project.
    b) insistence on creating huge projects with too many people involved in the decision making process.
    c) the fact that the suppliers get away with it, because the purchasers haven't the knowledge/courage/desire to say "no, that is way too expensive".

    The simple truth is that big organisations should avoid big projects.

    Hugo Rodger-Brown (post 59) makes some very valid points about how the costs have probably escalated very quickly. But the question is who authorised these costs ?

    Surely a minister has to sign off this kind of expenditure ?
    Rory, through the FOI is it possible to find out
    a) What was the original cost proposed in the initial bid ? (Are we 10 times over budget or did someone think it was acceptable to spend 100 million over 3 years, if so, who?)
    b) Is it possible to find out the relative prices of the other tenders. Was 35 million per year the "most reasonable" ? Yes I know you should not just choose on cost, but I find it hard to believe that all the bids were this high.

  • Comment number 66.

    This will be very familiar to anybody in the public sector. The real problems are the top-down management style and the fact that beyond a certain level promotion is primarily based on spending more money not less ("XYZ has experience of running a department of a similar size").

    The idea of giving people objectives, helping them to achieve them and assessing how well they have done so is unheard of. Arbitrary and expensive decisions are taken seemingly at random by committees of senior management who have no knowledge of the area.

    Such decisions are not derived from business aims and become objectives in their own right. ("We will reorganize." "We will adopt XYZ technology", i.e. a certain commercial product.) Afterwards they are a success by definition because the people who judge them are the same people who made the decision.

    Frank Field puts it extremely well when he says that he always talks about outputs but his colleagues always talk about [maximising] inputs.

    Does anybody really think the person who authorized £35m a year for a web site will be sacked?


  • Comment number 67.

    It drives me mad that all these government web sites are designed by "managers" with no real understanding of the "user", outsourced to expensive providers to create, host and manage and are usually built with expensive proprietary technologies. All on our tax-pound!

    Any changes to or maintenance these sites require has to be performed by the original supplier, under strict contract.

    It is no wonder they cost a fortune to build and run, are rarely delivered on time or to purpose, and have less than ideal customer support.

    Companies House seem to be the exception, all of their websites are created and hosted in-house, and in my experience this shows, as they
    offer an excellent customer experience and have been very quick to deal with issues and fix problems that have arisen. No doubt all at a fraction of the cost of other departments!

    Imagine phoning HMRC and getting to speak to someone who actually built their website?

  • Comment number 68.

    As an IT worker working in the Public Sector it does not surprise me in the slightest that we pay too much for our IT solutions. The procurement processes we go through are just not conducive to achieving value for money and are heavily biased towards the big providers. They in turn tend to outsource the work to India paying only a fraction of the going rate in the UK but pocket the hefty profit margin.

    I really feel for the small businesses providers who could provide so much more value.

    We have a saying where we work: it's easier to spend a lot of money than it is to spend a little.

    the Government should look at Public Sector procurement to acheive it's savings. It could even create local jobs too ....

  • Comment number 69.

    I thought it might be interesting to make a comparison with the cost of the BBC website but could only find cost details for 2008 when the cost of the website for that one year was £110m which incredibly seems to make the HMRC website quite good value by comparison when you consider that the BBC presumably wasn't paying development costs as the site was well established and most of the content comes from people who are already employed by the BBC in TV or radio capacities. Has anyone any more up to date details on costs of the BBC website?

  • Comment number 70.

    Having seen far larger projects which have cost less I struggle to understand how anyone could justify such costs for what appears to be a fairly minor repository on business info. 1 million hits a month is hardly a highly used web site. That only averages out at roughly a hit every other second, although I would assume (and desperately hope) that the actual number is higher as they really mean 1 million visits.

    What is worse is the design quality appears to be worse than a site built in someone back bedroom. For example pick a random page and run it through an HTML validation service and see how many errors it finds.

    However, worryingly I used to work for a private company which viewed government IT practice to be industry best practice and moved towards it. Unsurprisingly productivity dropped dramatically.

  • Comment number 71.

    As a professional computer consultant with a Computer Science Degree and 35 years post graduate business experience I can honestly tell you that this type of profligate spending and gross inefficiency is typical of government practice.

    There really are ‘Sir Humphreys’ running the show with absolutely no clue of how to do the job properly. The civil service often relies on big consulting firms for advice, using ‘rule 29’.

    Note ‘rule 29’ if you use a big established name and pay loads of money then nobody will question your decisions.

    It is not just government websites, look at any big government computer project: NHS, ID Cards, anything in the home office, and you will find big bucks spent and those responsible for the spending completely clueless about what they are getting for the money being spent.

    Look at the recent contract for swine flu vaccines where civil servants were criticised for the contracts that left the public paying for 30million vaccines that were not required. One hesitates, for legal reasons, to say that corruption is implicit in the system, but if it is not corruption, is it blithering incompetence?

    Remember ‘Yes Prime Minister’ when a professor suggested that success criteria would be drawn up at the start of each project and how ‘Sir Humphrey’ managed to persuade the minister that his ideas were too dangerous (for the established way of things).

    If things don’t change in the civil service and government practices then we will simply continue to pay 40% of our earnings and 20% of what we spend back to government and still continue to get further into debt.

    So let us be quite clear, we get into these messes because of greed, corruption, incompetence and nepotism.

    This government thinks that fast broadband by 2017 is a reasonable goal. This is proof of a technologically inept government.

    We needed fast broadband for everyone this year. Check you own home. How many devices are connected to the internet?

    1. How many computers and laptops?
    2. How many Mobile devices, iPods, iPads, eReaders, mobile phones?
    3. How many games consoles, xBox, PS3, Wii’s, PSP’s, etc.
    4. Internet radio, television, movie downloads and online video services?

    The demand is only going to increase.

    There is a way to do this by 2012, but it does need some degree of leadership and common sense, both of which are sadly lacking in government circles.

    If things don’t change and the lunatics are left running the asylum and you want to know how things will end up…watch the movie Idiocracy.

  • Comment number 72.

    Whoever oversaw this expenditure is clearly incompetent, and needs to be held accountable. Suppliers who overcharged should be blacklisted from future government projects for profiteering.

    If this is anything like typical of government procurement, then we can stop worrying about whether we'll be able to find sufficient public sector cuts to address the deficit.

  • Comment number 73.

    And here was i thinking that corruption only happened in third world countries. I used to be a web developer and £20k would be the most i would charge. The government just like throwing money at everything. They believe that if you spend big you get the best results which as we can see, is not always the case. These web design companies are like any other.. The employees have the same skills like as the freelancer charging £1k for work. An investigation needs to be carried out into this

  • Comment number 74.

    I absolutely agree with everything John_from _Hendon has said. HMRC requiring electronic filing is a rip-off and a tie-up with a few select third party software suppliers. They also have little or no regard for those businesses who promote and/or use open source software.

    As a SMB IT partnership specialising in UNIX, Linux and networks we have no Windows computers or any Microsoft software. Yet to file my partnership tax return in January this year I had to fork out for third party tax filing software plus a copy of Windows XP and put it on a PC - all this just to file a tax return. I hereby claim my share of the £800m allegedly saved by the BusinesLink website for SMBs to offset these extar costs.

  • Comment number 75.

    I've been looking at the website a bit more to see whats really special about it and I seriously cannot see it. The design and layout is very outdated and very poorly designed. It may be optimized to a high standard of accesabilite but really, there is absolutly nothing on this website I find amazing or well done. For the amount it cost, I expect to be blown away by how amazed I am.
    The reality is I could have built this website ON MY OWN with no team behind me and it would have taken me maybe 3-4 months. For this work I would have charged about £10k - £15k I am numb-struck by the scale of the fraud here. This is 100% money laudering where someone or a group of people have filtered money out of the government and the government are too dumb to realise they've been overcharged by millions and millions.

    It's the case where politicians and government workers are just not in touch with reality. How on earth could any sane person on this planet think a website could ammount to over 100 million. It's crazy beyond belief. Maybe if you had just built a new Google complete with algorithum and tools you could justify 100 mill but for a junk website that looks like it was built in the 90's is a absolute joke and someone needs to be prosecuted, never mind sacked. This is theft plane and simple.

  • Comment number 76.

    Who should I get in touch with if I want to offer to do it for half the price?

  • Comment number 77.

    @Aidy, comment #51

    As other have pointed out most of cost is most likely the people involved, with the requisite number of consultants strategy and vision meetings. All locked in with a typical government IT long term frame contract that makes walking away more expensive than ploughing on hoping the project delivers something tangible.

    So I have a problem with my website developed with Plone, who do I call? Well there are 28 companies I could get support from in the UK alone. It's not exactly a bedroom project by a single hacker.

    The myth that you can't get commercial support for Open Source software is one that is often repeated as FUD. Sure I wouldn't want to base my enterprise IT on some random piece of code written by a teenager in some other country, but no one is suggesting that. There are many well respected, widely deployed solutions out there with varying levels of support from multiple vendors.

    Using Open Source is by no means a panacea to IT solutions however it does have low start-up costs enabling rapid prototyping and experimentation. The ability to multi-source support and expertise also helps drive down the costs and keepd the vendors honest.

  • Comment number 78.

    Why has it taken so long for someone to uncover this. Owning an IT consultancy company working in the private sector I am consistently amazed at the numbers quoted on public sector projects.

    But lets not blame the government or Serco. Who is the person that sat in the meeting and said YES to Serco @ £35 million per year??

    What level of ignorance about IT must you have to actually think that you had got a bargain and that is REALLY the cost of designing, building, adding content and hosting a website.

    We need to find these people and bring them to account. Thats if you can find them obviously, what with all the golf days and free holidays.

    I have a senior consultant friend who works for another very large outsourcing company working on another Government website and he sits in an office with over 200 other consultants. He says that the actual number of people required to perform the job they do is about 5. However the outsourcing firm gets paid for the body count. Problem for him and the other workers is that they are bored out of their minds.

    For years now we hear of a Public Sector IT project, typically a database, that is going to cost at least £500 million but actually ends up costing £1 billion. How can it be? Check out the NHS IT spending it disgraceful.

    Having said all that, the thing is that the government always believed that by spending this much with a private orgainsation it would secure jobs and promotes the economy, which of course it does. So that's why they do it.



  • Comment number 79.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 80.

    Socrates470BC wrote:

    "If things don’t change in the civil service and government practices then we will simply continue to pay 40% of our earnings and 20% of what we spend back to government and still continue to get further into debt"

    ...and that 40% direct taxation is nearer 50% if you're a SME - 40% tax plus 8% class 4 NIC (National Insurance Contributions) plus class 2 NICs payable quarterly.

  • Comment number 81.

    @51,

    I agree with you that the OSS community massively overplays the cost savings it could deliver (given how small a proportion of the cost of a typical project is actually software licence fees.)

    However, to say that "there is no formal support agreement in place" has NOTHING to do with the whether the software is open- or closed-source, and everything to do with the supplier contract.

    I have run multi-million pound IT projects (to time and budget) that used Microsoft technologies. I have run similar projects that used OpenSource

    Oracle paid approximately $1 billion for MySQL, whose primary product is an OpenSource database, and who made their money by selling support contracts on said products.

    Companies such as IBM will, likewise, happily provide a turnkey solution based on OSS.

    I agree that a Wiki probably isn't the right idea for a public-facing public sector website, but it might turn out that Drupal on Ubuntu, was a better fit than Stellent on Windows Server.

  • Comment number 82.

    @Alex #77

    > So I have a problem with my website developed with Plone, who do I call? Well
    > there are 28 companies I could get support from in the UK alone.

    And you genuinely don't see the problem with that?

    > The ability to multi-source support and expertise also helps drive down the costs
    > and keepd the vendors honest.

    Oh, I see. So when I have a problem I then have to *pay* for support? I get free support with all the solutions I use and you normally only have to pay for support when your problem involves some form of complex reproduction or analysis.

    > Using Open Source is by no means a panacea to IT solutions however it does have low
    > start-up costs enabling rapid prototyping and experimentation.

    It has its place, for sure. But not on big, complicated or important web projects.

  • Comment number 83.

    #569 Hugo Rodger-Brown said:

    "Hosting costs in traditional data centres are considerably higher than the £500/month quoted in #26 for a managed service with anything above 99% uptime, and if you add in things like DR (Disaster Recovery) the costs will escalate very rapidly."

    Nope. Rackspace (pretty much the leader in the UK) charges about £500/month per server for the same uptime guarantees, managed backup etc that you mention.

    If you're being charged more you're being ripped off.

  • Comment number 84.

    get more moderators or don't ask for comment! Ridiculous wait for someone to have a look at posts

  • Comment number 85.

    fraud plain and simple, someone has taken a backhander...

    For £5m the government could have set up an internal design department of at least 50-75 people [if not more], surely enough to cover every design/web* need for our government?

    *not including print/hosting costs etc

  • Comment number 86.

    Why does the Department for Business Innovation & Skills (BIS) outsource the provision of Business Link, to HM Revenue & Customs (HMRC), who outsource it to Serco, who in turn appear to outsource the website to BT? How can any sane person think that this is a cost effective way to procure a service?

    In contrast to some of the other commentators I don't have a problem with the public procurement process (EU or otherwise), but I do have a problem with people coming up with ridiculous CYA specifications. For example, we recently bid on a public project that was designed to re-publish information already available on other websites. We had to demonstrate that we could meet the highest levels of data security, yet the information we would hold was already in the public sector.

  • Comment number 87.

    The UK government has been a sycophant for big business. Witness Mr Gates' visits to Mr Blair and the vast. stupid contracts given to over sized, budget-inflating, usually American consultancies. This was the politics of admiration combined with, one suspects, an eye on some lucrative post-power money making opportunities.

    The better value for money in IT is to hire local British talent: Independent contractors who survive by ingenuity, hard work and maintaining high skills and customer focus.

    However, the politics of envy come out when it's local, real talent doing real, value-added work. I present Dawn Primarolo and the infamous IR35 legislation which aggressively attacks contractors and the self-employed.

    Not for Labour were independent, free thinking, talented and motivated people. Oh no! Their mantra was big government with big employees and everyone fitting into little boxes.

    Spend big. Waste big. Fail big.

    There is a reason why the budget-driven, success-focussed financial sector employs IT contractors to implement their big projects with maintenance then handed over to permanent staff. It's because it keeps costs down, delivers results and retains and utilises skills within permanent staff as well as giving staff the chance for advancement and personal career development.

    The government, to date, has effectively done everything possible to exclude local talent and prevent smaller companies and highly skilled individuals from engagement whilst throwing away billions upon billions of our money into the gold-lined pockets of the giant international consultancies who, in turn either by outsourcing the work or through their own policies end up employing cheap, underskilled, low paid workers in vast numbers to deliver poorly thought out, unfit for purpose "committee designed" "solutions". The litany of high profile failures, catastrophic overspends and under-utilised and under-performing projects are a testament to this.

    The 1000s of web sites alone show the catastrophic failure on the part of government driven "policies" to implement joined-up thinking, a coherent strategy and a long term plan that is cost efficient, visionary and fit for purpose.

    Of course this would be the result.

    As someone who has two decades of experience in UK PLC, working for both large consultancies as well as directly for the end user clients, I have seen both sides of this farce and the consultancies are very aware of how to milk every penny going from these lazy, box-ticking, short sighted and in many cases unqualified and unmotivated bunch of government-funded flunkies.

    A coherent, value for money, fit for purpose, accountable and delivered on time set of public services and IT projects is the very last thing these quangos and snake oil merchants want. It's not good for the bottom line. It doesn't suit their profit-related pay packages and it doesn't fit the mantra of "more bums on seats for longer" that drives these consultancies.

    My own opinion is that the government has been negligent to the point of criminality.

    How does that work?

    Because no-one is accountable. It comes down to "inquiries" and other meta-efforts but the people who made the decisions at no point feel personally responsible and personally accountable. They don't have to ask questions, think for themselves or raise uncomfortable truths to bosses who are complicit because they will never be held personally accountable, exposed for what they have done and brought to justice.

    Hey, it's just figures on a piece of paper after all as each day is one tick off the calendar towards annual leave and, ultimately, an over-inflated pension

    That is the truth of the matter. And Mr Tony Blair and co getting off scott free for the "sexed up dossier" is the poster case for how no-one is held personally responsible and brought to book personally. Despite their being an audit trail in the said document showing exactly who worked on it.

    It's the "sexed up dossier" throughout the sordid mess knows as government procurement and project management.

    And this is why we have the mess that we have at the huge cost that these initiatives invariably land at.

    Employ the right staff, keep it in-house and make individuals personally responsible, accountable and required to account for their actions and behaviour and there will be a revolution in both cash savings as well as productivity, project success and value delivered to the public.

  • Comment number 88.

    I would welcome fraud investigations into some of this expenditure, if it wouldn't result in more money down the drain. After all, there are very few public sector workers who get sacked, let alone prosecuted, even when very grave mistakes have been made. The usual line we hear is, "No individual is to blame."

  • Comment number 89.

    As a professional software developer who has led multiple projects, I struggle to understand how the government manages to spend £1m on a website let alone more.

    A fairly complex website can be delivered for tens of thousands of pounds, or at worst hundreds of thousands, but certainly not millions. The fact they spend even close to what they do on these sites suggests that there is clearly someone milking the system of money without working for it.

    It's an absolute disagrace. I could run a project to build a site far superior to what the government has in this case, and still walk away with £104 million in pure profit.

  • Comment number 90.

    I've used the Business Link site and it is useful for a small business, but I can't believe it cost this much. Who approved the expenditure?

  • Comment number 91.

    Along with US government paperclips this doesn't suprise me. The fact that the contractor was CERCO and BT involved to. Then I am not suprised of the triple billing.

  • Comment number 92.

    @64 and other comments about how you get to large numbers in Complex Public Sector outsourcing deals.

    You start with a modest figure for doing the work (People costs, Materials, Hosting etc). We will call this X

    Sales in Company A (The Prime Contractor - SERCO in this instance) will have a margin target - say 15-30%

    Procurement Management will want a margin target as well - say another 15% to manage the relation ship of the subcontracted parties to deliver this work. but to contract with them you need to go through legal, compliance blah blah blah - this is all managed by a separate group say 20%

    Company B (BT) has a sales function who need a margin too - lets be generous - say 20%

    Company B has an internal delivery team - but to contract with them you need to go through legal, compliance blah blah blah - this is all managed by a separate group say 20%

    The delivery team will also have margin targets - I think you get the idea :)

    This is how large IT suppliers in the public (or large private) sector work.

    It goes on Margin not people or things - we call it the margarine factory.

    I would be surprised if 20% of the 35Mil went on bits/bytes'nbugs.

    Don't be surprised - be outraged - this is a mugging after all!

  • Comment number 93.

    Funnily enough, Scottish Enterprise, Scotland's economic development agency use a copy of the Business Link website (with Scottish content tweaks) for their small business offering.

    And funnily enough, prior to this Scottish Enterprise spent loads on their own small business gateway site, with the cost justifications of saving on physical advisor visits to customers.

    No-one seems to care that after a cost-saving is needed to be made it's madness to spend an obscene chunk of that cost-saving on a website with the justification it does the same or a better job.

  • Comment number 94.

    Rory,

    I really don't know what to say.

    back in 1998, I investigated the rates of fraud and waste in the (then) DSS. They were claiming 11%, we found 37%. That was in payments alone. We also found hugely wasteful IT projects, several of which were massively over-specified bespoke systems for very simple tasks where "off the peg" solutions would have achieved the desired results at a tiny fraction of the cost. I also worked in the NAO (back in 1996) and helped design their audit approach. So I have seen some idiotic wastes of my money in public hands.

    but this leaves me breathless.

    £105m is salaries for about 3,500 web designers and managers!

    at the VERY LEAST, the entire management team should be fired without pension for incompetance and BT and SERCO investigated for a massive fraud on the taxpayer. This is a shocking example of the 'leech like' behaviour of IT consultants, who, faced with a total lack of experience or professionalism in the public sector, con them. At the other end are brain dead morons on the public payroll (fat payroll, fat pensions) who measure their pathetic personal worth in the size of the public money they pour away down the drain.

    I'm still shocked, but I found some words...

  • Comment number 95.

    I've no idea why the HMRC site cost £105M, presumably the country will own 'the code' for future generations? However on a personal level I use the PAYE and NICS calculators, I have done my company's return, and my personal return, and the quartely VAT return online with no problems. Maybe as taxpayers we will get our payback in increased efficiency at work, increase edfficiency from the HMRC, more effective tax collection, less avoidance,less errors etc.
    Online is much better than using all the paper tables as we had to do in the past (and we no longer have to buy private sector software which charge for annual upgrades).

    I totally disagree with 'John from Hendon' however I do have an issue when additional spending is made to make the site usable by Apple/Google apps for Mobile phones. Who in their right mind is going to do their returns when on the move? The person in charge of scoping these projects does need tighter controls applied by someone with some sense! Not everything has to be Gold plated, just functional is adequate.

  • Comment number 96.

    The bigegst problem is that the constant goverment re-organisation means new sites are constantly being created, with no content brought over from the old one.

    Example: About four years ago, I was trying to work out whether it eould be better to take my (British) self to Canada, or for my Canadian wife-to-be. The relevant UK website was hard to use; the Canadian website had the feel of something which had been refined and polished over the years.
    Four years later, the UK websiet has completely changed (twice, in fact), but the Canadian website has just been tweaked a bit here and there.

  • Comment number 97.

    Having worked on the "scoring committee" for NHS Capital Procurement projects, the mentality was VERY MUCH to award tenders to well-known and often the most expensive companies...

    And yes, the overwhelming mindset was to ask for and spend the maximum budget in order to receive the same budget in future years (god forbid a project should make savings as the budget will be reduced next year....!)

  • Comment number 98.

    Surely its an even bigger crime to scrap something that has £105m already invested in it! It's a lot of money but it is a massive website with a large amount of users and stakeholders involved... Where else does one get this kind of information?

    The sheer amount of dynamic content must involve a lot of employees and time. Whenever policy changes then so does the site, so what is the problem? By that token why are we not analysing the total "cost" of running the BBC!!

  • Comment number 99.

    These figures look staggering but sadly don't come as a shock to me having worked as a contractor on similar projects. It's not uncommon for big name consulting firms to tender for jobs they have absolutely no capability to undertake. Get hired first then worry about doing the job later.

    This can lead to the big name firms subcontracting to successively smaller firms then eventually to individual specialists to get jobs done, each strata taking a cut and adding to the overall cost of the job.

    The client isn't blameless either, the level of competency can be shockingly bad, so bad that the clients have no idea what they're really looking for, the scale of the task or even why the project was funded.

    Far too much trust is put in hot shot consulting firms and legal costs are sky high.

  • Comment number 100.

    Everyone apart from the upper echelons of the Civil Service and the Governments KNOWS how much the taxpayer is ripped off by big business for IT projects. It's a total joke, ask any contractor like myself who's been approached about a TAXPAYER FUNDED IT PROJECT.

    Example : 5 years ago I was approached for a job with the very prestigous, high profile, and VERY costly NHS computerisation project. £50 per hour of taxpayers' money in Leeds, when you'd be very, very lucky to get that even with a City investment bank or hedge fund.

    A "project manager", who forgot my name (I still remember yours...) and who'd obviously never worked on a database system in his life called me for a "technical" interview. He asked me three questions (one of which was "when can you start") and offered me the job on the spot, a three year contract worth nearly £500,000. And he was after 40 of us...

    For some utterly unfathomable reason, they were prepared to pay production DBAs to work overnight, when the developers were only working the daytime, and the system was three years short of going into production. Go figure.

    Despite the overwhelming wads of cash they were prepared to throw at me, I turned down the offer of employment, taking the way the interview was handled as a warning sign that it would all end in tears. Sure enough, it did, when Fujitsu pulled out. I can hardly blame them.

 

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