Disclosure and barring services modernisation still faltering, says Committee

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• Read the report conclusions and recommendations
• Read the full report: Disclosure and barring service: progress review

In May 2018, the Disclosure and Barring Service (DBS) and its contractor, Tata Consultancy Services (TCS), claimed then that the modernisation programme, already running four years late and £229 million over budget, could still be delivered before the contract ended in March 2019. Since then: 

• The DBS has abandoned plans to modernise its disclosure certificates service, which aimed to deliver cost reductions and service improvements
• The DBS has been unable to resolve its dispute with TCS; and has announced that it is looking for a new supplier to take over the contract. 

The DBS expects the transition period in changing suppliers to go smoothly but it seems over-reliant on assurances from prospective new contractors and the discredited old one that the programme can be handed over seamlessly. There are risks involved with the overly optimistic timetable to appoint a new contractor. The Home Office needs to exercise closer oversight than it has done previously to help manage these risks and work with DBS to rescue the programme and deliver the benefits that were originally promised in 2012. 

Chair's comments

“The DBS programme continues to be a cause for concern. Already over budget when we last reported in May 2018, it continues to run up costs. The programme has not delivered the intended benefits and we have seen little evidence that the Home Office has a strategy for DBS beyond hoping that a new supplier will bring about the necessary improvements.”
 
“The Home Office is ultimately responsible for the DBS but it does not seem to have a clear vision for how to secure improvements to a system that is cumbersome for users and integral to providing the public with reassurance.”
 
“Despite calling the Home Office back to be questioned on this issue because of our serious concerns, we are still not reassured about progress and will continue to monitor developments.”

Efforts to modernise the DBS are a further example of contracting failure within the Home Office. The DBS still has not delivered its modernisation programme seven years after the programme started in 2012. The DBS took the decision in March 2018 to abandon the development of disclosure certificates and recognised a loss of some £9.4 million in its 2017-18 annual accounts by doing so.  Now, it will be forced to use existing infrastructure to issue Disclosures certificates, which means relying on a 17-year old system and shouldering all the associated risks of supporting and maintaining ageing infrastructure.  It is not clear to us that DBS has a clear strategy for delivering modernisation.

Also, it is now reliant on, and seemingly over-optimistic about, assurances from its prospective new contractors and a discredited old one that handover arrangements between suppliers will be effective so there is no disruption of services during and after the transition period. It is hugely disappointing that, a year after we first took evidence about the programme, negotiations with TCS are still on-going to determine fault for the delays in delivering modernisation.  The DBS could not give us any clear indication of when these negotiations would be concluded.  The Home Office and DBS made the decision in September 2018 not to extend the TCS contract beyond 31st March 2019 except for a 6 to12-month extension to facilitate the handover of services to a new contractor. There are clearly risks involved with this timetable given that the DBS are still to appoint a successor contractor and given the DBS' past track record when handing over such services.

Recommendations: The Home Office should write to us before Parliament's summer recess with an update on progress in transitioning between suppliers, the details of the new supplier and contract arrangements, expectations of deliverables and costs, the TCS exit strategy at the end of the transition period, and the outcomes of the negotiations with TCS over commercial disputes with the DBS.

In the same letter, the Home Office should also assess the strength of the DBS's confidence expressed at the evidence session that the new supplier will be able to pick up TCS's role quickly and effectively.

DBS is not yet in a position to set out a convincing longer-term vision for its services, and is no further forward with modernisation than it was at the beginning of the process in 2012. It is unclear what “modernisation” now means for the DBS given part of the programme will now be delivered using existing structures and by a new supplier without being modernised. While DBS confirmed that the take up of the Update Service had increased to some 1.8 million subscribers by the end of 2018, it does not expect the number to increase much beyond this level and there does not appear to be a strategy to grow the digital part of the service. In our eyes, this is does not represent either modernisation, or an ambitious longer-term vision: the DBS is not able to convey a clear strategy on how its business will develop and grow.

DBS told us that while it owns the intellectual property rights to material developed by the TCS, it does not appear that these rights will be marketable to third parties to generate additional revenue for the UK. This is because custom-made aspects of the system do not, in its view, function effectively  It continues to remain unclear what benefits the DBS is expecting to achieve against original expectations for the programme and the lack of an update of the expected benefits further highlights the absence of a coherent strategy.

Recommendation: By the end of 2019, DBS should write to us with details of its achievements against benefits promised in the 2012 business case, the strategy it will have in place for further service improvements, and actions it will take to achieve them.
 
We are concerned about the extent to which the Home Office will take responsibility for turning round the DBS modernisation programme. The Home Office is the parent department, ultimately responsible for improvements and for effective oversight of the DBS. As we reported in May 2018, the Department agreed the original contract in 2012 despite the flaws that have now become evident. Sir Mark Sedwill, former Permanent Secretary at the Home Office (2013-15) and now Head of the UK Civil Service, recognised that “the original business case was highly ambitious and… the institutional capabilities of the agency were over-stretched”. He told us that the programme “was off track and needed action taking” when he joined the Department and described how, in summer 2014, the Department “reset that business case and the entire programme” by changing the scope and timing of the programme. While he acknowledged that “there were some further problems that took it off track” subsequent to the overhaul of the programme, he attributed this to an upgrade of online systems and commercial problems with the providers. 

The Home Office still has not written to us with the outcomes of its review of lessons learnt from the management of this programme and the failure to deliver intended benefits, as it committed to do following our previous report. 

As a result of our May 2018 evidence session and report, the Home Office has now taken action to review the fees charged to the public and employers by the DBS given the surpluses the DBS had amassed over a number of years. It now expects to reduce the fees to be charged across the range of products offered by the DBS, subject to legislation.  The DBS has confirmed that unit costs for its products have fallen significantly since we last reported and that this will drive a reduction in fees by the autumn of 2019. 

Recommendations: The Department should write to us before Parliament's summer recess setting out what it has done to oversee, monitor and challenge the ongoing work at DBS to improve services and transition to the new contractor.

The Home Office should provide the Committee with its lessons learned review as soon as possible after the transition between contractors has been completed. Although it was the Department's intention after our last inquiry to provide a review once the DBS modernisation project has been delivered, given the length of time it is taking the Department should review and update the Committee sooner. This exercise should be clear as to how lessons will be applied to other projects managed by the Home Office – particularly given our concerns over the Emergency Services Network programme.

In the same letter, the Home Office should also provide the Committee with an update on the progress it is making to reduce the fees to the users of the DBS's services.

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