In-sourcing IT in Wales has provided a positive change, says auditor

An Audit Wales report has found that the Welsh government’s decision to move away from outsourcing has been largely successful.

The Welsh government’s ambitious programme to largely in-source IT has overall delivered benefits, the auditor said, however savings have not been as great as anticipated.

Originally, the programme anticipated savings of £8.1m in 2019-20, but it only achieved £4.9m. This was mainly due to increased software costs, as well as costs for contractors as the programme struggled to fill some roles.

“Since the transition, the Welsh government has found it challenging to fully staff the service. The ICT division has been understaffed by 15-20% since the transition, such understaffing increases the pressure on existing staff and potentially damages morale,” the report said.

It added that there are currently no workforce plans for the central IT division to “set out measures for developing skills and recruiting staff”, but that the programme aims to develop a workforce plan for the digital, data and technology (DDaT) function across government.

The Welsh government launched plans in 2017 to begin the in-sourcing programme in 2019, and according to the report, the implementation programme “proceeded broadly in line with planned timescales so that key milestones were achieved”.

The in-sourcing programme aimed to move away from the Welsh government’s Merlin contract with supplier Atos, which maintained the government’s IT systems, undertook development work, provided infrastructure, equipment and expertise.

One of the staffing issues came as contractor staff were transferred, but the government was “unable to replicate some features of Atos’ employment offer, notably company cars and private medical insurance, and offered to buy out these benefits”. This led to Atos staff being disappointed with the offer.

Despite the issues it faced, the auditor’s report was positive to the changes made by the Welsh government.

“Some, but not all, non-financial benefits are being delivered, although it is difficult to judge success because specific targets were not set,” the report said, adding that there has been a gradual decline in the number of serious IT incidents and that user satisfaction has also improved.

There has, however, been a “dip in ICT service desk performance, which is most likely due to understaffing”, the report added.  

Commenting on the report, Welsh auditor general Adrian Compton said it was good to report on a positive IT change programme “that has served the Welsh government well as it has faced the challenge of a different way of working in response to the Covid-19 pandemic”.

“The job is not complete, however, with further action required to secure all of the intended benefits, to address the pressures caused by understaffing, and to ensure lessons are learnt for future projects,” he said.