Press Release

Statement by An Tánaiste and Minister for Health and Children, Mary Harney TD, on Publication of Report of Comptroller and Auditor General into PPARS

The Tánaiste and Minister for Health and Children, Mary Harney T.D., has this morning (Tuesday) written to the Comptroller and Auditor General indicating her agreement to the presentation to Dáil Eireann of his Value for Money Examination on the Development of the PPARS system for the health services.

The Tánaiste said,  “I welcome this objective and balanced report from the Comptroller and Auditor General which has been worked on for over a year. Some of the main conclusions I have drawn from it are:

  • The aims of PPARS project were correct and valid, since there was a need to streamline and modernise personnel and payroll practices and systems throughout the health sector. As the C & AG states, ‘The intention of PPARS was not simply to computerise personnel records or to replace existing payroll systems. Its primary goal was to enable the transformation of human resource management in the health service’.
  • This was the first major ICT project of its kind in the health services for over 20 years. A number of classic mistakes common to such projects in both public and private sectors were made in relation to PPARS, e.g. in regard to definition of the project and the tasks required to implement it, the lines of management authority and contracting strategy.
  • The governance of the PPARS project proved very difficult because of the independent statutory powers and responsibilities of the former Health Boards and their CEOs. The HSE now provides a single organisation for project management and governance. This did not exist for the most of the lifetime of the PPARS project.
  • The health service management did not have the internal capability to manage this complex project without an over-reliance on external consultancy resources. This matter will be addressed as part of the government’s new peer review process for major public services IT projects.
  • Notwithstanding the time pressures and a genuine concern to get the job done, it is regrettable that public procurement procedures were not adhered to on time in all cases for the awarding of contracts.
  • There were major difficulties in tackling the different ways that Health Boards had of interpreting and implementing Circulars on Pay and Conditions. Had this not been the case, the project could have been brought to a conclusion earlier and at a much lower cost.
  • Investment in PPARS should not, insofar as possible, be allowed go to waste, as the Comptroller and Auditor General points out in his conclusions under ‘Future Considerations’ in Chapter 8. ”

“An important fact that is evident is that the system works where it is now applied. While there have been teething problems, as is inevitable, the system is now operational and paying over 32,000 staff, together with 4,000 pensioners and has the further ability to pay around 70,000 staff. So far in 2005 over 600,000 actual payments have been made amounting to over €950 million.

“Valuable lessons can now be learned for the management of this project and for IT and change management projects in the public sector generally.

“The Government has announced new arrangements for major public service projects. In addition, I have asked my Department to follow up, in consultation as necessary with the Department of Finance, on the conclusions outlined in Chapter 8 of the report.

“I understand the Report will now be considered by the Public Accounts Committee and I look forward to seeing the outcome of that examination in due course.

“I have been informed also that the Board of the HSE will be making its decision on the future development of PPARS early in the New Year.

Blackmore Group Assets Limited

The Tánaiste set out further information in relation to questions raised recently about payments to one company, Blackmore Group Assets Limited:

“Separate to the report by the Comptroller and Auditor General, I have now received further information from the Health Service Executive about work carried out for the PPARS project by Blackmore Group Assets Limited.

“Eight individual technical contractors were hired for PPARS through Blackmore Group Assets Limited.

“These individuals were recommended for selection by a firm contracted to advise the PPARS project, Integrity Consulting Partners.

“To the best of the knowledge of the PPARS Project Team none of the eight individuals was a resident of Ireland.

“The PPARS project team has informed me that individuals were selected for work based on technical experience, knowledge of health sector and availability. There was no general or overall contract with Blackmore Group Assets Limited. Contracts were signed for specified periods for individual contractors as the need for skills arose.

“Blackmore Group Assets Limited was one of eight organisations recommended by Integrity to be awarded work in 2002-04. They were described, by Integrity, as a UK based limited company with the staff provided being UK-based. The PPARS office took this at face value.

“The PPARS office has stated it is satisfied with the services provided and the costs involved, amounting to approximately €2 million. The work was scheduled and completed; invoices were paid based on timesheets. These invoices were certified by the PPARS office for payment through HSE North Western Area (former North Western Health Board) Finance Unit. VAT was paid directly in accordance with procedures for ‘foreign’ invoices.

“When IBM became the Technical Implementation Partner in 2004, they engaged four of the contractors who had worked on PPARS including two from Blackmore Group Assets Limited.

“It has been established that the legal domicile of Blackmore Group Assets Limited is the British Virgin Islands. It is administered from Guernsey.

“In my reply to Deputy Kenny’s Parliamentary Question on 25 October last I transmitted information supplied by the Health Service Executive that described Blackmore Group Assets Limited as being based in England. I regret that that was not correct. I am happy now to confirm the correct information.

“In regard to questions raised about the taxation treatment of payments to Blackmore Group Assets Limited, I have been informed that the Revenue Commissioners are in contact with the HSE North Western Area. It is for the Revenue Commissioners to assess the facts about payments in regard to taxation.”

The report, VFM Report 51: Development of a Human Resource Management System for the Health Service (PPARS), is available on the website of the Comptroller and Auditor General.