Millennium Compliance

HL Deb 27 November 1997 vol 583 cc1132-9

6.22 p.m.

Lord McIntosh of Haringey

My Lords, with the leave of the House, I shall now repeat a Statement which has been made in another place by my right honourable friend the Chancellor of the Duchy of Lancaster. The Statement is as follows:

"I should like to make a Statement on how government departments and their agencies are tackling the millennium compliance problem—sometimes called the "millennium bomb"—within central government departments and agencies.

"The problem is widely understood to pose serious and potentially catastrophic hazards in all organisations, in both public and private sectors, in every country worldwide. It affects mainframe and personal computers and any device containing a microprocessor chip that manipulates dates, including telephone equipment, lifts, air conditioning, lighting, clocks, timers and control equipment.

"Checking and where necessary correcting every system is a detailed, laborious process, and there is a fixed deadline for its completion. My right honourable friend the President of the Board of Trade is leading efforts to raise awareness of this urgent problem throughout the private sector.

"The principal responsibility for ensuring that systems are millennium compliant rests with individual departments. They are also responsible for ensuring that organisations in the wider public service sectors that they sponsor have the necessary guidance and information. My role is to co-ordinate activity in central government, assess progress and provide guidance. The Central Computer and Telecommunications Agency in my department has produced comprehensive guidance for departments on how to deal with the problem. This is available publicly.

"Immediately after taking office I asked to receive, as soon as possible after 1st October, detailed and costed plans, showing how the departments and agencies were tackling the problem. My officials have now analysed those plans. On the basis of those plans I am now able to confirm that all departments and agencies have work in hand and scheduled for completion in time—many by December 1998, the majority by March 1999 and a small number later in 1999. Some departments will, in general, give priority to correcting business critical systems and may leave systems of minor importance until later.

"The total estimated cost indicated in the plans is just over £370 million. Most of this will be spent in the current and next two financial years. That is less than some estimates but is based on careful calculation by departments and their advisers, and I have no reason to believe that it is not of the right order. But this is something that Ministers and I will monitor carefully.

"The Government's policy is that the cost will be met from within planned allocations, and the evidence from the plans is that almost 97 per cent. is so covered. Many costs will be accommodated in maintenance and system replacement budgets. In some cases, departments will bring forward investment plans and adjust their priorities.

"Guidance published by the Central Computer and Telecommunications Agency asked departments to consider whether staff shortages would inhibit progress. The plans as a whole do not suggest that this is a serious problem at present, but I shall keep a close watch on this. I have written to departments asking for further clarification and will ensure that that will be covered specifically in subsequent reports.

"Overall, my assessment is that we have established the measure of the problem and set in hand plans which are realistic and achievable. But the bulk of the actual remedial or replacement work is yet to be done, the timetable is tight and there is little margin for error. This is the challenge. The programme needs continuous monitoring, and I shall be checking progress regularly and report to the House on a quarterly basis starting next spring.

"It is also my intention that we should be open about the scale of the problem and our progress in dealing with it. I am therefore arranging for all the departmental reports to be placed in the Library of the House and published on the Internet; and I shall ensure that progress reports are also made available on a regular basis.

"Finally, I can announce today that we are re-inforcing and strengthening our effort in two significant ways. First, a ministerial group is being set up, under my right honourable friend the President of the Board of Trade, to drive forward action to tackle the year 2000 problem across the public and private sectors. I shall be a member of that group, chairing a sub-group which will co-ordinate and drive forward the action for which central government departments and agencies are responsible.

"Secondly, we have asked Don Cruickshank, the chairman of Action 2000, to re-inforce this effort across both the public and private sectors by keeping in close touch with the ministerial group and advising on best practice from the private sector.

"I hope that this demonstrates the seriousness with which we take this problem, and the vigour of our approach to it. These efforts will be maintained."

My Lords, that concludes the Statement.

6.27 p.m.

Lord Lucas

My Lords, I am grateful to the noble Lord for repeating the Statement in this House. It is a Statement which I think I can say I welcome unreservedly. I personally have always called it the "millennium bug", but perhaps that invites confusion with Peter Mandelson, so the "millennium bomb" will have to do.

I am delighted that the Government are not just concentrating on their own problems but are taking in those faced by the private sector, and our economy as a result of the problems that the private sector faces. It seems akin to a public health problem: it is something from which we are all likely to suffer. If we do not do something about it generally, we may suffer serious national damage; and even if we do do something, we will expect individual companies to die, and unless we are careful people may also die. I am delighted to see that the Government are treating the issue with the seriousness demonstrated by the Statement. I am also delighted that they are showing realism as regards the extent and difficulty of the problem; that they are committed to openness; and that they are committed to a wholehearted participative approach by government and by senior people within government.

I have a few concerns which arise principally from the list appended to the back of the Statement setting out details regarding individual departments. It seems to me that some departments which are planning to be ready in March 1999, like the Employment Service, are likely to have substantial problems which may well cause great disruption. Any slippage from those dates will give us great cause for concern. I hope that the noble Lord can confirm that those target dates will be monitored carefully and that before the next report is made to Parliament—I understand that will be next spring—there will be some checking up on the reality of those target dates to make sure that they are not slipping and that the key services will be covered as it would cause a great deal of disruption if they went down at the end of 1999, or indeed perhaps earlier in 1999, as the millennium dates start to be entered into the computer systems.

It seems to me doubtful whether it is satisfactory that the Coastguard Agency, which has direct responsibility for human life, is waiting until mid-1999 to deal with its problems when a sum of £100,000 only is involved. They could surely be dealt with much faster than that. The Department of Social Security is waiting until September 1999 to deal with many of its systems. That allows little time for slippage. It should follow the example of the Ministry of Defence which is responsible for a great many more computer systems than the Department of Social Security, and which expects to get everything done by January 1999. That allows reasonable time for slippage with systems of that scale. I do not believe that the social security timescale allows for that. One must expect, from what it predicts, that there will be some disasters and some great inconveniences flowing from that.

The Foreign and Commonwealth Office is aiming for the end of September 1999. One likes to think that it is not that important these days, but that timescale is dilatory. The Treasury is aiming for the end of March 1999 with an estimated cost of only £100,000. Given how crucial the Treasury is, that is unacceptable. I cannot see why it cannot hasten that timescale a great deal. The Valuation Office of the Inland Revenue has given a date of the end of 1999. A day's slippage on that will put it into the black hole. Presumably it is being careless about this because the Valuation Office deals with taxpayers rather than the rest of government. Again, that cannot be acceptable. As I say, the Ministry of Defence, which faces the bulk of this problem—over half of it—seems to be doing well. The Office for National Statistics appears to be pretty dilatory, too. One way or another, there are some individual departments within this schedule which will bear watching.

I have one or two suggestions on which I should like to hear the Government's reaction. First, the Government will in the course of all these investigations discover a number of concrete examples of where the millennium bug would have caused problems. I hope that they will undertake to publish details of these in a central and easily accessible form so that people who fear that their similar systems may be affected can see the extent of the problem and what kind of systems are being infected. They may turn out to be publicly available programmes which have been bought by many people in the private sector. It is difficult for private sector enterprises to admit to this kind of fault. The Government have been courageously open about this. I hope that they will make their openness more accessible and individuals will not have to look through the individual reports of 100 or so different departments and agencies to find out what systems have gone wrong, if indeed—and it is not clear from the Statement—the reporting would extend to that.

Secondly, I hope that when they report next spring we shall have some indication from the Government whether they are satisfied with the progress being made in the major private systems which could have a major effect on the economy of this country. One thinks of telecommunications, banking and similar systems. I hope that the Government will be in touch with the major enterprises in those areas to assure themselves that those enterprises are not likely to cause problems for us all. I hope that they will also be able to cover such areas as the National Health Service—where there is a potential for severe threat to life—local authorities, fire and police, all of which must be facing problems in this area, and none of which are covered by this Statement. As a whole I welcome the Statement and congratulate the Government on it.

6.34 p.m.

Lord Methuen

My Lords, I, too, thank the Minister for repeating the Statement made in another place. I take a personal interest in this problem as I was one of the instigators of the problem some 20 years ago when I was writing programmes when there was a different cultural climate in the computer industry to that of today.

Last year I asked a number of questions of the previous government as to how matters were progressing. I received suitably bland responses from them. Having looked at the documents which accompany the Statement, I, too, am worried about the anxieties which have been expressed on costs and timescales. I shall not go into them in such detail as the previous speaker but I wonder whether the costs have been reasonably assessed. I have heard costs suggested of a greater order of magnitude.

I believe that one of the major problems will be the lack of people with appropriate skills who are available to tackle this problem. Many of the systems involved are so-called "legacy systems" which were written many years ago. They used different computer languages and they used different people, many of whom, like myself, have now retired. There is a major problem in finding those with the skill base to tackle modern systems let alone these older systems with the amount of work that is involved. When one couples that with the amount of work that will be required to introduce EMU into the City systems, one sees there is a real shortage of skilled personnel to carry out that work in the timescale that is envisaged both for EMU and for tackling the millennium bug.

A major problem is posed by systems that no one knows anything about such as the "embedded systems" with micro processors which control all kinds of process plant. Again, many of those are ancient systems and the firms which created them may have gone out of business. Records may be scarce and there is also the question of having the resources to mend these systems. I think in particular of the air traffic control systems which I believe are largely now being replaced in this country but are perhaps more of a problem in other countries. There is a major difficulty in that area.

I believe that the private sector is a disaster area. Figures have been suggested of the order of £30 billion. Some firms, such as that which I used to work for, Rolls-Royce, were considering this problem seven or eight years ago. At that time its costs, on my reckoning, were something in the order of £ 1 million. Many firms are nothing like as advanced in their consideration. As the millennium approaches, we shall see more and more private sector firms in a catastrophic state.

The Minister has said nothing about local government. The same problems apply there. The previous Government suggested that systems would be available to local government to help support their conversion costs. Perhaps the Minister will comment on that. Perhaps the Minister will also comment on the skills and resources that the Government think are available countrywide to meet these requirements. It has been said that one should not fly between 30th December 1999 and 2nd January 2000. We generally welcome this Statement. I hope that the Government's figures are accurate both as regards timescales and costs.

Lord McIntosh of Haringey

My Lords, I am grateful to both noble Lords for the reception they have given to this Statement. I do not think I have ever seen, either in government or in opposition, a Statement which was welcomed unreservedly on the Opposition Front Bench. I do not think that when I was in Opposition I ever welcomed a government Statement unreservedly.

The noble Lord, Lord Lucas, was right to say that this is still a widespread and a difficult problem. He emphasised that point. He emphasised the need for realism as to the extent of the problem, and the need to recognise how difficult it is. As regards his comments on the completion dates given in the summary, I have some sympathy with what he said. I hope that I can reassure him. This is a summary, after all. It summarises by giving the end date for the final completion of the work in the appropriate department. If the noble Lord looks in the Library, he will see the detailed submissions which have been given by departments. He will see that I am holding in front of me about 50 pages. That is about a quarter of the submission from the Department of Social Security. The noble Lord commented in particular on the Department of Social Security, with a completion date of September 1999. As he will see when he considers the report, the DSS has been incredibly conscientious in looking at the extent of the problem not only centrally but in all of its agencies. It has costed, allowed for and given a timescale to the replacement of hardware, operating systems and application software. Even additional copies of manuals are provided for in the DSS submission.

When the noble Lord refers to completion dates at April 1999, he is right to say that it diminishes the scope for dealing with slippage. However, perhaps I may remind him that the previous government set a target date of December 1998 for all departments. Departments then wrote in to say, "We cannot test our financial systems by December 1998. We have to run them over a year end"; that is the end of March, beginning of April. Therefore, they could not complete their review of the problems and deal with them before April/May 1999. That seemed a reasonable answer and it was widely accepted.

I am not sure that I can answer the noble Lord about the coastguard agency. He is right to say that the Ministry of Defence has an extraordinarily large problem in that it has something like 20,000 different systems. Virtually every piece of equipment that it operates has some device in it which is susceptible to the millennium bug. All those points are well taken and will have the continued attention of Ministers and of the ministerial group which has just been announced.

The noble Lord, Lord Lucas, asked me whether we would be willing to publish concrete examples of the problems which have been found in central government so that we could give help to the private sector in dealing with them. That is exactly the purpose of the Action 2000 task force which has been set up under Mr. Don Cruickshank. It is not only to deal with the interface between the public and private sector but to make available the lessons from the public sector. I can therefore answer the noble Lord's question on that positively.

The noble Lord asked me whether in our quarterly report next spring we would be able to express our satisfaction or dissatisfaction with progress in the major private sector companies. I am not sure that we shall be able to do that. But that is again why we have the ministerial group under the President of the Board of Trade, who will be seeking to ensure that the private sector is not slipping as disastrously as the noble Lord, Lord Methuen, seems to fear.

I appreciate the point that the noble Lord makes. In 1958 as a programmer I was invited to approve the purchase of an Elliott 1301. I am glad to say that I advised my company against it because it would have taken a whole air-conditioned room to perform what can now be done with equipment I can hold in the palm of my hand.

The noble Lord, Lord Methuen, rightly drew attention to the problem of the lack of skills of people who know about the older systems. I suspect that the answer will not be retraining people in the older systems but replacing the equipment. Estimates of costs for dealing with the millennium bug are of two kinds: one is going into the systems and actually dealing with the problem by replacing the chips or rewriting the software, scrolling through thousands of pages of source code, I imagine; and the other is simply to advance replacements. In many cases, in particular with smaller systems, it must be more effective to advance replacements. The capital cost of that replacement equipment or software is not the total cost of the millennium bug. I believe that some people who are making estimates are confusing the two.

The noble Lord, Lord Methuen, asked me about local government. I can confirm that local government will be within the scope of the ministerial group which I have announced.

Above all, I wish to say this to noble Lords who have expressed concerns. The action we are taking is precisely because we believe those concerns to be justified. Nothing in information technology ever works the first time or on time. We must not expect it to do so. But we believe that we have now taken every reasonable precaution to set things in the right direction.

6.45 p.m.

Viscount Waverley

Has a study been done into what ministries, first, created software in-house, secondly, contracted out the production of software, and, thirdly, purchased the software off the peg? The point is as regards the responsibility in cost which could be passed on to third parties.

Lord McIntosh of Haringey

Government departments and agencies have for many years taken the advice of the Central Computer and Telecommunications Agency on the purchase and leasing of both hardware and software. Therefore that responsibility goes back a long way. I very much doubt whether there is scope for suing people for past mistakes, although if there is any failure among those who have guaranteed millennium compliance that would certainly be pursued.

The noble Viscount's question gives me the opportunity to say that since September 1996 all government purchases, whether of hardware, firmware or software, have been guaranteed by contract to be millennium compliant. That applies also to equipment or software which is bought off the government electronic computer catalogue (G.Cat) produced by the CCTA. That also is all guaranteed to be millennium compliant.