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HMRC data loss indicates poor overall IT Governance awareness.

Butler Group : 28 November, 2007  (Technical Article)
The Butler Group believes that public service sectors now need to overhaul their IT management and governance strategies in the wake of the HMRC data loss.
The loss of 25 million records of UK citizens' personal data by Her Majesty's Revenue and Customs (HMRC) is not only a massive security breach but a clear indication that the government, which is aiming to modernise public services through the increased use of IT, has a highly inflated view of its departments' IT skills and capabilities. This affects all government IT projects, and shows that urgent action is needed if those projects are to achieve their objectives. But whilst the main consequences of the data loss have already been well documented by the press, there is a third and less obvious consequence of the data loss scandal that must be noted too - that is a lack of confidence in the government's capability to deliver modernisation of public services without any attempts to develop the required skills. Sarah Burnett, Senior Research Analyst with Butler Group, Europe's leading IT research and advisory organization, explains.

The main consequences of the data loss scandal have already been covered by the press in some detail. These can be summarised firstly as a huge loss of confidence in the government to handle citizens' data responsibly, and secondly the threat of identity theft that now hangs over two generations of UK citizens. The first is a big problem given that data is at the heart of government services - e.g. income and council taxes, the health service, schools registration, land registry. The second, the threat of Identity theft, is part of a real and growing problem; according to CIFAS, the UK's fraud prevention service, there were 80,000 cases of identity theft in 2006 - almost 3.5 times more than reported in 2001 and a trend that is expected to increase sharply.

There is a third and less obvious consequence of the data loss scandal - that is a lack of confidence in the government's capability to deliver modernisation of public services. That modernisation hinges on the increased use of IT and data sharing. Yet, the very basic and avoidable errors that led to HMRC's data loss suggest a failure to appreciate the fundamentals of information management and governance. This indicates that the Government's pursuit of modernisation through IT is not being matched with development of skills. So far, there has been altogether too much attention on outcomes and little on developing the required IT, and personnel and management skills.

Government departments have had to collaborate and share information for decades and no doubt have been sending each other floppy disks and CDs for years too. What is unforgivable is that the practice has not changed with the times, and that the concepts of data security, confidentiality, governance, and stewardship have not been taken on-board. These types of failure to change and move with the times are often due to cultural issues. Symptoms of these include a glaring lack of training of junior or new personnel, no processes for transfer of knowledge, insufficient communication of requirements and objectives, and where poor practice is tolerated rather than stamped out. These types of ingrained cultural issues are very difficult to change and yet must be overcome if the government's modernisation objectives are to be realised.
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