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Driver and Vehicle Licensing Agency (DVLA) Appropriation Accounts 1999-2000

Sir John Bourn, head of the National Audit Office, today reported to Parliament on how the Driver and Vehicle Licensing Agency (DVLA)1 successfully avoided millennium-compliance problems when replacing its computerised vehicles system, although the project took twice the anticipated timescale to complete.
The report details the project management problems encountered by the DVLA in replacing its twenty-five year old Vehicles database system with a bespoke product developed by Electronic Data Systems Ltd (EDS)2 The Agency opted in mid-October 1999 to implement the final phase of the replacement system, as it expected the old master record system would develop millennium-compliance failures that would have had serious implications for the DVLA’s statutory operations. However, at that time the associated Information Technology (IT) Disaster Recovery Plan had not yet been fully tested. Nevertheless, Sir John was able to issue an unqualified audit opinion on the Agency’s 1999-2000 accounts.

The £5 million, fixed-price contract to replace the Agency’s Vehicle computer system by a phased implementation was originally expected to take two years, and was planned to be completed by October 1998. The report highlights a number of issues in the management of this project.

  • The project’s last implementation phase slipped to March 1999 and then to August 1999. The Agency had drawn up contingency plans in case both the new and existing vehicle computer systems failed, but these fallback measures mainly relied upon manual processing by up to 400 temporary staff. Since the DVLA could not guarantee to handle the volume of work manually, this would have led to a serious disruption of customer services. The final phase implementation avoided this.
  • When the ‘go-live’ decision was taken, several project elements had yet to be fully or successfully tested, including the processing of some refunds of excise duty to vehicle keepers, the licensing of fleet vehicles and the operation of the IT Disaster Recovery Plan. This Plan has still not been fully tested, and Sir John considers that it should be finalised and testing completed urgently. EDS are planning this for completion in October 2001.
  • In the new system’s first year of operation a number of problems arose, particularly with the timely processing of excise duty refunds to vehicle keepers, for which a three-day backlog of some 100,000 cases had developed by January 2000.
  • Sir John also noted that during the Christmas period 1999 some instances of corrupt data had been downloaded to the Police National Computer, although no evidence was found of any wrongful arrests or legal action based on this incorrect data. EDS was able to resolve the problem in January 2000. A further significant risk to enforcement activities was averted when the DVLA’s manual controls detected that the printing procedures had generated some 100,000 duplicate marks for issue to motor dealers.
  • The contract for the replacement vehicles system entitled EDS to submit claims for stage payments despite the significant project delays. It was August 1998 before EDS acknowledged that it could not meet the planned ‘go-live’ date of 1 October 1998. By June 1998 EDS had claimed 85 per cent of the monies due at that point, but the Agency was retaining some £560,000 against undelivered products or functions. The Agency also retained £200,000 (4 per cent) of the project value until final completion in October 2000.

However, Sir John noted that the DVLA had successfully avoided spiralling project costs by holding EDS to the fixed price and also by negotiating reductions in the associated running costs of the project provided by EDS.

"I am concerned at the significant delays in achieving the final implementation of this database system by the dvla, particularly as its predecessor was known not to be millennium-compliant. The agency took a high-risk but necessary decision to implement the final phases in October 1999, before system testing was fully completed. In doing so, they avoided the breakdown of a key customer service to both enforcement agencies and the public." The report also comments positively on other aspects of the DVLA’s operations.

Sir John

Notes for Editors

1The Driver and Vehicle Licensing Agency (DVLA) is an executive agency of the Department of the Environment, Transport and the Regions. It employs some 4,650 staff, mainly at its Swansea headquarters, and operates a network of regional offices across Great Britain. Its annual operating costs total some £229 million.

2Electronic Data Systems Ltd (EDS) acquired the IT division of the Agency in 1993. The contract included terms that committed the Agency to employ EDS for all development work on both the master Vehicle and Driver database systems until 30 June 1999.

Press notices and reports are available from the date of publication on the NAO website at Hard copies can be obtained from The Stationery Office on 0845 702 3474.

The Comptroller and Auditor General, Sir John Bourn, is the head of the National Audit Office employing some 750 staff. He and the NAO are totally independent of Government. He certifies the accounts of all Government departments and a wide range of other public sector bodies; and he has statutory authority to report to Parliament on the economy, efficiency and effectiveness with which departments and other bodies have used their resources.

PN: 14/01