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Sir John Bourn, head of the National Audit Office, reported to Parliament today on the difficulties faced by the Office for National Statistics (ONS) in outsourcing elements of the 2001 Census. The Census is expected to deliver good quality population data within the overall budget of £207 million. However, the appointment of professional advisors was mismanaged by ONS and around a third of payments to Census field staff through ONS’s payroll contractor were delayed or inaccurate.

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The appointment of Vogue Consultants to advise on the procurement and management of the contracted out Census services was not in accordance with public procurement procedures. An internal audit review in May 1999 discovered that the contract did not meet ONS’s standard terms and conditions. ONS concluded after a thorough review of the quality of work undertaken by Vogue that the consultants should be retained and a new contract was negotiated. In total Vogue were paid £1 million for their work.

The arrangements to post census forms were more successful than forecast. Around 21 million forms (88 per cent) were returned by post. The higher than expected volume and regional variances in the patterns of posting back forms contributed to backlogs in the sorting and checking of returns. ONS deployed field staff after 9 May to chase up missing forms but, owing to weaknesses in their own information, ONS’s managers could not tell if forms were missing or just held up in the backlog and so were unable to take decisions to effectively direct field activities. Some houses were therefore visited unnecessarily. ONS believed that savings in those districts where the response rate exceeded expectations would offset the costs of these visits. In the event the total amounts paid to field staff was £59.9 million against a budget of £54.1 million.

The £1.02 million contract awarded to Chessington to administer payroll services did not run smoothly. There were delays and incorrect payments. 23,000 staff (30 per cent of the total staff) received their payments at least two weeks late. The 5,650 staff who were paid at least four weeks late received additional compensation worth £292,000 in total. Also, ONS is in the process of recovering £500,000 worth of overpayments. There were problems with the accuracy of data submitted by field staff and with the operation of controls designed to flag high value claims for review by ONS’s staff. Over 12,000 field staff queried the accuracy of payments they received.

"The experience of the 2001 Census shows the importance of managing outsourced services. The ONS is to be congratulated in meeting its objectives within budget. I encourage it and any department or agency involved in outsourcing services to take note of my recommendations to ensure that they get value for money from procurement."

Sir John Bourn

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