IT in the public sector: The clock is ticking, minister The millennium bug could take a big bite out of local and national government computer systems. Stephen Pritchard reports

Of all the organisations affected by the millennium bug, the public sector could be hit worst of all. Local and national governments face a double bind. Their systems are mission critical, large, and often old. At the same time, the public sector faces serious restraints on its spending power, especially in Europe. The millennium bug poses a serious dilemma for governments: the problem is on a large scale, but there are only limited resources to fix it.

In addition to funding shortages, government departments face a raft of other challenges. One is time. In business, the board decides priorities, and can change them swiftly if the need arises. In the public sector, politicians and ultimately the electoral process decide the agenda.

According to millennium bug experts, staffing is another area the public sector is concerned about. Large government departments adopted computerised systems - for example, for payrolls, calculating benefit entitlements or paying contractors - often before computerisation was commonplace in industry. Even now, few private companies have IT installations on the scale of government systems. Government computer systems of the Sixties and Seventies were, by necessity, either highly customised or written in house. But the programmers and analysts who developed them may have moved on, or even retired.

There is also evidence that skilled programmers are being enticed away from the public sector to industry or consulting. IT professionals with skills in languages such as COBOL are seeing a resurgence in demand for their skills, while pay in the public sector lags behind that in industry. When IT staff do move, councils and government departments may well find they cannot afford the fees of contractors or consultants to replace them.

It is by no means given that the millennium will see large-scale failures of IT systems in the public sector; there is still time for contingency planning even where it is too late to fix the "bug" itself. However, analysts believe the problem is serious.

"We see the public sector in Europe as at medium to high risk of year 2000 failure," suggests Andy Kyte, European research director for the year 2000 problem at Gartner Group. A change in attitude by heads of IT and their political bosses could, Mr Kyte believes, cause Gartner to change that rating. "We are not just talking about keeping Parliament running, but the services government delivers."

According to Gartner, public sector IT systems are vulnerable because "there is significant date dependency in most public sector activity". State pensions and school rolls both depend on dates. "Governments were also early adopters of technology. Government departments liked computers because they had big processing needs - for example, databases with millions of names," Mr Kyte adds.

While the scale of the problem is not in doubt, solutions are less clear. "Some failure is inevitable," warns David Ganesh, a year 2000 expert at PA Consulting. "Departments should tackle this problem by focusing their resources on the most critical systems. No one in government will be able to fix all the problems."

The priority, Mr Ganesh says, will be systems that affect the public, including tax or National Insurance. "Smaller systems may not be fixed," he predicts.

"In the private sector, a lot of people are terminating projects that are not year 2000-related in order to free up resources," says Mr Kyte, "but most public sector projects are working on developments to implement legislative changes. It is difficult, if not impossible, to decide to put these to one side.

"So public sector IT departments have to do all the existing work and year 2000 work as well. That is quite difficult to achieve."

David Ganesh believes government departments are also hampered by their planning systems. Government spending is committed in advance, and it is not always easy to move staff, or cash, from one project to another. "Plans for this year will have been made several years ago," he says.

Extra resources will be hard to find, especially with governments determined to keep the lid on spending in order to meet EU economic criteria. One way forward, though, is to devote senior management time to solving year 2000 issues. In the public sector, creating "ownership" of the millennium bug is sometimes difficult. Elected politicians are reluctant to take on a problem which is mostly administrative. Even so, governments are starting to appoint high-level task forces to develop solutions.

David Ganesh thinks that government is becoming more aware of the problem. "The departments that are most aware of the problem are the larger ones: social security, and health. Those that are smaller have struggled."

Analysts do not think catastrophe will hit government; more likely, non- critical projects will be put on hold, and less critical systems will not be upgraded. "This year, a lot more contingency planning will go on, as departments realise they will not be able to fix all problems," Mr Ganesh predicts.

"We believe the year 2000 will be taken seriously," says Gartner's Andy Kyte. Departments have started to act individually, but he suggests ministerial- level appointments will be needed to drive through compliance. "Effective management and focus are necessary to deliver the level of service that is required across all systems," he says.

A ministerial hand could deliver this, but it would be a brave politician indeed who volunteered for the millennium portfolio.