Avon and Somerset Police has been consistent in its good news statements on the force’s “innovative” outsourcing deal with IBM-owned Southwest One.
These announcements and similar FOI responses have a clear message: that savings from the deal are more than expected.
But the statements have differed in tone and substance from those of Somerset County Council which ended up in a legal action with Southwest One.
Somerset’s losses on its Southwest One deal could leave the casual observer wondering why and how Avon and Somerset Police had made a success of its deal with Southwest One, whereas the county council has had a disastrous experience.
Now the BBC reports that Avon and Somerset will not be renewing its contract with Southwest One when the deal expires in 2018.
Southwest One is 75% owned by IBM and carries out administrative, IT and human resources tasks for the force.
Avon and Somerset Police’s “new” chief constable Andy Marsh – who took up the post in February 2016 – confirmed he has “given notice” that the Southwest On contract will not be renewed.
Instead he said he wants to work with neighbouring police and fire services. Marsh said,
“We will be finding a new way of providing those services. It is my intention to collaborate with other forces. I do believe I can save some money and I want to protect frontline numbers.”
Marsh came to Avon and Somerset with a reputation for making value for money a priority.
These are some of the statements made by Avon and Somerset Police on the progress of the Southwest One contract before Marsh joined the force:
- “I am delighted with the level of procurement savings Southwest One is delivering for us, particularly as it is our local communities who will benefit most as front-line services are protected. “
“Using Southwest One’s innovative approach, we have been able to exceed our expected savings level.”
- “I am looking forward to building on our close working relationship with Southwest One to deliver even greater savings in the future.”
FOI campaigner David Orr says of the police’s decision not to renew its contract with Southwest One,
“This controversial contract with IBM for Southwest One was signed in 2007 with the County Council, the Police and Taunton Deane Borough Council.
“We were promised £180m of cash savings, an iconic building in Taunton at Firepool, as well as new jobs and a boost to the economy. None of that ever materialised. “
If Avon and Somerset Police is happy with its outsourcing deal with Southwest One, why is it not renewing or extending the contract?
It’s clear the “new” chief constable Andy Marsh believes he can save money by finding a new way of delivering services, including IT. This sounds sensible given that the client organisation will at some point have to contribute to the supplier’s profits, usually in the later years of the contract.
Savings by ending outsourcing
Public authorities, particularly councils, when they announce the end of an outsourcing contract, will often say they plan to make substantial savings by doing something different in future – Somerset County Council and Liverpool Council among them.
Liverpool Council announced it would save £30m over three years by ending its outsourcing deal.
Dexter Whitfield of the European Services Strategy Unit which monitors the success or otherwise of major outsourcing deals, is quoted in a House of Commons briefing paper last month entitled “Local government – alternative models of service delivery” as saying,
“Councils have spent £14.2bn on 65 strategic public-private partnership contracts, but there is scant evidence of full costs and savings”.
According to Whitfield, this is due to “the lack of transparent financial audits of contracts, secretive joint council-contractor governance arrangements, poor monitoring, undisclosed procurement costs, a lack of rigorous scrutiny and political fear of admitting failure”.
If it’s so obvious that outsourcing suppliers will eventually try to make up later for any losses in the early stages of a contract – suppliers are not registered charities – why are such deals signed in the first place?
Do officials and councillors not realise that their successors will probably seek to save money by jettisoning the same outsourcing deal?
The problem, perhaps, is that those who preside over the early years of an outsourcing contract are unlikely to be around in the later years. For them, there is no effective accountability.
Hence the enthusiastic public announcements of savings and new investments in IT and other facilities in the early stages of an outsourcing contract.
It’s likely things will go quiet in the later years of the contract when the supplier may be trying to recoup losses incurred in the early years.
Then, suddenly, the public authority will announce it is ending its outsourcing deal. Outsiders are left wondering why.
Given Avon and Somerset’s determination to end its relationship with Southwest One, can we trust all the good news statements by the force’s officials in past years?
With facts in any outsourcing deal so hard to come by, even for FOI campaigners, selective statements by public servants or ruling councillors about how successful their deal is, and how many tens of millions of pounds they are saving, are best taken with a pinch of salt.
Especially if the announcements were at an early stage of the contract and things have now gone quiet.
Thank you to David Orr for alerting me to the BBC story and providing links to much of the material that went into this post.
From hubris to the High Court (almost) – the story of Southwest One.
Too easy for councils to make up savings figures for outsourcing deals?
It seems pretty obvious that the most important and valuable task these outsourced organizations perform is in proclaiming how invaluable, economic and forward thinking they are.
With such vast sums of money involved, the truth is one of those little details that can so easily be brushed aside, particularly as, above a certain level, no one is held accountable, or punished or censured or forced to return any ill gotten gains.
The legal contracts involved must be works of art in themselves.
Thank you David for your comment and your help on the post. Your research and insight are, as always, invaluable. Tony.
Thanks for another well-written article which brings the whole sorry saga of the South West One Joint venture to a close.
I am able to evidence that by March 2014, the County Council had paid IBM (through South West One) at least £53m more than the declared cashable savings.
That is a huge amount of money that had to then come from frontline services just when austerity budget cuts were made, instead of, as claimed, protecting frontline services!
It would be nice to report that Lessons have indeed been Learnt but In Somerset County Council there are still serious shortcomings and issues (identified by the Auditors SWAP Ltd) in a major & sensitive social care contract that are, frankly, very dismaying indeed to still find happening – especially after the South West One debacle with IBM.
You reported on those on-going Contract Management issues in the article “Are Councillors in Somerset ignoring the wisdom of their auditors?” here:
We are now waiting on a meeting of the Audit Committee in Somerset County Council (hopefully in July) for those dismaying Contract Management problems and issues to be aired and hopefully swiftly rectified
I know of NOT ONE Joint Venture that has fully met (or even got near to meeting) all the extravagant savings and “transformation” claims made by all parties on contract signing.
Serial failures occurred in: Bedfordshire, Buckinghamshire, Suffolk, Liverpool, Somerset, Birmingham, Cornwall.
One certainty: THE BARNET CONTRACT WITH CAPITA IS THE NEXT FAILURE (if they ever allow the truth to get out and/or if the Auditors do their job and report in public session).
Reblogged this on sdbast.