Are councils short of money? Only for public services

By Tony Collins

Councils are short of money for public services – but not for senior officers’ pay-offs or botched deals.

A recent case is highlighted by Somerset’s County Gazette.

It says that restructuring costs for a newly-created council – in which two local authorities merged to save money by way of a “digital revolution” – are likely to double after more people than expected took redundancy.

The new council is expected to pay about £6m in redundancies instead of the target figure of £3m.

According to Somerset’s County Gazette, the pay-outs include £343,000 to the former chief executive of one of the two councils in the merger, Taunton Deane Borough Council, which was a founder member of the failed Somerset One joint venture with IBM.

The Southwest One enterprise cost taxpayers tens of millions of pounds more than it saved.

Now it emerges that five other senior officers involved in the Somerset merger plans have received pay-offs of more than £100,000 each; and although 191 council staff were laid off last year as part of the merger plans, the new council is now considering recruiting dozens of much-needed extra staff.

Campaigner David Orr, a former IT professional at Somerset County Council, has written to the chief executive of newly-created Somerset West and Taunton Council, to express concerns about pay-offs, consultancy costs involved in the merger and what he called the “failed transformation”.

Somerset West and Taunton Liberal Democrat councillor Mike Rigby said,

This [the merger] is a spectacular failure. An uncontrolled exodus of staff, walking away with tens or even hundreds of thousands of pounds, in advance of a “digital revolution” that never arrived.

The council thought it could lose 120 staff as 250 council services went online. The problem is that 191 staff left while fewer than 20 services are available online.

“No consideration as to whether any of those 191 staff were carrying out essential duties so now we’re having to fill many of the redundant roles.

“An utter shambles … It’ll take some time to put this all back together.”

The new chief executive of Somerset West and Taunton Council, told the BBC,

“We’ve overshot that target (£3m), mainly because people put their hands up for voluntary redundancy…

“I think ultimately, people who were eligible to apply for voluntary redundancy decided to take that opportunity.” He said there had been no limit on the number of employees eligible for voluntary redundancy.

“There was an acceptance that if people wanted to take voluntary redundancy, they could do – that’s the way it was set up.

Short of money?

Although councils are said to be short of money for public services – it was reported in 2017 that many were facing bankruptcy – the Taxpayers’ Alliance said last month that, across the country, 2,441 council officers  — a four-year high – earned at least £100,000 a year with 607 of those receiving at least £150,000 in 2017-18.

A total of 28 local authority employees received remuneration in excess of a quarter of a million pounds in 2017-18.

One council has 55 employees earning more than £100,000.

Councils say they need to pay the equivalent of private sector salaries to attract the right people to run large and complex local authorities.

A Local Government Association spokesperson said councils are  “large, complex organisations” that make a “huge difference” to people’s lives.

The spokesperson added: “Senior pay is always decided by democratically elected councillors in an open and transparent way.”

Comment

IT-led transformations are fun. They are a break from routine and great for the CV.

The supplier gains. Those at the council working on the transformation gain. A win-win. Even the public may gain if anyone can ascertain from a complicated deal whether any savings have been made.

If the deal fails,  nobody is constitutionally accountable except the volunteer councillors.

And councils seem to follow the principle that every overtly botched IT-led transformation needs to be followed by a new IT-led transformation. If that doesn’t succeed, a third may make up for the other two.

All the while, senior council officers continue to receive no-risk salaries of £100,000 + and/or large pay-offs.

Large amounts of money paid to senior officers does a disservice to the mass of lower or middle grade council officers who earn appropriate sums and bear the same risks of losing their jobs as anyone in the private sector.

Why do councils exist?

Botched deals leave less for public services. And the more senior council officers continue to receive large sums of money whether their councils succeed or not,  the more they will reinforce the fat cat stereotype and convince people that councils exist for their own benefit rather than the public’s.

As more public services disappear while the cost of the council payroll soars, the more people will wonder whether their local council would prefer not to offer any services at all.

A Yes Minister episode had officials boasting of the efficiency of a newly-built and fully-equipped NHS hospital that had no patients.

The hospital was fully staffed with 500 administrators and ancillary workers but had no money left for any nurses or doctors.

Is this where councils’ public services are headed?

Thank you to campaigner David Orr who seeks to hold those in power in Somerset to account.

 

6 responses to “Are councils short of money? Only for public services

  1. If only UK Government had carried out research on what was well proven as articulated here https://www.theguardian.com/public-leaders-network/2012/nov/02/uk-sport-public-sector-admin-costs . Let me summarise the position now covering 18 years distributing c£2bn which has seen constant change as required and driven by users by using the “no code” approach where build of tasks takes place in a Graphical Process Map
    Total process maps developed and deployed over 18 years = 342
    Total process tasks developed and deployed over 18 years = 7,877
    Active processes (those that are currently in use) = 102
    Active tasks = 2071 of these tasks 418 are user interfaces.
    The low build, change and maintenance costs at UK Sport are breath taking for a complex Case Management of grants Cost of build from new with initial costs, the various additional changes including the two significant upgrade projects and annual support contracts come to approximately £800,000! Similar UK Government projects run into multi £100ms with many “botched” IT projects.
    Imagine the savings which could have benefitted local authorities releasing funds for public services. This really should be investigated….as I have suggested many times but ignored?

    Liked by 1 person

    • Thank you for the comment David. UK-sport is a fascinating case study. Perhaps too much good sense in there for central government to adopt widely. I suspect Sir Humphrey fears slimming down business processes and cutting costs too much. And how would a bottom-up approach fit in with Whitehall’s unchanging and archaic hierarchical structures? Tony

      Like

  2. I thank you for posting this essay but always sad that such matters occur in the first place.

    Nothing succeeds like failure, particularly when the consequences are largely predictable. It seems to me that just about all of our institutions are run similarly – like attracts like. No one competent can be allowed near those who are not.

    I wonder if I could ask your advice as I have been forced to look into certain aspects of my Council – one within the Greater London area?

    At the moment it is an enviable, leafy, comparatively wealthy Thames-side, historic town. Plans have recently been unveiled by our Council to transform it, within the next 20 years, into a densified, high-rise, urban jungle with options to build on Metropolitan Open Land, possibly Green Belt and compulsory purchase orders for homes worth less than a million. Our town, in other words, will be changed into an unrecognisable building site and we have been given no real say in this – just enough to cover legalities. Although all Greater London Boroughs will be affected, only Haringey will be more densely packed and urbanised than us. The GLA is being blamed. In turn, they will blame national government.

    I imagine some of the origins for this imposition – and it is an imposition – will be the 2008 banking disaster leaving us printing money to bail out those institutions deemed too big to fail and leaving us in further national debt.

    I understand the dreadful and offensive stumpy monstrosities – high rise flats at Vauxhall, opposite the Houses of Parliament – so no effective planning protection there – are largely investment properties courtesy of Russian and Chinese money.

    We residents and taxpayers have been left largely in the dark whilst being told that our Council is proudly transparent. In fact, most residents are still largely in the dark as to the reality of what is about to happen and would probably be overwhelmed even if they knew.

    I can’t really think of any powerful friends that we could appeal to – it seems to be about big money. I imagine ‘our Councillors will do very well – in many and various ways – whilst telling us they have no choice and are going everything that they can.

    Sorry if I seem to have hijacked this post but it is about not being able to hold to account those who should be – ‘our’ public servants.

    Any kind words would be most welcome. Thanks.

    Like

    • Hi Zara

      I have a similar problem locally and my MP is doing a good job in speaking at public meeting against the proposals and generally fighting the Cause. While MPs at or near the top of tree may spend much of their lives giving expression to their egos, the ordinary constituency MPs seem, by and large, to be doing a good job. I do not believe that MPs are in the pockets of developers. If any councillors have a vested interest in major developments I would think they (the councillors) are few and far between. Sorry I am not being very helpful but I would raise concerns with your MPs and councillors. Sometimes big development mistakes are made but that doesn’t mean we ought to give up fighting. Tony.

      Liked by 1 person

  3. Fully agree – and the same applies to the NHS.

    Liked by 1 person

  4. I understand that you are now conducting a review into the controversial SWT transformation programme and I hope that my email below will make a valuable contribution (as an IT professional of 30 years experience working in both the private and public sectors).

    I am not a member of any political party; I only seek genuine improvement in public service delivery and efficiency.

    You may or may not be aware of the expensive failure of the controversial joint venture with IBM called Southwest One (from 2007 to 2016) where instead of saving £182m the councils (mainly the County Council) paid out £70m more than was saved.

    Taunton Deane Borough Council (TDBC) were in that failed joint venture with IBM and Penny James was the CEO. West Somerset Council refused to join.

    Both the County Council CEO Alan Jones and the Avon and Somerset Police Chief Constable Colin Port left shortly after the controversial contract was terminated one year early. Only Penny James survived as a Southwest One founder CEO.

    The Southwest One Joint Venture also claimed that IT-based “transformation” would make substantial savings by moving to electronic self-service.

    Those “magic IT” transformation claims for electronic self-service also underpinned the Business Case for the Somerset West and Taunton (SWT) merged Council.

    When banks reduce counter staff or close or merge branches, they do so with excellent electronic services available online and in smartphone apps which are in place BEFORE the staff are lost or branches merged/closed. They also spend a lot of money to ensure that their customers know about the online services, to effect an access channel migration from expensive Branch face-to-face services and phone services, to much less costly electronic self-service by their customers.

    I have logged on to the SWT website and registered as an online service user.

    I discovered that there are very few online transactional services and I struggled to spot any new electronic services that were not already available in the Taunton Deane Borough Council (TDBC) website. I would estimate that barely 10% of transactional services that should be available electronically have been implemented.

    Despite the lack of SWT electronic service provision, you have let go 2x as many staff as you intended WITHOUT any sensible level of electronic services to offset the loss of staff. There appears to have been no access channel migration effort either.

    The posts and staff that who were so expensively made redundant relied upon many services being available electronically BEFOREHAND so that their work would be taken up by the public accessing effective electronic services.

    As an IT professional and someone who campaigned about the failures of Southwest One, I had a number of conversations and supplied email-based concerns with some of the Transformation JMAP members (most of whom were councillors when Southwest One expensively failed so should have learnt the lessons therein). I retain those emails if you wish to see them.

    ————————————————————————————————-

    Unanswered questions to the CEO of the Somerset West
    and Taunton (SWT) Council:

    Q1. Will SWT ask Ignite to amend their globally available “fake news” claims about the new SWT council, transformation and savings having been delivered?

    Q2. How much were Ignite paid in total? Is it possible to robustly negotiate or take legal action to recover some of those costs from Ignite given the failed transformation and Return on Investment outcomes?

    Q3. Will the Transformation Business Case be updated and re-published so that the added costs and extensive delays to the return on investment (ROI) can be recalculated and made public?

    Q4. For the CEO Penny James (who took Taunton Deane Council into the failed Southwest One partnership with IBM), are there any clawback clauses where the performance of her leadership in the Transformation programme, leading to the formation of SWT council, has demonstrably failed to meet the performance criteria set for her role? Without some penalties, the public could see this £343K payoff as “a reward for failure”.

    Q5. Equally, are there any clawback arrangements for the 3 Assistant Directors too?

    Q6. Given that the role of CEO continued in SWT and was NOT a redundant role then why was a redundancy payment made?

    Q7. Why did the CEO and Assistant Directors receive additional awards of money for “Loss of Office” and how is that defined? Were “Loss of Office” payments limited to the CEO and Assistant Directors only?

    Q8. Why did the redundancy programme not follow best HR practice and identify the staff roles in services that were to be retained in SWT and limit redundancy to only those posts identified as redundant in the new target organisation?

    Q9. When will all of the services planned to be electronic for online self-service be implemented by SWT? How many electronic services are currently implemented and how many are left to be implemented?

    Q10. Should councillors on the key Transformation JMAP (Joint Members Advisory Panels) and in the scrutiny/oversight roles have received more Transformation Programme support so that shortcomings in the oversight and scrutiny can be avoided in future?

    Q11. There are anecdotal reports that former CEO Penny James is consulting for Ignite (on the Somerset unitary consultancy work). Is that correct? Does the termination agreement for the former CEO Penny James have any requirement to avoid “revolving doors” and can any enforcement action be taken to prevent “revolving doors” work with former suppliers by the CDO and/or the 3 Assistant Directors?

    Q12. Will termination agreements for senior staff be reviewed and amended following your review.

    Liked by 1 person

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