Category Archives: legal disputes

Post Office’s Horizon IT – an unusual case study?

Posted on 12/01/2015 | 1 comment

By Tony Collins

post office logoIn the House of Commons in December Conservative MP Andrew Bridgen spoke about his constituent Michael Rudkin, a former Post Office subpostmaster.

Rudkin was a magistrate. He also served as the most senior member on the national executive of the National Federation of SubPostmasters. He  was chairman of the Federation’s negotiating committee, responsible for negotiations with Post Office Ltd and Royal Mail Group.

In 2008, after Post Office accounts showed a loss of £44,000 at his local branch office, Rudkin lost his business, his reputation, his position as a magistrate, some property and his good name, and he has been unable to work since.

Bridgen claimed in the House of Commons on 17 December 2014 that a Post Office auditor told Rudkin of the £44,000 loss the day after Rudkin had visited the Fujitsu/Post Office Ltd offices at Bracknell.

Campaign4Change put the whole of Bridgen’s speech to the Post Office. It declined to comment on the specifics but gave a strongly-worded statement (below).

Bridgen’s speech

Like other MPs, including Labour MPs, who spoke at the debate, Bridgen began by paying tribute to Conservative MP James Arbuthnot who has been leading a Parliamentary campaign for justice for more than 150 subpostmasters, some of whom have been jailed, made bankrupt and have had their lives ruined after the Post Office’s Horizon system showed shortfalls on local branch accounts.

Arbuthnot had secured the “adjournment” debate on the Post Office’s mediation scheme that was set up to resolve disputes between subpostmasters and the PO over discrepancies shown on the Horizon system.  Arbuthnot said it was the first time in his 28 years in Parliament he had sought an adjournment debate (a debate that ends with no vote).

“In 28 years in the House, I have never needed to apply for an adjournment debate, but the way in which the Post Office has treated sub-postmasters and members of parliament who have expressed concern about the matter is so worrying, and to my mind shocking, that in my final few months in Parliament it has become necessary for me to apply for an adjournment debate,” said Arbuthnot.

Bridgen said in the debate (the names he mentioned are not included here):

“The issue first came to my attention because of the plight of a constituent, Mr Michael Rudkin. For 15 years, he was a sub-postmaster… He was responsible for negotiations with Post Office Ltd and Royal Mail Group, so he is an experienced sub-postmaster.

“I would like to share with members his experience of the problems with the Horizon system, which demonstrates that significant questions need to be asked of the Post Office, although it is reluctant to answer them.

“Mr Rudkin’s story starts on Tuesday 19 August 2008. In his official capacity as a negotiator on behalf of sub-postmasters, he was invited to a meeting at the Fujitsu/Post Office Ltd offices in Bracknell to discuss problems with the Horizon system.

“If Mr Rudkin is telling the truth, which I have no doubt he is, this sequence of events raises questions about the system, which the Post Office must answer.

“On arrival that morning, my constituent signed the visitors’ book in reception and waited for his chaperone, a Mr R.

“Mr R took him to the second/third floor, and they entered a suite where Mr Rudkin recognised Horizon equipment on the benches.

“There was only one other person in the room – a male of approximately 30 to 35 who was reluctant to engage in conversation with Mr Rudkin or Mr R.

“Mr R asked Mr Rudkin to follow him through a number of pass card-protected security doors to some stairs. They went down to the ground floor and then entered the boiler room [an office in the Fujitsu building].

“Mr Rudkin states that a number of men dressed in casual office wear were standing around the doorway. They became very uncomfortable about Mr Rudkin’s presence and left.

“Having entered the boiler room, Mr Rudkin instantly recognised two Horizon terminals. There were data on both screens, and an operative was sitting in front of one of them, on which the pure feed for the Horizon system came into the building.

“Mr Rudkin asked if what he could see were real-time data available on the system. Mr R. said, ‘Yes. I can actually alter a bureau de change figure to demonstrate that this is live’ – he was going to alter a figure in a sub-postmaster’s account.

“He then laughed and said, ‘I’ll have to put it back. Otherwise, the sub-postmaster’s account will be short tonight.’

“Mr Rudkin expressed deep concern, because he had been told that no one had remote access to a sub-postmaster’s account. At that point, he was politely but speedily taken to reception, and he was told to leave the building.

“Mysteriously, the next day, Wednesday 20 August 2008, a Post Office Ltd auditor—a gentleman Mr Rudkin knew, by the name of P.F. – arrived at Mr Rudkin’s sub-post office. He proceeded to tell Mr Rudkin that his branch had a loss of £44,000.

“Interestingly, Mr Rudkin maintains that the investigator knew the size of the loss before he even entered the premises.

“Mr Rudkin was absolved of all knowledge of the loss by Post Office Ltd, but he was ordered to pay the money back at the rate of £1,000 a month from his salary.

“As we have heard, the sub-postmaster is completely liable under the contract for all losses.

“As Mr Rudkin points out, why would someone steal money from themselves when they know that?

“After Mr Rudkin had paid £13,000 back to Post Office Ltd, the Post Office started proceedings against Mr Rudkin’s wife for false accounting. It also applied for a confiscation order on all his property and had his bank account frozen under the Proceeds of Crime Act 2002.

“Mr Rudkin has since cleared all his debts to Post Office Ltd. In the process, he has lost his business, his reputation, his position as a magistrate, some property and his good name, and he has been unable to work since.

“Second Sight – the team of independent investigators appointed by the Post Office to look into the matter – questioned the Post Office about Mr Rudkin’s allegations and his visit.

” Initially, Post Office Ltd consistently denied the visit had ever taken place – until Mr Rudkin produced an e-mail from Mr R. from the day before the visit, which invited Mr Rudkin to visit and said that Mr R. would meet him in reception, at which point the Post Office did admit that the meeting had taken place.

“Second Sight has repeatedly requested e-mail data from before, during and after Mr Rudkin’s visit, as well as a copy of the visitor’s book, but all those things have been withheld or are, we are told, now missing. That raises serious questions about the Post Office.

“Second Sight told me that it has looked at the contract sub-postmasters are asked to sign and that, in its view, a person would have to be an economic and legal illiterate to be willing to sign it, because it is so slanted in favour of the Post Office.

“As we know, the Horizon system is imposed on sub-postmasters by the Post Office.

“Effectively, the sub-postmasters become the fall guys – they are ultimately liable for all losses – so there is little incentive for the Post Office to ensure that the system or the support for it are robust.

“The way in which Post Office senior management have dealt with our working group of MPs has been extremely high-handed. I share my right hon. friend’s concerns: if Post Office management speak to Cabinet members and senior members of parliament in the way they do, the way they treat their sub-postmasters must be feudal …

“There are many questions to be answered, and I hope that as a result of parliamentary pressure and debates such as this, we will get the Post Office to move to a position where genuine negotiations can take place with aggrieved parties on a level playing field.

“We are some way from that yet, and I honestly think we will need a full clear-out of Post Office management before we get a change of attitude in this important public institution.”

Post Office statement

Questioned by Campaign4Change on the speech in the House of Commons about Rudkin, the Post Office issued this statement:

“There is very selective, misleading and incorrect information being put into the public domain about a number of cases but Post Office cannot and will not breach the privacy of individual applicants by discussing their cases, even though this means it cannot defend itself against unsubstantiated, baseless or malicious allegations.  To do so would lead to us being accused of breaching confidentiality and undermining the mediation process.

“Each and every allegation is being reinvestigated and to date there is no evidence of either system-wide computer faults or malicious remote tampering with Post Office branch transaction data in subpostmasters’ accounts.  Further, it is not possible for Post Office to alter that transaction data.

“Post Office has retrieved the available records for every case and these have been rigorously investigated and made available for independent review. For cases that are many years old it is not always possible to confirm, for example, every event – such as a meeting – referred to in a complaint.  However, Post Office has investigated, as far as it is able, on the information now available, including that provided by the applicants.”

Mediation Scheme – facts and figures

This is a letter written by Sir Anthony Hooper, chair of the Working Group Initial Complaint Review and Mediation Scheme, to Jo Swinson, the Post Office minister – Sir Anthony Hooper letter to PO minister Jo Swinson Dec 2014.

BBC’s The One Show

TV investigative journalist Nick Wallis has covered the Post Office Horizon IT dispute extensively. He has presented reports on the dispute for BBC’s The One Show.

Computer Weekly’s timeline of the problems since 2009.

House of Commons debate on Post Office mediation scheme 17 December 2014`

Second Sight report on Horizon

Justice for Subpostmasters Alliance

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Posted in Fujitsu, Government IT, legal disputes, Post Office IT

Is the Post Office making money from disputed transactions?

Posted on 29/09/2014 | Leave a comment

By Tony Collins

This month the Shields Gazette reported that Kevin Carter and his wife Julie, who is registered disabled, had little choice but to re-mortgage their home after the Post Office’s Horizon system showed a deficit of tens of thousands of pounds.

The Carters and dozens of other former sub-postmasters say that Horizon showed shortfalls that didn’t exist by logging some transactions twice.

Sub-postmasters are not directly employed by the Post Office, and under their contracts, are responsible for deficits at their branches.

More than 150 sub-postmasters say they were prosecuted, or made to repay money, because of the system. Some of them were ruined, made bankrupt, or sent to prison.

Five years on, the Carters say they are still no further forward in their fight to reclaim their cash, and have been left with no option but to wait and see what happens.

Mr Carter told the Shields Gazette earlier this month: “We are still in limbo. The Post Office is adamant there was nothing wrong with the system but how can 150 people be wrong?

“We are hoping to have this sorted soon, and hopefully we can get our money back. But, right now, all we can do is sit and wait.”

The couple were allowed to sell their Post Office in Dickens Avenue, Biddick Hall, South Shields, only after they agreed to pay the Post Office £45,000 from the sale, which the PO claimed the couple owed. They have made further payments to the PO from their own pockets, and deductions from Mrs Carter’s salary.

Mr Carter said: “This is a nightmare for us. We were made to feel like criminals, when we haven’t done anything wrong. We contacted the Post Office and asked for help as we were sure it was down to the computer system. But the losses continued to get bigger and bigger and, in the end, they suspended us pending further inquiries.”

The couple are receiving support from Justice for Sub-postmasters Alliance which is representing sub-postmasters across the country.

PO statement

A spokeswoman for the Post Office said: “We cannot comment on individual cases and while mediation is taking place. We will also not comment on the contents of any confidential documents.”

“After two years of investigation, it remains the case that there is absolutely no evidence of any systemic issues with the computer system which is used by over 78,000 people across our 11,500 branches, and which successfully processes over six million transactions every day.”

Campaign

After a campaign for justice by MPs, led by Hampshire Conservative MP James Arbuthnot, forensic accountants Second Sight have investigated the Horizon system. The company’s interim report said its investigation was hampered by a lack of information from the Post Office. The full version of the report has not been published but Private Eye appears to have a copy.

It quotes Second Sight as saying that PO investigators often “fail to identify the underlying root cause of shortfalls prior to initiating civil recovery action or criminal proceedings”.

PO officials then “seem to have defaulted to seeking evidence that would support a charge of false accounting, rather than carrying out an investigation into the root cause of any suspected problems… investigators seem to have found that recording admissions of false accounting was the key to achieving relatively rapid, and inexpensive, asset recovery.”

The 23-page document also notes poor training of sub-postmasters using Horizon, inadequate record-keeping and shoddy auditing processes.

Suicide?

Surrey postmistress Seema Misra went to prison while pregnant on the strength of disputed Horizon evidence. Lee Castleton from East Yorkshire was told to repay £25,000 even though the Post Office wouldn’t tell him how it had disappeared. Tom Brown from County Durham was pursued for four years, accused of stealing £85,000. After sacking and bankrupting Brown, the Post Office couldn’t provide any evidence against him in court.

Private Eye says there are “dozens more heartbreaking stories behind this scandal, with at least one suicide”.

Comment

The PO has received, cumulatively, large sums from the Carters and other former sub-postmasters.

What has happened to the money while it has been in dispute – and who is earning interest on it? Is the Post Office earning money – and has it been earning money for years – on payments made as a result of the disputed transactions?

The longer the disputes continue the greater the suspicion that the Post Office is letting matters drift because it cannot see a way of resolving them. Meanwhile the interest on the disputed payments mounts. And ruined lives continue in ruins.

Private Eye suggests there might have been “miscarriages on a grand scale”. If so,  what’s the PO doing about it?  Some of the disputes are in mediation. But is this a way to park the most difficult cases indefinitely?

Private Eye says the PO pressured a working group, which was set up to coordinate the mediation process, to ignore Second Sight’s report and not pass it on to the mediation team, but it was overruled on the casting vote of working group chairman Lord Cooper.

Does the PO really want injustices to be righted? Or will it let the most contentious of the disputes drag on?

Computer blunder has left us in limbo

Jailed and bankrupt because of “unfit” Post Office IT?

Are some sub-postmasters being gagged?

Private Eye – more trouble looms over the Horizon

Justice for Subpostmasters Alliance

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Posted in Campaign4Change, Fujitsu, legal disputes, Post Office IT

Has Fujitsu won £700m NHS legal dispute?

Posted on 24/07/2014 | 6 comments

By Tony Collins

The Telegraph reports unconfirmed rumours that Fujitsu has thrown a party at the Savoy to celebrate the successful end of its long-running dispute with the NHS over a failed £896m NPfIT contract.

Government officials are being coy about the settlement which implies that Fujitsu has indeed won its legal dispute with the Department of Health, at a potential cost to taxpayers of hundreds of millions of pounds.

Fujitsu sued the DH for £700m after it was ejected from its NPfIT contract to deliver the Cerner Millennium system to NHS trusts in the south of England.

At one point a former ambassador to Japan was said to have been involved in trying to broker an out-of-court settlement with Fujitsu at UK and global level.

But the final cost of the settlement is much higher than any figure agreed, for the Department of Health paid tens, possibly hundreds of millions of pounds, more than market prices for BT to take over from Fujitsu support for NHS trusts in the south of England. The DH paid BT £546m to take over from Fujitsu which triggered a minor Parliamentary inquiry.

A case that couldn’t go to court?

The FT reported in 2011 that Fujitsu and the Department of Health had been unable to resolve their dispute in arbitration and a court case was “almost inevitable”.

But the FT article did not take account of the fact that major government departments do not take large IT suppliers to an open courtroom. Though there have been many legal disputes between IT suppliers and Whitehall they have only once reached an open courtroom [HP versus National Air Traffic Services] – and the case collapsed hours before a senior civil servant was due to take the witness stand.

Nightmare for taxpayers

Now the Telegraph says:

“Unconfirmed reports circulating in the industry suggest that a long-running dispute over the Japan-based Fujitsu’s claim against the NHS for the cancellation of an £896 million contract has finally been settled – in favour of Fujitsu.”

It adds:

“Both Fujitsu and the Cabinet Office, which took over negotiations on the contract from the Department of Health, are refusing to comment. The case went to arbitration after the two sides failed to reach agreement on Fujitsu’s claim for £700 million compensation. Such a pay-out would be the biggest in the 60-year history of the NHS – and a nightmare for taxpayers.”

The government’s legal costs alone were £31.45m by the end of 2012 in the Fujitsu case.

Francis Maude, Cabinet Office minister, is likely to be aware that his officials will face Parliamentary criticisms for keeping quiet about the settlement. The Cabinet Office is supposed to be the home of open government.

Earlier this week the National Audit Office reported that Capgemini and Fujitsu are due to collect a combined profit of about £1.2bn from the “Aspire” outsourcing contract with HM Revenue and Customs.

Richard Bacon, a Conservative member of the Public Accounts Committee is quoted in the Telegraph as saying the settlement with Fujitsu has implications across the public sector. “It should be plain to anyone that we are witnessing systemic failure in the government’s ability to contract.”

What went wrong?

The Department of Health and Fujitsu signed a deal in January 2004 in good faith, but before either side had a clear idea of how difficult it would be to install arguably over-specified systems in hospitals where staff had little time to meet the demands of new technology.

Both sides later tried to renegotiate the contract but talks failed.

In 2008 Fujitsu Services withdrew from the talks because the terms set down by the health service were unaffordable, a director disclosed to MPs.

Fujitsu’s withdrawal prompted the Department of Health to terminate the company’s contract under the NHS’s National Programme for IT (NPfIT).

Fujitsu’s direct losses on the contract at that time – which was in part for the supply and installation of the Cerner “Millennium” system – were understood to be about £340m.

At a hearing of the Public Accounts Committee into the NPfIT,  Peter Hutchinson, Fujitsu’s then group director for UK public services, said that his company had been willing to continue with its original NPfIT contract – even when talks over the contract “re-set” had failed.

“We withdrew from the re-set negotiations. We were still perfectly willing and able to deliver to the original contract,” he said.

Asked by committee MP Richard Bacon why Fujitsu had withdrawn Hutchinson said, “We had tried for a very long period of time to re-set the contract to match what everybody agreed was what the NHS really needed in terms of the contractual format.

“In the end the terms the NHS were willing to agree to we could not have afforded. Whilst we have been very committed to this programme and have put a lot of our time, energy and money behind it we have other stakeholders we have to worry about including our shareholders, our pension funds, our pensioners and the staff who work in the company. There was a limit beyond which we could not go.”

The termination of Fujitsu’s contract left the NHS with a “gaping hole,” said the then chairman of the Public Accounts Committee Edward Leigh.

Thank you to campaigner Dave Orr for drawing my attention to the Telegraph article.

Comment 

In an era on open government it is probably not right for officials and ministers at the Cabinet Office and the Department of Heath to be allowed to secretly plunge their hands into public coffers to pay Fujitsu for a massive failure that officialdom is too embarrassed to talk about.

Why did the DH in 2008 end Fujitsu’s contract rather than renegotiate its own unrealistic gold-plated contract specifications? Should those who ended the contract be held accountable today for the settlement?

The answer is nobody is accountable in part because the terms of the dispute aren’t known. Nobody knows each side’s arguments. Nobody even knows for certain who has won and who has lost. Possibly the government has paid out hundreds of millions of pounds to Fujitsu on the quiet, for no benefit to taxpayers.

Is this in the spirit of government of the people, by the people, for the people?

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Posted in BT, BT Health, e-health, excessive secrecy, Fujitsu, Government IT, health records, IT-related failures, legal disputes, NHS, npfit, supplier relationships

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Stop filming! That’s the IBM exit strategy we’re discussing

Posted on 10/07/2014 | 5 comments

By Tony Collins

Dave Orr, a former IT employee at Somerset County Council, is now a local taxpayer trying to see if public statements made aboutthe authority’s joint venture with IBM match up to the facts.

Some councillors don’t seem to welcome his scrutiny, or his campaigning which can attract the attention of the local press.

Somerset claims it is saving millions of pounds through the Southwest One joint venture – which is majority owned by IBM. But Orr has learned through FOI requests and council reports that once extra costs are taken into account the council has had a net loss of £53m on the contract. He points to:

– £52m of SAP and “transformation” costs the council paid upfront to IBM

– £4m of council bid costs

–  £2m for a written-off loan to Avon and Somerset Police for SAP

–  £3m interest on a £30m loan over 10 years

–  £3m in contract management costs

–  £5m in legal costs over a dispute with IBM

This totals £69m. Procurement savings to December 2013 were £16m – which gives a net loss of £53m. The contract is supposed to save £150m over its 10-year life. The deal was signed in 2007 by IBM, Somerset County Council, Taunton Deane Borough Council and Avon and Somerset Police. The authorities are considering what they will do at the end of the contract.

Stop filming

At a meeting of the council’s audit committee last month, the chairman of the audit committee asked Orr to stop filming. He was using a Panasonic compact camera. A vote was proposed and seconded that the meeting not be recorded.

Five councillors voted in favour and 3 Lib-dems abstained. Those supporting the motion to stop filming included Tory, Labour and UKIP members.  Somerset is Conservative controlled.

Orr says the discussion shortly before the vote was taken was on Southwest One and the council’s exit strategy from the contract.  Councillors also agreed that they may at a later date go into a secret “Part 2” session to discuss a “lessons learnt” report about the collaboration with Southwest One.

A blow to local democracy?  

The government has issued guidance that states explicitly that councils should allow the public to film council meetings. Under the heading “Lights, camera, democracy in action” an announcement by local government secretary Eric Pickles  says on the gov.uk website:

“I want to stand up for the rights of journalists and taxpayers to scrutinise and challenge decisions of the state. Data protection rules or health and safety should not be used to suppress reporting or a healthy dose of criticism.

“Modern technology has created a new cadre of bloggers and hyper-local journalists, and councils should open their digital doors and not cling to analogue interpretations of council rules.

“Councillors shouldn’t be shy about the public seeing the good work they do in championing local communities and local interests.”

Before the meeting of the audit committee Orr had obtained informal consent from the council to filming.

Comment

Open government is not a party political issue – none of the parties seem to want it. Indeed councillors at Somerset seem at their most comfortable  when voting for secrecy.  Is this because it gives them a feeling of privilege – having access to information the ordinary citizens don’t have?

In central government one of the first things the civil service does after a general election is give new ministers access to state secrets. It distances the ministers from ordinary people. Ministers feel privileged – “one of us”.  Is this the main unspoken reason some Somerset councillors  love to have secret meetings?

Councillors may feel weighed down by Orr’s questions and campaigning. But his questions are arguably more important than those raised internally by deferential party politicians who don’t ask the most difficult questions.

If anything they should be asking themselves whether they should ask the questions he is asking.

It’s too easy on big outsourcing contracts for supplier and client to put a gloss on the relationship. It’s easier talking about unsubstantiated savings than explaining why the contract isn’t making the savings originally intended. And it’s even easier when you shun scrutiny from members of the public.

5 Comments

Posted in Campaign4Change, excessive secrecy, IBM, IT-related failures, legal disputes, local democracy, local government, managing change, managing outsourced services, SAP, shared services

Tagged ,

Should Liverpool Council smile now it’s ending BT joint venture?

Posted on 14/03/2014 | 3 comments

By Tony Collins

Liverpool Direct Ltd describes itself as the largest public/private partnership of its kind in the UK. BT and Liverpool City Council formed the joint venture in 2001. At one point it employed more than 1,300 people.

Last year the joint venture had a visit from  Prince Edward who met its apprentices and trainees.

Now Liverpool City Council is taking full ownership of the joint venture. BT is handing back its 60% share in Liverpool Direct to the council. But the way the dissolution is being handled is like a theatre compere smiling exaggeratedly at the audience while he pushes off stage a performer who has overstayed his welcome.

Indeed the council’s report on why BT is being pushed out has an oversized grin on every page. Too much self-conscious praise for BT, perhaps. Which may show how political outsourcing deals have become.

This is the first sentence of the council’s report on why the joint venture with BT is ending:

“BT and Liverpool City Council have enjoyed a long and successful partnership through the joint venture company Liverpool Direct Limited.”

And then:

“The ethos of the Partnership was to place the ‘customer at the heart’ of the organisation through the development of innovative new ways of working building on BT’s global brand and reputation.”

There’s much more praise for BT. From the council’s report:

Groundbreaking achievements have included:

  • Establishment of the first ever 24x7x365 local government contact centre including a call centre which is top quartile
  • The only ‘Benefits Plus’ service in the UK.
  • A comprehensive and integrated network of One Stop Shops serving 350,000 visitors each year.
  • First class ICT infrastructure.
  • Creation of 300 new jobs supporting 3nd party business won by LDL.

But there’s a give-away line in one of the sets of bullet points on some of the benefits of the partnership. In 2011 came a refresh of the 10 year-old deal. The benefits of the refresh:

  • Further price reduction of £22.5m.
  • Increased share of third party business. Potential investment of £17m.
  • Continued sponsorship of ( e.g. BT Convention Centre 2012-2017)
  • The ‘write off’ by both parties of potential legal claims against Liverpool City Council estimated by BT of approximately £56m.
  • Increased ownership level from 20% to 40% in favour of the council.

Spot the anomaly – a write-of legal claims against each other of £56m? So the partnership wasn’t quite so wonderful. But that was 2011. Why is the council now pushing out BT from the Liverpool Direct joint venture – what the council calls officially “The Way Forward”?

Amid all the praise for BT it is not easy to see at first glance why Liverpool Direct is being taken into the council’s full ownership. It turns out that austerity is the reason. The council needs to make more cuts than BT is willing to make, and it recognises that BT needs to make a profit. Which raises the question of whether the council was willing to pay BT a decent profit during bountiful times until cuts began to bite.

From Liverpool Council’s report:

“In the early Autumn of 2013, both parties were in active discussions in an effort to resolve the serious financial savings Liverpool City Council needed to make between 2014 and 2017.

“As a result of these discussions and negotiations, BT agreed a further price reduction of £5m contribution to the budget process for 2014/15 together with a further £5m for the following financial year.

“Whilst the Council really appreciated BT’s continued commitment to the city, the current budget deficit would require a far more substantive financial contribution from the Contract both for 2014/15 and for future years.

“Unfortunately BT feels unable to commit to any further price reduction within the Contract as they need to sustain their own financial position. Moreover, the City Council is now well placed, as a result of the long collaboration with BT and the learning gained from the Partnership, to continue to drive forward business transformation and run the services with consequent cost savings to the city.”

The result is that negotiations will continue with a view to transferring BT’s 60% share in Liverpool Direct to the council by 31 March 2014; and the good news doesn’t stop there.

“The City Council and BT both believe that the transfer will enable additional savings to flow to the council including all income from third party contracts.

“BT remains committed to serving residents and businesses in Liverpool and its long and successful relationship with Liverpool City Council will carry on with BT continuing to provide a range of services to the council. During negotiations in late 2013 BT announced it plans to recruit a further 240 staff in Liverpool to support the growth of high-speed broadband services and has recently committed to being a major sponsor of the 2014 International Festival of Business.”

A dark side?

Behind the smiles Liverpool City Council has, it seems, an unusually secretive side.   Richard Kemp CBE has been a member of Liverpool City Council for 30 years having held major portfolios in both control and opposition. He is leader of the Liberal Democrats on the Council. He was Vice Chair of the Local Government Association of England & Wales for more than 6 years.

He says on his blog that has “taken the very unusual step of asking for two independent enquiries into activities of Liverpool City Council”. He adds: “The cases are related and refer to the tangled web of relationships which surround the Liverpool/Liverpool Direct Ltd/Lancashire/One Call Ltd/BT activities.

“In the first instance I have asked that the Lancashire Police extend their Lancashire investigation into Liverpool. In the second I have asked the Information Commissioner to look at the appalling record of the council in responding to freedom of information requests about any matter relating to Liverpool Direct Ltd.”

He says the council has an excellent record of responding to FOI requests – except when it comes to LDL. “When I raised this with the Mayor at the Mayoral Select Committee I didn’t get any answers …”

He also says:

“I find it amazing that I have been told that no contract exists between Liverpool, Lancashire and BT only to find that there is a legal agreement! As a layman I am unclear as to what the difference is between these two positions.

“We now need external scrutiny and investigation to examine these tangled relationships and work out not only who agreed what and when but also whether Liverpool and Lancashire tax payers are getting value for money for this deal.

“In a system where there is no internal scrutiny, Liverpool Labour members have to ask permission to raise issues in the scrutiny process, I feel that I have no alternative but to ask for help in looking at these affairs outside the council.

“In my career I have not only been a councillor for a long time but also asked to work in other councils which were in severe difficulties with their governance structures. Liverpool feels as bad as any council that I have worked in. There is no clear definition of Member and Officer roles.

“ No effective challenges exist within the system and a centralised almost Stalinist decision-making process pertains … I hope that these external investigations will take place and then that they force change in this secretive and opaque council.”

Infighting

A local paper, the Liverpool Echo, has also been investigating the council and its deal with BT.

It says the deal “has been dogged by accusations of infighting between BT and the Council, after top QCs were brought in to settle disputes over how much work would be awarded to LDL under the terms of its contract”.

An internal council report obtained by the Echo before agreement for the contract refresh in 2011 “showed the it took place amid the threat of costly legal claims by BT if city bosses pulled the plug and did not stay in partnership with them until 2017”.

Private/public deals too secretive – MPs today

A report by the Public Accounts Committee published today Private Contractors and Public Spending says private and public partnerships are too secretive – and they lie largely outside the FOI Act. Indeed a BBC File on 4 investigation into the growing influence of accountancy companies such as Capita in public life reached similar conclusions. File on 4 suggested that even if the contract between Service Birmingham, Capita and Birmingham City Council were published in full it could prove impenetrably complicated.

Margaret Hodge MP, chairman of the Public Accounts Commitee, said today:

 “There is a lack of transparency and openness around Government’s contracts with private providers, with ‘commercial confidentiality’ frequently invoked as an excuse to withhold information.

“It is vital that Parliament and the public are able to follow the taxpayers’ pound to ensure value for money. So, today we are calling for three basic transparency measures:

– the extension of Freedom of Information to public contracts with private providers;

– access rights for the National Audit Office; and

– a requirement for contractors to open their books up to scrutiny by officials.

Comment:

It’s remarkable how council outsourcing deals are becoming more cabalistic despite many initiatives toward more open government.

It’s a pity that things have reached a point where Richard Kemp, a Liverpool councillor of 30 years, ends up reporting his authority to the police and the Information Commissioner.

Meanwhile Liverpool City Council, which is one of the most self-image-protecting authorities in the UK, ends a long-standing joint venture with BT by giving the supplier nothing but praise – in public.

Democracy is a form of government in which all eligible citizens participate equally, either directly or indirectly through elected representatives. Clearly that’s not happening properly in Liverpool – or  some other parts of local government.

Reasons I have asked police and Information Commissioner to come in 

BT ad Capita  –  outsourcing joint ventures under pressure in Liverpool and Birmingham 

Private contractors and public spending – Public Accounts Committee report published today

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Posted in BT, Capita, excessive secrecy, FOI, Freedom of Information, legal disputes, local democracy, local government, managing outsourced services, outsourcing, public sector, public services, public-private partnerships, reducing cost strategically

Hospital group wins $106m settlement in Cerner dispute

Posted on 19/02/2014 | 1 comment

By Tony Collins

 A US health organisation Trinity Medical Centre has won a $106m settlement in  a legal dispute with Cerner, which is one the main suppliers of patient record systems to NHS trusts in London and the south.

Under the NPfIT BT has installed Cerner at trusts that include the Royal Free, London, Barnet and Chase Farm Hospitals NHS Trust, Weston Area Health NHS Trust, Barts Health NHS Trust, North Bristol NHS Trust and more recently at Croydon Health Services NHS Trust.

The Wall St Journal says a clinical patient accounting program Trinity bought from Cerner in 2008 was defective and didn’t deliver the promised benefits, which Cerner disputed. Trinity sought about $240m in damages; Cerner estimated $4m.

The companies agreed to submit the dispute to arbitration which began in October 2013.

Cerner said it “strongly disagrees” with the award and believes the claim was based on unique circumstances. It called the award the only material judgment against Cerner in its 34-year history.

US lawyer Michael Dagley says his firm won a $106m settlement for North Dakota-based Trinity Medical Centre in an arbitration case against Cerner.

The firm says that Trinity alleged in 2012 that patient accounting software and other services purchased from Cerner were defective, producing thousands of billing errors.

“We think it’s tremendously significant because it represents the first major victory that we’re aware of by a health care provider against a software vendor,” Dagley said in a statement.

“Providers are under pressure to automate and vendors are under pressure to offer integrated products. Providers want one vendor for all their IT needs, so the vendors have this incentive to deliver software to the market as quickly as possible, and that can lead to products being introduced that are immature and defective, which in health care, can cause tremendous damage.”

Last year Cerner said it believed the chance of a material loss related to the matter was remote and it had 147 hospitals and 735 clinics using the patient accounting program.

Despite the settlement Cerner’s share price has held up well.

Trinity Medical Centre is a non-profit organisation with about 2,700 employees.

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Posted in BT, BT Health, Campaign4Change, Cerner, e-health, health, health records, IT projects, legal disputes, NHS, npfit, operational issues

Somerset Council publishes “lessons learnt” from IBM contract

Posted on 18/02/2014 | 7 comments

By Tony Collins

It’s rare for any council to publish the lessons learned from its outsourcing/joint venture contract, but Somerset County Council has set an example.

The council has produced its report to “inform future commissioning”. The council held a workshop to help identify the right lessons.

Written by Kevin Nacey, the council’s Director of Finance and Performance, and published by the Audit Committee, the document is diplomatically worded because the South West One joint venture contract with IBM continues; it was renegotiated in 2013 when the council took back some services and about 100 staff that had been seconded to South West One.

IBM is the majority shareholder in the joint venture company, and is its main funder. The minority shareholders comprise the county council, Taunton Deane Borough Council and Avon and Somerset Police. The joint venture company still provides ICT, finance and human resources/payroll.

Dave Orr, a former council IT employee and campaigner for openness, who spotted Nacey’s report, says it misses some important lessons, which are in Orr’s From Hubris to High Court (almost) – the story of Southwest One.

Lessons

From Somerset County Council’s Audit Committee report:

Contract too long and complicated

“One of the most significant lessons learnt is not to make contracts overly complicated. Both the provider and the Council would agree that the contract is incredibly complicated. A contract with over 3,000 pages was drawn up back in 2007 which was considered necessary at the time given the range of services and the partnership and contractual arrangements created.”

Expectations not met

“The partnership between the provider and the three clients has at times been adversarial and at times worked well. What has become clear over time is that any such partnership depends upon having similar incentives and an understanding of each partner’s requirements.

“Requirements change and the nature of local government changed considerably as a result of the national austerity programme. The well-documented financial difficulties faced by the provider early into the contract life also affected its ability to meet client expectations. The net effect is that at times the provider and partner aims in service delivery do not always match and discord and dissatisfaction can occur.”

Client team to monitor supplier “too small”

“The Client function monitoring a major contract needs to be adequately resourced. At the outset the size of the client unit was deemed commensurate with the tasks ahead, such as monitoring a range of performance measures and reporting on such to various management and Member forums.

“Liaison between partners, approving service development plans and approval of payments under the contract were other significant roles performed by the client unit. However, as performance issues became evident and legal and other contractual disputes escalated, the team had to cope with increasing workloads and increasing pressure from service managers and Council Members to address these issues.

“This is a difficult balancing act. You do not want to assemble a large client function that in part duplicates the management of the services being provided nor overstaff to the extent that there is insufficient work if contract performance is such that no issues are created.

“With hindsight, the initial team was too small to manage the contract when SAP and other performance issues were not resolved quickly enough. Sizing the function is tricky but we do now have an extremely knowledgeable and experienced client team.”

Some contract clauses “too onerous”

“Performance indicators need to be meaningful rather than simply what can be measured. Agreement between the provider and the SCC client of all the appropriate performance measures was a long and difficult exercise at the beginning of the contract. Early on in the first year of the contract, there were a large number of meetings held to agree how to record performance and what steps would be necessary should performance slip below targets.

“Internal audit advice was taken (and has been at least twice since under further reviews) on the quality and value of the performance indicator regime. It is regrettable and again with hindsight a learning point that too much attention was paid to these contractual mechanisms rather than ensuring the relationship between provider and SCC was positive. Perhaps the regime was too onerous for both sides to administer.”

Too ambitious

“Contract periods need to be different for different services as the pace of change is different. The range of services provided under the initial few years of the contract were quite extensive. On another related point the provider also had to manage different services for different clients.

“This level of complexity was perhaps too ambitious for all parties. Although there are many successful parts to the contract, it is inevitable that most will remember those that did not work so well.

“The contract period of 10 years is a long time for 9 different services to change at the same pace. Of course, service development plans were agreed for each service to attempt to keep pace with service needs as they changed. The secondment model introduced as part of the contract arrangements had been used elsewhere in the country before this contract used it.

“Nevertheless, it was the first time that 3 separate organisations had seconded staff into one provider. In many ways the model worked as staff felt both loyalty to their “home” employer, keeping the public service ethos we all felt to be important, and to Southwest One as they merged staff into a centre of excellence model.”

Hampered by terms of staff contracts

“The disadvantage was that Southwest One was hampered by the terms and conditions staff kept as they tried to find savings for their business model and to provide savings to the Council in recent years given the changing financial conditions we now operate under.

“Another aspect of this contract in terms of complexity is the nature of the partnering arrangement. It is not easy for all partners to have exactly the same view or stance on an issue. Southwest One had to manage competing priorities from its clients and the partners also had varying opinions on the level of performance provided.”

In summary

“This was a very ambitious venture. The service provided in some cases got off to an unfortunate start with the issues generated by SAP problems and relationships were strained and attracted much inside and outside attention.

“All parties have been working very hard to keep good relationships and to fix service issues as they arise. The sheer size and complexity of this contract has proven difficult to manage and future commissioning decisions will bear this in mind.

“Over the years officers running services that receive support from Southwest One have been surveyed regularly on how they feel the contract has been progressing. Despite all of the issues and lessons learnt outlined in this report, it is worth pointing out that many of the customer satisfaction and performance levels under the contract have been met by Southwest One.”

Comment

Well done to Somerset County Council’s Audit Committee and the Council’s auditors Grant Thornton for asking for the report. The South West One contract has been a costly embarrassment for IBM and the council. It has also had mixed results for Taunton Deane and the local police though officials in these two organisations seem locked into a “good news” culture and cannot admit it.

Perhaps the best thing to emerge from the IBM-led joint venture is this “lessons learnt” report. Without it, what would be the point of the millions lost and the damage to council services?

From contracts that don’t work out as expected, councils and central government departments rarely produce a “lessons” report , because nobody requires them to. Why should they bother, especially when it may be hard to get an internal consensus on what the lessons are, and especially when a report may mean admitting that mistakes were made when the contract was drawn up and signed.

Public sector organisations will sometimes do anything to avoid admitting they’ve made mistakes. Somerset County Council and its Audit Committee have shown they are different. Maybe the rest of the public sector will start to follow their example.

Dave Orr’s well-informed analysis of the lessons from Southwest One.

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Posted in Campaign4Change, change management, IBM, Institute for Government, IT-related failures, legal disputes, local government, SAP, shared services, supplier relationships

Top 5 posts on this site in last 12 months

Posted on 02/01/2014 | 1 comment

Below are the top 5 most viewed posts of 2013.  Of other posts the most viewed includes “What exactly is HMRC paying Capgemini billions for?” and “Somerset County Council settles IBM dispute – who wins?“.

1) Big IT suppliers and their Whitehall “hostages”

Mark Thompson is a senior lecturer in information systems at Cambridge Judge Business School, ICT futures advisor to the Cabinet Office and strategy director at consultancy Methods.

Last month he said in a Guardian comment that central government departments are “increasingly being held hostage by a handful of huge, often overseas, suppliers of customised all-or-nothing IT systems”.

Some senior officials are happy to be held captive.

“Unfortunately, hostage and hostage taker have become closely aligned in Stockholm-syndrome fashion.

“Many people in the public sector now design, procure, manage and evaluate these IT systems and ignore the exploitative nature of the relationship,” said Thompson.

The Stockholm syndrome is a psychological phenomenon in which hostages bond with their captors, sometimes to the point of defending them.

This month the Foreign and Commonwealth Office issued  a pre-tender notice for Oracle ERP systems. Worth between £250m and £750m, the framework will be open to all central government departments, arms length bodies and agencies and will replace the current “Prism” contract with Capgemini.

It’s an old-style centralised framework that, says Chris Chant, former Executive Director at the Cabinet Office who was its head of G-Cloud, will have Oracle popping champagne corks.

2) Natwest/RBS – what went wrong?

Outsourcing to India and losing IBM mainframe skills in the process? The failure of CA-7 batch scheduling software which had a knock-on effect on multiple feeder systems?

As RBS continues to try and clear the backlog from last week’s crash during a software upgrade, many in the IT industry are asking how it could have happened.

3) Another Universal Credit leader stands down

Universal Credit’s Programme Director, Hilary Reynolds, has stood down after only four months in post. The Department for Work and Pensions says she has been replaced by the interim head of Universal Credit David Pitchford.

Last month the DWP said Pitchford was temporarily leading Universal Credit following the death of Philip Langsdale at Christmas. In November 2012 the DWP confirmed that the then Programme Director for UC, Malcolm Whitehouse, was stepping down – to be replaced by Hilary Reynolds. Steve Dover,  the DWP’s Corporate Director, Universal Credit Programme Business, has also been replaced.

4) The “best implementation of Cerner Millennium yet”?

Edward Donald, the chief executive of Reading-based Royal Berkshire NHS Foundation Trust, is reported in the trust’s latest published board papers as saying that a Cerner go-live has been relatively successful.

“The Chief Executive emphasised that, despite these challenges, the ‘go-live’ at the Trust had been more successful than in other Cerner Millennium sites.”

A similar, stronger message appeared was in a separate board paper which was released under FOI.  Royal Berkshire’s EPR [electronic patient record] Executive Governance Committee minutes said:

“… the Committee noted that the Trust’s launch had been considered to be the best implementation of Cerner Millennium yet and that despite staff misgivings, the project was progressing well. This positive message should also be disseminated…”

Royal Berkshire went live in June 2012 with an implementation of Cerner outside the NPfIT.  In mid-2009, the trust signed with University of Pittsburgh Medical Centre to deliver Millennium.

Not everything has gone well – which raises questions, if this was the best Cerner implementation yet,  of what others were like.

5) Universal Credit – the ace up Duncan Smith’s sleeve?

Some people, including those in the know, suspect  Universal Credit will be a failed IT-based project, among them Francis Maude. As Cabinet Office minister Maude is ultimately responsible for the Major Projects Authority which has the job, among other things, of averting major project failures.

But Iain Duncan Smith, the DWP secretary of state, has an ace up his sleeve: the initial go-live of Universal Credit is so limited in scope that claims could be managed by hand, at least in part.

The DWP’s FAQs suggest that Universal Credit will handle, in its first phase due to start in October 2013, only new claims  – and only those from the unemployed.  Under such a light load the system is unlikely to fail, as any particularly complicated claims could managed clerically.

 

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Posted in Accenture, Agile, BT, Campaign4Change, Capgemini, Cerner, Cloud, Cloud Computing, CSC, DWP, excessive secrecy, FOI, Freedom of Information, G-Cloud, Government IT, health records, HP, IBM, IT projects, IT-related failures, legal disputes, local democracy, local government, LPfIT, Major Projects Authority, NHS, npfit, outsourcing, public-private partnerships, Real-Time Information, SAP, Universal Credit

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Are Whitehall IT business cases largely fictional?

Posted on 09/10/2013 | Leave a comment

By Tony Collins

Today’s report on the e-Borders programme by John Vine, the Chief Inspector of Borders and Immigration, is a reminder that central government business cases for major IT-based projects can be largely fictional.

Says the Vine report:

“The failure to identify these risks in the 2007 business plan meant that the original data collection targets, set out in the e-Borders delivery plan, were unrealistic and were always likely to be missed.”

It adds:

“The e-Borders programme business case indicated that e-Borders would allow foreign national passengers to be counted in and counted out of the UK, providing more reliable data for the purposes of migration and population statistics, and in planning the provision of public services. However, we found that the data set collected by e-Borders was not extensive enough for these purposes.”

And:

“Management information shows that between January and September 2012, 2,200 arrests took place as a direct result of the identification of wanted persons. This was less than the original estimate provided in the 2007 business case, which had anticipated 8,200 arrests per year based on the Semaphore pilot.”

One Whitehall insider said that experts are employed to write business cases to a template.  But do any of the promises in the business cases have to be fulfilled? It seems not.  Do business cases have to be realistic? The history of IT-based projects and programmes in central government shows that they don’t have to be.  

Business cases make promises on targets, any savings and costs.  When the targets in the business prove unachievable a new business case is written, and when the revised targets also prove unachievable another is written and so forth.

By the time assumptions in the business case have been properly tested the writers of the business cases are likely to have moved to other departments. Nobody is ever held responsible for writing a business case that proves to have been fictional. And why should they be? The writers of the business cases are in no way responsible for delivering the results.

The National Programme for IT in the NHS – NPfIT –had so many revised business cases nobody counted them.  Perhaps officials at the Department of Health knew they were largely fictional or, to put it more politely, aspirational. But the Treasury requires tick-box business cases to be written to justify money allocated to a project. Is there any point in a business case that’s not realistic? Perhaps. It allows money to be spent on a project that, based on realistic assumptions, would probably not be approved.

Below are the results of the e-Borders business case of 2007. Most of the promises haven’t been fulfilled.

The e-Borders system was based on Project Semaphore which was delivered by IBM in 2004 and it’s clear from the Vine report that the system  has been a success. Project Semaphore is still used because its replacement, which was commissioned in 2007, has been a standard government IT-based disaster with suppliers claiming that government kept changing its mind and the requirements, and the government saying milestones were not met.  In July 2010 the e-borders contract with “Trusted Borders” was terminated.

Vine’s report today,  Exporting the border’? An inspection of e-Borders October 2012 – March 2013, has a table (figure 18) that shows how much the Border Force has been able to meet the promises in the 2007 business case for the e-borders programme:  

1. Improved security by supporting the security and intelligence agencies to track and analyse the activities of terrorists and other national security targets across the border. Delivered? Partially.

2. Increased ability to identify and arrest those of interest to the police. Delivered? Yes.

3. Improved effectiveness and efficiency of border control activity by providing a risk assessment of passengers, facilitating expedited processing of passengers at the border and providing a platform for automated clearance services. Delivered? No.

4. Benefits will accrue from process cost savings as a result of the phasing
out of landing cards and the ability to access electronic movement
records when determining applications for extensions of stay. Delivered? No.

5. Enable the identification of those involved in excise duty avoidance and
impact on the market penetration of smuggled goods. Delivered? Partially.

6. Enable HMRC and DWP to establish the length of time spent in the
UK by an individual permitting easy identification of benefit claimants
living outside the UK and those falsely claiming non domicile status for
income tax purposes. Delivered? No.

7. Benefits to ports and carriers such as:
• reductions in removal and detention costs of those refused entry
(subject to implementation of an authority to carry scheme);
• more effective use of detention space at ports, provided free of
rent to control agencies; and
• remove requirement to procure and administer landing cards.

Delivered? No.

8. The ability to count all foreign national passengers into and out of the
UK enabling the provision of accurate statistical data to support the
provision of services. Delivered? No.

**

The Home Office is now writing a further business case for a new e-Borders programme, and will appoint a new IT supplier. Are its business case  authors expecting their work to be published under fiction or non-fiction? History, it seems, will provide the answer.

[The Home Office said its e-Borders technology was the most advanced in Europe – which says much for the 2004 IBM Semaphore system.]

John Vine’s report.

JohnVine “surprised” by findings

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Posted in Accenture, Campaign4Change, Capgemini, change management, Government IT, IBM, IT-related failures, legal disputes, npfit, project management

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Is this a reason some council and NHS scandals stay hidden for years?

Posted on 19/09/2013 | 5 comments

By Tony Collins

Six years into Southwest One’s joint venture between IBM and three public authorities, the outsourced service is not a big success.  

Somerset County Council, one of the joint venture’s partners, has been in dispute with IBM, the major shareholder in Southwest One. It cost the county council £5.9m to settle, including £800,000 in costs when bringing back staff who had been outsourced.

The joint venture’s SAP-based “transformation” led to complaints of poor quality of service by some of Somerset’s finance users; the venture has consistently made losses and on the matter of savings, Somerset Cabinet member for resources, David Huxtable, said there have been some but added:

“It was a very complex contract and lots of the savings were predicated on an ever-increasing amount of money being put into public services and we know in the last four years that has gone into reverse.”

Now IBM has sold its low-margin customer care outsourcing unit which could affect the future of Southwest One.

Yet a smaller partner in Southwest One, Taunton Deane Borough Council, describes the relationship as a “success”. Reports to Taunton Deane’s councillors on Southwest One are remarkably positive.

Dave Orr an IT specialist who used to be work for Somerset County Council and has kept a close eye on Southwest One since it was formed in 2007 has drawn my attention to Taunton’s latest reports on the joint venture. When read quickly Taunton’s reports are upbeat, almost breathless with praise for the joint venture.

Below are excerpts from two reports that have been written for today’s meeting of Taunton Deane’s Corporate Scrutiny Committee.  The first is a “Procurement Transformation Update”, report to the council by Southwest One’s Chief Procurement Officer.

There are no hints of any difficulties on the contract except a comment that cutting spending will make it harder to achieve procurement savings. From Southwest One’s report to Taunton:

“Executive Summary

“As at 31/07/13, in excess of £1.8m [report’s emphasis] savings have been delivered to the Council through signed-off procurement-related initiatives brought about by Southwest One’s Strategic Procurement Service. This is up from £1.59m when last reported in January 2013.

“A further £1.364m of savings are scheduled to be delivered from these signed-off initiatives during the life of the current Southwest One contract, which expires in 2017.

“Multiple projects continue to be progressed by Southwest One Strategic Procurement Service which are expected to significantly add to the pipeline of savings. These Include initiatives for a new pool & spa at Blackbrook; Waste; Insurance; various small scale initiatives within the DLO/HPS areas .”

A second report for Taunton’s Corporate Scrutiny Committee “SouthwestOne Partnership Update report” is written jointly by a team at Taunton council and the CEO of Southwest One. Again it’s upbeat and summarises Southwest One’s performance over the last six months.

“Service delivery for TDBC, viewed in the round, is broadly on track. The majority of services perform well or extremely well (eg Customer Services). We do have concerns in some areas and we are working closely with the services in question to remedy the issues. “

The report says that the shared service model in conjunction with larger authorities provides Taunton with “much needed resilience” (report’s underlining) in service delivery, although “this has been impacted to a certain extent by changes made recently to the contract by the other partners”.

Additionally, “our secondee staff to SWO benefit from ‘assured employment’, which was offered by IBM”.

A survey of staff in June 2013 “saw marked improvements in staff morale and communication”.

Sickness absence for the financial year to the end of March 2013 was slightly down to about 9 days per full-time employee though up a little more recently.

Appendices – now for the problems

It’s only when councillors come to the report’s appendices that they will see some detail of the problems. But how many councillors will scrutinise a report’s appendices? From the Taunton report’s appendices:

“There are service and capacity issues. The helpdesk move caused significant problems, leading to an increased number of issues being raised with the Client Team from TDBC [Taunton Deane Borough Council] staff. We are closely monitoring the plan SWO [Southwest One] have put in place to fix these issues.

“Project delivery capacity and project scheduling continues to cause concern, with improved governance within TDBC highlighting this problem more acutely. Our issue tracker is currently tracking 11 escalated issues with SWOne, 6 of them with a Red RAG status.

“ SRM (Supplier Relationship Management) performance in SAP continues to be well below the required level despite the amount of focus it is receiving from SWOne. Work on a revised governance process for the SAP system is underway and looks likely to deliver a more controlled SAP Change process.”

The most serious problem – and it is not mentioned until the penultimate page of the report’s appendices – is that savings will be nowhere near the original target of £10m.

“This is red, tracked against the original [savings] £10m target. To date £2.8m has been signed-off and it is not yet clear how the lower target of £5.7m will be achieved as there are fewer savings opportunities and initiatives emanating from SWO…”

From the small print of Taunton Deane’s report it is possible to work out that the cost of the council’s SAP implementation was supposed to have been paid off by savings but hasn’t. Indeed a debt of nearly £1m is still incurring interest.

Comment

Perhaps it’s unfair to pick on Taunton Deane’s reports to councillors. The positive tone is little different to dozens, perhaps hundreds, of NHS, council and central government board reports I have read over two decades.

If you’re a director of a public authority your job is probably made harder if you’re getting self-vindicating internal reports on the organisation’s progress. It would be more helpful if management reports were neutral and objective, framed by unvarnished facts.

When you hire a roofing company and it reports back on the finished job, you want to know about the tiles that leave a gap or are loose, not the ones that fit nicely.

NHS trust reports can often be particularly one-sided, often of the type that say:

“We had 3 fatalities on the main staircase last month because of a ruptured floor lining but the overall accident rate in that part of the building is down over the last 3 years and our falls rate overall is 3% below the average for the NHS as a whole.

“Our contractor confirms that the floor lining is within KPI requirements and a repair will be effected shortly.”

It appears that those who write board reports for public authorities feel an obligation to motivate and inspire, to leave the reader feeling good, to clothe bad news in layers of good news, omit it altogether or put it in the appendix hardly anyone reads.

Is this one reason so many outsourcing and NHS scandals stay hidden for years? 

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Posted in Campaign4Change, cost reduction, decision-making, excessive secrecy, IBM, legal disputes, local democracy, local government, NHS, openness and transparency, outsourcing, public sector, public services, public-private partnerships