Category Archives: outsourcing

Will MPs’ report on Capita’s BBC contract make any difference?

By Tony Collins

At one level, Capita’s contract to handle most of the BBC’s TV licensing work is, in general, a success, at least according to statements made to the media.

Were it not for the National Audit Office and the Public Accounts Committee, a fuller story would not have emerged.

Today in The Guardian, a BBC spokesperson speaks of the Capita TV licensing contract in glowing terms. Through the contract, the BBC has reduced collection costs by 25% and increased revenue for programmes and services.

A Capita spokesperson spoke in similar terms. Capita has helped the BBC to collect more TV licence fee revenue every year since 2010-2011.

The only blip in the contract had seemed to be the heavy-handed tactics of some Capita staff. The Daily Mail reported in February 2017 that vulnerable people were hounded as some Capita staff tried to catch 28 TV licence evaders a week for bonuses of £15,000 a year.

This blip aside, has anything else gone wrong? There’s no hint of any technological problems on Capita’s website – or the BBC’s.

The BBC reported in 2011 that Capita will transform the TV licensing service, “using advances in technology and analytics to increase revenue and reduce costs”.

Capita’s website has a case study on its work for the BBC that refers to cost savings of £220m over the life of the contract, organisation-wide efficiencies and “protected brand image” among other benefits.

In December 2016, Capita described the “partnership” with the BBC  as a “success”.

The bigger picture

Capita processes TV licence payments, collects arrears and enforces licence fee collection. Its current contract with the BBC began in July 2012 and, after a recent renegotiation, ends in 2022 with the option to extend by up to a further five years.The BBC paid Capita £59 million in 2015–16.

The BBC has had a long-standing ambition to improve its main TV licensing databases so that they are structured by individual customers rather than households.

This was one of the hopes for the contract with Capita but it hasn’t happened. Capita had partly subcontracted work on the BBC’s legacy databases to CSC Computer Sciences.

Manual workarounds

The BBC, in its contract with Capita, aimed to upgrade ICT as part of a wider transition programme. The BBC paid Capita £22.9m for parts of the programme that were delivered, including restructuring contact centres, updating the TV Licensing website and upgrading handheld units for field staff.

The Public Accounts Committee says in today’s report,

“However, improvements with a contract value of £27.9m, primarily related to replacing legacy ICT systems, were not delivered by Capita and its subcontractor (CSC), and were not paid for by the BBC.

“As a result of the transition programme being only partly completed and subsequently stopped, the BBC and Capita currently have to do resource-intensive manual workarounds between inefficient ICT systems.

“Capita informed us that it was bearing the additional costs associated with undelivered elements of the transition programme. However, the BBC has had to allocate £9m to Capita to support the ongoing use of legacy systems, costs which the BBC told us were compensated for elsewhere in the renegotiated contract.

“It is unclear to us why ICT database improvements have proved so difficult over the last 15 years, particularly when competitors and other organisations can make similar changes.

“The BBC acknowledges that its current database is not fit for purpose for the future but does not yet have a clear plan to replace it.”

Comment

All outsourcing contracts have their strengths and failures – including early promises that don’t come to anything.

But it’s unlikely councils and other public sector organisations that are seriously considering outsourcing will take into account the past failures and broken promises of their potential suppliers.

If officials and councillors want to outsource IT and other services they probably will, whatever the record of their favoured potential suppliers.

They will see reports of the National Audit Office and Public Accounts Committee as biased towards negative disclosures.

Indeed the BBC and Capita, in their responses to today’s TV licensing report of the Public Accounts Committee, have drawn attention to the positive aspects of the report and not mentioned the technological failures.

Where does this leave councils and other organisations that are considering IT-related outsourcing and are seeking reference sites as part of the bid process?

Will those reference sites give only the positive aspects and not mention, or successfully deprecate, any media, PAC or NAO reports on contract failures?

Negative findings by the National Audit Office and Public Accounts Committee are usually important. Were it not for their scrutiny would not know how public money is being spent and misspent.

But their reports will have little or no effect as warnings to organisations that want to outsource.

Public Accounts Committee – BBC Licence Fee – 26 April 2017

 

Whitehall to auto-extend outsourcing deals using Brexit as excuse?

By Tony Collins

Type of government procurement spend 2014-2015. ICT is the top item.
Source: National Audit Office

Under a headline “UK outsourcing deals extended because of Brexit workload”, the Financial Times has reported that “hundreds of government contracts with the private sector that were due to expire are to be automatically extended because civil servants are too busy with Brexit to focus on new and better-value tenders”.

The FT says the decision to roll over the contracts could prove expensive for taxpayers because it limits competition and undermines government efforts to improve procurement.

A “procurement adviser to the government” whom the FT doesn’t name, said more than 250 contracts were either close to expiring or had already expired in 2016-17. The adviser told the FT,

“Brexit has pushed them down the list of priorities so there are lots of extensions and re-extensions of existing deals.”

The adviser added that this was the only way civil servants could prioritise the huge increase in Brexit-related work since the referendum.

Extensions

The FT provides no evidence of automatic contract extensions or the claim that deals will be extended because of the civil service’s Brexit workload.

There is evidence, however, that Whitehall officials tend to extend contracts beyond their original expiry date.

In a report published this year on the Cabinet Office’s Crown Commercial Service, the National Audit Office identified 22 framework contracts that were due to expire in 2016-17. Half of them (eleven) were extended beyond their original expiry date.

[The Crown Commercial Service was set up in 2014 to improve state procurement.]

The NAO also found that Whitehall departments – and the Crown Commercial Service – have been awarding contracts using expired framework deals, even though this contravenes public contracting regulations.

In 2015-16, 21 of the 39 frameworks that were due to expire were extended without competition or market testing, according to the NAO.

One example of an extended contract is a deal between Capita and the Department for Work and Pensions which started in 2010. Capita provides eligibility assessments for the personal independent payment allowance, which supports for people with long-term ill health or disability.

The five-year deal was extended by two years until July 2019.

Capita has also won a three-year extension to a contract with the Pensions Regulator and the BBC has extended a deal with Capita that was signed originally in 2002 to June 2022 – a total of at least 20 years.

Open competition?

The NAO has found that extending ICT contracts may not always be good for taxpayers. In the later years of their government contracts, suppliers tend to make higher margins (though not always).

There are also suggestions that civil servants will sometimes sign contract extensions when the performance of the supplier does not meet expected standards.

On ICT, the Cabinet Office asks central departments to complete a return every six months for each business process outsourcing and facilities management contract above £20m with strategic suppliers.

The survey asks whether the contract is being delivered on time, to scope, to budget, to the appropriate standards, and whether there have been any disputes.

In one study of government contracts with ICT suppliers, the NAO found that, of 259 returns from departments, 42 highlighted problems that included,

  • failure to achieve milestones
  • dissatisfaction with quality of outputs
  • errors and other issues with delivery
  • poor customer engagement and end user dissatisfaction and
  • failure to meet key performance indicators.

Comment

For taxpayers there is some good news.

A break-up of “Aspire”, the biggest IT outsourcing long-term deal of all, between HMRC and Capgemini (and to a lesser extent Fujitsu) – worth about £9bn – is going ahead this June. An HMRC spokesman says,

“HMRC is on track to complete the phased exit from Aspire, as planned, by June 2017.”

And according to Government Computing, Defra’s IT outsourcing contracts with IBM and Capgemini under a £1.6bn contract called “Unity” are due to expire in 2018 and there are no signs the deals will be extended.

But the Department for Work and Pensions’ huge IT outsourcing contracts with the same major suppliers are renewed routinely and not always with open competition. The DWP says on its website,

“DWP contracts are awarded by competition between potential suppliers, unless there are compelling reasons why competition cannot be used.”

The DWP doesn’t define “compelling”. Nor is it clear whether its auditors look at whether the DWP has put up a compelling case for not putting a large IT contract out to open competition.

In 2014 the Public Accounts Committee, after investigating major suppliers to government, concluded,

“Government is clearly failing to manage performance across the board, and to achieve the best for citizens out of the contracts into which they have entered.

“Government needs a far more professional and skilled approach to managing contracts and contractors, and contractors need to demonstrate the high standards of ethics expected in the conduct of public business, and be more transparent about their performance and costs”.

Breaking up is hard to do

The break up of the huge Aspire IT outsourcing contract at HMRC is an exception, not the rule. The NAO has found that civil servants regard their major incumbent suppliers as safe and less risky than hiring a smaller company (that’s not steeped in Whitehall’s culture).

The NAO has also found that in some cases officials don’t know whether their suppliers are performing well or not. On many ICT contracts there is “open book” accounting, but not all departments have the staff or expertise to check regularly on whether their suppliers’ profits are excessive.

If Whitehall, with exceptions, is continuing to roll over contracts whether it’s legal to do so or not, what incentive exists to stick to the rules?

Brexit?

The FT story suggests Brexit is the reason hundreds of contracts are to be extended automatically. There’s probably truth in the automatic extension of some contracts – but it’s unlikely to be because of Brexit.

It’s unlikely that the civil servants involved in Brexit will be the same ones who are handling ICT contract extensions. That said, Brexit will inevitably put a higher workload on lawyers working for government.

If contracts are being extended automatically, it’s probably because that’s the way it has always been, at least within living memory.

While Sir Humphrey and his senior officials remain only nominally accountable to Parliament for how they spend taxpayers’ money, the easiest option of renewing or extending existing contracts will usually be seen as the best option.

It can be justified with “compelling” arguments such as a need to make an urgent decision in difficult circumstances, or the absence of alternative suppliers who have the necessary skills or the financial strength to accept the risks of failure.

Will anything change?

Until departments have to publish contemporaneously their intentions to award contracts without open competition or there is effective accountability within the civil service for major decisions, little is likely to change.

It hasn’t happened yet and there’s no reason to believe it will.  Many politicians including prime ministers have tried to reform the civil service and they haven’t ruffled a single carpet in the corridors of Whitehall.

As Antony Jay, co-writer of Yes Minister,  said in January 2013,

“The central anomaly is that civil servants have years of experience, jobs for life, and a budget of hundreds of billions of pounds, while ministers have, usually, little or no experience of the job and could be kicked out tomorrow.

” After researching and writing 44 episodes and a play, I find government much easier to understand by looking at ministers as public relations consultants to the real government – which is, of course, the Civil Service.”

In short, Brexit is likely to be officialdom’s up-to-date excuse for carrying on much as before.

Thank you to @TimMorton2 for alerting me to the FT article.

Capita said to owe thousands to pharmacies

By Tony Collins

Capita owes some pharmacy owners thousands of pounds, according to Chemist+Druggist.

One pharmacist Salim Jetha of Lewis Grove Pharmacy in Lewisham told Chemist+Druggist he had emailed Capita in February but it “bounced back because the inbox was full”. He said that if emails are unanswered and there is no phone number to ring “what are you supposed to do?”

Under its Primary Care Support Services contract with NHS England, Capita is due, among other obligations, to reimburse some of the costs of pharmacy trainees. The trainees are termed “pre-registration” pharmacists because they have not yet passed a General Pharmaceutical Council assessment.

Pharmacy owners can apply for an annual grant from NHS England for up to £18,440 for every pre-registration trainee taken on.

Capita took on responsibility for delivering NHS England’s primary care support services in September 2015, including overseeing the pharmacy training grants.

In response to the article, Capita spokesperson said it is aware of “some isolated issues” and that all claims that meet “the required checks” have been backdated, as will any further claims.

The spokesperson said that one of the “key improvements” under Capita has been the introduction of a centralised process for dealing with primary care.

The old system was localised, meaning grant claims “came in from various sources on an ad hoc and irregular basis”.

Chemist+Druggist article

Jeremy Hunt is prepared to end Capita’s NHS contract if necessary

 

Capita’s chief executive to step down

By Tony Collins

Capita’s chief executive Andy Parker is to step down later this year. The company has today announced that full-year results for 2016 were “disappointing”.

The company reported a sharp fall in annual profit.

Underlying pre-tax profit – which strips out restructuring costs – was £475.3m, well below the group’s expectations despite two profit warnings late last year.

Capita had said in December it expected annual pre-tax profits in the current financial year to be at least £515m.

Reported pre-tax profit was £74.8m, down 33 per cent year-on-year on slightly higher revenues of £4.9bn.

The company is moving some jobs to India, where it already provides outsourcing services for UK companies.

Capita is being dropped from the FTSE 100 from 20 March 2017. Its share price has fallen sharply over the past year but has risen gradually from its low about three months ago. The company’s share price fell sharply this morning, at one point down nearly 10% on yesterday’s close.

The company has had problems on multiple contracts.

In a statement this morning Parker said,

“2016 was a challenging year and Capita delivered a disappointing performance. We are determined to turn this performance around. We have taken quick and decisive action to reduce our cost base, increase management accountability, simplify the business, strengthen the balance sheet, and return the Group to profitable growth.

“We remain very confident that our target markets continue to offer long term structural growth. Capita is well placed in these markets with our unique set of complementary capabilities and the talent of our people. The bid pipeline of major contract opportunities remains active, and we are also seeing success in providing additional new, high value, replicable services to clients.

“The proposed sale of our Asset Services businesses and Specialist Recruitment businesses are on track. We have received good interest and, following regulatory approvals where required, we remain confident in concluding these transactions this year, which will leave us with a more focussed Group and significantly strengthen our balance sheet.

“We expect 2017 to be a transitional year for the business, as we complete our disposals, bed down the structural changes inside the business, and re-position Capita for a return to growth in 2018”.

Capita’s 2016 full-year results

Hunt is prepared to end Capita’s NHS contract if necessary.

Southwest One – a positive postscript

By Tony Collins

somerset county council2IBM-led Southwest One has had a mostly bad press since it was set up in 2007. But the story has a positive postscript.

Officials at Somerset County Council now understand what has long been obvious to ICT professionals: that the bulk of an organisation’s savings come from changing the way people work – and less from the ICT itself.

Now that Somerset County Council has the job of running its own IT again – its IT-based relationship with Southwest One ended prematurely in December 2016 – the council’s officials have realised that technology is not an end in itself but an “enabler” of headcount reductions and improvements in productivity.

A 2017 paper by the county council’s “Programme Management Office”  says the council has begun a “technology and people programme” to “contribute to savings via headcount reduction by improving organisational productivity and process efficiency using technology as the key enabler”.

Outsourcing IT a “bad mistake” 

It was in 2007 that Somerset County Council and IBM launched a joint venture, Southwest One. The new company took over the IT staff and some services from the council.

In the nine years since then the council has concluded that outsourcing ICT – thereby separating it from the council’s general operations – was not a good idea.

The same message – that IT is too integral and important to an organisation  to be outsourced – has also reached Whitehall’s biggest department, the Department for Work and Pensions.

Yesterday (8 February 2017) Lord Freud,  who was the Conservative minister in charge of Universal Credit at the Department for Work and Pensions, told MPs that outsourcing IT across government had proved to be a “bad idea”.  He said,

“What I didn’t know, and I don’t think anyone knew, was how bad a mistake it had been for all of government to have sent out their IT…

“You went to these big firms to build your IT. I think that was a most fundamental mistake, right across government  and probably across government in the western world …

” We talk about IT as something separate but it isn’t. It is part of your operating system. It’s a tool within a much better system. If you get rid of it, and lose control of it, you don’t know how to build these systems.

” So we had an IT department but it was actually an IT commissioning department. It didn’t know how to do the IT.

“What we actually discovered through the (Universal Credit) process was that you had to bring the IT back on board. The department has been rebuilding itself in order to do that. That is a massive job.”

Task facing Somerset officials

Somerset County Council says in its paper that the council now suffers from what it describes as:

  • Duplicated effort
  • Inefficient business processes
  • A reliance on traditional ways of working (paper-based and meeting-focused).
  • Technology that is not sufficient to meet business needs
  • Inadequate data extraction that does not support evidence based decision making.
  • “Significant under-investment in IT”.

To help tackle these problems the council says it needs a shift in culture. This would enable the workforce to change the way it works.  

From January 2017 to 2021, the council plans “organisation and people-led transformational change focused on opportunities arising from targeted systems review outcomes”.

The council’s officers hope this will lead to

  • Less unproductive time in travelling and  attending some statutory duties such as court proceedings.
  • Fewer meetings.
  • Reduced management time because of fewer people to manage e.g. supervision, appraisal, performance and sickness.
  • Reduced infrastructure spend because fewer people will mean cuts in building and office costs, and IT equipment. Also less training would be required.
  • Reduction in business support process and roles.
  • Reduction in hard copy file storage and retention.

 The council has discovered that it could, for instance, with changes in working practices supported by the right technology,  conduct the same number of social services assessments with fewer front- line social workers or increase the level of assessments with the same number of staff.

Southwest One continues to provide outsourced services to Avon and Somerset Police. The contract expires next year.

Comment

Somerset County Council is taking a bold, almost private sector approach to IT.

Its paper on “technology and people” says in essence that the council cannot  save much money by IT change alone.

Genuine savings are to be found in changing ways of working and thus reducing headcount. This will require very close working – and agreement – between IT and the business end-users within the council.

It is an innovative approach for a council.

The downside is that there are major financial risks, such as a big upfront spend with Microsoft that may or may not more than pay for itself.

Does outsourcing IT ever make sense?

Somerset County Council is not an international organisation like BP where outsourcing and standardising IT across many countries can make sense.

The wider implication of Somerset’s experience – and the experience of the Department for Work and Pensions – is that outsourcing IT in the public sector is rarely a good idea.

Thank you to Dave Orr, who worked for Somerset County Council as an IT analyst and who has, since the Southwest One contract was signed in 2007, campaigned for more openness over the implications of the deal.

He has been more effective than any Somerset councillor in holding to account the county council, Taunton Deane Borough Council and Avon and Somerset Police, over the Southwest One deal.  He alerted Campaign4Change to Somerset’s “Technology and People Programme” Somerset paper.

One of Orr’s recent discoveries is that the council’s IT assets at the start of the Southwest One contract were worth about £8m and at hand-back in December 2016 were worth just £0.32m, despite various technology refreshes.

Somerset County Council’s “Technology and People Programme” paper

Whitehall’s outsourcing IT a “bad mistake” – and other Universal Credit lessons, by a former DWP minister

Birmingham Council to “close down” contract with Capita when it ends in 2021

By Tony Collins

Birmingham City Council has said in a job advert that it plans to “close down” its joint venture contract with Capita when it expires in 2021.

The advert was discovered by Government Computing which has reported the job requirements in detail.

Capita and Birmingham City Council have one of the largest and longest IT-based outsourcing contracts in the public sector.

It began in 2006 when the council and Capita set up a joint venture “Service Birmingham”. The council has spent about £85m to £120m a year on the contract which puts the total cost of the deal so far at more than £1bn.

Government Computing reports that the council is seeking an assistant director ICT and digital services and CIO role. The job will include a task to “oversee the effective closedown of the current Service Birmingham ICT contract”.

This suggests the council is unlikely to renew the existing contract. It could decide to sign a new outsourcing deal but the signs so far are that the council will bring services in-house in 2021.

The council says in the job advert it wants to move to an “increasingly agile state of continuous business transformation”.

Nigel Kletz, director of commissioning and procurement for Birmingham City Council, told Government Computing,  “The current Service Birmingham contract has four years still to run (until 2021), so this role will lead the implementation of the ICT and digital strategy, which includes developing a transition programme to identify and then implement ICT delivery options going forward.

“Decisions on how ICT support is provided from 2021 onwards are yet to be taken.”

Capita did not add to the council’s statement.

Alan Mo, research director at public sector analysis group Kable, is quoted in Government Computing as saying,

“When it comes to ICT, Birmingham is the largest spending council in the UK. Given what’s at stake, we cannot over emphasise the importance of early planning…

“As we know, Service Birmingham has been under a huge amount of scrutiny over the past few years. Given the trends in local government, it would not surprise us if Birmingham prefers to go down the in-sourcing path; the council has already opted to take back contact centre services.”

Projected savings of “£1bn” 

Service Birmingham lists on its website some of the benefits from the joint venture.

  • Projected cost savings of £1bn back to the Council over the initial 10-year term, for reinvestment in services
  • £2m investment in a new server estate
  • Rationalising 550 applications to 150
  • Consolidated 7 service desks into 2
  • 500% improvement in e-mail speed
  • Help desk calls answered within 20 seconds increased from 40% to nearly 90%

Service Birmingham provides Birmingham City Council’s IT, along with a council tax and business rates administration service. The council has discussed taking back in-house the council tax  element of the contract. 

Capita has run into trouble on some of its major contracts, including one with the NHS to supply services to GPs.

Comment

It appears that Capita has served its purpose and put the council into a position where it can take back ICT services now that are in a better state than they were  at the start of the contract 2006.

Austerity is the enemy of such large public sector IT-based outsourcing contracts.  When councils can afford to spend huge sums – via monthly, quarterly and annual service charges – on so-called “transformation”, all may be well for such deals.

Their high costs can be publicly justified on the basis of routine annual efficiency “savings” which do not by law have to be verified.

The downfall for such deals comes when councils have to make large savings that may go well beyond the numbers that go into press releases. It’s known that Birmingham City Council has been in almost continuous negotiation to reduce the annual sums paid to Capita.

Capita is not a charity. How can it continue to transform ICT and other services, pay the increasing salaries of 200 more people than were seconded from the council in 2006, accept large reductions in its service changes and still make a reasonable profit?

It makes economic sense, if Birmingham needs to pay much less for IT, to take back the service.

It’s a pity that austerity has such force in local government but not in central government where IT profligacy is commonplace.

Job spec for senior Birmingham IT post looks towards end of Service Birmingham ICT deal – Government Computing

 

Days from taking back outsourced IT, Somerset Council is unsure what it’ll find

By Tony Collins

Facing the TV cameras, officials at Somerset County Council spoke with confidence about the new joint venture company they had set up with the “world-class” IT supplier IBM.

“The contract has to succeed; we will make it succeed, ” a senior official said at the time. Greater choice for residents, more control, sustained improvement of services, improved efficiency, tens of millions in savings and enhanced job prospects for staff.

These were some of the promises in 2007.

Since then, Somerset County Council has been through a costly legal dispute with IBM; projected savings have become losses, and Somerset is days away from taking back the service early.

Now the council faces new IT-related risks to its reputation and finances, warns a team of auditors.

In several audit reports on the exit arrangements, auditors warn of a series of uncertainties about:

  •  what exactly IT assets the council will own as of 1 December 2016, when the joint venture hands back IT and staff.
  • how much software may not be licensed, therefore being used illicitly.
  • how much software is being paid for without being needed or used, wasting council tax money.
  • whether thousands of pieces of hardware have been disposed of securely over the years of the contract, or whether confidential data could later turn up in the public domain.
  • the accuracy of some supplied information. “… the same networking hardware items have the same value associated with them even though one is twelve years old and the other only four” said auditors.

Comment

That Somerset County Council laments setting up the Southwest One joint venture with IBM is not new. What continues to surprise is the extent of the difficulties of ending the joint venture cleanly – despite months, indeed more than a year – of preparatory work.

The realty is that uncertainties and risks abound.

When IT journalists ask leading councillors and officers at the start of outsourcing/joint venture deals whether all the most potentially serious risks have been given proper consideration, the spokespeople inevitably sound supremely confident.

If things go wrong, they are sure the council will be able to take back the service under secure arrangements that have been properly planned and written into the contract.

Yet today some of the most potentially serious risks to Somerset’s finances and reputation come from continuing threats such as the possibility confidential data being found on old hardware not securely disposed of.

Or the council may be paying for unneeded software licences.

In short Somerset County Council is taking back the IT service on 1 December 2016 without being certain what it will find.

In future, therefore, when councillors and officials across the country talk with supreme confidence at the start of an outsourcing deal or joint venture about large savings, sustained efficiencies, and a step-change improvement in services that comes with the benefits of collaborating with a world-class private-sector partner, local residents will have every right to be deeply sceptical.

For the reality is more likely to be that the council and its world-class supplier are about to embark on a journey into the unknown.

Thank you to campaigner Dave Orr for alerting me to the council audit reports that made this post possible.

TV broadcast in 2007 days after the council and IBM signed the Southwest One joint venture deal.

**

Excerpts from reports due to be considered by Somerset County Council’s Audit Committee next week (29 November 2016):

“… laptops, servers, storage devices, networking equipment, etc.) have been disposed of without the correct documentation historically, throughout the term with SWO [Southwest One]. There is a high likelihood that without the documentation to show that SWO were meant to have previously disposed of any specific data baring assets in a compliant manner then subsequent fines and loss of reputation will need to be dealt with by the Council.

“This is being addressed as part of the exit works but initial investigations show an expected lack of documentation.

**

“The quality of asset management and therefore exposure to risk (over and above this inherited risk) is expected to improve significantly once asset management returns to SCC [Somerset County Council).”

**

“Asset locations have been updated and improved though there are still issues regarding all asset details not being recorded accurately in the Asset Register. There is a risk that if wrong details are recorded against an asset then incorrect decisions could be made regarding these assets which may in turn cause the Council financial loss and/or loss of reputation.”

**

“… the same networking hardware items have the same value associated with them even though one is twelve years old and the other only four.”

**

“Software assets are now included in the monthly asset register report though the information collected and lack of correlation to meaningful license information means the original risk is not fully mitigated.

“This continued lack of software asset usage information against licensing proof of entitlement as well as the obvious risk of illegally using non licensed software there is also a risk that the Council is wasting public funds and Council officer’s time to manage unnecessary software. This means the Council will not be able to show “Best Value” in these purchases which could lead to fines being imposed by Central Government and loss of reputation by the inefficiencies being reported in the media.”

**

“I cannot though see evidence of the warranty & support arrangements being recorded or accurate recording of end of life assets. Due to a lack of or incorrect detail on the asset information there is the risk of incorrect decisions being made regarding an asset’s usage which could then lead to loss of money or reputation for the Council.”

Capita adds 500 staff to boost recovery on “unacceptable” NHS contract

By Tony Collins

nicola-blackwoodNicola Blackwood, minister for public health and innovation at the Department of Health, yesterday described failings on Capita’s GP support services contract as “entirely unacceptable”.

Blackwood told MPs at an adjournment debate on failures relating to Capita’s £1bn Primary Care Support England contract,

“It was always clear that Capita’s services needed to be at least as good as those that they replaced… Capita put forward the most credible of any of the bids accepted on the short list, and at the time both the Department and NHS England had every confidence that the programme would be a success.

“However, it is evident that Capita was inadequately prepared for delivering this complex transition.”

Under its contract with NHS England, Capita is responsible for providing GP medical supplies such as needles and syringes, transferring medical records when patients switch GPs, payments to GPs and “performers list” applications.

Capita won the “Primary Care Support England” contract in 2015, amid unheeded warnings from some GPs that the private sector would be unable to successfully deliver the complexity of support services to GPs that were being provided by the NHS.

Blackwood said yesterday that MPs were “right to be concerned that the service provided by Capita under the primary care support services contract … has so far fallen well short of the standards that we expect, and GPs have borne the brunt of these failings, as we have heard today”.

She added,

“We need to make sure that GPs and their patients receive the service to which they are entitled.

“We want to restore acceptable services, and the contract contains sufficient financial incentives to ensure that Capita shares that goal, which is an important part of the contract and process.

“Let us be clear that the problems encountered with medical record transfers [in which thousands of records have gone missing, says the BBC] and overdue payments are entirely unacceptable. The Department shares that view.

“Both Capita and NHS England are co-operating fully with the Information Commissioner’s Office in order to address the implications for information governance, and I accept the need for urgent action in order to address the impact that this is having on patients and practitioners.

“That is why I have been holding regular meetings with Capita’s chief executive for integrated services, Joe Hemming, its new managing director for primary care support, Simon England, and NHS England’s national director for transformation and corporate operations, Karen Wheeler, and I will continue to hold such meetings.

“Both NHS England and Capita openly acknowledge that the service has not so far been good enough.

“NHS England has demanded and received rectification plans from Capita for the six most affected service lines, and has embedded a team of seven experts within Capita to support it as it resolves these issues…

“… it is also about having the right resources in the right place at the right time. Capita has informed me that it is adding around 500 more full-time equivalent staff to the service, at its cost, and that it is improving the training provided to ensure that new staff understand the importance of the service to both patients and practitioners.”

The minster denied that patients had been harmed (by GPs not having patient records).

“I know that these problems have caused great inconvenience and distress, but with reference to risk NHS England has assured me that it is not aware of any direct cases of patient harm that can be attributed to service issues.

“However, NHS England is working closely with regional and local medical directors so that we can be assured of patient safety. In particular, Dr Raj Patel, medical director of NHS England Greater Manchester, has joined the embedded team to ensure that clinical risks and concerns are appropriately addressed.

Backlogs

“The priority now is to deal with any backlogs, particularly with medical record requests, and to ensure that services are stabilised with the capacity to deal properly with new requests.

” There has been progress on that, which is encouraging. The backlog of medical record requests has reduced from 17,262 to 3,465 in the past two weeks. Capita assures me that it has an effective triage system in operation for new requests and is confident that the situate”ion will not recur. However, I will be monitoring the situation closely.”

Shortage of supplies

Blackwood continued,

“I am aware that some GPs were left short of basic supplies as a result, including syringes, and that they have had to source those from other suppliers at their own expense.

“NHS England tells me that it has reimbursed practices for any costs incurred from having to buy local supplies of needles and syringes.

Contact centre shortcomings

“I know that many of the members’ GP constituents have experienced frustration with Capita’s contact centre. I share those frustrations.

“Capita assures me that the contact centre has improved the way it responds to urgent queries by investing in more staff, improved processes and enhanced training. Capita is confident that these measures will deliver a quality service to customers. We will monitor its progress closely, including through meetings.

Late payments – compensation?

“I recognise that GPs, and ophthalmologists in particular, have suffered financial detriment as a result of late processing of payments.

“NHS England is working with Capita to explore what can be done to support affected stakeholders, and I have made it clear to Capita that I expect it to consider compensation as an option.”

Absence of medical records

Another Coventry MP Colleen Fletcher said that people who have requested a copy of a late relative’s medical records from the primary care support service have had to wait for more than twice the maximum 40 days that it should take to process such a request.

“It is utterly unacceptable to put anyone through that kind of delay, but it is inexcusable for it to happen to anyone who is already in an extremely vulnerable position following the death of a relative.”

New charges to the public for medical records

Geoffrey Robinson said,

“I have nothing against the private sector making profits—I am all for it—but the irony is that the companies cannot make a profit from a proper service, so they turn to such measures as imposing a £40 charge for access to a deceased relative’s records …

“They do not have to impose that charge. I think it used to be left to the GP’s discretion — but they now insist on it, and people have to pay postage and delivery charges on top, which is a disgraceful pursuit of short-term gain at the expense of the people they are meant to serve.”

Reinstate the old NHS support service?

Blackwood said,

“Some have suggested that the old model for provision of primary care support should be reinstated, but we must remember that it relied on localised services that did not connect with one another, with much duplication across processes.

“The quality of these services varied greatly—in some areas, it was outstanding; in others, it was quite poor. That was simply unsustainable.

“Furthermore, the system was unable to generate useful management information and so, honestly, issues such as the ones that we now face would be very unlikely to have surfaced. They would have gone unreported.

“A new model, with efficient and modernised processes, is the right approach to deliver to our primary care providers the service that they deserve.

“The Department and I will continue to closely scrutinise Capita and NHS England as they work to resolve current problems and build a quality service that is sustainable.”

A long way to go

“I acknowledge fully that there is a long way to go before the service can be considered acceptable and that Capita has much to do to earn the trust of practitioners and patients.

“This is clearly a live issue. I want to be clear today: I am listening. The issue is at the top of my priority list and will remain there until I am satisfied that an efficient and effective service is being delivered that meets the needs of patients and providers.”

Lessons

Coventry Labour MP Geoffrey Robinson, who secured the adjournment debate, told the minister,

“These contracts are gaily handed out to companies that do not have the skills, preparation or sheer commitment necessary to provide the service.”

He questioned whether the contract would make the intended 40% savings.

“… the irony is that we have ended up with a terrible service that is costing more than the previous service ever would, because the company was not properly prepared, did not have a commitment to providing the service, and was unable to do so, and because of the competing and irreconcilable claims about short-term gains in the form of profits and illusory savings for the health service…

“We should not have badly planned impositions from the private sector, which does not know what it is going to do or how to do it.”

He said that minsters and civil servants pride themselves on awarding a contract that they have won a hard-nosed negotiation.

 “We got them down from Y to X and we saved all this. It is great. We really screwed the private sector, didn’t we? That is all a total illusion.”

Labour MP Kate Green said that NHS England trialled the new system in west Yorkshire and it provided unsatisfactory. “Yet the contract was rolled out regardless.”

Savings?

Robinson said,

“How can the Minister talk of savings? How can any savings have been made when 9,000 patients records have been missing for more than two months, without which they cannot attend doctors surgeries? It is illusory to speak of savings.”

MPs to debate Capita NHS contract today

By Tony Collins

In the House of Commons today MPs will debate the Capita Primary Care Support Services contract.

It has been secured by Coventry North West MP Geoffrey Robinson, who wants GPs to be compensated for the failures arising from the outsourcing contract.

The debate comes a day after the BBC reported that “more than 9,000 patients’ records in Norfolk, Suffolk and Essex have gone missing” since Capita took on the task of transferring files.

As part of its contract Capita took on the job of transferring patients’ records, when people move from one GP to another.

A BBC survey of 78 GP practices showed that 9,009 records had been missing for more than two months.

Capita told the BBC it did not “recognise these claims”.

An NHS England spokesman said, “We know there have been serious issues with services delivered by Capita which have had an unacceptable impact on practices. We are ensuring Capita takes urgent steps to improve services.”

Patients “at risk”

Paul Conroy, a practice manager in Essex, has started a House of Commons petition on the delays, which has been signed by more than 3,000 people. It calls for an inquiry into the Capita contract and the impact it has had on GP practices.

“GPs rely on that full medical history in order to make key clinical decisions on patient care,” he said.

“If they can’t get hold of that physical record there could be vital information there could be vital information that puts a patient at risk.”

James Dillon, director of Practice Index – an organisation bringing together practice managers – told the BBC,

“GP practices are getting more and more frustrated by the missing patient records.

“Not only is this debacle putting the health of their patients at risk, it is putting added pressure on already stretched practices.”

In a statement, Capita said it had taken on the “challenging initiative” to streamline GP support services and there had been “teething problems”.

“[But] medical records are now being delivered securely up to three times faster than under the previous system,” it said.

“We do not recognise these claims regarding thousands of files being missing whatsoever.

“We request and move on average 100,000 files a week from multiple sites including GP surgeries and also third party run storage facilities which are contracted and managed by NHS England.”

GP magazine Pulse quoted MP Geoffrey Robinson as saying that the secretary of state should intervene directly “as this is extremely dangerous”. Robinson said that some medical records are not being delivered at all, or delivered late or delivered to the wrong practices.

Dr Richard Vautrey, deputy chairman of the British Medical Association’s GP Committee said that the problems arising from the outsourcing contract “are directly impacting on the ability of many GPs to provide safe, effective care to their patients in the area”.

He said, “They are in some cases being left without the essential information they need to know about a new patient and the tools to treat them.”

In August 2016, NHS England published the results of a User Satisfaction Survey of primary care support services over the previous six months. Only 21% of GPs were satisfied with the outsourced service, giving it an average overall score of 2.91 out of 10.

Lunacy?

An anonymous GP told Pulse how the problems are affecting him. He refers to the “performers list” that assures the public that GPs are suitably qualified, have up to date training, have appropriate English language skills and have passed other relevant checks such as with the Disclosure and Barring Service and the NHS Litigation Authority.

Said the GP,

“I moved 12 months ago and still haven’t been able to transfer performers list. I am 6 months late for my appraisal and unemployable except for my current salaried job as a result.

” It would have been easier to emigrate. The department responsible for the performers list at Capita is uncontactable except via a national email that isn’t responded to and a phone line that isn’t able to put you through to anyone.

“… As it is it’s virtually impossible to move region if you a UK GP. I am basically a slave bonded to a geographical region, forbidden to move house and work anywhere else other than short periods. Totally at the mercy of a faceless uninterested bureaucracy incapable of helping. Lunacy and utterly depressing. Why the hell did I become a GP? I curse the day.”

“I urgently need my medical records”

A patient who wrote to Campaign4Change said,

“My medical records were requested at the beginning of June 2016 when I changed to another health centre about 2 miles away.

“[I] phoned Capita today and was told there was no record of this request and to get my solicitor to contact them. Then they put the phone down. I don’t have and cannot afford a solicitor.

“I urgently need my medical records with my new doctor and am feeling helpless and extremely stressed by this.”

Pulse magazine reported yesterday (7 November 2016) the results of a snapshot survey of 281 GP practices carried out by the BMA’s GP Committee. It found:

  • 31% of practices had received incorrect patient records;
  • 28% failed to receive or have records collected from them on the date agreed with Capita;
  • 58% reported that new patient registrations were not processed within the required three days.
  • 81% of urgent requests for records were not actioned within three weeks.

GP practices also noted a reduction in the number of incorrect payments and fewer delays in registrations of the “performers list”.

Comment

It would be a pity if MPs today, in criticising Capita, lost sight of the bigger picture: how such outsourcing deals are considered and awarded.

The root of the problem is that before the contract is awarded officials concentrate their attention on the minutiae of the benefits: exactly how much will be saved, and how this will be achieved.

Pervading the pre-contract literature and discussions are the projected savings. This is understandable but wrong.

It’s understandable because it’s the projected savings that justify the sometimes-exciting time and effort that go into the pre-contract negotiations and discussions.

Large amounts of money are at stake. For officials, the pre-contract work can be a euphoric time – certainly more interesting than the day-to-day routine.

But what happens to negotiation and discussion of risk?

Risk is a table or two at the back of the reports. It’s a dry, uninspiring vaguely technical and points-scoring analysis of the likelihood of adverse events and the seriousness of the consequences materialising.

Sometimes the most serious risks are highlighted in red. But there’s always a juxtaposed “mitigation” strategy that appears to reassure. Indeed it appears to cancel out any reason for concern.

Risk is mentioned at the back of the internal pre-contract because it’s a cultural anathema. It’s the equivalent of visits by Building Regulations inspectors at a theme park under construction.

Who wants to talk about risk when a contract worth hundreds of millions of pounds is about to be awarded?

A bold official may dare to point out the horror stories arising from previous outsourcing contracts. That hapless individual will then be perceived by the outsourcing advisory group to have a cloud over his or her head. Not one of us.

And the horror stories will be dismissed by the officer group as the media getting it wrong as usual. The horror stories, it will be explained, were in fact successes.

Even when big public sector outsourcing deals end in a legal action between the main parties, officials and the supplier will later talk – without explanation or detail or audited accounts –  of the contract’s savings and overall success.

We’re seeing this on the Southwest One outsourcing/joint venture contract.

No doubt some will claim the GP contract support contract is a success. They’ll describe problems as teething. Marginalise them. And later, when it comes to the awarding of future contracts, supporters of the GP outsourcing contract will be believed over the critics.

And so the cycle of pre-contract outsourcing euphoria and post-contract rows over failure will be repeated indefinitely.

It would be of more use if MPs today debated the role of NHS England in the award of the GP support contract.

Blaming Capita will do little good. The supplier will face some minor financial penalties and will continue to receive what it is contractually due.

Countless National Audit Office reports show how contracts between the public and private sectors, when it comes to the crunch, strongly protect the supplier’s interests. The public sector doesn’t usually have a leg to stand on.

A focus today on Capita would be a missed opportunity to do some lasting good.

NHS England letter on Capita contract – September 2016

Capita NHS contract under scrutiny after “teething” problems – June 2016

GPs decry Capita’s privatised services as shambles – The Guardian

Did NHS England consider us in the Capita take-over?

NHS England vows to hold Capita to account

Capita mistakenly flags up to 15% of GP practice patients for removal  

Capita primary care support service performance “unacceptable”

 

 

 

Well done to Unite for challenging council’s joint venture “savings” claim

By Tony Collins

When councils make unexplained (and self-congratulatory) claims that they have made savings at the end of a joint venture, it will usually raise a series of questions.

So well done to Nigel Behan of the Unite union for putting a series of FOI questions to Taunton Deane Borough Council about its joint venture with IBM, as part of Southwest One.

In an “Efficiency Plan” published on its website last month, Taunton Deane
Borough Council announced that it was “part of the ground-breaking Southwest
One shared services joint venture partnership, between Somerset County
Council, Avon and Somerset Police and IBM”.

“This ten year partnership, which is now drawing to a close, has delivered significant savings to the Council and has made an important contribution to our finances.”

Unite is not so sure. Its officials believe the joint venture has, for Taunton Deane,  broken even at best. Its FOI questions to the council:

  • Please will you provide the unitary charge payable by TDBC to
    Southwest One/IBM for each financial year from 2007-2008 to date?
  •  For each financial year since 2007-2008 what was the cost of
    letting and managing the contract – including legal costs, procurement costs etc. etc.?
  • Re IT – software, hardware and peripherals. What was the value in 2007 of all IT (Hardware, software, peripherals and infrastructure) and what is the value of these assets now, ie what has been the depreciation on this asset class since 2007? What will cost of replacing these?
  • What are the net savings achieved by Southwest One for Taunton Deane Borough Council for each financial year since 2007-2008? Will you define “significant savings” (provide a measurable test)?

 Comment:

Taunton Deane Borough Council’s claim of savings was imperious, self-serving and unexplained. The council’s Efficiency Plan looks like a glossy commercial brochure that local residents have had no option but to pay for.

Were a newspaper to make a controversial claim without any explanation or justification, its readers would be entitled to question the article’s veracity.

Taunton Deane’s joint venture peripherally involved a costly legal action between the two main parties to the joint venture: IBM and Somerset County Council.

To make a claim of savings in such circumstances is like officials claiming a mission to space was a success even though the spacecraft blew up.

No rational judgement can be made without a detailed weighing up of the costs and benefits.

Even then the costs and benefits may be subjective. What costs have been excluded from the “savings” figure? What were the baseline costs on which the savings have been measured? And were those baseline figures audited as accurate  – or were they intelligent guesses? Have any benefits been double-counted? Are the benefits audited?

Without people like Nigel Behan and Somerset campaigner Dave Orr, and organisations like Unite, councils would get used to saying publicly whatever they liked, possibly without challenge.