Category Archives: public-private partnerships

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

Barnet Council claims £31m savings with Capita – and not an auditor in sight.

By Tony Collins

capita

It’s commendable that Barnet Council has published much material on its three-year review of a £322m 10-year outsourcing contract with Capita.

More than a dozen council reports and appendices cover every aspect of the contract.

The quantity of material seems, on the face of it, to answer critics of the outsourcing deal, among them local bloggers, who have pointed to the lack of reliable evidence of the savings achieved. The suspicion is that costs have increased and council services including ICT have deteriorated since Capita took over in 2013.

Now the council has ostensibly proved that the opposite is the case. Barnet’s press release says,

Barnet Council and Capita contract delivers £31m savings

“A review of a contract between Barnet Council and Capita has demonstrated it is delivering significant benefits to the borough with overall savings of £31 million achieved alongside increased resident satisfaction…

“In terms of satisfaction with services provided, the review, showed 76 per cent of residents were satisfied with the outward-facing customer services, up from 52 per cent before the contract was established.

“This increase was even more significant in respect of face to face services, as 96 per cent of residents who engaged with the council in this way said they were satisfied compared with a previous 35 per cent.

“The review also showed that the cost of delivering the bundle of services provided in the contract is now £6m a year less than before the contract was signed and that 90 per cent of the contract’s key performance indicators being met or exceeded.”

The press release quotes two leaders of the council saying how pleased they were with the contract. Capita calls it a “positive review”.

The review has various mentions of items of additional spending including £9m on ICT and it’s not clear whether the extra sums are taken into account in the savings figures.

Among the review’s suggestions is that the council pay Capita’s annual management fee of £25m up front – a year in advance – instead of every quarter in return for extra savings.

The review also raises the possibility of extending the contract beyond the 10 years in return for additional savings. Capita is “keen” to explore this suggestion (though it could tie the hands of a future council administration).

The review reports were compiled by council officers who reported to a working group of Tory and Labour councillors, under a much-respected Tory chairman. By a small margin, Conservatives run the council.

Lack of independent challenge?

It’s unclear why the council did not commission its audit committee, or auditors, to review the contract. In the past the audit committee has been critical of some aspects of the contract.

For this reason the reports are unlikely to silence critics of Barnet’s outsourcing deal. Council officers compiled the review’s findings, not auditors.

As a result, despite the volume of published written material, there is no evidence that the figures for savings have been independently verified as accurate.

Neither is there independent verification of the methods used by officers for obtaining the figures.

Further, some observers may question the positive tone of the review findings. The “good news” tone may be said to be at odds with the factual neutrality of, say, reports of the National Audit Office.

There are also questions about whether the council is providing enough effective challenge to Capita’s decisions and figures.

At a council committee meeting in November 2016 to discuss the review reports, the most informed challenges to the findings appear to have come not from Barnet councillors but two local bloggers, Mrs Angry and Mr Reasonable, who questioned whether the claimed savings could be more than wiped out by additional spending – including an extra £9m on ICT. They appear to have received no clear answers.

Concerns of some officials

The body of the review reports outline some of the concerns of staff and directors. Mrs Angry quotes some of the concerns from the review reports:

“Transparency of costs, additional charges and project spend were raised as key concerns. It was felt that CSG [Barnet’s Customer and Support Group, for which Capita is responsible] are often reluctant to go above and beyond the requirements of the contract without additional charges.

“Directors reported that the council needs to be more confident that solutions suggested by CSG, particularly for projects and capital spend are best value.

“Concerns were raised that CSG has a disproportionate focus on the delivery of process and KPIs over outcomes, creating a more contractual rather than partnership relationship between CSG and the council. Directors noted that many KPIs are not relevant and their reporting does not reflect actual service performance.”

The Capita contract began in September 2013, under which it provides finance, ICT, HR, Customer Services, Revenues and Benefits, Procurement, Estates and Corporate Programmes.

Comment

On the face of it, Barnet Council’s review of the Capita contract looks comprehensive and impressively detailed.

Looked at closely it’s disappointing – a wasted opportunity.

Had the council wanted the review’s findings to be widely believed, it would have made it uncompromisingly independent, in line with reports by the National Audit Office.

As it is, the review was carried out by council officers who reported to a working group of councillors. The working group comprised Labour as well as Tory councillors but the facts and figures were compiled by officers.

Nearly every page of every Barnet review report has a “good news” feel. There’s an impression that negative findings are played down.

Example:

“It should be noted that the failure to meet the target for KPI 30 related to one quarter only [my italics] and discussions are continuing regarding the application of the above service credit.”

Some negative findings are immediately countered by positive statements:

“CIPFA benchmarking data shows that the cost of the ICT service is slightly above the median, but below upper quartile in terms of the cost of the service as a percentage of organisational running costs.”

Another example of a negative finding immediately countered by a positive one, which may be said to be one hallmark of a non-independent report:

“One key area of concern in terms of overall performance is internal customer satisfaction… Survey results in respect of the financial year 2015/16 were universally poor, with all services failing to meet the target of upper quartile customer satisfaction. As a result, service credits to a total value of £116k have been applied in respect of these KPIs.

“To some extent, a degree of dissatisfaction amongst internal service users is to be expected, given the fact that cost reductions have been achieved to a large extent through increased self-service for both managers and staff, along with more restrictive processes and controls over things like the payment of invoices and the appointment of staff.

“Despite the survey outcomes indicating a low level of satisfaction, the interviews conducted with staff and managers as part of this Review suggest that services are generally considered to be improving.”

Integra ERP financial system a “success” – ?

The review report describes Capita’s introduction of the Integra financial system as “successful”. Elsewhere, however, it says,

“Many users raised issues with the Integra finance system, describing it as clunky and not user-friendly or intuitive.”

Double counting?

There’s no evidence that savings figures have been checked for possible inadvertent double counting on overlapping services. Double counting of savings is regularly found in National Audit Office reports.

“There are no standardised way for departments to evidence the reductions in ongoing expenditure,” said the National Audit Office in a report on Cabinet Office savings in July 2014. “Departments provided poor evidence, and double counting was highly likely as projects reduced staff or estates requirements.”

In a separate report on claimed savings in central government, the National Audit Office quoted the findings of an internal audit …

“A number of errors (instances where the evidence did not support the assertion) were found during our review and total adjusted accordingly … In addition, a number of savings were double counted with other savings categories and these have now been removed…

“We assessed some £200m of other savings as Red because they were double counted due to the same savings having been claimed by different units or, for example, because savings on staff were also claimed through reductions in average case costs.”

Omitted costs?

The omission of relevant costs could skew savings figures. It’s unclear from Barnet’s review reports whether extra spending of millions of pounds on, for example, ICT have been taken into account. Barnet blogger Mr Reasonable, who has a business background, raises the question of whether £65m of additional spending has been taken into account in the savings figures.

Reverse Sir Humphrey phenomenon?

The biggest single flaw in the review reports is that they appear worded to please the councillors who made the decision to outsource – the reverse of the “Sir Humphrey” caricature. The positive tone of Barnet’s reports implies that officers are – naturally – deferring to their political leaders.

In a BBC Radio 4 documentary on Whitehall, former minister Peter Lilley talked about how some officials spend part of their working lives trying to please their political leaders.

“Officials are trying to work out how to interpret and apply policy in line with what the minister’s views on the policy is …. They can only take their minister’s written or spoken word for it and that has a ripple effect on the department far greater than you imagine… Making speeches is the official policy of the department and that creates action.”

Another former minister Francis Maude told the BBC he found that too few officials were willing to say anything the minister did not want to hear.

“The way it should work is for civil servants give very candid well informed advice to ministers about what it is ministers want to do – the risks and difficulties,” said Maude. “My experience this time round in government, 20 years on from when I was previously government, is that the civil service was much less ready to do that.

“There were brilliant civil servants who were perfectly ready to tell you things that they thought you might not want to hear but there were too few of them.”

Barnet’s reviewing officers might have been dispassionately independent in reporting their findings and double checking the supplied figures – but who can tell without any expert independent assessment of the review?

The US Sabanes-Oxley Act, which the Bush administration introduced after a series of financial scandals, defines what is meant by an “independent” audit. The Act prohibits auditing by anyone who has been involved in a management function or provided expert services for the organisation being audited.

That would disqualify every Barnet officer from being involved in an independent audit of their own council’s contract with Capita.

The Act also says that the auditor must not have been an employee of the organisation being audited. Again that would disqualify every Barnet officer from an independent audit of their own council’s contract.

Review a waste of time and money?

It would be wrong to imply that the review is a pointless exercise. It identifies what works well and what doesn’t. It will help officers negotiate changes to the contract and to key performance indicators. For example it’s of little value having a KPI to answer phone calls within 60 seconds if the operator is unable to help the caller.

What the review does not provide is proof of the claimed savings. Barnet’s press release announcing savings of £31m is just that – a press release. It does not pretend to be politically neutral.

But without independent evidence of the claimed savings, it’s impossible for the disinterested observer to say that the Capita contract so far has been a success. Neither does evidence exist it has failed.

Capita share price at 10-year low

What is clear is that fixing some of the more serious problems identified in the report, such as obsolescent IT, will not be easy given the conflict between the continuing need for savings and Capita’s pressing need to improve the value of its business for shareholders, against a backdrop of difficulties on a number of its major contracts [Transport for London, Co-op Bank, NHS] and a share price that was yesterday [30 November 2016] at a ten-year low.

The review also raises a wider question: are most of a council’s busy councillors who come to council meetings in their free time equipped to read through and digest a succession of detailed reports on the three-year interim results of a complex outsourcing contract?

If they do glance through them, will they have enough of a close interest in the subject, and a good understanding of it,  to provide effective challenge to council officers and their political leaders?

If nothing else, the Barnet review shows that councillors in general cannot provide proper accountability on an outsourcing contract as complex as Capita’s deal with Barnet.

Either council tax payers have to put their faith in officers, irrespective of the obvious pressure for officialdom to tell its political leaders what they want to hear, or council taxpayers can put their faith in an independent audit.

Barnet Council has not given its residents any choice.

It’s a pity that when it comes to claimed savings of £31m there’s not an auditor in sight.

Barnet declares its contract a success – Barnet and Whetstone Press

Mr Reasonable – important questions on the Capita review

Mrs Angry – who writes compellingly on the council meeting where the review reports were discussed.

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 to lose part of £1bn+ Service Birmingham contract?

By Tony Collins

Birmingham City Council is set to take back the “Revenues” – council tax – element of its Service Birmingham contract with Capita.

A report which went before a cabinet meeting on Tuesday said that decisions on the “proposed termination of the revenues element of the Service Birmingham contract” with Capita would be taken in the “private” – secret – part of the meeting.

One reason the discussions are in private is that even though the contract allows the council to take back services “at will”, this may still involve paying compensation to Capita,

In the open part of the meeting, the deputy leader said that bringing the revenues service back in-house will allow the council “greater flexibility” – which appears to mean lower costs.

It will require a change to the wider Service Birmingham contract under which Capita delivers Birmingham’s ICT services.

In particular, said the deputy leader, taking back the revenues service will avoid any need to invoke a formal “change control” within the contract. He didn’t say why the council was keen to avoid invoking the change control clause.

Taking back revenue services could mean up to 150 Capita staff returning to the direct employment of the council, according to theBusinessDesk.com.

Service Birmingham is a joint venture company run by Capita since 2006 in which the council owns a minority of shares. The contract, which mainly covers ICT services, ends in 2021.

In the first few years Capita received about £120m a year from the joint venture but the figure has come down to about £90m-£100m a year after much criticism of the cost of the contract.

Between 2006 and 2012, Service Birmingham paid Capita £994m. It’s unclear whether the payments have represented value for money for Birmingham’s residents.

The report for this week’s cabinet meeting said that since Capita took over revenue collection the government has introduced a number of local welfare reforms [related to Universal Credit] “which have resulted in the council wishing to deal with Revenues matters differently”.

Keen to retain the revenues work, Capita had suggested a revised service to the council but the report said, “These were considered and it was concluded that they did not meet the current requirements of the council.”

Taking back revenue collection could result in “savings” worth £10.5m between next year and 2020, according to theBusinessDesk.com.

The gradual introduction of Universal Credit means that the Department for Work and Pensions, rather than the council, will eventually handle housing benefit payments.

This would mean less work for the council and Service Birmingham.

Councillors were expected at yesterday’s meeting to confirm officer recommendations on terminating the revenues collection part of the Service Birmingham contract. The new arrangements are likely to come into effect from February 1, 2017

Capita says on the Service Birmingham website that it has transformed services and “realised savings of approximately £1bn”. Capita had introduced SMS texting to prompt council tax payments and reduce the need to issue paper reminders.

Overspend

Birmingham council has a serious overspend for 2016/17, estimated to be around £49m.

The Birmingham Independent Improvement Panel says, “The Council faces a mammoth task to prepare a balanced budget for 2017/18.  With very limited general reserves available, this potentially places at risk its future success.”

Lessons

In 2012 a “high-level” review of Service Birmingham by the Best Practice Group suggested that the deal had its successes but that trust and relationships might have been breaking down in some areas.

It said,

“BCC [Birmingham City Council] and SB [Service Birmingham] seemed to overcome early challenges in their relationship by having a ‘great common cause’. The Council entered into this relationship in 2006 because it had the foresight to realise it had to fundamentally transform how it operated in order to improve social outcomes for its population…

“Now the transformation has largely been successful and the initiatives are almost complete, the level of innovation seems to have stalled and the relationship has deteriorated. Somewhere in the fire-fighting, both BCC and SB have lost sight of the next ‘great common cause’ – the fact that the Council needs to further reduce the cost of ICT service delivery by £20m per annum. This will require some significant ‘outside the box’ thinking about how to achieve from both BCC and SB.”

The report said that some individuals within the council needed to understand better that Service Birmingham was not a social enterprise, a public sector mutual, or a charity, and needed “to make a significant return on its capital for its shareholders” amid a “significantly deteriorating financial position due to Government cutbacks.”

Best Practice Group also said that Capita reduced its charges when challenged

“There have been statements made by a number of the officers in the Council that SB drops its prices when challenged, especially when the Council has investigated alternative industry offerings. SB have suggested that it is only when the challenge arises that initial data is clarified and therefore, more focused pricing can be provided.”

Trust

There was – at that time – a “general lack of commercial trust between the parties and the fact that BCC have shown that SB have reported some data incorrectly (after discussion around interpretation), means that the KPIs are not fully aligned to the business outcomes BCC now needs to achieve in the current financial climate”.

The report reached no firm conclusions on value for money but questioned whether Service Birmingham was “significantly more expensive” in some technology areas.

Comment

Birmingham City Council expects to make “savings” by bringing the revenues collection service back in-house.

If the new savings are added to the claimed £1bn savings originally predicted for the Service Birmingham joint venture, are the actual savings more or less what the council could have saved if it carried on supplying ICT in-house, without helping to keep Caita’s shareholders happy?

In fact the word “savings” has been largely discredited when used in connection with large council outsourcing deals and joint ventures.

In the absence of published and audited savings figures, council reports can interpret the word “savings” to mean almost anything.

The unfortunate truth, as observers of Barnet Council’s deal with Capita have discovered, is that local residents who fund joint ventures and outsourcing deals, have no idea whether their councillors end up paying far too much for IT and other services.

Hide

Birmingham Council this week discussed a major revision to the Service Birmingham contract in secret, which raises a wider point.

Commercial confidentiality means that councils and suppliers can hide behind the contract when things go wrong. Indeed all parties to the contract have an interest in not telling the public about anything that goes wrong.

Exactly what is going on with Service Birmingham nobody knows – outside the council’s inner circle of officers and ruling councillors.  Could the contract be costing too much but the cancellation fees are too high to make cancellation worthwhile?

How many of the councillors who were involved in the signing of the original deal will care if it ends up costing a fortune?

The ruling councillors in 2006 are highly unlikely to be the ruling councillors in 2016.

Councils have the power to make the wrong decisions in private and local residents have no options but to pay for those decisions; and when, many years later, councillors want to discuss a major revision to the contract, which could involve paying compensation on the basis of further promised savings, they have the power to go into private session again.

Those who have no right to know what’s going wrong are the captive council tax payers – those who fund the council’s decisions on the basis of never-ending promises of “savings” – savings that are rarely if ever independently verified as having been achieved.

The system could work well if big decisions were taken in public view.

ICT suppliers are not always obsessed with secrecy. They tend to want only very specific details kept secret. Ian Watmore, former head of Accenture, later government chief information officer and the first Civil Service Commissioner, has been a notable advocate of public sector openness.

But council officers and ruling councillors usually want to have all discussions about outsourcing deals in private – largely because life is simpler without accountability.

It’s not a political matter. Birmingham council is staunchly labour but it was a coalition of Conservatives and Lib-dems that set up Service Birmingham in 2006.

In the same way as the government imposed openness on local councils, so new laws or government guidelines could force councils to be open on big decision and major revisions to contracts.

There again, if council tax payers knew in advance the whole truth about the likely full-term costs and speculative benefits of a major IT-based outsourcing deal or joint venture, would such a public-private partnership deal ever be signed?

Update 11.05 17 November 2016

Barnet Council has this week published a report on “£31” savings from its contract with Capita, alongside “increased resident satisfaction”. Barnet outsourced IT,  HR, a call centre and other services in 2013 in a 10-year contract. The Barnet report will be the subject of a separate post on Campaign4Change.

Birmingham set to pull out of [part of] Capita joint venture in revenues collection overhaul.

 

Avon and Somerset Police to end outsourcing deal after years of proclaiming its success

avon and somerset police logoBy Tony Collins

Avon and Somerset Police has been consistent in its good news statements on the force’s “innovative” outsourcing deal with IBM-owned Southwest One.

These announcements and similar FOI responses have a clear message: that savings from the deal are more than expected.

But the statements have differed in tone and substance from those of Somerset County Council which ended up in a legal action with Southwest One.

Somerset’s losses on its Southwest One deal could leave the casual observer wondering why and how Avon and Somerset Police had made a success of its deal with Southwest One, whereas the county council has had a disastrous experience.

Now the BBC reports that Avon and Somerset will not be renewing its contract with Southwest One when the deal expires in 2018.

Southwest One is 75% owned by IBM and carries out administrative, IT and human resources tasks for the force.

Avon and Somerset Police’s “new” chief constable Andy Marsh – who took up the post in February 2016 – confirmed he has “given notice” that the Southwest On contract will not be renewed.

Andy Marsh, chief constable, Avon and Somerset.

Andy Marsh, chief constable, Avon and Somerset.

Instead he said he wants to work with neighbouring police and fire services. Marsh said,

“We will be finding a new way of providing those services. It is my intention to collaborate with other forces. I do believe I can save some money and I want to protect frontline numbers.”

Marsh came to Avon and Somerset with a reputation for making value for money a priority.

These are some of the statements made by Avon and Somerset Police on the progress of the Southwest One contract before Marsh joined the force:

  • “I am delighted with the level of procurement savings Southwest One is delivering for us, particularly as it is our local communities who will benefit most as front-line services are protected. “
  • “Using Southwest One’s innovative approach, we have been able to exceed our expected savings level.”
  • “I am looking forward to building on our close working relationship with Southwest One to deliver even greater savings in the future.”

FOI campaigner David Orr says of the police’s decision not to renew its contract with Southwest One,

“This controversial contract with IBM for Southwest One was signed in 2007 with the County Council, the Police and Taunton Deane Borough Council.

“We were promised £180m of cash savings, an iconic building in Taunton at Firepool, as well as new jobs and a boost to the economy. None of that ever materialised. “

Comment

If Avon and Somerset Police is happy with its outsourcing deal with Southwest One, why is it not renewing or extending the contract?

It’s clear the “new” chief constable Andy Marsh believes he can save money by finding a new way of delivering services, including IT. This sounds sensible given that the client organisation will at some point have to contribute to the supplier’s profits, usually in the later years of the contract.

Savings by ending outsourcing

Public authorities, particularly councils, when they announce the end of an outsourcing contract, will often say they plan to make substantial savings by doing something different in future – Somerset County Council and Liverpool Council among them.

Liverpool Council announced it would save £30m over three years  by ending its outsourcing deal.

Dexter Whitfield of the European Services Strategy Unit which monitors the success or otherwise of major outsourcing deals, is quoted in a House of Commons briefing paper last month entitled “Local government – alternative models of service delivery” as saying,

“Councils have spent £14.2bn on 65 strategic public-private partnership contracts, but there is scant evidence of full costs and savings”.

According to Whitfield, this is due to “the lack of transparent financial audits of contracts, secretive joint council-contractor governance arrangements, poor monitoring, undisclosed procurement costs, a lack of rigorous scrutiny and political fear of admitting failure”.

If it’s so obvious that outsourcing suppliers will eventually try to make up later for any losses in the early stages of a contract – suppliers are not registered charities – why are such deals signed in the first place?

Do officials and councillors not realise that  their successors will probably seek to save money by jettisoning the same outsourcing deal?

The problem, perhaps, is that those who preside over the early years of an outsourcing contract are unlikely to be around in the later years. For them, there is no effective accountability.

Hence the enthusiastic public announcements of savings and new investments in IT and other facilities in the early stages of an outsourcing  contract.

It’s likely things will go quiet in the later years of the contract when the supplier may be trying to recoup losses incurred in the early years.

Then, suddenly, the public authority will announce it is ending its outsourcing deal. Outsiders are left wondering why.

Good news?

Given Avon and Somerset’s determination to end its relationship with Southwest One, can we trust all the good news statements by the force’s officials in past years?

With facts in any outsourcing deal so hard to come by, even for FOI campaigners, selective statements by public servants or ruling councillors about how successful their deal is, and how many tens of millions of pounds they are saving, are best taken with a pinch of salt.

Especially if the announcements were at an early stage of the contract and things have now gone quiet.

Thank you to David Orr for alerting me to the BBC story and providing links to much of the material that went into this post.

From hubris to the High Court (almost) – the story of Southwest One.

Too easy for councils to make up savings figures for outsourcing deals?

Cornwall a model of openness as outsourcing deal with BT turns sour?

By Tony Collins

Will Barnet Council ever be as open as Cornwall Council has been over the performance of its IT outsourcing supplier?

Two years ago Cornwall signed a 10-year £260m strategic “partnership” with BT. The word “partnership” seems odd now that BT has taken out an injunction against Cornwall to stop the council ending the relationship 8 years early.

The two sides will go to court in December to determine if the council has a right to terminate the contract now.

If it loses  the case, Cornwall will have to retain as its main IT services supplier a company that has been its High Court adversary. The judge may also order the council to pay BT’s legal costs.

The odds may be against Cornwall’s winning because BT has much experience in outsourcing legalities. It’s possible that its managers have been collecting evidence of  any council shortcomings from day 1 of the contract,  in case the relationship turned sour.

But independent Cornwall councillor Andrew Wallis says on his blog that BT is dragging the council to court because of BT’s own failings. The council says BT has not achieved its key performance indicators or met to its guarantees on creating new jobs.

Cornwall council logoCornwall threatened to terminate for breach of contract but did not do so while it was in talks with BT’s senior corporate executives. When an amicable termination could not be agreed BT instructed its lawyers to seek an injunction preventing the council from terminating, which they did at a hearing on 12 August.  The result was that the High Court agreed to an expedited trial that will start on 1 December 2015.

It’s all a far cry from the time two years ago, before the contract was signed, when BT and council officers were promising much, and saying little about what could go awry.

In its literature, amid beautifully-executed artwork and graphics, BT highlighted its success at South Tyneside Council, its sponsorship of events such as Comic Relief, Children in Need and Childline and its presence as one of the largest employers in the South West.

Similarly, Cornwall officers, in 2013,  wrote reassuringly about any forthcoming deal with BT. They said:

“It should also be borne in mind that strategic partnerships are nothing new. BT – and other councils – have been involved in them for more than 10 years.

“Similarly the outsourcing market is mature and well understood. The UK local government IT and Business Process Outsourcing market is the biggest outsourcing market in the world and there are over 100 deals in operation.

“Risks are sometimes managed well and sometimes managed badly. The risks have been mitigated by using expert advisors and the Council has senior officers who understand this territory well.”

A BT spokesman told Government Computing this week:

“BT has commenced legal action to ensure fair and proper handling of the issues which have arisen about BT Cornwall, and while this is taking place, it would be inappropriate for us to comment.”

Comment

How is Capita’s performance on its contract at Barnet? We don’t know. The success or otherwise of the deal is blanketed in secrecy. In May Barnet blogger Mr Reasonable offered to make a charity donation of £250 if the council showed it was making the promised savings. The money went unclaimed.

There is no evidence of any failure of Barnet’s outsourcing deal. But would the public or media ever know if the supplier’s performance was falling short of the council’s expectations?

Cornwall has many independent councillors (36 compared with the 37 ruling Liberal Democrats). Debates tend to be on the merits of the matter not on the basis of party politics.

Barnet’s policy is tied in with a political ideology: ruling councillors want to turn Barnet into a “commissioning council” which involves outsourcing as much as possible.

In  practice the bedrock of this ideology is the relationship with Capita. If it went wrong would Barnet have too much to lose to go into dispute? For the sake of its ideology would Barnet accept any quality of service Capita delivers?

Cornwall

In threatening BT with termination because of breaches of contract, Cornwall Council could be criticised for not letting a 10-year outsourcing bed down. It’s unusual for a strategic partnership to end up in court less than 3 years into a 10-year contract.

On the other hand BT promised to create jobs in year 1 and 2 of the contract that the council say have not materialised. Councillors and officers are unhappy about many other aspects of the deal.  BT took on about 280 full-time equivalent council employees, about 130 of whom worked in Information Services.

What’s striking about the history of outsourcing discussions at Cornwall, and the run-up to the signing of a contract, is its openness. It would be easy for BT’s defenders to say that Cornwall’s open, feisty and unforgiving attitude are factors in the strained relationships so far.

On the other hand the problems Cornwall has experienced in the first 2 years of the relationship may be normal in outsourcing deals at other councils. It’s  just that ruling councillors and officers don’t talk about them in public.

All the more credit to Cornwall for its openness.

Barnet’s outsourcing deal may be more successful than Cornwall’s – but how does anyone outside a small group at Barnet really know? Local government and democratic accountability are often uncomfortable bedfellows.

Thank you to Dave Orr who drew my attention to the latest developments at Cornwall Council. 

Cornwall Council rushes to sign BT deal before elections

Cornwall Council tries to pull the plug on BT Cornwall

BT Cornwall is not working for Cornwall as it should

Overview of BT Cornwall’s performance against commitments and guarantees – as perceived by Cornwall’s officers

KPI measures Achieved (185/289) – 64%

PI measures Achieved (266/402) – 66%

Service Transformation (percentage of plans completed) – 38%

Financial contractual baseline savings (10% & 11.6%) – 100%

Trading gain share received (est £17.4m over 10 years) – £0

Guaranteed new jobs in Cornwall (yrs 1 & 2 111 new jobs target / 35.1 created) – 32%

Committed new jobs in Cornwall (yrs 1 & 2) – 0


Some of BT’s pre-outsourcing deal literature for Cornwall’s councillors

  • BT is a FTSE 100 company
  • We are one of the largest employers in the UK and the SW
  • We currently employ > 5,900 people in the South West including 1,028 Cornwall residents
  • BT already makes a financial impact of over £749m a year in the region
  • BT spent >£145m with local suppliers in 2011/12 and will increase this substantially through the Partnership
  • We generate 142,000 fraud referrals each week for the DWP across 50 data sources from 260,000,000 records
  • We undertake c.1,000,000 criminal record checks per annum at Disclosure Scotland to safeguard vulnerable groups.
  • We provide the highly secure directory services for the 260,000 military and civilian defence staff
  • We collect circa £580,000,000 in tax revenues each year on behalf of our local authority partnerships
  • The NHS Spine platform exchanges £3.5m prescription messages per week
  • We are delivering in excess of £500,000,000 savings in partnership with six UK Councils through efficiency and transformation programmes
  • We run one of the worlds largest data warehouses to enable the timely anonymous collection of patient data and information for clinical and billing purposes other than direct patient care .
  • Yes, we do poles and wires…but did you also know in the public sector we process over 532,000 benefits assessments for new applications and change of circumstances each year in our Local Government Partnerships?

Are councillors in Somerset ignoring the wisdom of their auditors?

By Tony Collins

It’s good to see auditors in local government doing their job well  – not accepting verbal assurances and seeking proof that all is well with an outsourced system .

But what if councillors apply a lower standard – and accept verbal assurances without checking them?

A  strong report by the South West Audit Partnership [SWAP] went to councillors at Somerset County Council’s Audit Committee on 2 July 2015. The report was about problems with an outsourced system, the Adults Integrated Solution [AIS].

Although not the original supplier, IBM has provided AIS to Somerset County Council under a 10-year outsourcing contract/joint venture – Southwest One –  that was signed in 2007.

The SWAP report said limited progress has been made in implementing the AIS-related recommendations from its 2012-2013 audit report. It added that:

– AIS performance and response times could be “less than adequate for users’ needs”.

– Southwest One was unwilling to develop a service level agreement specifically for the AIS application.

– “Poor response time has led to the disabling of enhanced audit trails/logs that would make it possible to trace and attribute user activity in the system.” SWAP added that this was “worrying” given that the data involved was “sensitive and personal”.

– SWAP had been refused access to the contract between IBM and Northgate, the original supplier of AIS.

Are verbal assurances worth anything?

Having studied AIS from time to time over 2 years, and spoken to its users, SWAP’s auditors have been reluctant, on some of their concerns, to accept verbal assurances that all is well.

When they have sought documentary evidence to support assurances it hasn’t always been forthcoming.

SWAP said in its latest report:

“Verbal assurances were provided that the ToR for AIS Programme Board had been reviewed and that roles and responsibilities in relation to system ownership had been clarified. However, no evidence was provided to support these assurances.”

Now Somerset’s audit committee has done what its auditors wouldn’t do and has accepted verbal assurances that all is well with AIS.

SWAP’s auditors had expressed a multitude of concerns about AIS. But Somerset’s officers verbally assured audit committee councillors that a single upgrade had solved all the problems.

One officer, in a statement, told Dave Orr, a Somerset resident who campaigns for openness over IBM’s relationship with the council:

“I can confirm that all of the fundamental issues raised through the [SWAP] Audit Report [on AIS] have now been addressed…

“The AIS application is one of the top systems used by local authorities for social care services in the UK. The performance issues referred to in the Audit Report were resolved by a system upgrade.”

Comment:

It’s difficult if not impossible to see how a single upgrade could address all the points SWAP made – such as the lack of a service level agreement to cover AIS or the refusal by IBM to supply a copy of its contract with Northgate.

Whenever auditors produce a hard-hitting report there will be 2 opposing sides: defenders of what’s being criticised and the auditors.

It is up to the auditors to cut through any dissimulation, obfuscation and prevarication to identify what’s going well, what isn’t, and what the uncertainties and risks are.

Auditors would not be doing their job if they always accepted verbal assurances at face value.

But what if auditors are undermined by councillors who readily accept verbal assurances from their officers who wish to defend the suppliers?

A supplier that doesn’t have to provide documentary evidence can say anything in defence of its systems and the quality of service.

Somerset’s councillors are lucky to have auditors as independently-minded as SWAP.

It’s unlikely that SWAP would accept at face value the Somerset officer’s suggestion that because AIS is widely used it’s unlikely to be a poor system.

This would be like Ford saying a particular Mondeo is unlikely to be at fault because thousands of people happily own one.

Every IT installation is different, even if the main software package is widely used. The hardware, network configuration, load on the network, facilities and interfaces installed will render every IT installation unique.

It’s conceivable that every council client of AIS could have a trouble-free service except Somerset.

Are the council’s audit committee councillors gullible to accept verbal assurances about the problems with AIS being solved without requiring proof?

Where does this leave the 775 users of Somerset’s AIS, many of whom may be having to do difficult work in managing vulnerable adults while trying to cope with what may be one of the UK’s worst outsourced systems?

Thank you to Dave Orr for providing information that made this post possible.

Pity the 775 users who use this outsourced council system?

SWAP report on AIS for Somerset County Council’s Audit Committee 2 July 2015

SWAP 2012-2013 audit report on AIS

 

 

Pity the 775 users who use this outsourced council system?

By Tony Collins

Adult care systems are a cinderella IT service for councils.

It’s rare for journalists to write about them, for good or ill, perhaps because they help council staff deal with vulnerable adults. Such systems help with payments to care home and hospice providers. They help staff organise facilities for adults with learning disabilities or dementia, and respite care for adults at risk of abuse.

One such system has 775 users in Somerset. It’s a “critical” application according to the county council there.  The Adults Integrated Solution was originally supplied by Northgate. The system became IBM’s responsibility under a 10-year outsourcing and joint venture, Southwest One.

The latest in a series of excellent reports on the system’s enduring problems by auditors the South West Audit Partnership goes to Somerset County Council’s Audit Committee today (2 July 2015).

How bad is bad?

The report says the system’s response times have been so poor  that audit trails and logs have been disabled. So how can IBM and the council trace and attribute user activity in the system – particularly one handling sensitive and personal data?

The report says this disabling of the audit trial and logs is “worrying”.

Auditors reported on the system’s weaknesses in their 2012/2013 audit report.  Since then there has been only “limited progress” in implementing recommendations, says today’s report.

On some of their priority recommendations, auditors say they have been unable to obtain documentary evidence to support implementation. They have received verbal assurances – but they remain concerned.

The report says that AIS performance and response times “can still be less than adequate for users’ needs” and IBM is unwilling to develop a service level agreement specifically for the AIS application.

Indeed IBM has refused to give the county council a copy of the AIS contract with Northgate and it was not made available to the South West Audit Partnership for its audit of the system.

This may prompt councillors to ask how the council can properly manage a critical application if it has no control over the system or the outsourcer.

Repeated audit reports on the problems appear to have left matters unresolved.

Below are some of the concerns of the South West Audit Partnership as mentioned in its 2012/2013 audit report. It reports today that it has received only “partial” assurances that these problems have been solved.

Applications could be unavailable a month or more

Said the South West Audit Partnership: “We have identified in previous audit reports that there is no tested IT disaster recovery strategy. This is a strategy that would be put into effect in the event the Somerset County Council data centre was unavailable for any reason. Although a contract has been signed with Adam Continuity, applications could still be unavailable for a month or even more.”

No formally-named business system owner

“As of November 2014, Helen Wakeling (AIS System Owner) has left Somerset County Council. The responsibility of AIS system ownership needs to be reassigned and formalised.”

Payments to care providers not properly checked?

“… there does not appear to be a process to ensure payments are authorised, appropriate, complete and accurate…

 

IBM has no contractual duty to provide a good system

“There is no contractual requirement or service level for Southwest One [IBM] to provide a platform that delivers performance and response time that is acceptable to ASC [Adult Social Care] Operations.”

Data validation?

“Data quality in AIS data is undermined by the lack of robust input validation within the AIS application.

“Client records can be created with a minimum of information. Key personal identifiers such as data of birth, NI number and NHS number do not need to be entered and this both increases the risk of duplicate records and provides less data with which to identify those that have been created…”

Is IBM hiding AIS contract from the council?

“Southwest One currently owns the contract with Northgate and would not provide SWAP with a copy. As a result SWAP [South West Audit Partnership] was not able to evaluate Northgate’s compliance with the terms of the contract including licensing requirements…”

Personal data at risk?

“It was noted that developers have access to the production environment, unmasked live production data is used by developers and vendors for testing purposes and desktops are not locked down.”

Potential for fraud?

“In addition the authorise function, a security feature available in AIS has not been implemented resulting in all authorisations occurring outside of AIS. As a result data loss, potential corruption of data, incorrect and potentially fraudulent use of the application, missed, inappropriate or additional payments, will not be identified and acted upon.”

Corrupt data?

“In spite of a recent security incident that appeared to result in some data corruption, there is no reporting in place or review of user, super user or generic user access for appropriateness.”

Can former staff still log on?

“Terminated users were identified with valid AIS access credentials. Just less than 10% of managers with access were found to be no longer employed. In addition user ids are not disabled after not being used for a period of time.”

Unattended screens?

“The time-out for the application is 1 hour. Although users typically leave the application on and lock the screen when they go out to lunch, this process is inefficient, leaving sessions unavailable for others and insecure, since the user could forget to lock their screen and allow bypass of all security.”

System security?

“We also identified in our capacity management audit that desktop lock-down is not in effect and as a result AIS data can be downloaded and copied to USB flash storage. SWAP recommended data security policies be developed and implemented …”

**

Dave Orr who has followed events at Somerset closely since the county council signed the Southwest One contract in 2007 has written to audit committee councillors about the AIS system.

One of his questions is how the council could have transferred a critical application to IBM without its being protected by any specific service level agreement.

Orr says: “I do not believe that an in-house IT service, with a head of IT in the direct employ of this council, would be allowed to leave these serious shortcomings in performance, audit logging and disaster recovery unaddressed.”

Comment

So much for the claims back in 2007, when the council and IBM formed Southwest One, that the services would be “beyond excellence”.

If this is the worst outsourced system in the UK where does that leave the 775 council users who no doubt are trying to do their best for the vulnerable adults in their community?

Thank you to Dave Orr for providing the information on which this article is based.

Medication errors 6 months after “admin” system goes live

By Tony Collins

When Croydon Health Services NHS Trust went live with Cerner Millennium in October 2013 a spokesman told eHealth Insider:

“The new system will give everyone working at the trust better access to information and an accurate picture of what all of our services are doing. This will allow staff to make quicker, more informed decisions about the care patients need. It will improve the quality, safety and efficiency of care.”

The go-live has indeed brought some benefits. The trust says these include more efficient management of medicines, more detailed patient information being conveyed between shifts and departments, and better management of beds.

But earlier this week Campaign4Change reported on some of the problems associated with the go-live including 50,000 patients on the trust’s waiting list and a “serious incident” declared over diagnostic waits including extended waits for patients with suspected cancer.

Said the trust’s Audit Committee in March 2014 – 6 months after the go-live of the Cerner Millennium Care Records Service [CRS] :

“CRS Millennium Lessons Learned

“KB [COO and Deputy Chief Executive] outlined the context in which the implementation of CRS had taken place from the time the Business case had been approved in 2010 to the commencement of deployment in January 2011 and its subsequent implementation to date.

“She noted the 7 official “go live” dates which were reflected in the lessons learned report many of which fell during a period of organisational change.

“She noted that the deployment in CHS [Croydon Health Services NHS Trust] had been the most comprehensive deployment to take place nationally.

“It was noted that Programme Team had considered the lessons learned from other [NPfIT] Care Records Service deployments as part of the implementation programme at CHS and that there was no evidence of harm to patients despite the challenges around delivery of service.

” However significant operational challenges were experienced and a deep dive into the implementation of CRS was carried out and the findings submitted to the Finance & Performance Committee and the Trust Development Authority.

“In relation to ‘no harm to patients’ SC [Chairman] asked what empirical evidence there was to support the findings of the Deep Dive.

“KB explained from October 2013 to date there were 50,000 patients on the waiting list, but a patient validation exercise had taken place which had confirmed that no patients had come to any harm.

“The potential backlog would be cleared by the end of March but in the meantime those patients on waiting lists would be subject to a further clinical review to ensure that there was no harm.”

In fact the trust is still working through the backlogs; and long waiting times are not the only matters arising from the Cerner Millennium implementation. A medication safety report for the month of March 2004 highlights these lessons:

“The patient was prescribed Furosemide for acute pulmonary oedema on 12/03/2014. The drug was not administered and the reason not documented. On review of the incident, it was identified that there was a mis-communication between both nurses and the fact that they have started using a new computer system had caused confusion which led to the error. Once error identified the dose was given and ward sister has ensured that staff will go for further training if unsure on how to use the CRS Millennium system…

“Third incident was a failure to administer fluids (Normal Saline) in an acute kidney injury patient with an admission creatinine of greater than 700. Again there was confusion with the electronic prescribing system and the nurse thought that patient did not have a drug chart as the electronic prescribing system had gone live whereas in fact there was a paper drug chart for the fluid. The position of the venflon on the patient arm also contributed to the delay. Once error identified the fluids were given but were not running to time and patient improved. Ward sister has ensured that staff will go for further training if unsure on how to use the CRS Millennium system and staff were also briefed about poor documentation of the incident…

“Fourth incident occurred involved a patient prescribed ACS protocol for NSTEMI, Positive trop T. The aspirin 300mg, clopidogrel 300mg and fondaparinux 2.5mg were not administered and not signed for. Omission of medicines was discussed with doctor looking after the patient and the patient did not come to any harm. Omission occurred as agency staff did not know how to use CRS Millennium. On review of incident all staff were briefed on importance of patients being administered medicines on time and in particular a discussion took place between agency staff and for agency staff to have adequate CRS Millennium training. There are champion users nurses on wards who are able to train Agency staff.

NPfIT

Cerner Millennium is provided to the trust under a national contract hosted by the Department of Health and managed via a Local Service Provider (LSP) contract with BT. The contract covers trusts in London and the south of England.

The DH contract expires on 31st October 2015 after which point the DH will no longer fund any of the services currently hosted by them. This includes both the software and licencing costs for Cerner Millennium as well as the BT data storage facilities and other costs.

The DH requires all trusts with Cerner under the NPfIT to commit to an exit strategy before 31st October 2015.

Comment

Is Cerner Millennium merely an administrative system as officials at Croydon Health Services NHS Trust claim it is?  The implication is, with an administrative system, that it cannot be involved in any harm to patients. Officials at Connecting for Health when they ran the NPfIT used to describe Cerner Millennium as an administrative system.

It is the deployment of this “admin” system at Croydon that is implicated in medication errors, a waiting list of 50,000 people, and long waits for diagnostic tests for people with suspected cancer.

If Whitehall and NHS officials cannot see the system as other than administrative, this is a mistake that may help to explain why a poor service for patients, which sometimes has serious potential clinical implications,  is so commonplace, even months after go-live.

50,000 on waiting list and cancer test delays after NPfIT go-live

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

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