By David Bicknell
Four companies have been identified as potential partners for new mutual venture, My Civil Service Pension.
The four – Xafinity, JLT, Wipro and Capita – have been chosen from an initial tender list of 50 potential partners.
There is an article on the shortlist on the Guardian Public Leaders Network.
Posted in Campaign4Change, mutuals, public sector, public services, Uncategorized
Tagged Capita, JLT, My Civil Service Pension, Wipro, Xafinity
By David Bicknell
In the aftermath of the Open Public Services White Paper, Stephen Kelly, who is in charge of the Coalition’s plan to mutualise the public sector, has been interviewed in the Daily Telegraph here.
Meanwhile, in this clip from a Policy Exchange debate on mutuals, Julian Legrand has been quoted as saying managers are the biggest barrier to employee ownership
By Tony Collins
C
onservative MP Richard Bacon wrote to the NHS Chief Executive Sir David Nicholson yesterday warning that a failure to disclose information to the Public Accounts Committee was a “very serious matter”.
Bacon, a long-standing member of the Public Accounts Committee, wrote to Nicholson about advance payments to CSC under the NHS National Programme for IT.
The MP is concerned that the Department of Health did not mention a £200m advance payment to CSC at a hearing of the Public Accounts Committee on the NPfIT detailed care records systems on 23 May 2011; and the payment wasn’t mentioned in the Department’s subsequent memo to the committee.
Said Bacon in his letter:
“I understand that the advance payment of £200m to CSC was made in April 2011 but the Department of Health’s memo of 7 June 2011 doesn’t mention it.
“The failure to disclose to the PAC an advance payment of £200m is a very serious matter. The fact that the payment appears to have happened after 31 March 2011 is scarcely the point.
“What is going on? …
CSC declared the £200m advance payment in regulatory announcement
CSC has told regulatory authorities in the US that on 1 April 2011, pursuant to the NPfIT contract, the “NHS made an advance payment to the Company of £200 million ($320 million) related to the forecasted charges expected by the Company during fiscal year 2012”.
The payment was reported by E-health Insider last month.
It appears that the Department decided to give the committee details of advance payments to CSC up until 31 March 2011. The undisclosed £200m payment to CSC was made the next day, 1 April.
As the Department of Health wrote to the committee on 7 June there is no clear reason for its choice of 31 March as the cut-off date for informing MPs of advance payments to CSC.
It would not be the first time the Department has withheld the latest information on the NPfIT from what it regards as outsiders, such as Parliament and the media.
When the National Audit Office was investigating the NPfIT several years ago it was not told of the latest Ipsos MORI survey on NHS perceptions of the National Programme.
The Department instead gave the NAO an older and more positive Ipsos MORI survey. The NAO confirmed to me it had not seen the latest survey [which had some negative findings on the NPfIT].
Today some in the Cabinet Office are exasperated at the disdain with which some officials at the Department of Health – not all – treat outside supervisory organisations such as the NAO, the Public Accounts Committee and the Cabinet Office.
It appears that some in the Department regard these organisations as necessary by-products of democracy that must be tolerated but not encouraged.
Comment:
Major change is unlikely to happen in Whitehall or at least within the Department of Health and NHS Connecting for Health if officials are allowed, with ease, to dismiss their scrutineers with a wave of their hand.
The culture of allowing the DH to withhold the truth about the NPfIT needs tackling. All credit to Bacon and the Cabinet Office for trying to do just that. It’s likely that Katie Davis, the interim health CIO, will also seek to make the DH less introspective and defensive, at least in terms of the NPfIT and health informatics generally.
**
Bacon’s letter to Sir David Nicholson
This is Bacon’s letter dated 14 July2011 to Nicholson, copied to the head of the National Audit Office Amyas Morse, the chair of the Public Accounts Committee Margaret Hodge, and the Cabinet Office.
Dear Sir David
NATIONAL PROGRAMME FOR IT IN THE NATIONAL HEALTH SERVICE
I do not seem to have received a reply to my email of 27 June below.
Making advance payments of any kind at all is wholly at variance with the Department of Health’s long-stated boast that the NPfIT contracts “only pay for delivery”, but let us leave aside this basic point for the moment.
I understand that the advance payment of £200 million to CSC was made in April 2011 but the Department of Health’s memo of 7 June 2011 doesn’t mention it. The failure to disclose to the PAC an advanced payment of £200 million is a very serious matter. The fact that the payment appears to have happened after 31 March 2011 is scarcely the point.
What is going on? Please reply to my email below with its various questions without further delay.
Yours sincerely
Richard Bacon MP for South Norfolk, Member of the Public Accounts Committee
Bacon’s earlier letter to Nicholson, dated 27 June 2011
Dear Sir David
NATIONAL PROGRAMME FOR IT IN THE NATIONAL HEALTH SERVICE
I am writing following the hearing of the Public Accounts Committee on Monday 23 May 2011, to follow up on two important issues that were raised during your evidence:
1. ADVANCE PAYMENTS TO SUPPLIERS
In your supplementary memorandum to the PAC following the hearing you gave a total of advance payments made up to 31 March 2011, in respect of all contracts over the whole period of the Programme, of £2,532m of which suppliers have retained £1,328m. You also identified a further £119 million of advance payments to be earned or refunded. Since the memorandum was received by the PAC, it has been reported that the NHS made an advance payment of £200 million to CSC in April 2011. http://www.ehi.co.uk/news/acute-care/6971/nhs-made-£200m-april-advance-to-csc
I should be most grateful if you would let me know the answers to the following questions:
1. Is this report accurate?
2. Why was this payment was not reported to the PAC, either during the hearing or in the subsequent memorandum?
3. What was the justification for this payment and what value does it represent to the NHS?
4. What will happen in respect of this payment if a new memorandum of understanding is not in fact signed with CSC?
5. I would also be grateful if you would comment on the CSC filing with the US Security and Exchange Commission, which states that in the opinion of the company, if the NHS were to terminate the current contract “for convenience” it would owe fees totalling less than the $1 billion asset value CSC now has on its books for the contract. How is this consistent with the claim at the PAC hearing by Ms Connelly that the cost of terminating the CSC deal could “potentially leave us exposed to a higher cost than if we completed as it stands today”?
2. THE COST OF DEPLOYING CERNER MILLENNIUM AT NORTH BRISTOL
Second, I would be grateful if you could comment on the cost of deploying Cerner Millennium at North Bristol, reported in your memorandum as £21 million, including service for 56 months, and on the current expected go-live date. Specifically:
6. Can you explain why the delivery date agreed with BT at the contract “reset” was 4th June 2011?
7. Why it was then revised to 2nd July 2011?
8. And why it now appears that there is no agreed delivery date at all?
9. Can you also give your best comparison of the cost of deploying the Cerner Millennium system at North Bristol, with the cost to University Hospitals Bristol of deploying the System C Healthcare Medway system outside the National Programme? It would appear from media reports that this latter contract includes deployment of functionality including PAS, Accident and Emergency, maternity, theatres, clinical data collection, and a data warehouse and reporting system, as well as integration of third party and current Trust applications. According to the National Audit Office, the average cost for each new site under the BT South contract is £28.3 million, but the cost of the Medway system to UHB has been reported as £8.2 million over seven years. (http://www.guardian.co.uk/healthcare-network/2011/may/19/university-hospitals-bristol-foundation-trust-awards-e-patient-contract) What is the justification for this apparent difference?
10. As the Senior Responsible Owner for the National Programme, can you give your explicit undertaking that the North Bristol contract represents value for money for taxpayers?
I look forward to receiving your reply.
With many thanks
Yours sincerely
Richard Bacon
By David Bicknell
Responding to the Government’s Open Public Services White Paper launched by David Cameron this week, the Institute for Government says the agenda is a radical one, but failure to deliver will come at a cost.
Commenting on the launch, the Institute’s Programme Director, Tom Gash said:
“There’s not much that is new in this white paper but it is still a radical agenda for change. Other governments have tried and failed to remodel public services. The difference this time is that the stakes are higher. With massive cuts to public spending, if these measures don’t work, the state will not be in a position to shore up services.
“A white paper by itself doesn’t change anything. To make this vision a reality, a lot of work lies ahead. Failure to take these next steps in any of the policy areas covered by the paper will lead to the risk of future u-turns, uncertainty and failure”.
The Institute argues that several key issues need to be addressed going forward. These include:
The Institute argues that policies in the white paper are at different stages of their development. Ministers, central and local government and practitioners will all have work to do if they are to ensure that they are implemented in a way that genuinely improves public services and the lives of citizens. Drawing on its publication Making Policy Better, the Institute recommends that departments will need to:
Gash added:
“In order to avoid repeating the experience of the beleaguered NHS reforms, the coalition will need to invest a good deal of time and resources in delivering its radical programme for reforming public services. To publish a white paper and then walk away will not be enough but today’s announcement, with its emphasis on consultation and analysis seems to show that government has learnt from its mistakes and is ready to take the time to deliver something which could change forever the way citizens choose and receive their services”.
By David Bicknell
Some commentators believe that the Government could and should have gone further with the publication of the Open Public Services White Paper.
Writing in the Guardian, Colin Cram, the former chief executive of the North West Centre of Excellence, makes some constructive suggestions. He argues that publishing the white paper is “a bold step. It is an attempt to create a coherent and different approach to providing public services. My feeling is that the consultation will be genuine, which will provide an opportunity for criticisms to be addressed and the government to back off from impracticable ideas or change its approach. The risks for the government are that the rhetoric looks likely to exceed the scale of delivery and it could be easy for the parliamentary opposition and the electorate to hold it to account.
Under the sub-heading ‘Making a Change’, Cram makes the following points:
“The white paper places much emphasis on consultation and facilitating change rather than directing. A weakness is that many proposals are projects or programmes and should be subject to the established public sector controls such as “starting gate” and “gateway”. These are not bureaucratic, help identify what should not go ahead, whether the necessary success factors are in place at each stage of the project and whether there need to be changes. These robust approaches save time and money and greatly increase chances of success. The white paper should have provided assurance about applying these disciplines.
“The paper argues that the public sector should be a commissioner of services rather than a provider, yet appears to run out of ideas on where this might operate, focusing mainly on social care and to a lesser degree the hackneyed “back office services”. The government is attracted by employee-led mutuals, but suggests that these will be created voluntarily.
“The potential contribution of the private sector to the diversity of service providers is scarcely mentioned. Lib Dems 3, Conservatives 0? However, local government will increasingly outsource front and back-office services, and we can expect the NHS to continue to do so.”
“Critics might argue that the white paper represents little more than bringing together government policy announcements in a coherent form: health and wellbeing boards, strengthening the powers of local government over the NHS, removing excessive monitoring and oversight by central government, community budgets and retention of business rates. However, it does provide a narrative and context.”
“Absent from the paper is how one might manage the anticipated increasing diversity of service providers. The wider public sector has not been good at this, hence the Southern Cross debacle. Integrated commercial management of markets and suppliers throughout the public sector is vital.
“New commercial models include incentivising suppliers to deliver successful outcomes and assigning the risk to them, though I would question whether payments to suppliers under the work programme will be “based primarily on the results they achieve” unless the bar is set very low. Risk sharing would rule out many social enterprises.”
Posted in Campaign4Change, mutuals, NHS, outsourcing, public sector, public services
By Tony Collins
Chinook ZD576
The day after the fatal crash of Chinook ZD576 on the Mull of Kintyre an RAF Board of Inquiry convened.
There was little to go on: what could be retrieved from the fire at the crash site, and records of recent trouble with the aircraft type, including difficulties with the Chinook Mk2’s software-controlled “Fadec” system.
There had been so much trouble with the Fadec, in fact, that test pilots had ceased flying the Mk2 the previous day. But operational flights continued.
The crash of ZD576 left no survivors: all 29 on board were killed. There was no cockpit voice recorder. No flight data recorder. Particularly for John Cook, the father of one of the pilots, the absence of black boxes compounded his grief.
While a Concorde pilot for British Airways, John Cook led successful negotiations with the Air Accidents Investigation Branch for the installation of cockpit voice recorders on large passenger aircraft.
He recognised the importance of flight data and cockpit voice recorders to investigators and the families of dead pilots because they could show how an aircraft was performing in the moments before it crashed. A cockpit voice recorder could record audible warnings, pilots expressing concern about a possible malfunction and any unusual noises.
Without black boxes it would be easy to blame dead pilots for a major, fatal accident.
Said John Cook in 1999: “I fought to have the recorders installed and then I lost a son in an aircraft which didn’t have one.”
The campaign begins
In crashes of civil airliners the data from the black boxes often gives the best clues as to the likely cause or causes. Even when the black box data is fully recovered the likely causes of an accident can elude investigators.
So how could anyone know what happened in the moments before the crash of ZD576? In 1995, nearly a year after the accident, the RAF Board of Inquiry produced its findings.
The campaign to restore the reputations of the two pilots of ZD576, Flight Lieutenants Jonathan Tapper and Rick Cook, began.
MoD and RAF attack their own software experts
In some ways the investigation into the crash was exhaustive. In other ways it was limited. It reflected the mindset of the RAF at the time, which was that Chinooks were needed desperately, and, if possible, in greater numbers. The last thing the RAF hierarchy needed was credibility being given to the internal concerns about the helicopter’s Fadec system, in which software controlled fuel to the Chinook’s two jet engines.
Days after the crash on the Mull of Kintyre in June 1994, a senior RAF officer expressed his frustration at the internal concerns over the Fadec.
In a signed, draft memo, the RAF officer attacked the MoD’s own software experts at Boscombe Down. He said their “ongoing stance towards the Mk2 contrasts sharply with the considerable efforts being made by the front line to bring the aircraft into service and maintain a capability”.
Boscombe Down’s attitude, he said, “does nothing to engender aircrew confidence in the aircraft”.
It was beginning to look as if the RAF would not tolerate an investigation that concentrated too much on the integrity of the helicopter and its software. But, to its credit, the RAF brought in the civil Air Accidents Investigation Branch.
The AAIB did not have a free hand, however. The limits of its investigation were agreed with the RAF. The AAIB could not simply require all relevant documents. It was up to the MoD and RAF what documents it showed the AAIB.
And the MoD supplied the bare minimum.
Documents not shown to investigators
Many potentially-relevant documents were to emerge years later, long after the RAF Board of Inquiry had been disbanded. The documents came to light, in part, because of leaks by well-intentioned insiders who were concerned that possible flaws in the airworthiness of the Mk2 were being overlooked.
Back in 1994, the AAIB’s chief investigator Tony Cable knew there had been problems with the Fadec, none of which the RAF hierarchy regarded as serious. Among the many things Cable wasn’t told was that the Superintendent of Engineering Systems at the MoD, Boscombe Down had, nine months before the crash, found flaws in the Fadec that he said in an internal memo were “positively dangerous”.
And Cable didn’t know at the time of his investigation that the MoD was suing the Fadec suppliers because of faults in the system’s software that were exposed by a ground test of a Chinook at Wilmington in the US, Boeing’s “Center of Excellence”.
When the Fadec was working properly, which was most of the time, it made the job of Chinook pilots easier: they could fly the helicopter without controlling power to the engines. When the Fadec systems were not working properly they were apt to leave no trace of a fault, and could endanger the lives of all on board, said Squadron Leader Robert Burke who, at the time of the crash, was one of the most experienced Chinook Mk2 unit test pilots.
A near-catastrophe that left no trace
Four years after the crash of ZD576, Bric Lewis, the pilot of a US Chinook, exclaimed involuntarily “Oh God” into the microphone of his headset. His words were transmitted to all on board. His Chinook was falling out of the sky … upside down.
The displays in the cockpit showed no warning lights… no evidence of any technical malfunction. Then, as inexplicably as the Chinook had turned over, it flipped back again, into a normal, wheels-down position. After it landed safely no serious fault was found.
Bric Lewis and his crew lived to provide evidence that their Chinook had turned over. If they had died in the incident, would they have been blamed on the basis that no serious malfunction capable of causing the crash had been found?
An extraordinary campaign
That the campaign to clear the names of Cook and Tapper has succeeded is extraordinary, and yet it’s not in the least extraordinary. It has been a campaign characterised by its intensity, perseverance, and the status and number of those involved.
It has been a campaign that pivoted on the tenacity of the families of the two pilots and their pro bono advisers. Some of the campaigners cannot be named.
MoD spin
The campaign has also been marked by the determination of the MoD and RAF hierarchy not to attach any credibility or relevance to newly-disclosed information.
In the words of then independent MP Martin Bell in 2001: “The MoD is being anything but straightforward… clearly civil servants are trying to spin the facts to suit the air marshals’ agenda.”
With a manipulative use of language, and an evasive but self-confident way of answering of difficult questions – sophistry exemplified – the MoD was a decisive influence on defence ministers of the last administration.
Every defence minister in the last government was persuaded that there could be only one cause of the accident, and that was pilot error. Tony Blair wrote in his own hand that the pilots were to blame.
So how did one of most grievous military miscarriages of justice in the last 100 years come to be corrected? It was thanks, in part, to the injustice’s enduring visibility in Parliament and in the media, such that David Cameron, when in opposition, promised, if elected, to launch a formal review of the decision to blame the pilots.
And only a prime minister or his defence secretary could, in effect, take the steps necessary to overturn the judgement of a properly-constituted RAF Board of Inquiry. In ordering the Philip review, Cameron proved as good his word.
Liam Fox, too, unlike defence secretaries in the last government, has shown by his actions that he is not prepared to be putty in the hands of his civil servants and RAF air marshals. All credit also to Nick Clegg for his support of the Philip review.
Did the RAF try to dissuade Cameron from holding a review?
It’s unclear whether the RAF tried to discourage Cameron from setting up a review. What is not in doubt is that, in January 2010, a few months before the general election, four former chiefs of the air staff, and a former RAF Chief Engineer, wrote to the Daily Telegraph saying they would wish to brief ministers if there were to be “yet another” review of the RAF’s decision to blame the pilots for the crash of Chinook ZD576.
In their letter, Sir Michael Graydon, Sir Richard Johns, Sir Peter Squire, Sir Glenn Torpy, and Sir Michael Alcock said the finding of gross negligence against the pilots of ZD576 was “inescapable”.
“We understand that in the event of a Conservative administration coming to power it will revisit the Mull of Kintyre Chinook accident and consider the negligence finding,” said the letter of the five knights. “Each one of us has reviewed separately the findings of the Board of Inquiry and reached the same conclusion, namely that basic airmanship failings caused this tragic accident.
“If yet another review is to take place then we would welcome an opportunity to brief ministers and discuss in necessary detail why this finding remains inescapable. In particular, it will be explained precisely why it cannot be overturned by recourse to a hypothesis for which there is no evidence and which is revealed as wholly implausible when tested against the known facts.”
Sir Michael Graydon
Chief of the Air Staff 1992-1997
Sir Richard Johns
Chief of the Air Staff 1997-2000
Sir Peter Squire
Chief of the Air Staff 2000-2003
Sir Glenn Torpy
Chief of the Air Staff 2006-2009
Sir Michael Alcock
Chief Engineer (RAF) 1994-1999
London W1
It is likely that the Philip review came under pressure from the MoD and the RAF not to question the finding of gross negligence. The fact remains, though, that nobody knows the cause of the crash. It could have been pilot error. It could have been a chain of events that had little or nothing to do with pilot error. Indeed the AAIB investigation of equipment recovered from the wreckage revealed several anomalies that were never explained.
That said Tony Cable noted that there was little evidence to be gleaned from the investigation. Cable told a House of Lords select committee on 7 November 2001: “Throughout this investigation the evidence was remarkably thin, from my point of view, I must say”.
What could have caused the crash?
There were many potential causes of the loss of ZD576. What can be said with certainty is that we don’t know why it happened, or the events that preceded it.
One of the lessons is that “evidence” from aircraft manufacturers and their subcontractors should be treated with the same scepticism as speculation about the actions of the pilots. After the crash of ZD576, the main attention of the RAF and the MoD was on the possible actions of the pilots, not on the possible behaviour of the aircraft.
Nobody in the RAF hierarchy questioned the fact that most of the allegations against the pilots were made on the basis of manufacturers’ “evidence”. If that evidence is set aside as lacking impartiality, and indeed the AAIB does not confirm the accuracy of that evidence, there is no basis even for speculation about the actions of the pilots.
One of the things the campaign for justice has shown is that the RAF hierarchy took a circumscribed investigation of equipment found in the wreckage as the basis for a case against the pilots.
Black boxes found in the debris of civil airliners are sometimes transported under armed guard to independent investigators. Manufacturers are not always allowed to look at their equipment until it has been studied independently. Yet in the case of ZD576 manufacturers’ evidence has been taken as the whole truth. An Mod lawyer at the ZD576 Fatal Accident Inquiry in Scotland in 1996 sought to persuade the Sheriff that the manufacturer’s evidence was “hard fact”.
To my knowledge there has never been an investigation by the National Transportation Safety Board, the US equivalent of the AAIB, in which uncorroborated, unchecked evidence from aircraft manufacturers been taken as hard fact.
Today, the lack of understanding at the top of the RAF over how much information is needed after crashes of civil airliners to establish the likely chain of events may help to explain why air marshals still blame the pilots of ZD576.
In their eyes, the lack of evidence of serious technical malfunction appears to mean that the pilots were in control of the aircraft. Such a simplistic assumption would not be made in a full civil aircraft crash investigation.
Justice has now prevailed thanks to the Cameron government, supported by Sir Menzies “Ming” Campbell, Martin O’Neill, and numerous other parliamentarians including Lord Chalfont, James Arbuthnot, David Davis and Frank Field . There are too many other campaigners to name, though I make exceptions with Hooman Bassirian, Karl Schneider and Mike Simons who, at Computer Weekly, were willing to shape and publish innumerable stories in support of the Chinook campaign. David Harrison, a freelance producer at Channel 4 News, which has covered developments since the day of the crash, first alerted me to the flaws in the Chinook Mk2’s Fadec. Most of the documents relevant to the crash came to me from the Tapper family.
Air marshals will never accept that the pilots were not to blame. But that’s a hallmark of institutional disasters: once a decision is taken on the main cause that decision will be supported and stuck to whatever the facts. Thank goodness the Philip review, when it came to its investigation, had an open mind.
**
The campaign for justice for the pilots of Chinook ZD576 – Brian Dixon’s website
PPrune – hundreds of online pages of thoughtful discussion on the crash.
RAF Justice – how the RAF covered up problems with the Chinook Mk2’s Fadec.
Chinook ZD576 – report by Michael Powers QC.
Macdonald report on the crash of ZD576 – by three fellows of the Royal Aeronautical Society.
Flawed Chinook software updated after crash of ZD576.
The Chinook Fadec in-depth – by Malcolm Perks, another of the campaigners
Posted in Campaign4Change, Chinook campaign, legal disputes, outsourcing, public sector, supplier relationships
Tagged Chinook ZD576
Much of the immediate reaction to the Government’s publication of its Open Public Services White Paper concerns issues surrounding assets, definitions of mutuals and most importantly, support for them, and financing.
Dom Potter from the Transition Institute says, “Noticeable by it’s absence is any provision in the paper to establish a mechanism for ensuring that publicly-owned assets such as council buildings or parks will remain in some form of public, common or shared ownership by communities.
“This will be taken by some as evidence of wholesale privatisation looming around the corner. But in my view the political discourse that will swirl around the issue of asset locks shouldn’t obscure the need to utilise these assets for the wider, long-term public good.
“There is also an issue that isn’t addressed in the paper around how public assets could potentially be used to leverage external investment into public services.
“As long as the assets are secured for public/shared ownership, I would be interested to see what mechanisms might emerge from the Big Society Bank and out of central and local government to enable assets to be sweated in order to raise the initial cash to get emerging mutuals up and running with a sustainable business model.
On mutuals definitions, he says:
“Thankfully for those of us who are keen that each individual spin-out is set up with the legal and governance structures appropriate to it’s unique local context, the one-member-one-vote implication of calling them mutuals is not quite as literal is it could have been.
“There is a clear indication that a variety of ownership models – ‘wholly employee-led, multi-stakeholder and mutual joint venture models’ – are mentioned, although further clarification is needed as to exactly what is meant by these terms.
On finance and support:
“There is mention of an ‘Enterprise Incubator Unit’ set up within the Cabinet Office to ‘provide advice, challenge and resources for public service providers from central government departments and their agencies who want to move from the public sector to the independent sector’. This sounds interesting, but I am wary of the idea of government advising itself on how to set up independently of itself. In my view, the Unit at least needs to be staffed by individuals who have experience of the transition to independent delivery or by individuals with experience of running independent organisations (or, ideally, both) in order to have the desired impact.”
“The Mutual Support Programme is due to come on stream in autumn 2011 according to the White Paper. This means that there will be support available for entrepreneurial public sector staff more quickly than had been anticipated, given how quiet the Cabinet Office had become around getting the MSP up and running since it was first mentioned last year.”
“Recognised within the paper is the need to look for innovative ways of routing external finance into public services. The Big Society Bank will be a key part of this, and this may be a fruitful way of expanding, for example, the pool of social impact bonds beyond the one pilot in Peterborough prison.
CBI Director General John Cridland says:
“The Work Programme shows how companies of all sizes are successfully working in partnership with social enterprises, community groups and charities. While it is right to recognise the benefits mutuals and smaller providers can offer, the principle of any willing provider also means that larger firms should be able to bring their expertise to bear, and when they achieve better outcomes they should be able to make a reasonable profit. We think the Government could have made this much clearer in the White Paper.”
However, Peter Holbrook, Chief Executive of the Social Enterprise Coalition, takes a different view:
“We are concerned that the proposed reforms will create an unequal playing field in which social enterprises are unable to compete with large private sector providers for public sector contracts. Social enterprises often do not have the capital or scale required to compete with big private businesses in open markets.
“These reforms must protect our public services, not put them at risk. Without the necessary safeguards, the consequence of these proposals will be that private providers will dominate public sector markets. Taxpayers’ money will flow into profit seeking organisations that exist only to satisfy the needs of their shareholders. Public services must operate for the communities and people they serve, nobody else.
“The Government’s plans to extend Payment by results across a number of other public services will put private sector organisations at an automatic advantage. The reality is that without decisive action to use public spending to improve social outcomes, the big organisations will simply use their stronger balance sheets and ability to attract private investment to win contracts.
“We only have to look to the Department for Work and Pensions Work Programme to see that when markets open up, large private sector providers move in and squeeze out smaller organisations. A very small proportion of the contracts went to social enterprises, despite it being hailed by Government as a boost for the Big Society.”
Ed Mayo, Secretary General of Co-operatives UK, says:
“The government’s public services reform white paper presents an important opportunity for co-operatives and mutuals to bid for and deliver public services. As trusted organisations that are able to unleash the talents and energies of their employees and users, co-operatives can provide good quality public services.
“Longstanding examples of thriving and successful co-operatives running services like foster care, leisure centres and affordable housing and out of hours GP services show that the co-operative model works extraordinarily well.
“As the trade association for co-operatives we want to see co-operatives thrive in all areas of the economy, including delivering public services. Like many, however, we are wary of some elements of the government’s approach to opening up public services to outside providers.
“First, there are serious issues facing public sector employees and users looking into the co-operative option – from uncertainty about jobs and pensions to the challenge of public sector workers setting up new businesses – that need to be addressed if public sector mutuals are to succeed.
“Second, in the current context, it won’t help staff or users if all the government does is to open the door to privatisation with fake mutuals that fail basic quality tests of member ownership and democracy.
“Third, there is a gap between national policy and local practice, with a lack of understanding of the benefits of co-operatives delivering public services amongst local authority councillors and officers.
“Fourth, there is an urgent need for high quality advice and support with sufficient resource to make sure that this is in place for all who need it.”
It was unfortunate that yesterday’s press conference to launch the Open Public Services White Paper by David Cameron was hijacked by journalists quizzing him on the ongoing News International story.
The event, organised by Reform in Canary Wharf, also featured speakers from big business i.e. the CBI, the consumer organisation Which, and the voluntary sector – “a Coalition in support of the White Paper,” suggested Cameron.
Detailing the public services landscape, Cameron scarcely mentioned mutuals by name, though they do feature significantly in the White Paper itself.
Modernisation of public services, he said, will give people choice and control over the services they use, and end the ‘get what you’re given’ culture.
People will be given more choice to shape the public services they use, putting control in the hands of individuals and neighbourhoods so everyone can benefit from the best public services available.
“I know what our public services can do and how they are the backbone of this country. But I know too that the way they have been run for decades – old-fashioned, top-down, take-what-you’re-given – is just not working for a lot of people.“Ours is a vision of open public services – there will be more freedom, more choice and more local control. Wherever possible we are increasing choice by giving people direct control over the services they use,” said Cameron, who detailed five core principles for modernising public services: choice, decentralisation, diversity, fairness and accountability.
He also made some key points about change and also about risk-taking for those now in the public sector:
“This is the case for change. If we want to compete in the world; if we want to get value for money; and above all if we want the decent, reliable public services that make life better for people, there will be no progress if we stick with the status quo. What does change look like? It’s about ending the top-down, big government way of running public services, and bringing in a Big Society approach, releasing the grip of state control and putting power into people’s hands. The old dogma that says ‘Whitehall knows best’ – that is going.”
“We really need to ensure that civil servants and arms length bodies see that there is a clear set of principles to apply: about choice, about diversity, about payment by results, about the role of private and voluntary sectors.
“The biggest challenge for the Civil Service is to try and adapt to this new culture and also a very difficult thing to do, and an easy thing to say, is that actually civil servants will have to take some risks. We all know that in business it is very easy to award the contract to Price Waterhouse. They’ve done it before, they’re an enormous organisation, they won’t fail. I think there’s a similar tendency within the Civil Service. It’s safe to keep it in house and deal with one of the big providers.
“If we really want to see diversity, choice and competition, we have to take some risks and recognise that sometimes there will be a new dynamic social enterprise that has a great way of tackling poverty or drug abuse or helping prisoners go straight, and we do need to take some risks with those organisations and understand that rather like in business, when you have a failure, that that doesn’t mean that the Civil Service has done a disastrous job.
“In business, we try new things in order to do better, and when they don’t work, we sit back and think, ‘How do we do that better next time?’ We do need a sense of creativity and enterprise in our Civil Service which is clearly there….a change of culture, perhaps a different attitude towards innovation and risk and a sense that that will be a good way of driving performance.”
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This what the White Paper says about public service mutuals:
6.14 We are doing much more than just sweeping away regulations. We are giving public sector staff new rights to form new mutuals and bid to take over the services they deliver, empowering millions of public sector staff to become their own bosses. This will free up the often untapped entrepreneurial and innovative drive of public sector professionals.
6.15 Ownership and control, through mutualisation, empower employees to innovate and redesign services around service users and communities, driving up quality. We will not dictate the precise form of these mutuals; rather, this should be driven by what is best for the users of services and by employees as co-owners of the business. Options include wholly employee-led, multi-stakeholder and mutual joint venture models.
6.16 The Government will take steps to identify and overcome the barriers placed in the way of public sector workers who want to exercise these rights.
6.17 Public sector employee ownership: the key policies we are already implementing include:
7.7 Creating open public services will require new types of investment in public services: investment of money, inspiration and entrepreneurial effort. The Government will promote the opportunities being created by open public services, tailored to individual sectors. This promotion will aim to support:
If you want more details, you can access the White Paper here – and the Government has unveiled an Open Public Services website
Posted in Campaign4Change, mutualisation, mutuals, public sector, public services
Tagged accountability, Big Society, Cameron, CBI, change, choice, Civil Service, culture, decentralisation, diversity, fairness, mutuals, Mutuals Taskforce, News International, Reform, risk, voluntary sector, Which, White Paper
By David Bicknell
The Government is expected to launch its Open Public Services White Paper in London today, giving details of how so-called ‘John Lewis-style mutuals’, will take over the running of much of the public sector.
The shake-up of the state will hand “choice and control” to communities across the country, opening large parts of the public sector to the “best possible provider.”
The Open Public Service White Paper is being mooted as the sector’s biggest overhaul for 50 years, with private firms, voluntary groups and charities cleared to take over the running of schools, healthcare and council services.
The emphasis is expected to be put on “mutuals”, where staff control the planning and spending decisions for local services. Cabinet Office minister Francis Maude has already suggested that mutuals could have a “transformational” impact on service quality and morale. By 2015, it is estimated, one in six public sector employees will be working in mutuals.
Already a ‘Mutuals Taskforce’ is in place, supported by a pilot ‘Pathfinder’ programme to help point the way for would-be mutuals to learn from.
Maude has already pointed to the example of an intermediate care unit in Swindon which was launched as a pilot last summer, bringing together around 900 nurses, physiotherapists, doctors and other staff previously employed by the primary care trust and local council.
“It’s a mutual where there’s no financial incentive. They will own it, but with no profit share or anything, no financial upside, they will have to take out 30 per cent of their cost over the next four years and they are really excited about it,” Maude told The Independent on Sunday.
If you’re considering setting up a mutual, what are your concerns? What questions would you like the Government to answer about mutuals?
Posted in mutualisation, mutuals, public sector
Tagged John Lewis, mutuals, Open Public Services White Paper
When an investigative team from BBC File on 4 went to a business estate near Taunton, they saw an empty “hi-tech fortress” that looked like a NASA control room.
Nobody was working there. Nearly an entire wall of the control room was fitted with 50-inch monitors – 20 of them. They were blank.
That centre – and a further eight purpose-built buildings like it – remain empty because control room software has yet to be installed.
The £469m wasted on the centres and the failed IT project to support them – together called Firecontrol – was the subject yesterday of a hearing of the Public Accounts Committee.
Mistaken recommendation
At the hearing Sir Bob Kerslake, Permanent Secretary, Department for Communities and Local Government, said that officials made a “mistaken” recommendation to go-ahead of a new IT and control centres for fire services.
Kerslake accepted points made the Committee’s chair Margaret Hodge that officials recommended the go-ahead of the Firecontrol IT project without reliable figures on likely costs, savings or benefits
No finalised business case or project plan
Also absent when the IT procurement went ahead was a finalised project plan or business case, MPs heard yesterday. The full business case for Firecontrol wasn’t published until June 2007, three years after the start of the IT project. A revised business case was published in 2009, the year before the project was cancelled.
Rush to buy new systems – as with the NHS IT scheme
The Committee was told that procurement of new systems was underway by May 2004, amid a deep level of ignorance, because officials were in a rush.
It was a similar story on the NPfIT: officials were in a hurry to complete the procurement of new systems. And as with the NPfIT, there was no local buy-in. “Firecontrol was flawed from the outset because it did not have the support of the majority of those essential to its success – its users,” said the NAO.
Local fire services were under no statutory duty to use the regional control centres. As with the NPfIT, central government officials thought they could persuade local services to use the centres. They failed.
Firecontrol has lost a minimum of £469m, according to the NAO. The Department cancelled the scheme in December 2010 because of continued uncertainties. The coalition has approved a new project due to cost about £84m – which prompted MPs to ask yesterday why the original scheme could not have been done much cheaper.
What about the officials who made the flawed recommendation to go ahead?
Margaret Hodge, chair of the committee, asked Kerslake why his department did not seek a “ministerial direction” before embarking on a project that was so flawed. Ministerial directions are issued by departments’ most senior civil servants when they disagree with their minister’s decision so strongly that they refuse to be accountable for it.
Kerslake replied that no ministerial direction was issued because it was officials who were recommending the project’s go-ahead.
Said Kerslake:
“I don’t think it came to that [Ministerial Direction] because the view of officials was to recommend, with some of issues identified as concerns, that the scheme went ahead. This was not a case where a Direction would have applied because the recommendation from officials, as I understand it, was to go ahead with the scheme.”
MPs heard that Kerslake was a non-executive director at the department when the decision was taken to go ahead with Firecontrol. Didn’t he object to the scheme’s approval?
Kerslake said he raised concerns to the board about the large scale of the investment compared to the problem. “The concern I had at the time, whether fire and rescue services were willing to take on this technology, were all points that were discussed. The view of the officials on balance at the time was that the benefits of doing the scheme outweighed the risks and costs.”
Kerslake said that as a non-executive he was on the board in an advisory role.
Conservative MP Richard Bacon, a long-standing member of the committee, asked Kerslake if his scepticism as a non-executive was recorded.
“It was clearly part of the discussion. I have not gone back and checked every note of the meetings.”
Comment:
MP Richard Bacon suggested yesterday that the only accountability for the failure of the project was Sir Robert Kerslake’s having an uncomfortable two hours before the Public Accounts Committee.
As for his officials, the only accountability for the waste of £469m was to sit in seats behind him, periodically passing him notes. An observer at the hearing said public seats in the committee room “seemed to be packed full of advisers passing notes to the four people hauled before the committee”.
It’s a civil service tradition that officials are not generally held responsible for recommendations because the final decision on major projects is taken by the department’s minister; yet ministers will tend to know only what they are told by department’s civil servants.
If the officials are incompetent in drawing up their recommendations, they may be incompetent in the briefings they give their ministers.
Even so it would be a brave minister who rejected the recommendation of permanent and supposedly expert staff.
That’s why the coalition’s setting up of the Cabinet Office’s Major Projects Authority is such a good move: it will challenge departmental complacency and over-confidence in its own abilities and decisions.
Cabinet Office Francis Maude announced on 31 March 2011 that “from today all major projects will be scrutinised by the new Major Projects Authority”.
Most importantly it has powers from the Prime Minister to oversee and direct the effective management of all large-scale projects. Though there are still uncertainties among Cabinet Office officials about the extent to which the Major Projects Authority can intervene in major projects, it has an enforceable mandate from Cameron to scrutinise proposals for major projects; and the Authority is run by the redoubtable Australian David Pitchford who reports to the Cabinet Office’s Chief Operating Officer Ian Watmore whose brief includes making efficiency savings.
With the Major Projects Authority central government has the chance to stop flawed projects such as Firecontrol going ahead. Yesterday’s PAC hearing showed how badly the Authority is needed as an independent challenge. The existence of the Authority is one of the most important developments in government IT for decades – provided it makes effective use of the PM’s mandate.
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