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Firecontrol shows how much Major Projects Authority is needed

Posted on 07/07/2011 | Leave a comment

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. 

Firecontrol chiefs list reasons for project’s collapse.

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Lessons from an IT crisis – Tesco Bank

Posted on 06/07/2011 | 8 comments

By Tony Collins

In a crisis customers want truth and openness. So was Tesco Bank truthful and open when a data migration left its customers locked out of their accounts? As its chief executive Benny Higgins says:“The test of an organisation is what they do when things go wrong.”

This is the story of how Tesco Bank handled a crisis – what it did well and not so well – and what the public sector can learn from the difficulties. 

Many large companies – and government departments – go through IT-related crises. How they deal with them could determine whether their reputation and credibility suffer lasting damage.

Below is one of is one of most useful case studies in recent years. It’s a study of what happened on a day to day basis when IT changes at Tesco Bank locked out thousands of their customers from their online accounts – and the Bank’s helpline couldn’t cope with the volumes of calls. The Bank was accused of not telling the truth to the media and its customers, and of being in IT chaos.

In the way it handled the matter Tesco Bank unwittingly copied the way some central government departments act when faced with an IT-related crisis by, for example, comparing the small number of people affected with the high number who are unaffected, an approach that can belittle the experiences of the thousands who suffer the consequences of poor customer service.

By looking back over the period of the crisis at Tesco Bank it’s possible to draw out the mistakes that would otherwise be lost in the melee of the media reports on how the debacle affected individuals. Just as quickly as the media picks up and reports on a crisis, it can quickly forget all about it when new stories take priority.

For the thousands of Tesco Bank customers unable to log into their accounts, the crisis will not be quickly forgotten. Some have said they will remove their money from the Bank, if they have not done so already, and some will be seeking compensation. The crisis may remain a stain on the reputation and credibility of Tesco Bank for years.

In a personal tweet, the presenter of BBC R4’s Money Box Paul Lewis, who has done much to bring the Tesco Bank story to public attention, summed up his reading of the Bank’s handling of its crisis: “An apology but no real understanding of how to deal with a big mistake”.

So what did Tesco Bank get wrong and how should it have reacted?

Tesco Bank did some things well.  It:

 –          engaged with the media. George Gordon, the Edinburgh-based head of communications at Tesco agreed to be interviewed on BBC R4’s Money Box Live on Wednesday 22 June, day two of the crisis. A few days later, on Saturday 25 June, Tesco Bank’s CEO Benny Higgins went on Money Box to answer questions from the programme’s presenter Paul Lewis. [Tesco Bank also responded quickly to my questions.]

–          apologised to customers, gave out information about the numbers of people affected and conceded that its service to customers had been unacceptable.

–          said it would deal with requests for compensation on a case by case basis, and made this clear on its website.

–         set up a Q&A on its website to help customers with log-in problems

–          eventually unlocked customer accounts and elicited praise from some customers for its helpfulness in doing so

What it didn’t do well. It: 

 –          continued to tell customers the technical problems were sorted when many people still could not access their bank or savings accounts. Customers accused the bank of not telling the truth. One, on BBC R4, asked Tesco Bank’s head of communications why the Bank was “lying” to customers.

–          told customers that calls to its helplines had been answered in an average of 15 minutes when, the next day, it took Moneybox’s Paul Lewis 54 minutes to get through.

–          used, initially, an 0845 number on its helpline which for some customers was a premium-rate number.

–          apologised for its poor customer service but at no point answered directly any questions about whether it had given out inaccurately positive information.

–          allowed an in-store customer whose “Clubcard Plus” credit card transaction was declined to face embarrassment and blame rather than say the problem was Tesco Bank’s fault.

–           compared numbers of customers locked out of their accounts with the apparently much larger number who had successfully logged in

–          suggested some customers were at fault, saying that in a typical week up to 1,000  people will have trouble logging on because they “have inaccurate security credentials in their possession … do not have the right details”.

–          might have underestimated the volumes of attempted log-ins on the first operational day after a major migration of customer accounts from one system to another. It’s unclear whether testing before go-live took a pessimistic view on possible volumes of log-ins.

Anatomy of an IT crisis – how it unfolded and how Tesco Bank responded

Wednesday 15 June 2011

ComputerworldUK.com reveals that Tesco Bank is in the final stages of moving customer accounts from one system to another. The Bank plans “imminently” to switch customers from the old Royal Bank of Scotland systems to its own computers. Tesco Bank had bought RBS three years before to provide an alternative to the familiar customer service failings of High Street rivals.

Tesco Bank says in a financial statement that it “continues to make good progress and is now in the final stages of the transition to its own systems and infrastructure”. Tesco Bank launched in 1997 and has 6.5 million customers. It offers savings accounts, loans and credit cards.

Weekend 18/19 June

Tesco switches 605,000 savings accounts and 320,000 personal loan accounts from Royal Bank of Scotland to Tesco Bank’s systems.

Monday 20 June

Tesco Bank’s online services are unavailable for 12 hours to all customers – nobody with Tesco Bank can access their savings or loan accounts

Tuesday 21 June

Tesco bank systems are down again, this time for six hours. Complaints start to mount, some from people who say that the Bank is not telling the media the truth.  ComputerworldUK.com has 52 comments after it reports that some Tesco Bank customers cannot access their accounts while the bank undergoes system migration to its Fiserv Signature bank platform. The BBC quotes Tesco Bank as saying the problems have been fixed and that “all customers can access their accounts online as normal”.

Says the BBC, quoting a Tesco Bank spokesman:

“For a brief period some customers were unfortunately unable to access their accounts. We apologise for this, but can reassure them that the process is now complete and all customers can access their accounts online as normal.”

Jon is among those who have spent more an hour getting through to Tesco Bank’s helpline.

“I can’t understand comments that Tesco appear to have made to the media suggesting that the problem has been ‘fixed’.  It’s pretty clear that Tesco is having a huge IT collapse and, as soon as I’m able, I’ll be moving my funds to another bank. If they can mess up this so badly, then people need to question whether their funds are even safe with Tesco.”

Another customer comments: “I still cannot access my savings account…Not happy as needed to transfer some money to a relative for deposit on a flat . May now lose it. Hope they are proud of this monumental cock-up. They really need to compensate people for this.”

People are angry that Tesco Bank’s website says that people can now access their accounts and that extra staff have been brought in to answer phones.

“The front page of the Tesco bank website is now saying that access has now been restored and that extra staff are in place to answer phone enquiries. I still can’t access my account and they are still not answering their phones. Tescos are treating their customers disgracefully.”

Wednesday 22 June

BBC R4’s Money Box Live says it has been “inundated” with calls from Tesco Bank customers who cannot get through to their accounts. It takes a call from a customer who accuses Tesco Bank of “lying”, which the Bank denies. The caller speaks to George Gordon, head of communications at Tesco Bank, who has agreed to take part in the programme.

The caller, Alistair, says: “I have been trying to access my Tesco account since Monday to do a small transfer. We are not talking millions. You have six and half million bank customers. Why are you lying to them through your website and through other media by telling them that your system is now working. I can assure you that as of 30 seconds ago it is not working.”

Gordon says: “I just want to say how sorry I am that you have had these difficulties getting onto our website. For the vast majority of our customers, the site and our phone lines are working but we are aware there area few technical issues there. We have an IT helpdesk and some online information on our website which we are actually improving this afternoon to try and help people in your position. I am very happy after the call to take your details and make sure we pick up on that.”

Vincent Duggleby (presenter) “I have to say I looked at your website and I don’t think it was at all helpful. It simply said everything was alright and you were sorry.”

In his reply Gordon says the technical issues have been sorted out. “Obviously we are sorry for our savings customers who have had technical issues over the last couple of days. As our website says we have suffered some intermittent technical problems and these problems follow a significant piece of work that we did over the weekend – a planned piece of work that we told customers about –moving from Royal Bank of Scotland  platforms to our own Tesco Bank Platforms.

“Now we put messages out there today to let the vast majority of our customers who want to access their accounts know that we have sorted out technical issues and that we have actually increased the number of people in our call centre so that if people have issues they can get in contact with us and we can help them –

Alistair: “It says on your website all customers can access their accounts online as normal but that obviously is not the case. I spent 46 minutes today in a queue to get through only to be told by the person at the other end: ‘I am sorry we cannot access your account.’”

Another caller “Mike” says that Tesco Bank’s 0845 number costs a premium rate to ring, for some people. “Is Tesco Bank making money out of our discomfort?” asks Mike.

In his reply Gordon says – again – that technical problems have been sorted out. His reply: “Absolutely not. We are trying to sort things out. We have had some technical issues over the last couple of days which have been sorted out. We are looking at the calls we are getting at the moment. In terms of the time Mike has spent on the phone, that’s clearly not acceptable and we are sorry about that. In our call centre today we have significantly increased the number of people who are answering the phones so we can deal with the very high call volumes.”

James Hillon, head of Retail Banking at Co-operative Bank, emphasises the importance of trust.

“One of the things we have learned over the last two to three years is that trust is of paramount importance in financial services and it is things like this that can knock peoples’ trust. I am not going to pretend that the co-operative bank has never had systems issues but what customers want at this time is to be dealt with honestly and to be kept informed about what’s going on. That’s the sort of thing we try to do.”

Tesco Bank customers have particular problems logging in with IE9. Commenting on ComputerworldUK’s website they say they have had more success when using Google Chrome or Firefox, though these browsers don’t work for everyone .  Tesco Bank issues guidance to customers with IE9 saying they need to enable “compatibility mode”. Says one customer:

“I did download Firefox and managed to get in to my account (I also had to download Flash V9 – God help anybody who doesn’t know what they are doing). It sort of worked ok but the new level of security wouldn’t let me move any money to my high street bank account without sending them a bank statement first.”

Thursday 23 June. The website of Moneysavingexpert [Martin Lewis] reports that the “Tesco Bank online log-in pain” is “now over”. The site quotes Tesco Bank as saying:

“All of our savings customers can access their accounts online. However some customers need to make a small change to their browser settings to do so.

“We’ve improved the step by step guidance on our website and this should help those having problems. We have also contacted a limited number of customers who had a specific issue on Monday.

“Waiting times on the phone are falling, but customers are still waiting longer than any of us would like and we’re doing absolutely everything we can to sort this out as quickly as possible.”

Saturday 25 June

It’s clear some customers are still locked out.

Paul Lewis on BBC Money Box says some people with online savings accounts at Tesco Bank have been unable to access their money “all week”.

One customer says on Money Box: “The problem is essentially step six in the brochure about changing to the new security system where it says they need a password of at least seven characters long. I entered nine and it said it was not acceptable. It then took me over an hour to be able to ring back and get some help and it’s still not satisfactory. Quite frankly my attitude is I want to withdraw all my money from Tesco’s and bank somewhere else.”

Another Tesco Bank customer says: “I’ve been trying to log into my Tesco savings account since Monday. I think that Tesco should have come clean about this in the beginning and admitted they’d made rather a pig’s ear of it and given customers a regular update, and then I think everybody would have been a lot happier.”

One customer says that a store manager allowed his wife to take the blame for a Tesco Bank problem.

“My wife tried to buy some goods from Tesco’s on Wednesday using Clubcard Plus. Payment was refused. A manager was called and after another attempt he said that the problem was with my wife’s account and that she should call the Clubcard Plus helpline. He did not admit that the fault could be Tesco’s. She was stressed out by this. They could have admitted at the shop that it was Tesco’s fault and not my wife’s.”

Paul Lewis makes the point that the main source of customer frustration is the “lack of clarity from Tesco Bank about what the problems are, how they could be fixed, and indeed when”.

Says Lewis: “On Monday a Tesco Bank spokesperson told the BBC that for a brief period some customers were unable to access their accounts, but all customers could go back online as normal. Similar claims were made on Tuesday and on Wednesday, made indeed on Money Box Live in the afternoon, then on Thursday; and again on Friday we were told most of the problems were resolved.

“But throughout the week listeners kept emailing to say they were still having problems logging on and particularly contacting the helpdesk.”

To his credit, Benny Higgins, Chief Executive of Tesco Bank, goes on Money Box to answer Lewis’s questions, only he doesn’t quite answer questions about whether the Bank has been open about the seriousness of the problems.

Lewis asks Higgins: “Will you now admit that these problems are far more serious than your spokespeople have been telling us all week?”

Higgins: At Tesco we strive to deliver service of the very highest standard. And this week …

Lewis: Well you’ve not been doing that, have you?

Higgins: … and this week Tesco Bank has for a significant minority of customers failed to do so, and it’s not good enough and we apologise unreservedly for that. What I would like to make clear is what has happened and what we’re doing about it.

Lewis: Tell us what’s happened because I’ve heard a number of things have gone wrong. People have said it’s the passwords; it’s the wrong Internet browser. Some people, I was told, had their identities effectively trashed because they were online when the glitches occurred on Monday and Tuesday.

Higgins: I’d be delighted to tell you what happened …we transferred 605,000 customer accounts in respect of savings and another 320,000 in respect of personal loans. The system, the web availability, went down on Monday for 12 hours and on Tuesday for six hours, so regrettably during those periods customers clearly had no access to online. Thereafter we have had continuous availability of our online service…

Lewis: … it’s all very well saying you’ve resolved that [problems with IE9]. You haven’t resolved it for a huge number of customers.

Higgins: … As I say, there has been the issue with Internet 9 and that has affected a number of customers. Of the 100,000 active customers, 25,000 have already re-registered successfully. We’ve had 9,000 customers over each of the last few days active online. One of the two things I think you need to be aware of too is that there were a number of customers online when the system failed. Those customers were locked out. There was also …

Lewis: And they’re still locked out, aren’t they, until they write to you and you write back to them?

Higgins: No, that’s not the case if I can make it clear.

Lewis: Well that’s what some of them have told us.

Higgins: Well let me make it clear. There’s also a number of customers who routinely – and this happens every week … Prior to this week, in a typical week we would have between 750 and 1,000 customers who can’t sign on because they have got inaccurate security credentials in their possession, so they themselves don’t have the right details.

Lewis: Well so you’re blaming the customers now?

Higgins: No, I’m absolutely not. I’m just saying typically there will be 1,000 customers who have that difficulty every week. We had 2,500 customers, including any that had the details wrong themselves, plus those that were online. So we had 2,500 customers who were locked out as a result of Monday and Tuesday and we have been contacting those customers by telephone and by email to ensure that they have every chance to be back online.

**

Lewis makes the point that customers cannot get through on the phone, or they wait on the line seemingly indefinitely.

Higgins says that calls were being answered within 15 minutes on average the previous day; he doesn’t explain why Lewis was hanging on for 54 minutes that morning.

Lewis:  I hung on to your helpline with that lovely music for 54 minutes this morning before we got an answer. That’s just not good enough when you know there are thousands of people needing to contact you.

Higgins:  It’s absolutely the case that we have failed in that regard, but …

Lewis:  What are you doing about it? That’s what people want to know.

Higgins: …It is our highest priority to focus on doing the right thing to put customers in the right place. At the start of the week when we had the failure online, we had a waiting time, an average waiting time, of over 40 minutes. We have between doubled and trebled the number of people on the telephone since Wednesday. Our average waiting time yesterday was 15 minutes. Still not good enough, but we are …

Lewis: It was 54 when I rang, unless you’re saying I was kept on hold exceptionally. It was 54 minutes.

Higgins: Yesterday …

Lewis:  And also we were told today faster payments aren’t working, are they, so it’s still not back to normal even for the customers who can log on?

Higgins:  The average yesterday was 15 minutes. I don’t know what the average this morning has been, but I would expect it to be around the same time.

Lewis:  Well I can only tell you I rang at half-past ten and it was 54 minutes. Let me ask you this. You’ve got this transfer of, as you say, nearly 900,000 people. Didn’t you test the new system to destruction before you actually went live with it? This is a banking system with people’s money at stake.

Higgins:  Of course we did, and I have …

Lewis: Well not very well then, did you?

Higgins: …  I have been involved in a number of large migrations in my career in financial services. We tested very, very thoroughly. It is no consolation to customers and no consolation to us that a relatively small number of issues have gone wrong and created disproportionate damage to the customers. We do apologise unreservedly. It is absolutely our focus to put this right. We’re doing absolutely everything we can and we’ve made huge progress since earlier in the week. A number of …

Lewis: Well I have to say we’re getting more emails than we were earlier in the week. It doesn’t seem to us that things are getting better… A lot of people have said to us we’re going to take our money out of Tesco. What do you say to them?

Higgins:  Customers are entitled to make their own choice. We will not be deflected by the incidents this week from seeking to provide customers with the very highest level of service. The test of an individual and the test of an organisation is what they do when things go wrong as much as any other time. That’s what we’re focused on. Customers will make their own choice. We will not be deflected in our pursuit of serving customers well.

Lewis:  And you think you’ve passed that test because, of course, you want to become a force in banking, don’t you?

Higgins: We have not passed that test yet.

Lewis:  You haven’t passed it. But you want to become a force in banking to compete with other banks when one of the big problems is service?

Higgins: Absolutely, that is indeed what we are setting out to do. This is one of a series of migrations. Many are behind us very successfully. It is no consolation that things have gone wrong this week. We are very focused on doing the right thing and focusing on what customers need sorted. That’s what we’re doing.”

 **

Paul Lewis interviews Mike O’Connor, Chief Executive of Consumer Focus, which describes itself as the “statutory consumer champion” for the UK. O’Connor says:

“We’ll never have accident free. But when things go wrong banks should admit it; they should communicate clearly; they should fix it; they should apologise, and compensate not just for loss of money but also if you’ve spent an hour on the phone…”

Monday 27 June (week 2 of the crisis) 

Tesco Bank gives an address on its website for customers to make claims for compensation.

Thursday 30 June

 Tesco Bank’s website announces:  “Our online service is now fully operational.” The Bank apologises to “any of our savings customers who continue to have difficulties registering online”. It adds:

“We continue to receive a high volume of calls, but are beginning to see waiting times return to more acceptable levels. Your call will be answered as quickly as possible. In some instances to ensure that your request can be dealt with fully we will arrange a call back…”

Saturday 2 July

Some customers remain locked out, despite the assurances that customers could access their accounts. BBC Money Box says emails are “still arriving from listeners desperate to access their own money”.

One is from David of West Sussex who is unable to close his Tesco Bank account. Initially he’d wanted to pay a bill from his Tesco account. After a 40 minute wait on the phone David was told he couldn’t because the system was down.

Tesco promised to phone him back but didn’t. So David phoned twice on Wednesday 22 June and still didn’t get through. By Thursday 23 June, more than a week ago, he decided to close the account and transfer the money to another bank.

Says David on Money Box:

“On 23 June I waited for 45 minutes and eventually the phone was answered by a guy called Scott. He said that he would make the arrangement to close my account and transfer the funds to my nominated bank. He told me this would take three to five working days to complete.

“The next Wednesday, 29 June, that gave them 6 days, I went to my nominated account and there was no money in there. I am talking £7,000. I phoned Tesco again and then found my £7,000 was reinvested due to their – Tesco’s – human error into the Tesco account that was already closed. I couldn’t believe it. I spent a long time on the phone. I was frustrated and very angry. It is just not a way to do business for a company that size.”

A former member of Tesco Bank’s IT team emails to say he is not in the slightest bit surprised at the current fiasco at Tesco Bank. It would take three weeks just to get a computer on your desk, says the man. Another IT project that Tesco forecast would take six months to complete took in the end three years, he claims. He describes a scene to Money Box of total management chaos. “A great organisation bogged down by a management who can’t get things done as he put it.”

Tesco Bank denies it is a slow-moving bureaucratic organisation and says it has a reputation for getting things done, and done well.

Alex Fiatcosky, who was at Tesco Bank for a meeting at the height of the problems, implies that Tesco might have gone live too soon after migrating RBS accounts to Tesco Bank’s systems. “I think that would be something for Tesco to look at themselves to make they have the timings right on this and haven’t inadvertently inconvenienced their customer as part of timings to evacuate from the RBS systems.”

He adds: “Where they were perhaps undone on some of the system challenges is the rising volumes on the first day of full operation on the Monday. One could say: ‘should you not have anticipated the likely rise in volume and tested the system accordingly based on an uplift in attempted online log-ins’. There we have perhaps some areas of learning.”

Paul Lewis concludes by saying that most customers can now access their accounts, some have emailed to praise the Bank’s helpfulness and he got through to the helpline almost immediately.

3 and 4 July

I ask Tesco Bank:

– what lessons it has learned

– whether it had been open and accurate in its communications with customers and the media.

Its spokesman is helpful but doesn’t answer those questions directly . He says Tesco Bank has engaged with the media, made information available on its website and put more people on the phones.

This is Tesco Bank’s statement which, while helpful, still doesn’t answer questions on whether the Bank had learnt anything from telling customers they could access their accounts when some couldn’t.

“Our online service is fully operational and the overwhelming majority of our customers are able to access their accounts online. We are working to tackle remaining registration questions and continue to update the step-by-step guidance on our website to help customers quickly resolve any issues.

“We continue to receive a high volume of calls, but customer waiting times have returned to more acceptable levels. We’ve introduced a dedicated team to call back customers to ensure their requests are dealt with fully.

“We apologise to any of our Savings customers inconvenienced by the issues over the past two weeks.”

Comment:

Most people will welcome Tesco Bank’s entrance into financial services. The more competition the better.

But in saying problems are fixed when customers still cannot access their money, the Bank has inadvertently behaved like government departments that have played down the effect of IT-related problems on taxpayers, NHS patients, junior doctors, farmers, child support claimants, pupils and teachers involved in SAT tests, magistrates’ courts officials, prison officers and MoD workers.

Nothing would surprise people more in an IT-related crisis than plain speaking, truthfulness and openness. It’s time for people to be surprised.

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Posted in improving communications, private sector lessons for the public sector, Uncategorized

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FireControl – should PA Consulting share some responsibility for what happened?

Posted on 01/07/2011 | 4 comments

By Tony Collins

The defence and aerospace supplier EADS is widely regarded as the main supplier of the FireControl project which was cancelled in December 2010, with wasted costs of at least £469m.

But did the project have too many consultants, some of whom were  accountability-free? The question is raised by report published today on FireControl by the National Audit Office.

Says the report:

 “The implementation of FiReControl was heavily reliant on consultants and interim staff, who contributed around half the Department’s [for Communities and Local Government] project team at a cost of £68.6m, over three-quarters of the total spend on the national team supporting the project.

“PA Consulting was contracted to provide consultancy services at a cost of £42m to the end of March 2011. Its staff held key positions throughout the project, including the Project Manager, one of only two senior members of the team who remained on the project throughout its duration.

“Despite the Department’s reliance on consultants, there was no framework to assess their performance until the end of 2008, when the National Audit Office recommended that the Department’s contracts with consultants should include mechanisms to enable regular objective monitoring of performance, such as performance indicators and key milestones.

“Without such mechanisms, the Department was unable to determine whether or not the services provided offered value for money.

“A review of the FiReControl project by the Office of Government Commerce in 2008 similarly found that some consultants in key management roles did not have a level of authority matching their responsibilities, which led to decisions being referred to others.

“Other consultants were found to hold a disproportionate (and accountability-free) amount of authority. In response, the Department reviewed its use of consultants and interims within FiReControl and reduced the number employed, leading to a fall of 24% in consultancy costs between 2008-09 and 2009-10, and a further fall of 26 per cent in the following year.”

The failure of the FireControl project – and many other central government IT-based programmes dating back decades – shows the need for independent challenge as projects progress or otherwise.

Gateway reviews are independent reports on the state of a project but they appear to be ignored if they’re too critical, as in the cases of FireControl and the Rural Payments Agency’s Single Payment Scheme; and the Gateway review reports are secret – even today – so there is no outside pressure on departments to act on them.

What’s to be welcomed is the intervention of the Cabinet Office in major projects. FireControl systems could have been delivered. They could have worked. But there were too many missed deadlines and continuing uncertainties, as the NAO points out in today’s report.

The Cabinet Office’s major Projects Review Group, as it was then, said the FireControl contract should be ended – and it was a few months later, amicably, in December 2010.

All credit to the NAO for naming PA Consulting, as well as the main supplier EADS.

NAO report on FireControl.

What FireControl and NPfIT have in common.

FireControl disaster blasted by unions

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What the FireControl disaster and NPfIT have in common

Posted on 01/07/2011 | 1 comment

By Tony Collins

From today’s National Audit Office report on FireControl project which wasted at least £469m:

“FiReControl was flawed from the outset because it did not have the support of the majority of those essential to its success – its users”

Were the Fire and Rescue Service’s FireControl project and the National Programme for IT in the NHS launched to discover all that can go wrong with a large IT-based project?

One could be forgiven for thinking so. The two projects were conceived in the early part of the new millennium as national, centralised schemes which, in the main, did not have any support from the people who would be using them.

The schemes were launched by civil servants and ministers with good intentions and little or no experience in the many IT-related project disasters that went before.

The projects that had failed since the late 1970s and early 1980s went wrong for similar reasons. As early as 1984 the Public Accounts Committee met to question civil servants on the common factors in a succession of “administrative computing” failures.

Since then every department has come to its IT-based projects and programmes with little understanding – and very little interest – in the lessons from history; and it’s said that those who don’t learn from history are destined to repeat past mistakes.

The FireControl system, which is the subject of an NAO report today, and the NPfIT, had something striking in common: the fact that the system users were the ones with the control of money and decisions on how they spent it – and they did not want technology imposed on them by civil servants in London. That was clear from the start. But it did not stop either the NPfIT or FireControl going ahead.

Indeed a Gateway Review by the Office of Government Commerce in April 2004, after the FireControl project had been approved, found that the “extraordinarily fast pace” of the project was introducing new risks to its delivery, and was escalating the risks already identified. The review concluded that the project was in poor condition overall and at significant risk of failing to deliver.

That review was, at the time, as with similar reviews on the NPfIT, kept secret, so those outside the project, including MPs and the media, were unable to challenge the projects with a credibility that could have influenced decisions on the future of the schemes.

New gateway reviews are still kept secret today, despite the coalition’s promise of openness and transparency.

The good thing about the FireControl project and the NPfIT is that the Cabinet Office has taken control. A Cabinet Office Major Projects Review Group in in July 2010 concluded that negotiations should begin to terminate the FireControl contract – and indeed a settlement with the supplier EADS was reached successfully and amicably in December 2010. The Cabinet Office’s Major Projects Authority is now  reviewing the future of CSC’s £2.9bn worth of NPfIT contracts.

The bad thing is that the FireControl scheme has wasted at least £469m, according to today’s report of the National Audit Office. The NPfIT may have lost a great deal more.

NAO’s conclusion on FireControl

This was the NAO’s conclusion on the FireControl project. Much the same could be said of the NPfIT:

“This is an example of bad value for money. FiReControl will have wasted a minimum of £469m, through its failure to provide any enhancement to the capacity of the control centres of Fire and Rescue Services after seven years.

“At root, this outcome has been reached because the Department, without sufficient mandatory powers, decided to try to centrally impose a national control system on unwilling locally accountable bodies, which prize their distinctiveness from each other and their freedom to choose their own equipment.

“At the same time, it tried to rush through key elements of project initiation and ended up with an inadequate IT contract, under-appreciating its complexity and risk, and then mismanaged problems with the IT contractor’s performance and delivery.”

 Links:

FireControl project a comprehensive failure.

The failure of the FireControl project – NAO report.

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NHS IT supplier “corrects” Health CIO’s statements

Posted on 30/06/2011 | 3 comments

An IT supplier to the NHS has written to MPs to “correct” statements made by Health CIO Christine Connelly.

The implications of the supplier’s corrections are that Conservative MP Richard Bacon might have been right all along:  that the Department of Health may be paying BT as much as £200m more than necessary to install the “RiO” patient record system at 25 trusts in the south of England.

The corrections by CSE Healthcare Systems – supplier of RiO – call into question some of the Department of Health’s justifications for the high costs of NPfIT versions of RiO.

RiO is an electronic patient record system that is supplied to mental health trusts and community service organisations. Trusts can buy directly from CSE Healthcare or via its partner BT Global Services which is the local service provider to London under the National Programme for IT.

Through the NPfIT, BT is installing RiO at 25 trusts in the south of England under a £224.3m NPfIT deal – £8.9m per site, compared with £500,000 to £1.5m per site if supplied to the NHS directly by CSE outside of the national programme.

At a hearing of the Public Accounts Committee on 23 May 2011, Conservative MP Richard Bacon asked Connelly to explain why RiO costs so much more when it is supplied by BT.

Connelly told the Committee that the Department of Health had investigated the RiO costs at Bradford District Care Trust, which is a mental health trust.

Bradford bought RiO outside the NPfIT, using the ASCC framework contract, which enables trusts to buy systems directly from suppliers without going through NPfIT local service providers.

The total cost of RiO at Bradford was £1.3m, which Connelly said was for a 59‑month contract.

She told MPs:

“So the comparison: in terms of the services that we provide, there are a whole set of services that are not within that £1.3m that are inside the Local Service Provider contract.

“Earlier somebody said, ‘Well, doesn’t everybody have disaster recovery.’  Well, actually, no, and at this Trust only 25% availability is provided in their local arrangements, which are not included in these costs.

“So we have a cost in terms of the BT LSP in the South for the same period, which includes the hardware, the support, the disaster recovery at 100%, the Spine connectivity, all of which are not supplied inside this Bradford system.

“If we looked at those costs through BT’s cost profile, it would be valued at £2.5m.”

Bacon pointed out that £2.5m was still much less than £8.9m being charged by BT. He wanted the difference explained.

Connelly said:

“So first there is the period. So we need to take a look at the average period that you would expect to be there, because we pay a one‑off deployment charge and then we pay a monthly charge.  So in terms of the figure that you quote, it is generally for about a four-year period, and the figure we quote is generally for about a six-year period, sometimes a little more.  I think what we get is 24/7 support.

“We get full disaster recovery.  I think it is fine to say, “Oh, anybody has that.”  The cost of full disaster recovery is significant, when you look at the costs that BT have; we invited an external auditor to go look at the cost build-up, and they have audited these costs.  We looked at BT’s profit margin, and they have taken a significant reduction in their profit margin between the original contract and the contract that we have today…”

To which Bacon replied:  “But it is not the taxpayer’s fault if BT has unbelievably high costs.”

Bacon said that one reason the costs are so high is that CSE cannot talk directly to NHS trusts and must go through BT.  “That is the problem with this structure,” said Bacon. “It is like having you over here, and the customer over there, and an enormous thicket, a forest of lawyers, in between.”

Connelly replied that a change to the programme means that suppliers of RiO are now on site “talking to Trusts themselves”.  In London and the South, for RiO, a new user group brings together all the Trusts. Cerner, the supplier of NPfIT patient administration systems in London and the south of England, also deals directly with trusts rather than through BT, said Connelly.

Taking issue with Connelly’s comments about Bradford, this was CSE’s written statement to the Public Accounts Committee:

“During the evidence presented by Ms Christine Connelly, one of our contracts for RiO,  Bradford Mental Health Trust was referenced.

“Ms Connelly’s statement was that Bradford is receiving a lower standard of service than provided by BT in London and hence the lower price charged by CSE Healthcare Systems to Bradford.

“CSE Healthcare Systems wishes to correct the evidence given.

• Ms Connelly stated that the service is NOT 24*7 hours – the service is a 24*7 service.

• Ms Connelly stated that Disaster Recovery (DR) was NOT included in the service – a DR service is included.

• There was no mention of Facilities Management – we provide remote Facilities Management

• The service contract is for five years – not four years as stated.

• Ms Connelly implied that the system only had 25% availability – our records demonstrate that this is not true; the system is architected to achieve an availability of over 99%.”

**

Another NHS IT supplier Maracis has provided evidence that RiO costs several times more under the NPfIT than outside the programme, for similar levels of service, disaster recovery, availability and support periods.

On its website CSE Healthcare says its system is compliant with the NPfIT data “spine” and supports established standards for interoperability such as HL7 and XML.

The Public Accounts Committee is finalising a report on the NPfIT detailed care record systems. Its findings will be based on its questioning of Connelly and other witnesses, written evidence from CSE and others, and a report of the National Audit Office in May.

Connelly, who is Director General of Informatics, has announced she is leaving at the end of this month, after three years. She is being replaced in the interim by Katie Davis, who is from the Cabinet Office.

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Cabinet Office takes on open-source specialist

Posted on 28/06/2011 | 1 comment

By Tony Collins

“Let’s not waste this great opportunity to make British government IT the most effective and least expensive service per head in Western Europe.”

 An open source advocate and critic of the high costs of government IT, Liam Maxwell, is joining the Cabinet Office for 11 months  to provide expertise on how civil servants can use innovative new technology to deliver better, cheaper solutions.

His secondment from Eton College where he is ICT head underlines the determination of Francis Maude, the Cabinet Office minister, to continue bringing in strong people to oversee major changes in the way government works.

What remains unclear, however, is how much influence the Cabinet Office will have on autonomous government departments and their permanent secretaries.

Although David Cameron has given his personal backing to the changes being sought by the Cabinet Office, the PM has  little or no direct control over what departments do or don’t do.

Simon Dickson at Puffbox points out that Liam Maxwell has said all the right things in the past. Maxwell co-wrote a 2008 paper for the Tories on ‘Open Source, Open Standards: Reforming IT procurement in Government’, and also a 2010 paper Better for Less‘ for the Network for the Post-Bureaucratic Age, which said:

“British Government IT is too expensive. Worse, it has been designed badly and built to last. IT must work together across government and deliver a meaningful return on investment. Government must stop believing it is special and use commodity IT services much more widely.

“As we saw with the Open Source policy, the wish is there. However, the one common thread of successive technology leadership in government is a failure to execute policy.

“There is at last a ministerial team in place that “gets it”. The austerity measures that all have to face should act as a powerful dynamic for change. Let’s not waste this great opportunity to make British government IT the most effective and least expensive service per head in Western Europe.” 

In a statement, the Cabinet office said that Maxwell will help to develop ideas for how technology can:

– increase the drive towards open standards and open source software

– help SMEs to enter the government marketplace

– maintain a horizon scan of future technologies and methods

– develop new, more flexible ways of delivery in government

Ian Watmore, the Government’s Chief Operating Officer said: “Liam’s insight and knowledge will make him a valuable source to the team over the coming year. He has a strong track record of delivering success in government ICT and he also brings significant experience of turning the theory into practice.”

Dickson said that Maxwell was a Windsor and Maidenhead councillor who drove the debate a year or so ago on councils switching to Open Document Format, part of OpenOffice.

The Guardian said Maxwell has been an adviser to the  Conservative party on government ICT.  At the Cabinet Office he will advise the Efficiency and Reform Group and Ian Watmore. He will begin the job in September and is taking a sabbatical from Eton.

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Who’ll support the NPfIT now?

Posted on 23/06/2011 | 5 comments

By Tony Collins

The departure of Christine Connelly as health CIO at the end of this month will leave the NPfIT’s main civil service supporter, Sir David Nicholson, Chief Executive of the NHS and Senior Responsible Owner of the NHS IT scheme,  more isolated.

That Nicholson is a supporter of the continuance of the NPfIT is not in doubt. He spoke about the NHS IT scheme last month in terms of life and death. At a hearing of the public accounts committee on 23 May 2011, Nicholson said:

“We spent about 20% of that resource [the £11.4bn projected total spend on the NPfIT] on the acute sector. The other 80% is providing services that literally mean life and death to patients today, and have done for the last period.

“So the Spine, and all those things, provides really, really important services for our patients. If you are going to talk about the totality of the [NPfIT] system … you have to accept that 80% of that programme has been delivered.”

But without Christine Connelly, who put detailed arguments in favour of continuing with iSoft’s Lorenzo, and who was solidly behind the costly implementations of Cerner by BT, Nicholson may not have the civil service backup he needs to promote the continuance of the NPfIT.

The Cabinet Office’s Major Projects Authority, under the directorship of the independently-minded David Pitchford,  is now reviewing CSC’s £2.9bn worth of NPfIT contracts. It is known that the Authority regards the new proposals worked out between CSC and the Department of Health as poor value for money, even with CSC’s willingness to reduce the value of its contracts by £764m, to about £2.1bn.

That promised reduction comes at a cost. A leaked Cabinet office memo said that the CSC’s proposals would double the cost of each Lorenzo deployment.

The easiest thing for Nicholson and the Department of Health would be for the Major Projects Authority to approve the deal worked out between CSC and the Department of Health, and simply sign a new Memorandum of Understanding which would be, in part, legally binding.

Strong grounds for ending CSC’s NPfIT contracts

The more difficult but more practical alternative is for the Cabinet Office to require the Department of Health to end CSC’s NPfIT contracts, which would leave the NHS more able to decide its own IT-based future.

Indeed the signs are in some trusts that officials are not unhappy about Connelly’s departure in that they perceive it may weaken the centre’s control over NHS IT.

Legally it appears that an end to CSC’s contract would be feasible. The Department of Health has accused CSC of a breach of contract because of its failure to achieve a key milestone; the Department has also notified CSC of “various alleged events of default under the contract” which are “related to  delays and other alleged operational issues”. The Department is considering its position on termination of all or parts of the contract.

But the Department has not taken its claims to arbitration; its allegations are only a formal legal manoeuvre at the moment.

CSC accuses NHS of failures and breaches of contract

CSC has reacted by accusing the NHS of a breach of contract. The company’s formal legal position is that it has cured or is preparing to cure the faults that led to the alleged breach; it says that failures and breaches of contract on the part of NHS have caused delays and issues.

The DH could end CSC’s contract for reasons of convenience which could trigger a request from CSC for a large sum in compensation. But the Department could give strong legal reasons for not paying. Although CSC could pursue its claim for compensation, it may be on soft ground because of its failures. Also, CSC, if it pursues any legal action, could jeopardise its other work for government: some of its other major contracts with the UK government are with the Identity and Passport Service, which is part of the Home Office.

The Coalition is now supervising its major suppliers, including CSC, in the round, which is reason enough for CSC to do all it can to maintain a good relationship with the Cabinet Office.

CSC would support NHS trusts even if its contracts ended

The  Department of Health is concerned that if it ends the NPfIT contracts with CSC, the supplier may leave unsupported many trusts that have CSC’s iSoft software installed. That is highly unlikely, however, because CSC has a $1.03bn investment in the NPfIT contracts according to the regulatory reports to US authorities.

In the NHS CSC has a large customer base. Through its acquisition of iSoft, CSC will want to capitalise on its investment in iSoft’s Lorenzo software by selling it across the globe. That’s its stated plan. So CSC’s continued support for NHS trusts that have installed iSoft software is not in doubt.

What NHS Trusts want

The best outcome of the negotiations with CSC, for NHS trusts that have installed iSoft software, is that they have the:

-choice to continue with CSC if the price is right

– buy support elsewhere, or

– choose a different product.

Will CSC’s NPfIT contracts end by mutual agreement? – it’s possible

The question is: does the Cabinet Office have the courage to end CSC’s contract, freeing up billions of pounds that would otherwise have been spent on the NPfIT without a commensurate return for taxpayers, the NHS or patients?

It seems  so, even if it means paying a relatively painless sum to CSC as compensation for termination.

Leaked memo reveals CSC’s plans.

A sign that coalition reforms will change behaviour of major suppliers.

Health CIO resigns – Cabinet Office executive steps in.

Example of a trust that’s succeeding without the NPfIT – Trafford General Hospital.

Connelly at odds with PM over NPfIT value for money?

NHS CIO in dramatic resignation.

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Health CIO resigns – Cabinet Office executive steps in

Posted on 22/06/2011 | Leave a comment

By Tony Collins

The Health CIO Christine Connelly has resigned. I understand it’s for personal reasons and that she has no new job lined up.

She is being replaced on an interim basis by an executive at the Cabinet Office Katie Davis. It’s likely that Davis will remain Director, Operational Excellence at the Cabinet Office until she replaces Connelly on 1 July 2011.

Connelly says in her statement that the Department of Health faces a major reorganisation of its top structures that will result in fewer Director General posts. “I have been reflecting on whether I would wish to go for one of those roles and decided that I will not.”

The Cabinet Office has indicated in recent months that it wishes to have more control over negotiations of a £3bn contract with CSC under the National Programme for IT, NPfIT.

This was the Department’s statement this morning, in full:

“Christine Connelly, Chief Information Officer for Health, has announced that she will be leaving the Department of Health at the end of the month.

“Christine said: “The Department of Health faces a major reorganisation of its top structures that will result in fewer Director General posts. I have been reflecting on whether I would wish to go for one of those roles and decided that I will not.

“I have had a fascinating and challenging time in this role and I have decided that this is the right time to step back and think about what I might do next.

“I believe that information and technology have the potential to dramatically change the way health services are delivered to patients, and we are already seeing this happen in many parts of the service. I am confident that informatics will have a major role to play in delivering both the quality and efficiency challenge that the NHS faces.”

NHS Chief Executive, Sir David Nicholson, said:

“Christine has made a major contribution to the NHS, in promoting both the sharing and management of information, and as a professional with considerable experience of leading change.

“She has tackled a very difficult set of issues around the National Programme for IT, and moved them forward. I wish her well in her future career.”
Health Secretary Andrew Lansley said:
“Christine has brought a huge amount of experience, talent and technical knowledge to the National Programme for IT. For almost three years, Christine, as the first Chief Information Officer for Health, has worked to deliver the Department’s information strategy. I wish Christine the best of luck with whatever she chooses to do next.”
“Christine will be replaced on an interim basis by Katie Davis. Katie joins us on loan from the Cabinet Office where she has been Executive Director, Operational Excellence, in the Efficiency and Reform Group (ERG) since 2010. Before that, she was Executive Director of Strategy, Identity and Passport Service in the Home Office and Director of the Government IT Profession in the Cabinet Office. Katie will be joining us on 1 July 2011.”
**
Comment: One of Connelly’s strengths is her lack of artifice. She answers the most difficult questions about the NPfIT with openness and honesty. Not everyone will agree with her strong support for the continance of the NHS IT scheme but her arguments are made with a genuine conviction, clarity of thought and explanation, and without distortion of the truth. I wish her well.

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National Audit Office is stronger under its “new” leader

Posted on 22/06/2011 | Leave a comment

By Tony Collins

A report published yesterday by the National Audit Office is an example of how the organisation has changed since it appointed Amyas Morse as Comptroller and Auditor General in June 2009.

The NAO scrutinises public spending and its auditors value their reputation for independence from the civil service.

But past NAO reports were sometimes deferential: the impression given at times was of clubby civil servants auditing other clubby civil servants. What needed to be said went unsaid, or was said indistinctly. That doesn’t seem to happen now.

Indeed, in a departure from convention,  Amyas Morse and his colleagues put well-aimed questions to civil servants at hearings of the Public Accounts Committee.

In the past NAO representatives would say little at hearings of the Public Accounts Committee except, perhaps, to side with civil servants whom MPs were questioning.

Morse’s report  published yesterday on the Equality and Human Rights Commission, which is part of the Home Office,  is an example of straightforward reporting, with none of the circumlocution and coded language of the past.

In the report Morse went further than any NAO findings I remember:  he questioned whether staff at the Equality and Human Rights Commission are competent enough to manage public funds properly.

He said the Commission is now better able to handle public money than when it was set up in 2007 but “deep-seated” problems remain. The NAO qualified the Commission’s 2009/10 accounts because of a variety of irregular payments and an unauthorised write-off of £874,000 on a failed website.

Said Morse: “In general the Commission continues to be over-reliant on interim staff. Four out of the seven members of the Senior Management Team and eight of the 19 Directors are interim appointments, including the Finance and IT Directors. Other key staff in Corporate Services, such as the Head of Procurement and the Finance Project Manager, are also interim appointments.

“I am concerned that once these interim staff depart, there is a risk that the improvements in controls that they have delivered will lapse…

“I remain concerned, too, about the culture of the Commission with regard to financial and administrative controls. It is clear that there is little general financial understanding or competence in the organisation, and that many managers have limited experience of the effective management of public money.”

Questions about how fit the Commission’s staff are to manage public money are likely to be asked at a hearing of the Public Accounts Committee on the NAO’s report.

Long may the NAO’s new pernicketiness and assiduous search for clarity and truth continue.

**

Officials write off £874,000 on “rushed” website.

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Under a blood red sky: the challenges facing local councils over mutuals and social enterprises

Posted on 21/06/2011 | Leave a comment

By David Bicknell

The longer the waiting goes on for the open public services white paper to provide some clear direction on the Coalition’s up-to-date thinking, the more the mystique around mutuals grows.

Local Government Chronicle has just carried a blog by Chris Brophy, a partner at the Capsticks health and social care law firm, which discussed the potential of mutuals and social enterprises.

Brophy makes some good –  and certainly descriptive – points, suggesting for now that “there is a certain ‘quiet before the storm feeling’. You can sense the sea being sucked back, the birds have gone quiet, the sky is red-stained, there is no breeze, as those interested in new business methodologies wait anxiously to hear whether there is a panacea for financial, staffing and service problems.

“Breathing becomes more steady as anxiety is anaesthetised by contemplating the difference between mutuals on the one hand and social enterprises on the other and then you can start settling down to really understanding what is going on, and settle down you must as you realise you really need to understand this beast before heading back to base and being enveloped by the day to day issues.”

He goes on to make some excellent points about the challenges facing local authorities:

‘One of the difficulties for local authorities developing social enterprises is the time, funding and resources needed to just to consider change, never mind working up business plans including engaging with staff and thinking about the identification and transfer of significant businesses. Despite the difficulties all Councils have, everyone knows this process needs to be commenced, and now, as deadlines start to loom more large and the need to stay in control of the process becomes the main line on the forehead.

‘In many ways Local Authorities have it more difficult than PCTs. At least PCTs knew essentially what services they were looking to transfer as part of the Department of Health’s “Transforming Community Services programme and pursuant to their Right to Request” to take their provider services. The scope of the businesses for the LAs to think about is potentially very extensive and there is also the question of how to package businesses together.

‘Should all the businesses in contemplation be transferred to one social enterprise or would those businesses not work together and need to be packaged in different ways. They might for example have very different kinds of beneficiaries or users of the service and the stakeholders may be very different and therefore it might be more difficult to align the governance of the organisation with the business objectives if they were all combined. However scale is important and of course funding and income is crucial. It serves no useful purpose to set up a business which has no viable business plan. Whatever happens you need to identify the services, the assets, the staff and the support that will be involved and at the same time you will looking to satisfy yourself about the potential management team, its capabilities and skill-sets and then developing the business plan to see if it can all work.

A useful and informative piece. You can read the whole post here

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