A paperless NHS by 2018? Could it ever happen?

Posted on 16/01/2013 | 1 comment

By Tony Collins

The NHS should go paperless by 2018 to save billions, improve services and help meet the challenges of an ageing population, Health Secretary Jeremy Hunt will say today.

In a speech to the Policy Exchange this evening, the Health Secretary will say that patients should have compatible digital records so their health information can follow them around the health and social care system.

This would mean, says the DH, that in most cases, whether patients needs a GP, hospital or a care home, the professionals involved in their care could see patient histories “at the touch of a button”.

Hunt’s speech comes as two reports are also published which – says the DH – demonstrate the potential benefits of making better use of technology.

The DH says a report by PriceWaterhouseCoopers on the potential benefits of better use of IT “found that measures such as more use of text messages for negative test results, electronic prescribing and electronic patient records could improve care, allow health professionals to spend more time with patients and save billions”.

But the DH press release – and coverage of it by the BBC – does not mention the reservations in Pwc’s report.

Pwc says it could take 10 years or more for the NHS to derive the full benefits from some of the priority actions and further actions mentioned in its report.

Pwc also says that “significant further work is required to further substantiate some of the evaluations of potential benefit, and especially the evaluations of potential financial benefit. This work should be completed before the broad implementation of the recommended actions commences…”

A National Mobile Health Worker report, also published today, was a pilot study on introducing laptops at 11 NHS sites.

On the way towards the 2018 goal, Hunt will say that he wants to see:

– By March 2015 – everyone who wishes will be able to get online access to their own health records held by their GP.

– Adoption of paperless referrals – instead of sending a letter to the hospital when referring a patient to hospital, the GP can send an email instead.

– Clear plans in place to enable secure linking of these electronic health and care records wherever they are held, so there is as complete a record as possible of the care someone receives.

– Clear plans in place for those records to be able to follow individuals, with their consent, to any part of the NHS or social care system.

– By April 2018 – digital information to be fully available across NHS and social care services, barring any individual opt outs.

The NHS Commissioning Board is leading implementation and it has set a clear expectation that hospitals should plan to make information digitally and securely available by 2014/15.

This means that different professionals involved in one person’s care can start to safely share information on their treatment. This is set out in the NHS Commissioning Board’s recent publication ‘Everyone Counts: planning for patients in 2013/14′.

Hunt says:

“The NHS cannot be the last man standing as the rest of the economy embraces the technology revolution.

“It is crazy that ambulance drivers cannot access a full medical history of someone they are picking up in an emergency – and that GPs and hospitals still struggle to share digital records.

“Previous attempts to crack this became a top down project akin to building an aircraft carrier. We need to learn those lessons – and in particular avoid the pitfalls of a hugely complex, centrally specified approach.

“Only with world class information systems will the NHS deliver world class care.”

The Government recently announced it would be making £100 million available to NHS nurses and midwives to spend on new technology.

Challenges

The Pwc report is not an analysis of the costs of introducing shared electronic records across the NHS. But it does mention some of the challenges. It says:

“There are delivery risks to be addressed before the potential benefits can be realised.”

This is Pwc’s list of challenges of introducing better IT in the NHS, especially a shared electronic patient record:

– “The realisation of the potential benefits will depend on the concerted action and commitment of bodies from across the health and social care system.”

– “… the maximum possible benefits presented by this review will not be realised unless key supporting elements are put in place and unless appropriate and timely investments are made.”

–  “The availability of funds to cover one-off investment costs in technologies, information gathering or reworked organisational processes.”

– “The willingness of system bodies to adopt the technologies or commit to information gathering and use.”

–  “The clear and concise documentation of the benefits achieved and challenges faced by pilot programmes or early adopters of technologies or information protocols, to support other organisations in implementing actions in a cost-effective and efficient way.”

– “Strong and positive leadership to promote use of information and technology, and prioritise the commitment of resources and time to it and commitment of bodies from across the health and social care system.

– “The incentivisation of the adoption of the proposed actions, particularly when coordinated system-wide action is required.”

– “Measures to make contracting for the provision of systems and services as easy, quick and cost-effective as possible; and

– “The development of new or revised robust governance processes to not only support programme delivery but scrutinise the delivery of benefits.”

Comment:

On the face of it Hunt’s good intentions and the DH’s press release on his speech are little more than political rhetoric.

Indeed it appears that Hunt commissioned the Pwc report to give an independent voice to a political announcement. Pwc concedes in its report that it was commissioned to highlight the “potential benefits that could be achievable through the more efficient and effective use of information and technology in the NHS and social care before any action is taken”.

It is inconceivable that the NHS will be paperless or have shared electronic patient records by 2018. Each ward in every major hospital has a range of paper forms. These will take an unknown number of years to standardise for the purposes of electronic records; and shared electronic records will not take place across the NHS without enormous changes in culture and practice, and initial investments.

Nearly every secretary of state for health, shortly after coming to the post, is given a draft speech by his officials about the NHS’s having shared electronic patient records by a distant date.  A new government will be in power by 2018 and Hunt’s promise in January 2013 will have long been forgotten.

Yet Hunt’s announcement is still welcome because it will continue to add energy to the very slow move to shared electronic records.

It is astonishing in a technological age that patients with chronic diseases such as diabetes, or have complex health problems, can be treated at different specialist centres in various parts of the UK without their records being shared. A patient can be seen within a week in two different hospitals without each hospital sharing the patient’s most recent notes and diagrams.   This problem has to be grabbed by the throat – but not with a centralised system or database as proposed in the NPfIT.

Hunt recognises this. He talks of the need for records to be linked – from where the data currently resides. But Hunt needs to say how it will happen, and provide some limited investment for it to happen – tens and not hundreds of millions of pounds.

The political will is there – but without the means to achieve a shared electronic record it may never happen.

Pwc report

Jeremy Hunt challenges the NHS to go paperless by 2018 – DH press release

Going paperless would save the NHS billions – BBC online

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Posted in Campaign4Change, e-health, ERP, Government IT, health, health records, NHS, npfit, operational issues

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Frustrated with the system – Govt CIOs, executive directors, change agents

Posted on 14/01/2013 | 3 comments

By Tony Collins

Today The Times reports, in a series of articles, of tensions in Whitehall between ministers and an “unwilling civil service” over the pace of change.

It says a “permanent cold war” is being conducted with the utmost courtesy. It refers to Downing Street’s lack of control.

In one of the Times articles, Sir Antony Jay, co-creator of the “Yes Minister” TV series, writes that the civil service is more prepared to cut corners than in the 1970s  but hasn’t really changed. “If a civil servant from the 1970s came back today they would probably slot in pretty easily,” says Jay.

Politicians want “eye-catching” change while civil servants “don’t want to be blamed for cock-ups”, he says.

Separately, Mike Bracken, Executive Director of Digital in the Cabinet Office, has suggested that a frustration with the system extends to CIOs, executive directors to corporate change agents.

Bracken created the Government Digital Service which is an exemplar of digital services.  His philosophy is it’s cheaper and better to build, rent or pull together a new product, or at least a minimum feasible product, than go through the “twin horrors of an elongated policy process followed by a long procurement”.

Bracken has the eye of an outsider looking in. Before joining the Cabinet Office in July 2011 he was Director of Digital Development at the Guardian.

Bracken’s blog gives an account of his 18 months in office and why it is so hard to effect change within departments. I’ve summarised his blog in the following bullet points, at the risk of oversimplifying his messages:

Collective frustration

–  After joining the Cabinet Office in 2011 Bracken made a point of meeting senior officials who’d had exalted job titles, from CIOs and executive directors to corporate change agents. “While many of them banked some high-profile achievements, the collective reflection was frustration with and at the system,” says Bracken.

Civil service versus citizen’s needs

–  “I’ve lost count of the times when, in attempting to explain a poorly performing transaction or service, an explanation comes back along the lines of ‘Well, the department needs are different…’ How the needs of a department or an agency can so often trump the needs of the users of public services is beyond me,” says Bracken.

– Policy-making takes priority over delivery, which makes the civil service proficient at making policy and poor at delivery. “Delivery is too often the poor relation to policy,” says Bracken. Nearly 20,000 civil servants were employed in ‘policy delivery’ in 2009. Each government department produces around 171 policy or strategy documents on average each year. Bracken quotes one civil servant as saying: “The strategy was flawless but I couldn’t get anything done.”

Are citizen needs poisonous to existing suppliers?

– Departmental needs take priority over what the public wants. Bracken suggests that user needs – the needs of the citizen – are poison to the interests of policymakers and existing suppliers. “Delivery based on user need is like kryptonite to policy makers and existing suppliers, as it creates rapid feedback loops and mitigates against vendor lock-in,” says Bracken.

– “When it comes to digital, the voices of security and the voices of procurement dominate policy recommendations. The voice of the user [citizen] barely gets a look-in. ( Which also explains much of the poor internal IT, but that really is another story.)”

A vicious circle

Bracken says that new IT often mirrors clunky paper-based processes. [It should usually reflect new, simplified and standardised processes.] “For digital services, we usually start with a detailed policy. Often far too detailed, based not just on Ministerial input, but on substantial input from our existing suppliers of non-digital services. We then look to embed that in current process, or put simply, look for a digital version of how services are delivered in different channels. This is why so many of our digital services look like clunky, hard-to-use versions of our paper forms: because the process behind the paper version dictates the digital thinking.”

Then things take a turn for the worse, says Bracken. “The policy and process are put out to tender, and the search for the elusive ‘system’ starts. Due to a combination of European procurement law and a reliance on existing large IT contracts, a ‘system’ is usually procured, at great time and expense.

“After a long number of months, sometimes years, the service is unveiled. Years after ‘requirements’ were gathered, and paying little attention to the lightning-quick changes in user expectation and the digital marketplace, the service is unveiled to all users as the finished product.

“We then get the user feedback we should have had at the start. Sadly it’s too late to react. Because these services have been hard-wired, like the IT contract which supplied them, our services simply can’t react to the most valuable input: what users think and how they behave.

“As we have found in extreme examples, to change six words the web site of one of these services can take months and cost a huge amount, as, like IT contracts, they are seen as examples of ‘change control’ rather than a response to user need.

“If this 5-step process looks all too familiar that’s because you will have seen it with much of how Government approaches IT. It’s a process which is defined by having most delivery outsourced, and re-inforced by having a small number of large suppliers adept at long-term procurement cycles.

“It is, in short, the opposite of how leading digital services are created, from Amazon to British Airways, from Apple to Zipcar, there is a relentless focus on, and reaction to, user need…”

GOV.UK the civil service exemplar?

Bracken says: “In the first 10 days after we released the full version of GOV.UK in October 2012, we made over 100 changes to the service based on user feedback, at negligible cost. And the final result of this of this approach is a living system, which is reactive to all user needs, including that of policy colleagues with whom we work closely to design each release.”

Bracken says long procurements can be avoided.  “When we created GOV.UK, we created an alpha of the service in 12 weeks … We made it quickly, based on the user needs we knew about… As we move towards a Beta version, where the service is becoming more comprehensive, we capture thousands of pieces of feedback, from user surveys, A/B testing and summative tests and social media input.

“This goes a long way to inform our systems thinking, allowing us to use the appropriate tools for the job, and then replace them as the market provides better products or as our needs change. This of course precludes lengthy procurements and accelerates the time taken for feedback to result in changes to live services.”

Comment:

More big government projects could follow GOV.UK’s example, though some officials in their change-resistant departments would say their systems are too complex for easy-to-reach solutions. But a love of complexity is the hiding place of the dull-minded.

The Times describes the conflicts between the civil servants and ministers as a “crisis”. But conflicts between civil servants and ministers are a good thing. The best outcomes flow from a state of noble tension.

It’s natural for some senior civil servants to oppose change because it can disrupt the smooth running of government, leading potentially to the wrong, or no payments, to the most vulnerable.  It’s up to ministers like Francis Maude to oppose this argument on the basis that the existing systems of administration are inefficient, partly broken and much too costly.

A lazy dependence on the way things are will continue to enfeeble the civil service. Ministers who push for simplicity will always come into conflict with civil servants who quietly believe that simplicity demeans the important work they do. To effect change some sensible risks are worth taking.

The reports of a covert and courteous war between parts of the civil service and ministers are good news. They are signs that change is afoot. Consensus is far too expensive.

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Posted in Campaign4Change, change, change management, cost reduction, efficiency savings, EU procurement, G-Cloud, Government digital Service, Government IT, Politics, public sector, public services

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Real reform? Cabinet Office axes 3 framework contracts

Posted on 03/01/2013 | 2 comments

By Tony Collins

The Cabinet Office has ended three framework procurements after an internal review, reports Government Computing.

Framework contracts have made it easy for buyers in central departments to prolong IT buying habits of the past, by ignoring new ideas, and by-passing SMEs and G-Cloud. They can use frameworks to choose known suppliers without going to a full open tender each time.

Now Bill Crothers, the government’s chief procurement officer says bold action is needed to save more money and attract more innovative suppliers.

He told Government Computing:

“After looking at the current frameworks in use, we’ve decided to cease the Application Development, Delivery and Support Service and Hosting Services procurements from today and Service Integration & Management Services will not be progressed through the framework route.

“Frameworks which are already operating effectively and delivering significant change such as the Public Services Network and G-Cloud provide a model for success and will continue.”

The Cabinet Office says fewer IT frameworks will attract a wider range of suppliers. Frameworks let buyers choose from a list of pre-approved suppliers. They will be allowed only where they are shown to deliver against the commercial ICT strategy and can attract businesses of all sizes.

Cabinet Office Parliamentary Secretary Chloe Smith said:

“Framework agreements only work if they deliver what they set out to deliver and drive the greatest competition from a wider range of suppliers, including SMEs.”

Comment

In 2010 Nigel Smith, who was then CEO of the Office of Government Commerce, said that nearly a third of everything government spends is on procurement. He spoke of the need for major changes, saying there was “massive duplication”. He added:

“We need shooting if we don’t make the changes.” 

In 2011 Chris Chant who was then programme director at the Cabinet Office for G-Cloud, said something similar.

“The vast majority of government IT in my view is outrageously expensive, is ridiculously slow, or agile-less, is poor quality in the main and, most unforgivably I think, is rarely user-centric in any meaningful way at all.”

It can cost £50,000 to change one line of code, he added.

John Suffolk, when he was government CIO, spoke of “bucket-loads of cash” that can be saved by common IT systems, and eliminating duplication and disparate infrastructures.

So what has happened since? Cabinet Office minister Francis Maude and his senior officials have made some important changes. But government IT is an aircraft carrier whose rudders don’t move left or right, except by tiny amounts. Crothers and his procurement team can accept this or resolve to tackle the fundamentals.

Ceasing three framework contracts is moving the rudders of government IT a small amount but it’s a start. As politicians say: there is a lot more to do, and time is running out.

The reservoir of will to reform central government administration is nearly full at present. It may be running low by the time the next government comes to power.

 Three procurement frameworks axed.

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MPs criticise cash incentives to hospitals to take CSC Lorenzo – The Times

Posted on 18/12/2012 | 2 comments

By Tony Collins

MPs are criticising offers to hospitals under which they install the CSC Lorenzo system under the National Programme for IT in return for cash incentives, said The Times yesterday.

The Times’ headline was “Hospitals offered cash to take ‘cowboy’ IT system”, a reference to criticism by Margaret Hodge, the chairman of the Public Accounts Committee after the commitee published a report on the National Programme for IT.

The paper said that CSC will pay hospitals millions of pounds in “signing-on” fees to use the Lorenzo patient administration system, which was developed under the NPfIT.

Graham Frost, sales director for CSC health, is quoted as saying to eHealth Insider that the company has had a “huge rush of trusts enquiring about the incentive fund” and was expecting 24 to sign up. They could “call on this kitty for initial expenses”.

Richard Bacon, a member of the Public Accounts Committee who has made a plethora of disclosures on failures of the NPfIT, was quoted by The Times as saying that if hospitals came to him for advice he would urge them not to take the system.

Hodge was quoted as saying: “If this is true, it’s a mind-boggling waste. I just cannot believe the NHS is bribing trusts to take on an IT system which is known to have problems at a time when they are struggling to reduce their budgets.”

The Department of Health says: “We have made some central funding available for trusts implementing Lorenzo to help cover the costs”.  The funding depends on a robust business case, said the department’s spokesperson.

Comment:

So much for the dismantling of the NPfIT. In reality the Department of Health is using its influence and financial power to drag the wagon of the national programme along on its bare axles. It has from the start.

If CSC can afford t0 pay large cash incentives to trusts and still make money from its installations one wonders if, even with cuts on the NPfIT budgets, there is still too money left in the programme. The incentives give CSC an advantage over SMEs in a market that is supposed to be fair and balanced.

The Department of Health should be doing its best to ensure fair and open competition in the NHS – not tipping the scales in favour of one supplier.

Is the NPfIT still doing damage within the NHS – and to taxpayers?

Thank you to Dave Orr for alerting me to the article in The Times

The Times’ article

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Posted in Campaign4Change

Cornwall Council – a model of local democracy

Posted on 12/12/2012 | 1 comment

Cornwall Council yesterday debated in an open and informed way proposals to set up a major joint venture with BT, keep services in-house or have a limited “strategic partnership”.

The debate was webcast and councillors voted on the basis of a wealth of information published by the council on its website. On the specific potential benefits of a joint venture the council had information from BT and Kevin Lavery, the council’s chief executive. Lavery also produced a useful “pros and cons” summary of the options available to councillors.

On the risks of a joint venture, and the experiences of other authorities, councillors had invaluable information from Cornwall Council’s independent “Single Issue Panel” of councillors, and from Dave Orr who has a deep understanding of Southwest One, the failed joint venture in Somerset with IBM.

In the end the full council rejected proposals for in-house services, and also decided against setting up a major joint venture with BT. Councillors voted for a limited strategic partnership which includes telehealth and telecare, ICT and document management.  How this will work, whether BT will want to run it, and whether it will need a new competitive tender are questions yet to be answered.

Jim Currie, the council leader, and a sceptic of a major joint venture, warned councillors about the dangers of making a decision under pressure of fear.

“The doom and gloom is just not sustainable,” he said. “The fear that has been put in us has to be modified by reality. The reality is that the vast majority of councils will go under before we do.”

He added that the council has expertise, pensions, and trading contacts that would be given away in a joint venture or outsourcing deal. A costly SAP system would also be transferred. The council, he said, would be “giving away the ERP that cost us so much money and lots of IT updates that go with it”.

Comment:

Cornwall Council has emerged from the debate over the proposed joint venture with BT as an exemplar of local democracy. Alec Robertson, the former council leader, who was ousted because of his strong support for a joint venture, comes out of the debate with credit.

There was pressure to do so but Robertson decided that the future of council services should be a decision taken by the full council and not by an inner circle of cabinet councillors. This was a bold step but a critical one in favour of local democracy.

Jim Currie who was voted Cornwall’s leader after Robertson was ousted, also emerges from the debate with credit. Like Robertson Currie is a conviction politician.

But the clear winner of the debate is Cornwall Council. Its reports on the options available to councillors are not perfect but at least they make clear what is and is not being published; and a great deal has been published. Everything Cornwall Council has done is in marked contrast to the partnership decision of Barnet Council which kept its decision on a partnership deal to an inner circle of cabinet councillors. Barnet was entitled to do so, but it was a macho stance given the strength of local opposition. Barnet published little information on its proposals compared to Cornwall.

It would be a pity, though, to shine a light on Cornwall’s democratic strengths by putting Barnet in the shadows. Democracy has its flaws, but Cornwall Council has shown how those weaknesses can be tackled by more democracy, not less.

Cornwall Council – middle way agreed.

The biggest cause of shared services failure?

Shared services in the public sector – Tim Manning.

Jude’s Blog (local councillor)

Very thin joint venture is supported – Andrew Wallis (local councillor)

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Posted in BT, Campaign4Change, local democracy, local government, outsourcing, public-private partnerships, SAP, shared services

Is BT having trouble meeting some of its promises?

Posted on 10/12/2012 | Leave a comment

By Tony Collins

Six weeks ago BBC’s Watchdog broadcast an advert for BT Vision, which offers broadband-based pay-TV packages.  “With BT Vision you won’t miss a thing,” says the advert.

Chris Hollins, a presenter of Watchdog, then tells millions of viewers:

“Big promises. Tempting promises. But according to customers who contacted Watchdog they are empty promises.”

Can BT always be trusted to deliver on its promises? BT Vision is a completely different part of the company that bids for joint venture and outsourcing contracts with local authorities. At the same time BT is marketing its services to Cornwall Council and other local authorities partly on the basis of its unified corporate strength, as a FTSE 100 company.

Can BT’s culture and practice be separated from one division to the next?

Maragret Outschoorn told Watchdog of how she had been five months without a proper service. Sue Bennett, another BT Vision customer, had had problems for two and a half years, since 2010. She told the programme she had been on the phone to BT Vision nearly every week, sometimes for two or three hours.

“Like others who contacted us Sue fell foul of BT Vision’s habit of passing customers from one person to another for weeks on end without sorting out their problem,” said Hollins.

Joe McCaffrey said he spent about 13 hours on the phone over a period of 18 days and each time he had to re-trace the history of his problems.

Breaking up can be hard to do

“So what if a customer decides there are just too many problems to navigate through and they just want to leave BT Vision?” asked Hollins. “Can they achieve their goal? Kieran Potter couldn’t. He was told he’d have to pay a £200 cancellation fee first.

“I ended up having an argument with them for the best part of 13 months saying I want to cancel; I want to leave,” said Potter. “By the time I did get them to cancel me they still wanted me to pay £70 which was in July this year, which I refused. The only reason they did cancel was because I threatened to get in touch with Watchdog.”

Earlier this  year Ofcom revealed that for every 1,000 customers BT Vision received four times as many complaints as its nearest rivals. “We continue to hear from customers who are told they will be charged to leave even though their service is plagued with problems,” said Hollins.

Cornwall Council will decide tomorrow whether to go ahead with a mega-deal in which IT and other services are outsourced to BT. Some council officers and BT favour the services being delivered by a joint venture company that is owned completely by BT. Underlying the assumptions being made by the council is that BT would fulfil its promises and, if not, could be found in breach of contract. Remedies in the contract would give the council the ability to obtain compensation or terminate and bring services back in-house. A 134-page report to Cornwall’s councillors is underpinned by a catalogue of BT promises and guarantees.

But how easy would it be in reality to ensure that BT meets its promises? And how easy would it be in practice for the council to leave BT if termination became necessary?

BT’s response to Watchdog

“BT would like to apologise to the customers featured in the report. Where issues have occurred with BT Vision, we have made efforts to help customers to enjoy the service at its best.”

“However, it is clear that in these particular cases, we have failed to deliver the excellent and timely customer service customers would expect from BT. Where these customers have asked to leave, we have waived charges for leaving contracts early. We are also in the process of agreeing compensation, where appropriate, for some of these customers…”

BT’s full response to BBC Watchdog broadcast.

Comment:

A deal with BT may be good for Cornwall Council and its taxpayers. The evidence we have seen so far looks one-sided though.

The council’s presentations to councillors appear to make the assumption that BT’s promises and guarantees are inviolable, that contractual remedies for any breaches would be easy to enforce, and termination would be straightforward. Could this be because of what TS Eliot called the inability of humankind to bear very much reality?

BT Vision – Watchdog 31 October 2012

BT Vision tops Ofcom pay TV customer complaints

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Posted in BT, Campaign4Change, local government, managing outsourced services, public sector, public services, public-private partnerships

Cornwall staff oppose BT joint venture option

Posted on 07/12/2012 | 1 comment

By Tony Collins

Staff at Cornwall Council have, in general, voted against a joint venture with BT, but only about half of them have voted so far.

The figures are on the blog of councillor Andrew Wallis, an independent councillor who campaigned against the council’s plans to award a joint venture contract to BT, at least without full debate and information,

The full council is due to decide on Tuesday 11 December on whether to ask officers to invite BT to submit a final tender. The officers who are enthusiastic about a deal with BT have indicated that staff are in favour of a joint venture. But the survey results so far are:

In-house – 55% (256)

BT option – 33% (154)

Other outsourcing – 0%

Undecided – 12% (56)

Wallis says the results show that the staff view on the proposals is different to some of the spin coming out of the corporate leadership. But, 850 staff who  received the survey, only 467 have so far completed the survey.

Survey results – Andrew Wallis’s blog

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Posted in BT, local democracy, local government, public-private partnerships

Barnet’s inner circle ratifies Capita deal – now the challenge begins

Posted on 07/12/2012 | Leave a comment

By Tony Collins

Conservative-led Barnet Borough Council’s inner circle of “cabinet” members  agreed  unanimously last night to confirm Capita as the supplier for a 10-year £320m back-office services contract, subject to financial reports.

The deal was agreed despite widespread opposition, without a vote of the full council, and without a political consensus.  A report published by Cornwall Council’s Support Services Single Issue Panel has said that a political consensus is critical to the success of partnership deals.

Capita promises to save £120m over the 10 years, and make an £8m investment in new technology. Up to 200 jobs could go. Capita will run:

  • Estates
  • Finance and Payroll
  • Human Resources
  • IT Infrastructure and Support
  • Corporate Procurement
  • Revenues and Benefits
  • Commercial Services.

About 100 people gathered outside the Town Hall in The Burroughs, Hendon, to voice their opposition to the contract.

Standing on chairs and holding banners, members of Barnet Alliance for Public Services called on the cabinet members to listen to residents’ concerns.

Councillors vacated the room and continued their meeting next door. Speaking at the meeting, Labour councillor Alison Moore said: “This is an end to democracy as we know it… There is no such thing as guaranteed savings.”

Council leader Richard Cornelius said:

“I look forward to getting the savings we desperately need. This is not a gamble. This is not a quick fix – we have been talking about this for a long time. If we were to reject these proposals we would have to find savings elsewhere, which would be very unpleasant.”

Cornelius said the combination of a saving to the taxpayer of a million pounds a month and an £8m investment in technology by Capita made it a “very, very good deal for the Barnet taxpayer”.

The council will set up a monitoring committee in the next couple of months to scrutinise the contract.

Capita’s New Support and Customer Services Organisation deal will be the first of two major contracts awarded under the Barnet council’s One Barnet outsourcing programme. Capita’s contract is due to start in April 2013.

Comment:

Barnet’s cabinet has made an important and controversial decision about the council’s future without a vote of the full council, which is a snub to local democracy.

Somerset County Council’s joint venture with IBM has failed in part because the staff were opposed to it,  the promises were over-optimistic, the finances were on fragile foundations, and the political leadership changed.

In Barnet the opposition to the deal with Capita is more pronounced than at Somerset, particularly among staff. Can the contract survive so much animus, and will opposition to Barnet’s cabinet grow now that local democracy has been flouted in such a macho way?

Cornwall is putting its joint venture decision to a vote of the full council, on 11 December. Whatever the outcome one thing is clear. Cornwall Council’s approach to local democracy puts Barnet to shame.

Barnet approves outsourcing plan

Political consensus key to success in outsourcing

Capita contract approved despite protests

Resident seeks judicial review 

Barnet’s fire-sale

A day Capita will rue?

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Posted in Campaign4Change, Capita, change management, cost reduction, IBM, local democracy, local government, managing outsourced services, outsourcing, public-private partnerships

Parts of report on Cornwall’s planned BT joint venture are missing

Posted on 06/12/2012 | Leave a comment

By Tony Collins

Cornwall Council’s officers have written a 134-page report on the options available to councillors for confronting budget cuts.

It will help councillors  decide at a full council meeting on 11 December whether to ask officers to conclude a joint venture with BT.

The report “Partnership for Support Services – Options Appraisal” is clearly a well-meant attempt to convince councillors that the best option is a deal with BT. The current plan is for BT to set up a subsidiary it would own completely, that would deliver ICT and other services back to the council and parts of the local NHS. BT has no plans for the council to be represented on the subsidiary’s board.

The new report is strong on the benefits of a joint venture with BT, such as guaranteed jobs and savings. Absent, though, are  important parts on costs, risks and local authority experiences on joint ventures and private sector partnerships. 

Secret risks

The report says that the “risks inherent in SP 1 [the joint venture with BT] has been submitted to the Council” by legal firm Eversheds.  A final version of the Eversheds report will be signed off by council officers before any invitation to tender is issued to BT. But there’s no indication that this report on risks will be shown to all councillors.

Secret appendix 

The council’s own procurement costs relating to the proposed joint venture, and further projected costs, are escalating.

In July 2011 the costs to Cornwall’s taxpayers of planning the joint venture  were estimated at £375,000. That figure rose to £650,000, then to £800,000, then £1.8m and now stands at  £2.1m.

“The current forecast estimate of the costs of the procurement process now stands at £2.1m. This is funded from the corporate improvement budget,” says the new report.

There are further costs arising from the partnership, says the report. One example is the pension fund for the transfer of staff which will cost about £10m over 10 years.  “There will also need to be additional budget to create a robust client team [to manage the BT contract],” says the report. This would cost between £400,000 and £700,000 a year.

“Both of these additional costs have been taken into account in the option analysis contained in appendix 2.”

But appendix 2 is missing in the public version of the report.

Also missing  

The report suggests that strategic partnerships are “nothing new”. It adds:

“BT – and other councils (sic) – have been involved in them for more than 10 years. Similarly the outsourcing market is mature and well understood. The UK local government IT and Business Process Outsourcing market is the biggest outsourcing market in the world and there are over 100 deals in operation. Risks are sometimes managed well and sometimes managed badly. The risks have been mitigated by using expert advisors and the Council has senior officers who understand this territory well.”

But the report does not mention that some councils in the mature local authority market have, after poor experiences, outcast joint ventures and one-size-fits-all outsourcing deals. Neither does it mention that the Cabinet Office disapproves of partnerships that lock public sector organisations into one major supplier.

These are some of the partnerships not mentioned in Cornwall’s report:

– Suffolk County Council signed a £330m joint venture deal with BT in 2004. By late 2010 the cost had risen 26% to £417m.  A BT spokesman told  the Guardian that the additional costs were due to “…additional services contracted by the council”.  Suffolk has decided not to renew the BT contract. It will instead outsource to separate specialist firms. Assistant director director strategic finance Aidan Dunn said in a council report that “efficiencies can be achieved by dealing with individual suppliers who are experts in specific areas of back office service provision, rather than contracting with back office generalists”.

He added: “Our analysis suggests that it is not necessary to have one large contract, but that our requirements would best be serviced via three separate contracts: finance and HR, ICT and services to schools.”

– Somerset County Council’s loss-making joint venture is in dispute with its main supplier IBM. Council leader Ken Maddock said the joint venture was “failing to be flexible enough in the changing financial landscape”.  He did not blame the workforce but the “contract, the complications, the failed technology, the missed opportunities, the lack of promised savings”.

– Birmingham City Council is, in effect, locked into a “Services Birmingham” contract with Capita that began in 2006 and lasts for another nine years. The contract has been largely successful but the relationship is deteriorating in some areas, according to a report which was published this week.  The two sides have many problems to overcome.

– Essex County Council has taken civil legal dispute advice over its deal with BT. The European Services Strategy Unit quotes the Financial Times as saying that a 10-year contract began 2002 but in January 2009 Essex Council served BT with a notice of material breach of contract. A spokeswoman for the council said: “We decided it wasn’t value for money and we weren’t getting the level of service we required, so we decided to terminate the contract.”

Analysis of other parts of latest Cornwall report

The options appraisal report says it was produced in a tight timeframe which has limited its usefulness to councillors. But who has imposed a tight timeframe? Councillors have not imposed any specific time limit. It could be that some council officers have. But aren’t artificial time limits usually the prerogative of double-glazing salesmen who offer 60% off if you sign straight away? Cornwall’s report says:

“… it is recognised that the necessity for the Chief Executive to fulfil the mandate of Council in such a tight timeframe means that it has been difficult in terms of ensuring full Member engagement…

” … As stated, the timeframe has been particularly challenging and the report would have benefited from more discussions with and input from Members but it is hoped that the Council has sufficient analysis and background information to make a decision on the best way forward.”

Health partners

The report says of the council’s three proposed health partners that “all are keen to promote closer integration, improve services and deliver savings through the SP 1 [BT joint venture] proposal”.

This isn’t quite what “all” the health partners said.

Kevin Baber, chief executive of Peninsula Community Health in St Austell said the only realistic option was a BT joint venture (though the authority has begun telehealth talks outside the partnership). The other two health authorities were not so definite in their support for a BT joint venture – and one of them  wished expressly not to influence Cornwall Council’s debate.

Lezli Boswell, Chief Executive of Royal Cornwall Hospitals NHS Trust, said:

“It would not be appropriate for me to comment on the Options Appraisal as [the trust] has not been involved in the preparations process and also would not want to appear to be influencing the Council’s debate…”

Phil Confue, chief executive of Cornwall Partnership NHS Foundation Trust, said that the option for a BT joint venture appeared to offer to a real opportunity  to deliver value for money. But he made no commitment to the partnership even if Cornwall votes in favour of a deal with BT.  He said the trust did not want, as an NHS body, to lobby the council over its decision.

“The decision whether to pursue the Strategic Partnership will be made by
our Trust Board of Directors, once the Council has made its decision on the 11 December 2012.”

As the Cornwall options appraisal report concedes, health trusts have the option of outsourcing services to Shared Business Services, a successful shared services organisation run by Steria.

Comment:

Most of the councils that went into joint ventures with high hopes amid promises of large savings have become disillusioned. Such deals are characterised by an anxiety for a deal to be signed as soon as possible, followed by rising costs, lack of flexibility, high prices when there is a need for major legislative and organisational change, and the discovery that ending a contract early carries risks of disruption to services, high re-transitional expenses, legal action and sunk costs.

Some may wonder if the unforeseen rising costs of procurement – they have increased five-fold – may be a sign of what could happen with costs after a contract is in place.

Given the lessons from the growing number of joint venture failures, one would have thought that council officers would be suspicious of supplier promises.  Not at Cornwall. The officer-enthusiasts for the BT deal don’t mention any of the joint venture contracts that have failed. Indeed those officers prefer the claims of suppliers that failures are in the eyes of trouble-makers, media scaremongers and union activists.

Why does so much enthusiasm at the start of contracts dissipate once realities set in? Could it be that the best marketing people are the easiest to sell to? Do the officials that want success so much overlook or minimise the risks and past poor experiences of others?

Links to Cornwall Council’s options appraisal and agenda for 11 December council meeting on the blog of campaigner Cornwall councillor Andrew Wallis.

Cornwall’s joint venture procurement costs escalate

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Posted in BT, Campaign4Change, IT-related failures, local democracy, local government, managing outsourced services, outsourcing, Politics, public sector, public services, public-private partnerships, shared services, supplier relationships

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Lessons from Birmingham Council’s joint venture with Capita

Posted on 04/12/2012 | 3 comments

By Tony Collins

A report on Service Birmingham – Capita’s joint venture with Birmingham City Council – shows that the deal has been largely successful so far but that trust and relationships may be breaking down in some areas.

The “High-Level” review of Service Birmingham by the Best Practice Group could be read in two ways: as a qualified endorsement of the deal so far, or as a warning that a deteriorating relationship in some areas could end up, in years to come, as a legal dispute.

The report’s authors suggest that the council and Capita have little choice but to make improvements given that the contract lasts another nine years. They say:

“Given the fact that the commercial partnership has a further nine years to operate, there is an inherent risk that unless a core focus for both parties is re-established, the commercial trust between BCC [Birmingham City Council and SB [Service Birmingham] will continue to deteriorate.

“Neither party will benefit from the relationship if this situation is permitted to manifest itself.”

In another part of its report the Best Practice Group says:

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

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

Below are verbatim extracts from the Best Practice Group’s report which highlight some of the lessons arising from of the joint venture so far. The sub-headings (in italics) are mine.

Extracts from Best Practice Group’s report:

Service Birmingham charges a fee even when the council implements services outside the joint venture – poor value and reputedly poor practice?

“SB has an on-going contractual duty to ensure it provides independently benchmarked best value in the services it delivers to BCC [Birmingham City Council]. As part of these arrangements, BCC can request specific third party services (outside SB’s own delivery capability) with SB applying a fee for ‘contract management’.

“However, these situations vary considerably, raising the question of how to maximise value. The contract management fee would be considered high value when BCC gives SB a service outcome it wants to achieve, and SB researches the market, provides options and recommendations to BCC, sources the best value vendor, and ensures the solution is implemented and the business outcomes achieved.

“In other situations, BCC already knows the outcome to be achieved, how to achieve it and who the best value vendor is, and can implement the solution itself. However, the same contract management percentage still applies to these cases. This causes resentment for the service area involved because they cannot see how SB has added to the process, and in real terms, is perceived by BCC as very poor value. Although the sums involved are minimal compared with the relationship’s overall cost, it is highly visible as an area of poor value and reputedly bad practice, and needs to be realigned.”

Service Birmingham needs to make a significant return for its shareholders

“Given the relationship challenges between BCC and SB, there are a couple of fundamental points to address, namely that: (a) certain individuals within the Council need to understand that SB is not a social enterprise, a public sector mutual, or a charity, and needs to make a significant return on its capital for its shareholders, and (b) SB needs to understand that the Council is in a significantly deteriorating financial position due to Government cutbacks.”

SB drops its prices when challenged

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

A hardened commercial stance in some circumstances?

“… these obvious and immediate savings are now being met with a hardened commercial stance for anything that falls outside of the core deliverables by SB.”

The cloud imposes hidden costs for SB

“Regardless of whether a scale of mark-up can be achieved, one issue that is clear from the interviews undertaken is that SB/BCC needs to educate the BCC service areas at all levels around what the contract management mark-up actually buys for the Council from SB. At present, for example, there is a lack of understanding within BCC service areas that having ‘cloud’ delivered solutions within the overall portfolio does still incur hidden costs for SB in supporting the overall infrastructure and managing the intermediate fault–reporting service.”

Staff survey on SB – mixed results

“With regards to the survey, 63% stated that they talk ‘positively’ about SB to their colleagues. Slightly less, 59%, believe SB understands the requirements and support needed to deliver the Council’s services. However, when asked if they would naturally think to contact SB for help and advice in situations where they were thinking about undertaking new ICT related work, only 33% of the Council respondents said that they would…

“When asked the direct question of how satisfied they were overall with the service delivered by SB, only 15% of the respondents felt that the service was less than satisfactory. However, only 10% believed that it was excellent with 39% rating it as satisfactory and 36% rating the service received as good.”

Project concerns

“There is a feeling which was voiced by several interviewees from the Council that project implementation often runs behind schedule and ultimately it is the ‘loudest project to shout’ which will then have the scarce resources allocated to it at the cost of other projects.”

Lack of commercial trust

“…there are elements of the KPI [key performance indicator] reporting received from SB that BCC need clarity on . This, coupled with the general lack of commercial trust between the parties and the fact that BCC have shown that SB have reported some data incorrectly (after discussion around interpretation), means that the KPIs are not fully aligned to the business outcomes BCC now needs to achieve in the current financial climate.”

Seeds of a possible legal dispute in future years between the two sides?

“One point that should be highlighted is that we believe there is a misalignment between both parties view of what partnership working actually entails. From the perspective of some service areas within BCC, they view certain individuals within SB as uncooperative. In a similar vein, there are certain individuals within SB who view specific BCC staff also as uncooperative. It should be noted that these individuals within both BCC and SB are in the minority.

“However, such un-cooperation is manifesting itself into a perception of a lack of commercial trust in both camps. Some BCC individuals are not really taking into account, or understanding, that SB is a commercial organisation that has a majority shareholding by a publically listed company. Its commercial shareholders need to see financial returns from SB that increase annually…

“In the early stages, the working relationship was put firmly on the rails by having a ‘great common cause’. The transformation requirements of BCC were so fundamental, it seems many differences of opinion were set aside and both parties worked very hard to overcome the obstacles in ensuring the transformation was successful. Largely, that was achieved. Now that the original transformation process has almost all been completed, the parties working relationship seems to have deteriorated in certain instances. This pattern of behaviour is normal in most strategic vendor relationships.”

SB more expensive than the average in certain areas?

“SB appear to be significantly more expensive than average in the areas of voice, data and converged service provision (KPI-17). The most significant of the three costs provided is the provision of Data services where SB are the worst value of all of the respondents in the SOCITM survey with a cost of £227 per data outlet (capital + support) compared to a median of £118. At the time of writing this report, no clarification had been provided as to the reasons for the significant difference between the SB provided cost and the survey median. When KPI-17 is reviewed as a cost per user, SB fairs much better across the service types. It has a cost of £321 per user compared to a median of £290 per user. However if you consider that this £31 per user per year, it actually represents over £600k per annum above average.”

Council concerns over SAP work going abroad

“Different parties within BCC perceived that in the interest of cost savings, SB was passing some work on SAP projects to an off-shore organisation, rather than using the UK workforce. It should be noted that the contract allows for the off-shoring of SAP work, but only where such work does not adversely impact jobs in the UK.

“A high level review of the SAP project work has identified that SAP work has only been off-shored when the UK workforce does not have the required expertise. In addition, we requested specific evidence from individuals to support their view that work was being off-shored that could have been undertaken by the UK workforce, but this could not be provided.”

The Council was paying for unused phone lines

“… Ultimately, the Council kept receiving invoices from the line provider for what were essentially unused telephone lines. The process ceased promptly after BCC and SB addressed the escalation of the issue.”

Stagnating innovation could widen the divide between the two sides

“It is clear that both parties will continue to feel significant frustration until they can resolve how to share the innovation process, provide resources to help the generation of sound business cases and provide formalised and comprehensive feedback to allow for the implementation of suggestions. These suggestions need to become acceptable to the Council as realistic deliverable solutions. If this does not happen, then innovation between the partners will continue to stagnate, driving a widening divide between the organisations.”

KPIs not always useful?

In the case of the BCC and SB agreement, despite an abundance of KPIs being in place, the Council perceives the contract could be better aligned in order to maximise the behaviours from SB that it needs.

Comment:

The report gives the impression that those running the joint venture must overcome the many problems because the contract still has nine years left to run. Both sides, it seems, are locked into the relationship. In some areas it works. In others it doesn’t.

Capita, clearly, has been trying hard to make the relationship work. Some within the council have too. Some are not so enthusiastic and have been “making noise” according to the report’s authors. Do those making a noise have a point, or are they simply making trouble against the joint venture? The report suggests removing those making a noise. But will that remove some of those who are providing an independent challenge?

So far the relationship has been largely successful; and the survey of staff is generally positive. But there are signs of serious trouble. Innovation is stagnating, the council’s finances are deteriorating and Capita needs to make a profit from the venture. Are these fundamental incompatibilities? Will the relationship really last another nine years, especially if there is more political change within the council?

High-Level Review of Service Birmingham

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