Campaign4Change

By Tony Collins

The Work and Pensions Secretary Iain Duncan Smith continues to receive reports from his officials that things are going well with the Universal Credit project.

Which is just as well for the officials.

The most important of them is Malcolm Whitehouse, Universal Credit Programme Director, Department for Work and Pensions who has given a positive progress report on the Univeral Credit project to the House of Commons’ Work and Pensions Committee.

Whitehouse is “pleased to say” that HM Revenue and Customs’ “Real-Time Information” project – in which employers give HMRC monthly rather than annual details of how much tax and national insurance they are paying staff – is “on track and the pilot is going very well”.

Whitehouse’s paper ties in with the mood of Duncan Smith who, it appears, has no wish to convey anything but good news on UC, which is tough for anyone who wants to tell the minister the unvarnished truth.

“Whatever we do here is an investment in changing people’s lives,” said Duncan Smith when he went before the Work and Pensions Committee in September. The Committee’s MPs are investigating progress on universal credit.

Not so gung-ho

This week MPs on the Work and Pensions committee questioned Robert Devereux, Permanent Secretary, Department for Work and Pensions, on UC progress.

To various questions Devereux gave answers that showed the UC project is still subject to a plethora of uncertainties:

“We are doing quite a lot of piloting work now to try and understand exactly what the size of the problem is,” said Devereux.  “Deciding on what that is depends on the work we are doing at the moment… we are trying to make sure how that will work … we are trying to work through how that will work in practice… it is difficult to know on a programme that will take until 2017 to complete exactly how that will fall out but we are doing quite a lot of work over the next  six to nine months to try to get our heads around what that commitment will be …I don’t there is an individual cost for it because we are still trying to explore exactly what that will be… the amount that transition protection will eventually cost us depends on a number of variables not all of which we know at the moment … The business case has a set of assumptions on what these numbers will be…”

Staffing for UC?

“It depends … at the moment the department is absorbing within its budget … the number of extra staff is going to depend on where the economy is in 13/14, 14/15, 15/16, 16/17. In the event that the economy is in a good place I will have quite a lot of spare staff already which I will be able to redeploy.”

And support for claimants who are not online?

“I have 80,000 operational staff. We are not going to find ourselves short of staff.” He said that until the pilots are complete he will not know “what proportion of people will need what sort of help”.

IT progress

The DWP said in a paper to the Work and Pensions Committee that a “pathfinder” pilot, which is due to begin in April 2013, will prove the core Universal Credit policy and supporting processes.

“The design for these IT systems is now in its closing stages, with the build plan on track to complete at the end of October 2012,” said the paper. “Rigorous, integrated IT testing has also commenced and will continue until February 2013, bringing together Universal Credit and the various external system changes, such as the Real Time Information system…

“October 2013 will see us start to roll out this core Universal Credit service incrementally in each region of Great Britain. It will also see us deploy the next series of functionality and processes in to the pathfinder sites.

“Early scoping and high level design work has now started on this, which will focus on the delivering digital (by default) processes. The programme will continue to build iteratively the functional capability to add automation and integration through to October 2015 and beyond.

Contingency

“There will be robust standby arrangements which will enable the IT system to be fully recovered within a short period of time. These standby arrangements will cater for both failures within the Universal Credit IT System and possible catastrophic outage of infrastructure (i.e. Data Centre outage).

“The Department for Work and Pensions is recognised as having some of the best contingency arrangements in place across Government. Should there be a catastrophic outage of IT arrangements are in place that can be invoked to ensure people continue to get their money…

Real-Time Information

“It is estimated that RTI will deliver c£300m net reduction in administrative burdens for employers. PAYE reporting in real time will also support the introduction of Universal Credit…

“A pilot started in April 2012 to test the Real Time Information service and the IT and identify any issues which need to be resolved before most employers start submitting PAYE in real time in April 2013.

“The pilot is going very well and as a result Real Time Information is on track. So far there have been few issues and those that have occurred have been quickly resolved with ten volunteer employers.

“It was expanded on schedule in May to a further 310 PAYE schemes. Following the success of the first pilot stage, HMRC expanded the pilot again and by end July almost 1.8 million individual records were being reported in real time by 700 PAYE schemes.

“The quality of data in the pilot has been good, with the numbers of individual records matching to a National Insurance number exceeding expectations.

“Where a PAYE scheme pays using Bacs, HMRC uses an automated cross referencing process to match the amounts shown on the RTI return with the amount actually paid. This process is producing high rates of matching.

” HMRC is on track for around 1,300 schemes to be reporting PAYE in real time by the end of September and a further expansion in November. By March 2013 around 6 million individual records will be reported in real time by up to 250,000 PAYE schemes.

“HMRC are seeing external confidence in the pilot and have therefore offered more large employers, payroll bureaux, new employers and software developers the opportunity to join the pilot or to expand existing involvement in advance of the launch date of April 2013.

“This approach will bring more individuals into RTI, ensuring HMRC is well placed to support the early stages of Universal Credit including Pathfinder when it starts in April 2013.

“The remaining employers and pension providers will come on board from April 2013. HMRC are on track to have all employers and pension providers reporting PAYE in real time by October 2013 – in time for the introduction of Universal Credit.”

Concerns

The Institute of Chartered Accountants for England and Wales, which supports the introduction of UC, has unanswered questions and concerns around the preparedness of HMRC, the DWP and some employers.

In a detailed paper to the Work and Pensions Committee the Institute also suggested there were many uncertainties about how the UC systems will work.

“The IT system UC will rely on will not be fully implemented in time, and many kinks and problems in the system haven’t yet been addressed,” said the Institute.

The CBI also supports the introduction of UC but has told the Work and Pensions Committee:

“While initial feedback from employers involved in the RTI pilot has been satisfactory, with officials providing adequate support when the system fails, we are concerned that such support will not exist when the programme is rolled out at scale.”

Comment:

Universal Credit is not the same as other major government IT projects. It is being built on the lessons from failed projects. Hence the use of “fail early, fail cheaply” agile principles; and the extensive use of pilot projects.

But in at least one material aspect the coalition is repeating a mistake on past (failed) IT-enabled projects such as the NPfIT, Firecontrol and the Single Payment Scheme:  in public it gives one side of the story – what’s going well – while keeping secret its own analyses of the problems, issues and risks.

This  may mean in practice that claimants, Parliament, employers and even Iain Duncan Smith may not know that the project is in deep trouble until the problems are manifest.

It’s better for the coaltion to say something along these lines: “This is an important welfare reform, a simplification of benefit systems that carries with it the sort of risks that go with innovation.

“This is what’s going well, and these are the challenges we face. We need the help and forebearance of all involved to overcome the problems we face and have yet to face.”

Instead Duncan-Smith and his officials are waving aside their critics, telling them imperiously: “The programme is on track and on budget.”

Pilots

There was extensive piloting before the advent of the NPfIT. It was called ERDIP. But the ERDIP results were largely ignored because they threw up all sorts of problems that, if taken seriously, could have stopped the NPfIT from going ahead in 2002.

Duncan Smith mentions the pilot projects – and the DWP publishes press releases on the results – but the department does not publish the findings in full. Will the DWP take any notice of the pilots if they throw up problems that could delay the scheduled start of UC in October next year?

To answer the question in the headine “How’s the UC project going?” we are not sure the DWP really knows. Parliament certainly doesn’t know.

Some of the clues are likely to be in the consultancy and other internal reports the DWP is refusing to publish. Let us hope they’re not too negative overall. If they are Duncan Smith will not want to read them; and he’s the man answerable to Parliament – and the public – for the success or otherwise of the scheme.

Is Universal Credit really on track? – the DWP hides the facts.

By Tony Collins

Two months ago an inner circle of councillors and senior officers in Cornwall was finalising – in a rush – the most momentous deal in the council’s history, to outsource a range of council and NHS services to BT or CSC.

There were no plans to put the final outsourcing decision to the full council.

The inner circle had agreed that the final approval of a deal would be decided  by the council’s chief executive and a handful of councillors.

The view of the inner circle was that most councillors had no grasp of the detail. How could they understand how good the proposition was?

But in September campaigning councillor Andrew Wallis, an independent, put a motion before the full council:

“…this Council believes that it is not in the best interests of the people of Cornwall for the Council to enter into the proposed Strategic Partnership for Support Services.”

The motion was carried – then ignored by the inner circle who carried on negotiating with BT and CSC. Wallis was amazed. The next day his blog said he needed to “calm down from my disbelief and seething anger at one of the biggest F-yous to democracy I have ever witnessed”.

The Cabinet of Cornwall Council had “undermined democracy”.

“The arrogance of totally ignoring the majority of councillors’ feelings on the strategic partnership plans is staggering.”

Wallis organised a petition. It urged the cabinet to put the outsourcing deal to a vote of the full council; and 41 councillors put their names to a vote of no confidence in the leader Alec Robertson.

Democracy was now working as it should. It was starting to hold the inner circle to account.

The vote led to the replacement of Robertson as council leader. The full council narrowly chose  Jim Currie, an outsourcing sceptic, for its new leader; and the petition attracted more than 5,000 signatures (about 6,350) which meant that the outsourcing proposals had to be debated by the full council. A date was set: 23 October.

To his credit Robertson had said before being ousted as leader that the cabinet would abide by whatever the full council decided on 23 October.

BT worked hard on marketing its joint venture proposals to individual councillors with briefings,  Powerpoint slides and a draft business plan. CSC withdrew from the bidding after Robertson was ousted.

Meanwhile Dave Orr, a former IT analyst and lay union volunteer at Somerset County Council,  contacted all Cornwall councillors to provide an informed analysis on the lessons from Somerset’s failed joint venture with IBM-led Southwest One. He did so for public interest reasons.

By the time the matter came to the full council for a debate yesterday most councillors had taken into account BT’s briefings, and the concerns of Orr and others. They also had a rebuttal of Orr’s points by Cornwall’s CEO Kevin Lavery. [A pity that Lavery, in his rebuttal, appeared to tackle the man as well as the ball.]

In a unanimous vote the full council halted the rush towards signing a deal with BT.  Councillors expressed a preference for seeking independent information on BT’s proposals and on other options such as setting up an employee-owned  mutual.

Cornwall’s inner circle has been held to account.  Its unseemly and over-enthusiastic rush towards a deal was deferring to the wishes of the bidders. Now the full council has shown that it is, at least this time, in control of the cabinet. Which is the right way round.

Some of the best decisions emerge from a state of noble tension.

Outsourcing no longer cuts the mustard

By Tony Collins

BT has named Cornwall as its partner in competitive bidding though a partnership has yet to be signed. The company has the agreement of the council and NHS organisations to bid naming Cornwall as a partner.

Cornwall Council has not yet decided whether to proceed with a mega-outsourcing contract with BT. A majority of councillors at a full council meeting in September voted against a deal but the ruling “cabinet” decided to continue negotiations with the two shortlisted bidders CSC and BT. CSC has since withdrawn.

Tomorrow there will be another vote of the full council on whether to sign a joint venture contract. This is because a petition has attracted more than 5,000 signatures (about 6,300 so far). It means that the outsourcing plan must be debated by the full council. The cabinet says it will abide by the outcome of tomorrow’s full council vote.

A deal would see BT taking over staff and running services for Cornwall Council, Peninsula Community Health, Cornwall Partnership NHS Foundation Trust and Royal Cornwall Hospitals NHS Trust. The contract over 10 years would be worth between £210m and £800m.

BT appears to have some confidence it will win the vote. In its draft business plan written for the council and the potential NHS partners, BT explains that the strategic partnership for support services in Cornwall would bid for future government contracts. The partnership will be credible and low-risk trading vehicle from day one says BT.

Already, says BT, it has named Cornwall in competitive bid situations for telehealth, which has the agreement of Cornwall Council and health partners.

Comment:

Has an inner circle within the council taken it as read that a mega-deal with BT will be agreed? Is this why it has already allowed BT to name Cornwall as a partner in competitive bidding?

BT’s enthusiasm for winning new business for the proposed joint venture is impressive, but shouldn’t a contract be signed first? Cornwall council and its potential health partners have yet to agree to set up a joint venture.

How independent from each other are BT and Cornwall Council?

Officers and the cabinet have given councillors much information from BT about the proposed deal but independent information is conspicuously absent.

The council’s “Single Issue Panel” has expressed “deep misgivings” about the outsourcing proposals but its concerns were dismissed by the cabinet. Shouldn’t Gateway and any other independent reviews of BT’s proposals be published?

In its draft business plan on the strategic partnership for the council, BT uses the words “guarantee”,  “guarantees” or “guaranteed” 46 times. It uses commitment or similar at least 30 times.

But, in capital letters overprinted on every page, is the word “Draft”. Guaranteed outcomes, guaranteed savings, and guaranteed additional jobs in the draft report will need to be converted to contractual clauses.

Some questions for Cornwall’s councillors

The gap between guarantees in a draft business plan and commitments in a contract could be wide. Will those promises of “guarantee” clauses be unambiguous, without caveats? Will the full council be able to review the contract before it is signed?

The council says that if BT breaks commitments and guarantees it can exit the contract. But central government – the Department of Health included – has found it cannot exit large and complex contracts without paying tens of millions of pounds in compensation or facing legal action for its own contractual breaches.

Separately to the business plan, BT has produced a Powerpoint presentation for councillors on the joint venture. This document also uses the word “guaranteed” and “commitment” a great deal.

But BT’s small print in the Powerpoint presentation says: “This proposal is non-binding and all dealings, dialogue and negotiations are subject to the conclusion of appropriate terms and conditions.”

Are councillors aware of the small print?

A good deal – potentially

If BT fulfills all the promises in its draft business plan and non-binding Powerpoint presentation it could be good for the council, the NHS partner organisations, staff and council tax payers. There is no lack of a genuine conviction on BT’s part.

Do such deals have a history of success? It’s hard to tell.

Truth on outsourcing success and failure is hard to come by

Councils usually want to give a good news story on their outsourcing deals to the outside world, as do their suppliers, but independent internal reviews tend not to be published.

The little independent evidence there is – from say councils in Liverpool and Somerset – is not encouraging; and while Cornwall did get independent advice from its Single Issue Panel which visited supplier reference sites and spoke to clients of BT and CSC, the Panel, in the end, produced a “critical friend” report that was deeply sceptical of Cornwall’s proposals.

Are Cornwall’s outsourcing proposals outdated?

Central government is moving away from large and complex outsourcing deals in favour of “cloud” contracts that can be switched from supplier to supplier with months or even weeks of notice, with a clear and unambiguous per-transaction monthly charge.

By cloud standards, Cornwall’s plan seems outdated. Its proposals are similar in style and aspiration if not in detail to Somerset’s failed Southwest One joint venture, a contract for which was signed in 2007.

Strong contract management team?

If Cornwall planned to set up a large and strong internal management team to keep control of BT and arrange for independent audits of its performance and Key Performance Indicators (KPIs), it would inspire more confidence. But as procurement expert Peter Smith of Spend Matters says:

“If the current management of a service is judged to be incapable of bringing about improvements and efficiencies needed, then it is highly unlikely that they can manage someone else doing that.”

He also warns:

“Beware having aspirational pictures painted by expert sales people from large, sophisticated companies of how your (rosy) future will look. …

“When people are selling you something and stand to make a sales commission from the deal, do you look at them as impartial?”

We would suggest councillors in Cornwall commission an independent review of BT’s proposals before agreeing a mega-deal that could last 10 years or more. That review could answer key questions such as:

– Does the council have an independently audited baseline of the cost of the services to be outsourced, on which to judge the level of promised savings by BT?

– What are the most potentially serious risks, and how well prepared are the council and its potential partners if things to go wrong?

BT has told Cornwall council that its extensive experience of similar transformations in other partnerships “provides our Cornwall Partners with the security that our offer is based on fact”.

BT also says that a BT Guarantee, which puts its brand at risk, is worth its weight in gold.

Tomorrow the council may judge such assertions with or without an independent review.

Thank you to Dave Orr who provided information and informed analysis on BT’s proposals.

By Tony Collins

BT, with support from Cornwall Council’s Chief Executive Kevin Lavery,  is working hard to persuade councillors of the benefits of a mega-outsourcing deal, ahead of a full council vote next week on whether to proceed.

On Tuesday the authority ousted its pro-outsourcing leader Alec Robertson and replaced him with Jim Currie who has opposed large-scale outsourcing.

“The financial risks involved with the rush into the new joint venture proposals are unacceptable. The JV [joint venture] is basically too large to control,” said Currie before the vote of no confidence in Robertson.

Now Currie hasn’t ruled out a deal.  “Never say never,” he says. “It might be an option of last resort.”

 BT briefings

Council CEO Lavery says in his latest letter to all staff that 46 councillors attended a confidential briefing with BT and the programme team on Wednesday.  It lasted several hours.

More briefings were planned to enable councillors to “examine the proposals”. Lavery’s letter to employees (below) is published on the blog of independent Cornwall councillor Andrew Wallis. He  says the letter indicates a “business as usual” approach.

Outsourcing plan a dead duck?

Now that CSC has withdrawn from the bidding leaving only BT some in Cornwall are saying that the outsourcing plans are a dead duck. But perhaps not.

An article on Thisiscornwall.co.uk suggested that councillors might not have ousted Robertson had they received a confidential briefing on the deal before the vote.

BT’s savings pledges

In its briefing BT offers “guaranteed” savings of £60.6m on the core contract in years one to ten, plus  “£89m savings from procurement” – a total of £149.6m.

It is promising “additional forecast savings of £104.4m” plus £25m “anticipated profit share from trading”, which BT describes on a slide as a “cautious” estimate.

BT is further promising “additional procurement savings” of £129.4m, bringing the grand total of promised savings to £279m.

When Andrew Wallis asked at the briefing how the figures stack up if one or more of the other partners such as the Royal Cornwall Hospitals Trust do not enter into the partnership (and it is far from assured that NHS trusts will join the partnership)  he was told the figures would change. At that time BT could not give Wallis the revised figures but said it would send them to him.

A warming to BT?

Liberal Democrat leader Jeremy Rowe says it is possible there may be some merit in shared services and there’s a need to explore that without ruling it out completely.  “I would like to see officers working up a ‘third way’ option and to put all three options in front of the new council.”

Labour councillor Jude Robinson attended the confidential briefing.  Her blog gives a good insight into what happened.

“It was an interesting session and explained a lot. I’ve always said we have to consider this proposal seriously but we need evidence and figures to back up the reassurances and promises we have been given. The great mystery now is why councillors have been excluded for so long from this process. Just look where that has got us..

“Cornwall Council has spent huge amounts of time and a lot of money (£1.8 million) on this JV [joint venture] but the way it has been driven through has created tensions and mistrust that could mean this is rejected. £1.8 million is a lot of money for a dead duck.

“We now have only one company interested in bidding for this venture.  How can Cornwall Council put a tender out to one company and be sure of testing the market and getting the best value? is it even legal according to the constitution?

“To their credit, BT have done a lot of work over the past two years with officers of the council. They are still here but now, at the very end of the process it looks very uncertain. The Council has not even considered other options properly and it would be wrong to go for this just because it is on the table when we don’t know what other alternatives may deliver.

“It would also be politically outrageous to award a contract that commits the next council – after elections – to major change and risk without a democratic mandate.

“Will BT hang around or cut their losses? Will Cornwall lose out what could be a very positive offer because of the way this has been mishandled?”

Comment:

BT’s briefings seem to have had an effect on some councillors; and staff get the impression their jobs are uncertain if they stay with Cornwall council but, if they join BT, they will come under the company’s current policy of no compulsory redundancies. And they’ll get BT broadband for £1 plus other offers.

It’s by no means certain that the full council will vote next week to reject an outsourcing deal.  If it votes in favour of a deal that will be quite a victory for BT, Lavery and some on the council team who appear to believe that BT can cut costs, transform services, make a profit and employ hundreds more people without any downside.

Lavery’s letter as published on Andrew Wallis’s blog:

By Tony Collins

Updated 17 Oct 2012

Cornwall Council has today voted to remove its Conservative leader Alec Robertson, which casts some doubt over a mega-outsourcing deal with CSC or BT.

Robertson and his cabinet colleagues have been ardently in favour of an outsourcing deal that could be worth between £210m and £800m.

He will be replaced as leader by Conservative Jim Currie who had resigned from the cabinet in protest at its push towards the outsourcing deal despite a vote of the full council against the signing of a contract.

Currie’s appointment as the new leader – by 49 votes to 46 – makes an outsourcing deal less likely, though a final decision will be taken by the full council on 23 October. Several pro-outsourcing members of the cabinet resigned a few minutes ago without giving a reason. The suggestion is that they would not serve under Currie because he is opposed to outsourcing.

Standing against Currie for leadership of the council was Neil Burden, an independent councillor and member of the cabinet. In general the pro-outsourcing councillors voted for Burden.

Two independent councillors, Graham Walker and Bob Egerton, had brought the vote of no confidence in Robertson. It was carried by a majority of 14 – 63 in favour and 49 against.  The chair of the council Pat Harvey said she was sorry Robertson had lost the vote.  She thanked Robertson for all he has done for the council. She expressed regret that several cabinet members had resigned over Currie’s appointment as leader.

During the debate on the vote of no confidence in Robertson, most of the arguments in favour of his staying were supportive of him as a person. Most of the arguments against him were about the council’s policies and particularly his cabinet’s strong support for an outsourcing deal.

Several councillors spoke of their dismay that a majority at a full council meeting in September voted against the outsourcing deal but the cabinet has proceeded with negotiations anyway.

Comment:

Robertson lost the vote  but not by a large majority. It may be that his displacement will bring out neutral councillors in sympathy for his mega-outsourcing deal.

The new leader  Jim Currie won the vote in favour of his appointment by a margin of only three.  Though he is against an outsourcing deal, he will find himself up against opposition from some colleagues and particularly some senior officials.

The strength of feeling in some parts of the council for a deal to be signed is remarkable. Could that strength of feeling overcome opposition to the signing of a deal, even with Currie as the new leader?

Refreshing

Continuity of leadership is usually a good thing, but not when the leaders have become too like-minded and lack independent challenge.  Some new faces at the top of Cornwall council will refresh the authority’s outlook even with only a few months to go before local elections.

Currie doesn’t rule out outsourcing deal

In an interview with regional BBC TV news, Currie said he will want to see the facts of the outsourcing proposals, and he urged caution – but did not appear to rule out the signing of a contract.  Doubtless BT and CSC will be working hard to keep the scheme alive. Can they persuade Currie to change his mind – although he was elected in part because of his opposition to the outsourcing scheme?