Outsourcing costs in Cornwall escalate – and no deal signed yet

Posted on 16/10/2012 | 3 comments

By Tony Collins

The estimated procurement costs of a mega-outsourcing project in Cornwall have risen sharply, not necessarily under the full control of the county council’s cabinet, and before any deal with BT or CSC is signed.

Meanwhile councillors are due to be told, in confidential briefings, that BT and CSC may claim back their costs so far, and are prepared to legally enforce that claim,  if no outsourcing deal is signed.

Such a legal claim, of potential suppliers suing a potential client, would be highly unusual perhaps unprecedented. 

Is Cornwall’s  cabinet using FUD – fear, uncertainty and doubt – to make councillors fearful of not  agreeing a deal with CSC or BT at a full council vote next week?

Papers published by Cornwall County Council show that a mega-outsourcing deal proposed by the authority’s ruling cabinet will be worth between £210m and £800m.

The full  council will vote on whether to proceed with a contract with BT or CSC on 23 October.

Before that vote the cabinet is expected to give confidential briefings to individual councillors. The briefings will focus on the promised benefits of signing a deal,  and the disadvantages of not going ahead.

The cabinet may tell councillors approximately how much money BT and CSC will claim, and if necessary take legal action to recover, if a deal is not signed, according to an interview the council leader Alec Robertson gave to thisiscornwall.co.uk

“The two bidding companies have spent a lot of money over the past couple of years and they will have a legal claim against the council for changing direction,” Robertson is quoted as saying.

“Councillors need to know the consequences. There is a lot of commercial confidentiality, but we wouldn’t be talking about small amounts of money.”

The council’s own budget for the outsourcing project so far has escalated. An independent panel set up as a “critical friend” to scrutinise the council’s plans for outsourcing has learned that the costs to Cornwall’s taxpayers of planning for the scheme were £375,000 in July 2011.

In March this year the “Single Issue Panel” members were told that the costs for the project would need to be increased from £650,000 to £800,000.

“The current estimate of the cost of the procurement process at the time of writing this report is £1.8m,” says the panel in its July 2012 report.

The £1.8m will be met from existing budget, says the cabinet in council documents.

On top of this, potential NHS partners in the deal have their legal costs.

The cabinet says in its written reply to the panel that the increase in costs is due in part to a “significant  increase in external support drawn in to support the procurement”, including specialist legal support and costs for consultancy KPMG, which has advised on the finance and client side support.

There has also been an “extension of scope” due to the proposed inclusion of telehealth/telecare. In addition there have been “project delays”.

Comment:

With the outsourcing-related costs to Cornwall’s taxpayers escalating before any deal with CSC or BT is signed, what will happen after the council is contractually committed to a long-term deal with one of the companies?

One reason there is no clear answer to this question is that so much of the council’s plans are based on assumptions that BT or CSC will commit contractually to providing up to 500 new jobs, saving money and achieving an IT-led transformation of services (while making a profit from the deal and recovering bid costs).

Cornwall’s cabinet seems confident that BT or CSC will enshrine all its promises in a contract free of caveats and ambiguities, and that the sort of legal dispute that has broken out in Somerset over the IBM/Somerset County Council joint venture Southwest One is unlikely to happen in Cornwall.

But isn’t Cornwall repeating Somerset’s mistake of not seeing that, behind the promises, assumptions, hopes and so-called contractual commitments,  the reality of withheld payments for poor service and the subsequent threat of legal action by the supplier is always there.

If Cornwall’s cabinet is already concerned about possible legal action from the bidders to recover their costs,  will the council be more confident about avoiding a legal action once the chosen suppliers’ lawyers have agreed a long and very carefully-worded outsourcing contract – a contract that may be different from the council’s proposed draft contract?

The Cabinet Office’s Major Projects Authority, under the enlightened David Pitchford, has a guiding principle that sets the coalition apart from previous administrations when it comes to avoiding disasters. That principle is to stop a deeply-flawed project cheaply before much more is spent and at risk of being wasted.  Ian Watmore, when permanent secretary at the Cabinet Office, put it well: “Fail early, fail cheaply.”

Will council leader be asked to stand down?

Cornwall outsourcing/partnership debate.

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Posted in BT, Campaign4Change, CSC, IT-related failures, KPMG, legal disputes, local government, Major Projects Authority, managing outsourced services, procurement, project management, public sector

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Campaign for electronic patient information centre

Posted on 12/10/2012 | 1 comment

By Tony Collins

Shane Tickell, CEO of health IT supplier IMS Maxims, is leading a campaign for a national electronic patient information centre.

It would enable NHS staff, healthcare organisations and government suppliers to share details of, or learn about, innovative practices that work.

In a guest blog, Tickell argues that there are many examples of innovation in the NHS but information on the successes is scarce or not available in one place.

He advocates a physical and a virtual centre. Information, case studies, best practice and ideas from the NHS would be shared online. There are some websites that do this, but in isolation. The virtual site he proposes would be interactive and a way of collating information that exists in silos.

The physical centre, Tickell says, could be anywhere on the UK, potentially using some of the 2,000 acres of unused NHS estate. It would be a forum for education and sharing, where suppliers could showcase their systems, and NHS staff could speak openly about what they need from suppliers.

It would also be a place for policy to be explained by government officials, where quangos define their requirements, and NHS trusts share what they are doing and the lessons they have learned.

Shane Tickell writes:

“As an acceptance grows across the NHS that there is a crucial need for integration across health and social care, the extent to which our National Health Service is disjointed is becoming increasingly clear.

In many areas, although of course not all, there are so many examples of different approaches, poor collaboration and lack of joined thinking between organisations despite their attempts to achieve the same goals. On many occasions, I’ve seen examples where an NHS organisation has shared the results of a successful pilot with another organisation hundreds of miles away and yet the trust just a few miles down the road has no idea the initiative even exists.

In recent years, healthcare IT events such as EHI Live have helped suppliers of all sizes showcase their solutions, albeit just once a year.

However, despite best efforts, most often suppliers with the biggest marketing budgets often take the centre stage, while the smaller, more innovative companies huddle around the edges trying to grab the attention of the odd delegate who is less wowed by the exciting gizmos and freebies on the bigger stands.

Equally, these events have been valuable in enabling the NHS to share their experiences by allowing them to participate in best practice showcases. But while these shows are valuable in providing those once-a-year opportunities to network and see what is available, ideas and information gathered can soon be forgotten once back in the busy NHS setting, until the next time an event comes around.

There are more than 400 pilots across the NHS and 300 ‘examples of innovation’ alone, according to the BCS. On top of all of that, my team recently mapped more than 40 NHS organisations and bodies, who work virtually disparately to attempt to provide the NHS with direction, standards and protocols.

So where does this leave the NHS – confused? Disjointed? Not a clue where to start when they are told that they need to collaborate and innovate to improve patient safety and care while saving vast sums of money?

The NHS needs a place that provides an educational and innovation forum covering everything related to electronic health and wellbeing that is available all year round – an electronic patient information centre.

At present there are pockets of innovation across the country. Initiatives set up by the National Innovation Centre and its associated ‘innovation hubs’ are providing a useful mechanism to support and adopt healthcare technology across the regions.

But an all year round centre would provide a central location for healthcare organisations, bodies, government and suppliers to meet, discuss and understand policy. Equally important, the centre would provide a valuable place to educate on future challenges and where they are being driven from and an opportunity to work together to help to address them as soon as they start to emerge.

Although it would require investment, such a centre would provide trusts, CCGs, private and independent organisations and just about anyone with an interest in health and social care regardless of their budget, size, location or IT savviness with the opportunity to attend at a time that is convenient for them.

Meanwhile, suppliers of any shape or size would have a level playing field from which to be represented and educate their current and potential customers, rather than trawling up and down the country trying to find inroads to speak to those on the frontline. In addition, it would ensure that all is not lost from the National Programme for IT and that lessons learned are shared.

For too long the NHS has had to rely on word of mouth and second-guessing how surrounding organisations are achieving success. Now is the time to really work together to ensure true innovation is shared and for everyone to have a chance to be part of it.”

LinkedIn group – Electronic Patient Information Centre 

shane.tickell@imsmaxims.com.

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Posted in Campaign4Change, health, health records, improving communications, innovation, procurement, public sector, public services, SME, technology

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Cornwall council’s deputy leader resigns over “inevitable” outsourcing plans

Posted on 10/10/2012 | 2 comments

By Tony Collins

Jim Currie, the Conservative deputy leader of Conservative-controlled Cornwall County Council, has resigned in objection to the authority’s outsourcing plans.

“It’s an inevitability at this stage. I have done everything I can to try to influence the process and exhausted that,” he said in an email to the County Council’s leader Alec Robertson.

“The sensible thing is to step back if you’re out of step with the rest of the Cabinet.”

Parts of Currie’s email were published by Thisiscornwall.co.uk.

Some in the media suggest that Cornwall may make a u-turn over its plan to outsource support services to either BT or CSC. But Currie’s email suggests the opposite. He told Robertson “I know you will never let go.”

A small group of Cabinet councillors had expected to take the final decision to sign a deal with BT or CSC in November – a deal worth hundreds of millions of pounds – but they must now put the decision to a vote of the full council, which is expected to happen later this month.

The full council will be able to vote on the deal because independent councillor Andrew Wallis organised a petition which has collected 5,800 signatures. Any petition that collects a minimum of 5,000 signatures must go to the full council for debate and a vote.

The petition said: “We the undersigned call on Cornwall Council to reverse its decision to proceed with a Strategic Partnership for Shared Services until such time the majority of the elected members of Cornwall Council have voted to support the proposals.”

The petition is expected to be debated at a full council meeting on 23 October. Robertson has said he will abide by the decision of the full vote.

Extracts from Currie’s email to Robertson:

“I feel I have pushed the cause of retaining council control over the joint ventures as far as I can with the Cabinet.

“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.

“We have wasted £42m+ on the unitary [authority], £42m+ on the incinerator and we are now proposing to risk a great deal more on the joint venture.

“I welcome your somewhat ambiguous offer to respect full council decisions on the 23rd October but I know you will never let go.

“I could not leave local government with billions of pounds of Cornish taxpayers’ money at risk and on my conscience… Alec, this matter has never been personal.”

Currie told Thisiscornwall  “Honestly, I have done everything I can do. I have been out on a limb for a very long time and will just have to let the thing take its course and it’s down to the membership and that’s what the council is supposed to be about.

“It’s absolutely the courage of my convictions and nothing else. The amazing thing is how many other people on the council think the same way across all parties. It’s tremendously non-political.”

Jeremy Rowe, leader of Cornwall’s Liberal Democrat group, told the BBC,

“We’re in a situation where Cornwall Council is becoming a laughing stock. There’s an administration there now which has this bunker mentality. It’s completely out of touch.”

Comment:

Will the inner circle of pro-outsourcing Cabinet members win a vote of the full council on 23 October, which would enable them to go ahead and sign a deal with BT or CSC?

The pro-outsourcing group may hope that most Conservative councillors and a few from the other groups will vote for a deal, perhaps knowing or caring little about it.

When the outsourcing was last debated by the full council, in September, many of Cornwall’s 123 councillors were either away or abstained. A majority of those who were there voted against the deal – but the Cabinet has ignored that vote.

The next time the deal is debated the pro-outsourcing Cabinet councillors may win the vote if most councillors turn up and vote to support the Cabinet whether or not they know much of the proposals.

The council comprises 47 Conservative councillors, 37 liberal democrats, 31 independents, six Mebyon Kernow, one Labour and one vacant seat.

Campaign4Change has argued that the pro-outsourcing Cabinet has, in defending the deal, quoted the arguments of the bidders, which shows signs of naivity.

Currie is right to say that the deal, as  proposed, is extraordinarily risky – and he is right to resign, if only to make a point to those councillors who are undecided on whether the council should outsource.

A mega-outsourcing plan beset by naive fanaticism?

Council deputy leader resigns over £300m outsourcing deal

Cornwall Council – our [shared services] journey

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

Cornwall Council’s extraordinary attack on outsourcing critic

Posted on 10/10/2012 | 1 comment

By Tony Collins

A “Cabinet” councillor in Cornwall has launched an extraordinary attack on a former IT strategy analyst Dave Orr who emailed members of the county council with his analysis of its outsourcing plans.

Orr is concerned that the council may sign a deal similar to the Southwest One joint venture contract between IBM and Somerset County Council which has been branded a failure.

His email to Cornwall’s members included links to articles, board papers and a BBC regional TV item on Southwest One’s problems. The email provided evidence on the dangers of succumbing to over-optimistic promises.  He sent it as a Somerset resident and local taxpayer.

In response, a Cabinet councillor in Cornwall sent a lengthy email to all members which defended the outsourcing proposals but also attacked Orr’s credibility.

Said the Cabinet councillor: “I understand that David Orr was employed by Somerset County Council within ICT before being seconded into SouthWestOne.  I also understand that he was a Unison representative and that he no longer works for either company. He has submitted 92 FOI requests between 5 April 2011 and 24 September 2012 to Somerset County Council, Taunton Deane Borough Council and Avon and Somerset Police .

“Whilst he is clearly a ‘Somerset resident and local taxpayer’, we do feel he is potentially misrepresenting himself by not making his previous employment with Somerset County Council and SouthWestOne explicit.

“We do not dispute the information Mr Orr has provided about SouthWestOne, although it should be noted that he was not in the contract management team and much of his information appears to have been gleaned from FOI requests and media reporting. However, Mr Orr is clearly not well placed to comment on the proposed Cornwall deal …”

Comment:

The personalised attack on Orr suggests that Cornwall’s Cabinet councillors might have lost sight of the need for independence and objectivity, particularly when close to signing a deal with BT or CSC that could be worth £300m or more.

In the response to Orr’s legitimate concerns, Cornwall’s Cabinet – the councillor uses “we” in his email – appears to have played the man as well as the ball.

Orr has nothing to gain by criticising Cornwall’s outsourcing plans;  and his FOI requests about the Southwest One deal have helped to make Somerset County Council much more open than it was.

He is right to warn on the basis of experiences in Somerset that optimistic statements by Cornwall council and the bidders could come to little or nothing. Neither CSC nor BT is infallible. Both companies were notified by the Department of Health of a breach of contract over deals they had signed as part of the National Programme for IT [NPfIT], the UK government’s largest civil IT programme.

Cornwall has had a genuinely independent assessment of its outsourcing plans by a panel it set up. But the ruling councillors dismissed the panel’s biggest concerns.

Pro-outsourcing enthusiasts on the council negotiating with optimistic potential suppliers doesn’t sound like a recipe for a successful deal.

Three centuries ago Jonathan Swift warned of the dangers of over-optimism. “The most positive men are the most credulous,” he said.

Cornwall’s ruling councillors are entitled to defend their outsourcing proposals – and they have made it clear they will continue to argue their case vigorously. But objectivity is all-important especially as an outsourcing deal on the scale proposed could be the most momentous decision in the council’s history.

A meeting of the full council will vote on the outsourcing plan later this month.

At that meeting the council’s cabinet members will argue that, without a deal, council jobs will be at risk. But has the council looked seriously at other options for saving money?  By its own admission it hasn’t. So is it really ready to sign a mega-contract with CSC or BT?

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Posted in BT, Campaign4Change, CSC, decision-making, IBM, local government, managing outsourced services, npfit

Summary Care Record “unreliable”

Posted on 05/10/2012 | 1 comment

By Tony Collins

The  central Summary Care Record database (which is run by BT under its NPfIT Spine contract) is proving unreliable, Pulse reports today.

The SCR is supposed to give clinicians , particularly those working in A&E and for out-of-hours services, a view of the patient’s most recent medicines, allergies and bad reactions to drugs.

But one criticism of the scheme has always been the lack of any guarantee that the data in the SCR could be accurate or complete.

Researchers at University College, London, led by Trisha Greenhalgh, found in a confidential draft report that doctors were unable to trust the SCR database as a single source of truth. They found in some cases that  some information on the database was wrong, and what should have been included in the patient’s record was omitted for unknown reasons.

Now Pulse reports that some GP-derived information is going on the patient’s SCR, and some isn’t. One problem is that GPs must use smartcards to update the SCR database and some don’t use them.

The General Practitioners Committee of the British Medical Association has raised the matter with the Department of Health.

Dr Paul Roblin, chief executive of Oxfordshire, Buckinghamshire and Berkshire local medical committee told Pulse that  smartcards were not often used in Buckinghamshire, because they slowed down the practice IT system for normal use, with one practice reporting that it had interfered with allergy data.

Dr Roblin said that this made the record ‘unreliable’ and said that although most GPs would prefer to take their own history rather than relying on the SCR, and would double check all details with the patient, other health professionals may not realise the record is incomplete, and may not check the data.

He said “Drugs lists might not be complete and recent allergies may not be uploaded. The Summary Care Record is unreliable. Don’t rely on it. It’s an expensive initiative without a lot of benefit.”

Dr Chaand Nagpaul, GPC lead negotiator on IT, said the current arrangements  undermine the benefit and usefulness of summary care records.

“The GPC have suggested workaround systems for practices who do not use smartcards, such as a ‘mop-up’ session where all new data is uploaded on to the national spine once a day. However, the DH decided against this option.”

There may be professionals who believe the SCR database  represents an up to date record said Nagpaul.

A DH spokesperson said that most practices which have created Summary Care Records use smartcards.

[Whether justified or not the SCR  scheme is believed to have cost about £250m so far.]

In 2010 Professor Ross Anderson at Cambridge University argued that the SCR could do more harm than good.

Richard Veryard also wrote on the unreliability of the SCR in 2010.

The Devil’s in the Detail – UCL report on the Summary Care Record.

Summary Care Record – where does the truth lie?

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Posted in BT, BT Health, Campaign4Change, change management, culture, data sharing, e-health, Government IT, health, health records, NHS, npfit, Summary Care Record

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Labour’s NHS saviour – the man who agreed overpayment to BT under the NPfIT?

Posted on 05/10/2012 | 1 comment

By Tony Collins

In a speech this week to the Labour Party conference, reported in Pulse, the Shadow Health Secretary Andy Burnham portrayed himself as the man to put right the NHS.

“… Put patients before profits,” he said.  “Working together, putting patients before profits … One Nation system built on NHS values, putting people before profits…  The NHS desperately needs a Labour win in 2015.  You, me, we are its best hope. It’s only real hope…”

This could well be the Andy Burnham who, as Health Secretary in 2009, agreed an extraordinarily generous extra payment to BT of £546m under the NPfIT – a payment that has never been satisfactorily justified despite many questions by public accounts committee MP Richard Bacon?

This is what the Public Accounts Committee said of the Department of Health’s generosity to BT.

“The Department is clearly overpaying BT to implement systems: BT is paid £9m to implement [Rio] systems at each NHS site, even though the same systems have been purchased for under £2m by NHS organisations outside the Programme.”

It was Andy Burnham who denounced critics of the NPfIT on which about £7bn has been spent so far (much of it with large companies) for little return.

“I want to begin by challenging the myth … that the NHS IT programme has been a waste,” said Burnham in 2009, in a debate on health in the Commons. “The programme has changed the way in which the Government pay for IT by creating a contract whereby we pay for what we get from suppliers only when it is fully delivered.

“Indeed, we have been praised by the National Audit Office for creating such a contract [a point which is open to question).

“… To put it simply, the programme is a key part of delivering modern, safe, joined-up health care. It is supporting the ongoing reform of the NHS by giving choice and convenience to patients. The NHS could not function without it…

“… Let me be absolutely clear: we have no intention whatsoever of cancelling the programme overall, not least because it is already making the NHS safer, more efficient and more convenient for patients … The programme has already provided benefits, and we believe that this approach will accelerate the delivery of benefits to front-line services and patients across the NHS.”

Asked if he would acknowledge that billions of pounds had been spent without delivery, that the opportunity costs of delays were spiralling, and that there was confusion and frustration over IT and Choose and Book, Burnham replied:

“… It is simply not true to say that this programme is flawed and has not delivered benefits: it has delivered considerable benefits to the NHS and has improved the way in which the NHS contracts for IT… We believe that there are significant benefits from a national health service having a programme of IT that can link up clinicians across the system. We further believe that it is safer for patients if their records can be accessed across the system…”

Burnham went on to praise the NPfIT contracts.

“It was an innovative contract that meant that the NHS paid only once it received the system and the system had been passed over and was operational. That was a step forward in how the NHS paid for IT systems.”

Comment:

How much political credibility do ministers in the last government have today after their naive – and passionate – defence of an IT programme that was flawed so obviously from the start?

MP seeks inquiry into £546m payment to BT

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Posted in Campaign4Change

A mega-outsourcing plan in Cornwall beset by naive fanaticism?

Posted on 01/10/2012 | 6 comments

By Tony Collins

Comment and analysis

An inner circle of councillors at Cornwall council is rushing plans to sign a big outsourcing deal despite a council vote against it.  The aims of the deal include an IT-based transformation of services,  the creation of “up to” 500 new jobs and tens of millions of pounds in savings – all too good to be true? 

The warning signs are there. The council’s remarkable naivety,  a hurried enthusiasm for signing a deal, and a confident waving aside of internal and external concerns,  may be early indications of a possible disaster.  An internal report warns of a potential “catastrophe” over service delivery.

 If all turns sour could accusations of maladministration follow? Is there still time for the full council to stop the inner circle from pressing ahead with a contract signing?

Major IT suppliers have some exceptional salespeople. They don’t merely sell hardware, software and services. They inspire. They rouse to action. Their promises are believable because they believe them with a conviction that can be contagious.

Joe Galloway might have been a one-off.  He was managing director of a part of one of the world’s largest IT companies EDS (now HP).  He helped to strike a CRM [Customer Relationship Management] deal with BSkyB in 2000. The contract ended in a £709m legal dispute in which Galloway was a main witness for HP. The judge in the case of BSkyB v HP found that some of Galloway’s evidence was untrue.

He demonstrated an “astounding ability to be dishonest, making up a whole story about being in St John [part of the Virgin Islands], working there and studying at Concordia College. EDS properly distance themselves from his evidence and realistically accept that his evidence should be treated with caution,” said the judge.

The judge also said

“I am driven to the conclusion that he proffered timescales (on the CRM project) which he thought were those which Sky desired, without having a reasonable basis for doing so and knowing that to be the position… I consider that he acted deliberately in putting forward the timescales knowing that he had no proper basis for those timescales. At the very least he was reckless, not caring whether what he said was right or wrong.”

During the High Court hearing, when HP discovered Galloway’s dishonesty, it sacked him.

He had held a senior position at EDS and the company’s customer BSkyB believed what he had said.  The case cost HP £318m plus tens of millions of pounds in legal fees – and the dispute lasted more than seven years. HP, it could be said, became a victim of some of the statements made by one of its executives.

The point about mentioning the case is that supplier promises, even if made with the best of intentions, may in the end come to nothing – or worse, a costly and prolonged legal dispute. Good intentions were behind the setting up of a joint venture between IBM and Somerset County Council – Southwest One – in 2007. The two sides are now immersed in a legal dispute that looks like going to court. Other councils have gone into joint ventures with major IT suppliers only to be disappointed.

So why do councils still want to sign mega outsourcing deals?

Councils keen to enter a large outsourcing deal become convinced that failures of such ventures elsewhere do not apply to them because their plans are unique. Indeed Cornwall council says on its website:

“Our strategic partnership is unlike any that has happened before, and as such, we cannot compare our programme accurately to others.”

But how do potential suppliers explain failing contracts?

In talks with potential customers IT companies correct or clarify reports in the media about outsourcing deals that have failed or are failing. It is customary during the bidding process for salespeople to take potential clients to reference sites where the representatives will agree that the media reports of a failing partnership were inaccurate or hyperbolic.

[Councils that have signed failing outsourcing deals will sometimes be reluctant to publicise the fact – and may put on a brave face in which they align themselves with the supplier; until a council changes hands, as at Somerset County Council, when a new administration is happy to publicise the mistakes of the last, and the full extent of the problems begins to emerge publicly.]

Cornwall council says on its website that it has received responses from its two shortlisted suppliers BT and CSC to specific negative press articles. The Council is now untroubled by any of the articles.

Says Cornwall

 “The feedback we received from the references contacted were balanced and gave us no significant causes for concern… We do need to reflect that these are press stories and we know only too well from our own experience that you can find negative reports on most major companies if you look for them.

“As global companies, it is to be expected that you will find a whole range of perspectives on each; it is important we take a balanced and independent view.  Please be assured that we will continue to work with both companies to deal with any issues that may arise throughout the procurement process and beyond…”

Articles BT and CSC were not asked to respond to included one in the Financial Times which said of NHS IT contracts:

“There are big doubts as to whether the government can fire BT and CSC, its two main suppliers, without paying huge sums in compensation.”

Cornwall says it continues to monitor press coverage, with the help of BT and CSC. It suggests that articles not yet written may be biased.

“… We actively monitor the press, and both companies [BT and CSC] make sure that they let us know if a negative or positive story is going to break, making sure that we understand the background. It is important to note that these articles do not always present an unbiased view,” says Cornwall.

Does setting up a “critical friend” group give a false assurance?

On the face of it Cornwall deserves praise for setting up an independent panel of “critical friends” to scrutinise the council’s outsourcing plans. It is called the “Support Services Single Issue Panel” which comprises mostly Cornwall councillors. It had help from, among others, council officers, and BT and CSC. The Panel also visited some customers of BT and CSC that the suppliers chose.

But when the Panel later expressed serious concerns about Cornwall’s outsourcing plans the council’s inner circle simply replied that it did not accept those concerns. This may strike some as a naive response to real risks.

This was part of the council’s response to the Panel:

“We do not accept the magnitude of some of the risks raised in the SIP [Single Issue Panel]. This includes the risk of service delivery failure and the risk of losing senior officers to the partner. Nor do we think there is a significant conflict between profitable trading and a public service commitment. We do not think our timescales are risking service delivery but will advocate delaying those timescales if this is judged necessary to protect the Council’s interests and/or to achieve greater contractual benefit…”

Is there a danger the council will use the setting up of the critical friend group to say that it has considered all the risks – even if it has considered then dismissed the most serious of them?

A poor supplier would be in breach of contract – but then what?

To the Panel’s concerns that the joint venture may fail to deliver, or costs escalate, Cornwall responds that if its suppliers do not deliver they will be in breach of contract.

But then what?

Said the council:

“The contract obliges the strategic partner to deliver. Any initial failure to deliver would be dealt with through a service credit arrangement. Persistent failures would represent a breach of contractual conditions which would lead to breach of contract where the Cornwall Partners would exit the contract.

“The cost for this would be picked up by the strategic partner. Financial difficulty is covered by a guarantee that the parent company would step in and continue delivery. Costs are largely within our control…”

Is it straightforward to exit a contract after an alleged breach of contract? The Department of Health was in dispute with CSC over alleged breaches of contract on the National Programme for IT, NPfIT. CSC made it clear in its statements to US regulators that the DH was unable to exit the NPfIT contracts without large payments. CSC and the Department ended up accusing each other of breaches of contract which made negotiations for a settlement long and costly.

Heading for claims of maladministration?

Is Cornwall being naive when it says simply that after any breach of contract the council “would exit the contract”? In the past this has been the legal cycle of events in some major legal disputes on IT contracts

– Customer alleges breach of contract

– Supplier makes counter-claim

– Customer withholds money

– Supplier instigates legal action

– Customer wishes to exit contract but cannot because of potential costs, counter-claims and need for supplier’s cooperation to maintain existing services.

– Long and costly settlement negotiations – which is good for lawyers – while service delivery remains in the “hold” position, unresponsive to changes that may need to be made or remedial action that may need to be taken.

International IT companies are experts in the legal side of contracts and dealing with disputes. Do Cornwall’s ruling councillors believe that the council’s expertise and legal advice would trump the supplier’s in the event of an alleged breach of contract?

When Cornwall says that in a breach of contract it would exit the contract and “the cost for this would be picked up by the strategic partner”, do the council’s ruling councillors trust that the supplier would say to the council in any dispute, “Let us know your costs of exiting the contract and we’ll settle up.”

There is another worrying sign of Cornwall’s apparent naivety. The council says “The costs would only escalate if the Cornwall Partners make changes to the services required.”

Unforeseen change is endemic in the public sector: governments change, policies change, legislation changes, organisations change, particularly the NHS which is a potential party to Cornwall’s outsourcing plans.

Is any public authority that signs up to a large and complex outsourcing deal on the basis of ‘no unforeseen change’ leaving itself open to accusations of maladministration?

Has Cornwall’s democratic process broken down?

The most extraordinary single thing about Cornwall’s outsourcing plans is that, at a full council meeting on 4 September, a majority of councillors voted against a deal but the inner circle is going ahead anyway.

Says the council’s website: “A motion calling on Cornwall Council to change its decision to enter into a partnership with the private sector to deliver a range of support services was supported by a majority of 17 Members following a three hour debate at County Hall on 04 September.”

[The motion was put and seconded by two councillors, Andrew Wallis and Andrew Long, who are not members of the major political parties.]

In dismissing the vote of the council, a spokesman for Cornwall’s pro-outsourcing group said

“All the concerns which have been raised today have already been considered by the Cabinet… This is a very complex proposal and unfortunately the decision by Members not to move into private session meant that we were unable to share the detailed confidential information they needed to make an informed decision”.

Should the Council rush to sign a deal?

Somerset County Council’s joint venture was characterised by a rush to sign, which culminated in the signing at 2am at the weekend. The failed NHS IT plan was also notable among potential suppliers for the haste before the signing of contracts, as was the failed Firecontrol contract. Is Cornwall’s deal being rushed? Cornwall’s Support Services Single Issue Panel said

“The timetable restrictions placed on the SIP [Single Issue Panel] has condensed the available time such that this report has had to be compiled within one working day. Had the timetable slipped by just that one day it is certain that no report would have been submitted.”

The Panel also said

“The risk is that this timescale is far too short for detailed evaluation and due diligence to be carried out. This is a significant value contract. The estimated value of the contract in the Prospectus for Cornwall …was £210m to £800m. The current estimated value is not known to the Panel…”

The council’s inner circle concedes that its timescales are “tight but achievable”.

Conclusion

When outsourcing plans have taken up much time and money there is always a danger a contract will have to be signed to justify the effort.  But would the signing of a mega deal at Cornwall be a triumph of ideology over objective reasoning?

One has to wonder how a mega outsourcing deal can improve services, provide a good profit margin for an international IT company, save the council money and create hundreds of jobs. Doesn’t something have to give? Is there so much inefficiency, and so much money floating around the council and its potential NHS partners, that a major supplier can cut tens of millions of pounds, spend to transform services, and make money?

In evidence to MPs last year SOCITM, which represents ICT professionals in councils, said of outsourcing ICT that it “carries many risks for local authorities and can come at a heavy price”.

Some praise for Cornwall’s approach

Cornwall’s ruling councillors should be applauded for two things:

– There is every sign that the inner circle’s plans are motivated are by the best of intentions: to save money, improve services, protect existing jobs and create more.

– Although some criticise the council’s lack of openness, the inner circle is not hiding all of its papers and discussions in a blanket of secrecy. It has published the report of the “critical friend” Panel and the council’s responses. There is much information – and links – on the planned deal on the council’s website. This doesn’t always happen in the run-up to a large public sector outsourcing contract.

But good intentions do not make up for naivety and a wish for outsourcing that may border on fanaticism – the pursuit of a Cause whatever the dangers.

If a majority of councillors at a full council meeting cannot stop the signing of a mega-deal can anyone?

It appears that a tiny group within the council will make the final decision – although it is arguably the most momentous decision in the council’s history.

Says the council: “The final approval of, and the date for, the issuing of the said invitations to submit final tenders be determined by the Chief Executive in consultation with the Leader of the Council and the Portfolio Holders for Environment, Waste Management Policy and Shared Services, Health and Wellbeing and Human Resources and Corporate Resources.”

The final decision is due next month. If Cornwall enters a deal in which it relies on the contract to protect services and the council’s reputation is it being naive? Could it end up facing accusations of maladministration, particularly after side-lining a council vote against the deal?

**

Thank you to Dave Orr and a journalist in Cornwall for your emails on Cornwall’s outsourcing plans.

Council says its joint venture is failing – BBC

Some papers on Cornwall’s outsourcing plans

Local MP’s website on Southwest One.

An ill-judged outsourcing?

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Posted in BT, BT Health, Campaign4Change, CSC, legal disputes, local government, managing outsourced services, outsourcing, oversight, Politics, private sector lessons for the public sector, public sector, public-private partnerships, risk, supplier relationships

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HMRC G-Cloud deal a step towards less reliance on big IT suppliers

Posted on 27/09/2012 | 3 comments

By Tony Collins

HMRC has signed a deal with Skyscape Cloud Services for centralised data storage in the Cloud, says UKAuthority.

It quotes HMRC’s CIO, Phil Pavitt, as saying that the shift to cloud, “will save over £1m a year in running costs and will increase reliability and security of HMRC’s internal IT services”.

“The Skyscape contract is a major step for HMRC in moving away from traditional ways of working with large service providers. And it’s a great example of how we’re exploring smarter, more innovative solutions that make life simpler for us and help us provide a better deal for our customers.”

Data currently stored in local offices will be moved to cloud storage by early spring 2013 using the Public Services Network (PSN) as a conduit – a first in the use of cloud over PSN.

The Government Digital Service has signed a cloud deal with Skyscape too.

G-Cloud gathers pace

 

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Posted in Campaign4Change

Is £492m cheap for Universal Credit agile project spend?

Posted on 21/09/2012 | 1 comment

By T0ny Collins

Labour MP Frank Field asked what recent estimate has been made of the cost of the IT system for universal credit in each sub-category of expenditure.

Mark Hoban, who became a minister at the Department for Work and Pensions this month, replied on 18 September 2012 that IT investment costs over SR10 are estimated at £638m and include IT development, associated integration with other systems and infrastructure requirements.

The spend on design, development and software – at current estimates – is £492m. That sounds like a worthwhile investment from the point of view of at least one of the DWP’s main Universal Credit IT suppliers Accenture. Is it cheap, though, for a complex agile project?

Some have asked it before – indeed on this blog – and we ask again: To what extent is Universal Credit a genuinely agile project?

And with many hundreds of millions of pounds at stake, shouldn’t Parliament and taxpayers be allowed to view independent progress reports on the state of the project? No says the DWP.

Private Eye has picked up on the DWP’s rejection of our FOI request. [Thank you to Dave Orr for spotting the article]. This is from Private Eye’s latest issue:

“Nearly two years ago Eye 1276 reported with concern how the then chief executive of HM Revenue and Customs had told a committee of MPs that, when it came to delivering universal credits, the work and pensions secretary Iain Duncan Smith had a ‘big hard dependency’ on HMRC’s IT systems.

“Now critics from all sides are wondering whether Whitehall’s imperfect IT systems can be linked up… Labour’s Liam Byrne has claimed the scheme is ‘late and over budget’. Duncan Smith flatly denies this, but his department has refused freedom of information requests from IT campaigner Tony Collins for progress reports. Releasing them would ‘cause inappropriate concern’ apparently. Hardly reassuring.

“PS: Byrne’s credibility as scrutineer of IT is not helped by having been the health minister who in 2006 insisted that the NHS’s National Programme for IT was ‘broadly on track’ when it couldn’t have been further off track…”

Universal Credit IT – current cost estimates:

Design and development £441m
Software  £51m
Changes to dependent systems  £14m
Infrastructure   £52m
Other   £80m

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Posted in Agile, public sector, risk, Universal Credit

A Secretary of State talks about agile

Posted on 19/09/2012 | 2 comments

By Tony Collins

Iain Duncan Smith, the Secretary of State for Work and Pensions, told MPs about agile at a hearing of the Work and Pensions Committee this week on Univeral Credit.

He told the Committee:

“The thing about the agile process which I find frustrating at times, because we cannot quite get across to people, is that agile is about change. It is about allowing you to get to a certain point in the process, check it out, make sure it works, come up with something you can  rectify, and make it more efficient.

” So you are constantly rolling forward, proving, and making more efficient.”

He was answering concerns that the IT for Universal Credit may not work. Tomorrow the Department for Work and Pensions starts a publicity campaign on Universal Credit. Part of it will focus on how agile enables the UC project to adapt to change.

Agile does work in government – GDS

Agile will fail in Government IT  – corporate lawyer

Agile can fix failed GovIT says lawyer

PR campaign on Universal Credit starts tomorrow (20 September 2012).

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Posted in Agile, Campaign4Change, DWP

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