Chinook crash – the 16-year campaign to right an injustice

Posted on 13/07/2011 | 1 comment

By Tony Collins

Chinook ZD576

The day after the fatal crash of Chinook ZD576 on the Mull of Kintyre an RAF Board of Inquiry convened.

There was little to go on: what could be retrieved from the fire at the crash site, and records of recent trouble with the aircraft type, including difficulties with the Chinook Mk2’s software-controlled “Fadec” system.

There had been so much trouble with the Fadec, in fact, that test pilots had ceased flying the Mk2 the previous day. But operational flights continued.

The crash of ZD576 left no survivors: all 29 on board were killed. There was no cockpit voice recorder. No flight data recorder. Particularly for John Cook, the father of one of the pilots, the absence of black boxes compounded his grief.

While a Concorde pilot for British Airways, John Cook led successful negotiations with the Air Accidents Investigation Branch for the installation of cockpit voice recorders on large passenger aircraft.

He recognised the importance of flight data and cockpit voice recorders to investigators and the families of dead pilots because they could show how an aircraft was performing in the moments before it crashed. A cockpit voice recorder could record audible warnings, pilots expressing concern about a possible malfunction and any unusual noises.

Without black boxes it would be easy to blame dead pilots for a major, fatal accident.

Said John Cook in 1999: “I fought to have the recorders installed and then I lost a son in an aircraft which didn’t have one.”

The campaign begins

In crashes of civil airliners the data from the black boxes often gives the best clues as to the likely cause or causes. Even when the black box data is fully recovered the likely causes of an accident can elude investigators.

So how could anyone know what happened in the moments before the crash of ZD576? In 1995, nearly a year after the accident, the RAF Board of Inquiry produced its findings.

The campaign to restore the reputations of the two pilots of ZD576, Flight Lieutenants Jonathan Tapper and Rick Cook, began.

MoD  and RAF attack their own software experts

In some ways the investigation into the crash was exhaustive. In other ways it was limited. It reflected the mindset of the RAF at the time, which was that Chinooks were needed desperately, and, if possible, in greater numbers. The last thing the RAF hierarchy needed was credibility being given to the internal concerns about the helicopter’s Fadec system, in which software controlled fuel to the Chinook’s two jet engines.

Days after the crash on the Mull of Kintyre in June 1994, a senior RAF officer expressed his frustration at the internal concerns over the Fadec.

In a signed, draft memo, the RAF officer attacked the MoD’s own software experts at Boscombe Down. He said their “ongoing stance towards the Mk2 contrasts sharply with the considerable efforts being made by the front line to bring the aircraft into service and maintain a capability”.

Boscombe Down’s attitude, he said, “does nothing to engender aircrew confidence in the aircraft”.

It was beginning to look as if the RAF would not tolerate an investigation that concentrated too much on the integrity of the helicopter and its software. But, to its credit, the RAF brought in the civil Air Accidents Investigation Branch.

The AAIB did not have a free hand, however. The limits of its investigation were agreed with the RAF. The AAIB could not simply require all relevant documents. It was up to the MoD and RAF what documents it showed the AAIB.

And the MoD supplied the bare minimum.

Documents not shown to investigators

Many potentially-relevant documents were to emerge years later, long after the RAF Board of Inquiry had been disbanded. The documents came to light, in part, because of leaks by well-intentioned insiders who were concerned that possible flaws in the airworthiness of the Mk2 were being overlooked.

Back in 1994, the AAIB’s chief investigator Tony Cable knew there had been problems with the Fadec, none of which the RAF hierarchy regarded as serious. Among the many things Cable wasn’t told was that the Superintendent of Engineering Systems at the MoD, Boscombe Down had, nine months before the crash, found flaws in the Fadec that he said in an internal memo were “positively dangerous”.

And Cable didn’t know at the time of his investigation that the MoD was suing the Fadec suppliers because of faults in the system’s software that were exposed by a ground test of a Chinook at Wilmington in the US, Boeing’s “Center of Excellence”.

When the Fadec was working properly, which was most of the time, it made the job of Chinook pilots easier: they could fly the helicopter without controlling power to the engines. When the Fadec systems were not working properly they were apt to leave no trace of a fault, and could endanger the lives of all on board, said Squadron Leader Robert Burke who, at the time of the crash, was one of the most experienced Chinook Mk2 unit test pilots.

A near-catastrophe that left no trace

Four years after the crash of ZD576, Bric Lewis, the pilot of a US Chinook, exclaimed involuntarily “Oh God” into the microphone of his headset. His words were transmitted to all on board. His Chinook was falling out of the sky … upside down.

The displays in the cockpit showed no warning lights… no evidence of any technical malfunction. Then, as inexplicably as the Chinook had turned over, it flipped back again, into a normal, wheels-down position. After it landed safely no serious fault was found.

Bric Lewis and his crew lived to provide evidence that their Chinook had turned over. If they had died in the incident, would they have been blamed on the basis that no serious malfunction capable of causing the crash had been found?

An extraordinary campaign

That the campaign to clear the names of Cook and Tapper has succeeded is extraordinary, and yet it’s not in the least extraordinary. It has been a campaign characterised by its intensity, perseverance, and the status and number of those involved.

It has been a campaign that pivoted on the tenacity of the families of the two pilots and their pro bono advisers. Some of the campaigners cannot be named.

MoD spin

The campaign has also been marked by the determination of the MoD and RAF hierarchy not to attach any credibility or relevance to newly-disclosed information.

In the words of then independent MP Martin Bell in 2001: “The MoD is being anything but straightforward… clearly civil servants are trying to spin the facts to suit the air marshals’ agenda.”

With a manipulative use of language, and an evasive but self-confident way of answering of difficult questions – sophistry exemplified – the MoD was a decisive influence on defence ministers of the last administration.

Every defence minister in the last government was persuaded that there could be only one cause of the accident, and that was pilot error. Tony Blair wrote in his own hand that the pilots were to blame.

So how did one of most grievous military miscarriages of justice in the last 100 years come to be corrected? It was thanks, in part, to the injustice’s enduring visibility in Parliament and in the media, such that David Cameron, when in opposition, promised, if elected, to launch a formal review of the decision to blame the pilots.

And only a prime minister or his defence secretary could, in effect, take the steps necessary to overturn the judgement of a properly-constituted RAF Board of Inquiry. In ordering the Philip review, Cameron proved as good his word.

Liam Fox, too, unlike defence secretaries in the last government, has shown by his actions that he is not prepared to be putty in the hands of his civil servants and RAF air marshals. All credit also to Nick Clegg for his support of the Philip review.

Did the RAF try to dissuade Cameron from holding a review?

It’s unclear whether the RAF tried to discourage Cameron from setting up a review. What is not in doubt is that, in January 2010, a few months before the general election, four former chiefs of the air staff, and a former RAF Chief Engineer, wrote to the Daily Telegraph saying they would wish to brief ministers if there were to be “yet another” review of the RAF’s decision to blame the pilots for the crash of Chinook ZD576.

In their letter, Sir Michael Graydon, Sir Richard Johns, Sir Peter Squire, Sir Glenn Torpy, and Sir Michael Alcock said the finding of gross negligence against the pilots of ZD576 was “inescapable”.

“We understand that in the event of a Conservative administration coming to power it will revisit the Mull of Kintyre Chinook accident and consider the negligence finding,” said the letter of the five knights. “Each one of us has reviewed separately the findings of the Board of Inquiry and reached the same conclusion, namely that basic airmanship failings caused this tragic accident.

“If yet another review is to take place then we would welcome an opportunity to brief ministers and discuss in necessary detail why this finding remains inescapable. In particular, it will be explained precisely why it cannot be overturned by recourse to a hypothesis for which there is no evidence and which is revealed as wholly implausible when tested against the known facts.”

Sir Michael Graydon
Chief of the Air Staff 1992-1997
Sir Richard Johns
Chief of the Air Staff 1997-2000
Sir Peter Squire
Chief of the Air Staff 2000-2003
Sir Glenn Torpy
Chief of the Air Staff 2006-2009
Sir Michael Alcock
Chief Engineer (RAF) 1994-1999
London W1

It is likely that the Philip review came under pressure from the MoD and the RAF not to question the finding of gross negligence. The fact remains, though, that nobody knows the cause of the crash. It could have been pilot error. It could have been a chain of events that had little or nothing to do with pilot error. Indeed the AAIB investigation of equipment recovered from the wreckage revealed several anomalies that were never explained.

That said Tony Cable noted that there was little evidence to be gleaned from the investigation. Cable told a House of Lords select committee on 7 November 2001: “Throughout this investigation the evidence was remarkably thin, from my point of view, I must say”.

What could have caused the crash?

There were many potential causes of the loss of ZD576. What can be said with certainty is that we don’t know why it happened, or the events that preceded it.

One of the lessons is that “evidence” from aircraft manufacturers and their subcontractors should be treated with the same scepticism as speculation about the actions of the pilots. After the crash of ZD576, the main attention of the RAF and the MoD was on the possible actions of the pilots, not on the possible behaviour of the aircraft.

Nobody in the RAF hierarchy questioned the fact that most of the allegations against the pilots were made on the basis of manufacturers’ “evidence”. If that evidence is set aside as lacking impartiality, and indeed the AAIB does not confirm the accuracy of that evidence, there is no basis even for speculation about the actions of the pilots.

One of the things the campaign for justice has shown is that the RAF hierarchy took a circumscribed investigation of equipment found in the wreckage as the basis for a case against the pilots.

Black boxes found in the debris of civil airliners are sometimes transported under armed guard to independent investigators. Manufacturers are not always allowed to look at their equipment until it has been studied independently. Yet in the case of ZD576 manufacturers’ evidence has been taken as the whole truth. An Mod lawyer at the ZD576 Fatal Accident Inquiry in Scotland in 1996 sought to persuade the Sheriff that the manufacturer’s evidence was “hard fact”.

To my knowledge there has never been an investigation by the National Transportation Safety Board, the US equivalent of the AAIB, in which uncorroborated, unchecked evidence from aircraft manufacturers been taken as hard fact.

Today, the lack of understanding at the top of the RAF over how much information is needed after crashes of civil airliners to establish the likely chain of events may help to explain why air marshals still blame the pilots of ZD576.

In their eyes, the lack of evidence of serious technical malfunction appears to mean that the pilots were in control of the aircraft. Such a simplistic assumption would not be made in a full civil aircraft crash investigation.

Justice has now prevailed thanks to the Cameron government, supported by Sir Menzies “Ming” Campbell, Martin O’Neill, and numerous other parliamentarians including Lord Chalfont, James Arbuthnot, David Davis and Frank Field . There are too many other campaigners to name, though I make exceptions with Hooman Bassirian, Karl Schneider and Mike Simons who, at Computer Weekly, were willing to shape and publish innumerable stories in support of the Chinook campaign. David Harrison, a freelance producer  at Channel 4  News, which has covered developments since the day of the crash, first alerted me to the flaws in the Chinook Mk2’s Fadec.  Most of the documents relevant to the crash came to me from the Tapper family.

Air marshals will never accept that the pilots were not to blame. But that’s a hallmark of institutional disasters: once a decision is taken on the main cause that decision will be supported and stuck to whatever the facts. Thank goodness the Philip review, when it came to its investigation, had an open mind.

**

The campaign for justice for the pilots of Chinook ZD576 – Brian Dixon’s website

PPrune – hundreds of online pages of thoughtful discussion on the crash.

RAF Justice – how the RAF covered up problems with the Chinook Mk2’s Fadec.

Chinook ZD576 – report by Michael Powers QC.

Macdonald report on the crash of ZD576 – by three fellows of the Royal Aeronautical Society.

Flawed Chinook software updated after crash of ZD576.

The Chinook Fadec in-depth – by Malcolm Perks, another of the campaigners

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Reaction to white paper publication concerns asset locks, finance, resourcing and support for mutuals

Posted on 12/07/2011 | Leave a comment

Much of the immediate reaction to the Government’s publication of its Open Public Services White Paper concerns issues surrounding assets, definitions of mutuals and most importantly, support for them, and financing.

Dom Potter from the Transition Institute says, “Noticeable by it’s absence is any provision in the paper to establish a mechanism for ensuring that publicly-owned assets such as council buildings or parks will remain in some form of public, common or shared ownership by communities.

“This will be taken by some as evidence of wholesale privatisation looming around the corner. But in my view the political discourse that will swirl around the issue of asset locks shouldn’t obscure the need to utilise these assets for the wider, long-term public good.

“There is also an issue that isn’t addressed in the paper around how public assets could potentially be used to leverage external investment into public services.

“As long as the assets are secured for public/shared ownership, I would be interested to see what mechanisms might emerge from the Big Society Bank and out of central and local government to enable assets to be sweated in order to raise the initial cash to get emerging mutuals up and running with a sustainable business model.

On mutuals definitions, he says:

“Thankfully for those of us who are keen that each individual spin-out is set up with the legal and governance structures appropriate to it’s unique local context, the one-member-one-vote implication of calling them mutuals is not quite as literal is it could have been.

“There is a clear indication that a variety of ownership models – ‘wholly employee-led, multi-stakeholder and mutual joint venture models’ – are mentioned, although further clarification is needed as to exactly what is meant by these terms.

On finance and support:

“There is mention of an ‘Enterprise Incubator Unit’ set up within the Cabinet Office to ‘provide advice, challenge and resources for public service providers from central government departments and their agencies who want to move from the public sector to the independent sector’. This sounds interesting, but I am wary of the idea of government advising itself on how to set up independently of itself. In my view, the Unit at least needs to be staffed by individuals who have experience of the transition to independent delivery or by individuals with experience of running independent organisations (or, ideally, both) in order to have the desired impact.”

“The Mutual Support Programme is due to come on stream in autumn 2011 according to the White Paper.  This means that there will be support available for entrepreneurial public sector staff more quickly than had been anticipated, given how quiet the Cabinet Office had become around getting the MSP up and running since it was first mentioned last year.”

“Recognised within the paper is the need to look for innovative ways of routing external finance into public services. The Big Society Bank will be a key part of this, and this may be a fruitful way of expanding, for example, the pool of social impact bonds beyond the one pilot in Peterborough prison.

CBI Director General John Cridland says:

“The Work Programme shows how companies of all sizes are successfully working in partnership with social enterprises, community groups and charities. While it is right to recognise the benefits mutuals and smaller providers can offer, the principle of any willing provider also means that larger firms should be able to bring their expertise to bear, and when they achieve better outcomes they should be able to make a reasonable profit. We think the Government could have made this much clearer in the White Paper.”

However, Peter Holbrook, Chief Executive of the Social Enterprise Coalition, takes a different view:

“We are concerned that the proposed reforms will create an unequal playing field in which social enterprises are unable to compete with large private sector providers for public sector contracts.  Social enterprises often do not have the capital or scale required to compete with big private businesses in open markets.

“These reforms must protect our public services, not put them at risk.  Without the necessary safeguards, the consequence of these proposals will be that private providers will dominate public sector markets.  Taxpayers’ money will flow into profit seeking organisations that exist only to satisfy the needs of their shareholders.  Public services must operate for the communities and people they serve, nobody else.

“The Government’s plans to extend Payment by results across a number of other public services will put private sector organisations at an automatic advantage.  The reality is that without decisive action to use public spending to improve social outcomes, the big organisations will simply use their stronger balance sheets and ability to attract private investment to win contracts.

“We only have to look to the Department for Work and Pensions Work Programme to see that when markets open up, large private sector providers move in and squeeze out smaller organisations.  A very small proportion of the contracts went to social enterprises, despite it being hailed by Government as a boost for the Big Society.”

Ed Mayo, Secretary General of Co-operatives UK, says:

“The government’s public services reform white paper presents an important opportunity for co-operatives and mutuals to bid for and deliver public services. As trusted organisations that are able to unleash the talents and energies of their employees and users, co-operatives can provide good quality public services.

“Longstanding examples of thriving and successful co-operatives running services like foster care, leisure centres and affordable housing and out of hours GP services show that the co-operative model works extraordinarily well.

“As the trade association for co-operatives we want to see co-operatives thrive in all areas of the economy, including delivering public services. Like many, however, we are wary of some elements of the government’s approach to opening up public services to outside providers.

“First, there are serious issues facing public sector employees and users looking into the co-operative option – from uncertainty about jobs and pensions to the challenge of public sector workers setting up new businesses – that need to be addressed if public sector mutuals are to succeed.

“Second, in the current context, it won’t help staff or users if all the government does is to open the door to privatisation with fake mutuals that fail basic quality tests of member ownership and democracy.

“Third, there is a gap between national policy and local practice, with a lack of understanding of the benefits of co-operatives delivering public services amongst local authority councillors and officers.

“Fourth, there is an urgent need for high quality advice and support with sufficient resource to make sure that this is in place for all who need it.”

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Mutuals: white paper offers public services choice as Cameron tells Civil Service to take more risks

Posted on 12/07/2011 | Leave a comment

It was unfortunate that yesterday’s press conference to launch the Open Public Services White Paper by David Cameron was hijacked by journalists quizzing him on the ongoing News International story.

The event, organised by Reform in Canary Wharf, also featured speakers from big business i.e. the CBI, the consumer organisation Which, and the voluntary sector – “a Coalition in support of the White Paper,” suggested Cameron.

Detailing the public services landscape, Cameron scarcely mentioned mutuals by name, though they do feature significantly in the White Paper itself.

Modernisation of public services, he said, will give people choice and control over the services they use, and end the ‘get what you’re given’ culture.

People will be given more choice to shape the public services they use, putting control in the hands of individuals and neighbourhoods so everyone can benefit from the best public services available.

“I know what our public services can do and how they are the backbone of this country. But I know too that the way they have been run for decades – old-fashioned, top-down, take-what-you’re-given – is just not working for a lot of people.“Ours is a vision of open public services – there will be more freedom, more choice and more local control. Wherever possible we are increasing choice by giving people direct control over the services they use,” said Cameron, who detailed five core principles for modernising public services: choice, decentralisation, diversity, fairness and accountability.

He also made some key points about change and also about risk-taking for those now in the public sector:

“This is the case for change. If we want to compete in the world; if we want to get value for money; and above all if we want the decent, reliable public services that make life better for people, there will be no progress if we stick with the status quo.  What does change look like? It’s about ending the top-down, big government way of running public services,  and bringing in a Big Society approach, releasing the grip of state control and putting power into people’s hands. The old dogma that says ‘Whitehall knows best’ – that is going.”

“We really need to ensure that civil servants and arms length bodies see that there is a clear set of principles to apply: about choice, about diversity, about payment by results, about the role of private and voluntary sectors.

“The biggest challenge for the Civil Service is to try and adapt to this new culture and also a very difficult thing to do, and an easy thing to say, is that actually civil servants will have to take some risks. We all know that in business it is very easy to award the contract to Price Waterhouse. They’ve done it before, they’re an enormous organisation, they won’t fail. I think there’s a similar tendency within the Civil Service. It’s safe to keep it in house and deal with one of the big providers.

“If we really want to see diversity, choice and competition, we have to take some risks and recognise that sometimes there will be a new dynamic social enterprise that has a great way of tackling poverty or drug abuse or helping prisoners go straight, and we do need to take some risks with those organisations and understand that rather like in business, when you have a failure, that that doesn’t mean that the Civil Service has done a disastrous job.

“In business, we try new things in order to do better, and when they don’t work, we sit back and think, ‘How do we do that better next time?’ We do need a sense of creativity and enterprise in our Civil Service which is clearly there….a change of culture, perhaps a different attitude towards innovation and risk and a sense that that will be a good way of driving performance.”

************

This what the White Paper says about public service mutuals:

6.14 We are doing much more than just sweeping away regulations. We are giving public sector staff new rights to form new mutuals and bid to take over the services they deliver, empowering millions of public sector staff to become their own bosses. This will free up the often untapped entrepreneurial and innovative drive of public sector professionals.

6.15 Ownership and control, through mutualisation, empower employees to innovate and redesign services around service users and communities, driving up quality. We will not dictate the precise form of these mutuals; rather, this should be driven by what is best for the users of services and by employees as co-owners of the business. Options include wholly employee-led, multi-stakeholder and mutual joint venture models.

6.16 The Government will take steps to identify and overcome the barriers placed in the way of public sector workers who want to exercise these rights.

6.17 Public sector employee ownership: the key policies we are already implementing include:

  • Right to Provide – we are giving public sector workers who want to form mutuals or co-operatives to deliver public services a Right to Provide. This will enable public sector workers to form independent, or joint venture based, mutual and co-operative social enterprises. Progress is already being made with a new Right to Provide for NHS staff and opportunities for local authorities to invoke the Right to Challenge;
  • mutual pathfinders – the first wave of employee-led mutual pathfinders was launched in August 2010 with a second wave announced in February 2011. These pathfinders are being mentored by expert organisations as well as leading figures in social enterprise and public service to support their growth and share best practice; the pathfinders will provide critical learning as more employees look to exercise these rights;
  • Mutuals Task Force – Professor Julian Le Grand, one of theUK’s leading thinkers on public service reform, has been appointed to lead a Task Force to push employee ownership across the public sector;
  • Mutuals Support Programme – we will invest at least £10 million in the Mutuals Support Programme, to support some of the most promising and innovative mutuals so that they reach the point of investment readiness. This support will be available from autumn 2011;
  • Enterprise Incubator Unit – this has been set up within the Cabinet Office to provide advice, challenge and resources for public service providers from central government departments and their agencies who want to move from the public sector to the independent sector. The unit will help management teams to restructure themselves and their teams into independent businesses, which may include partners providing finance or expertise, for example through a joint venture;
  • Post Office mutualisation – In May, Co-operativesUK published a report commissioned by the Government on options to transfer Post Office Ltd from government ownership to a mutual run for the public benefit. The Government will carefully consider this report before launching a public consultation later this year; and
  • My Civil Service Pension (MyCSP) – plans have been announced for MyCSP to become the first mutual enterprise to spin out of a central government service. MyCSP administers Civil Service pension schemes for 1.5 million public sector workers. MyCSP’s plans to mutualise, which have the full backing of the Government, will give employees a stake in the new business, alongside government and a private sector partner. The innovative ownership model will be matched by a participative management approach: there has already been a strong turnout in elections for the Employee Partnership Council, through which employees will have a meaningful say in the running of the business.
Enabling new provision

7.7  Creating open public services will require new types of investment in public services: investment of money, inspiration and entrepreneurial effort. The Government will promote the opportunities being created by open public services, tailored to individual sectors. This promotion will aim to support:

  • accessing new forms of external finance – there is an exciting set of opportunities to bring new forms of finance into public services. This includes social investment (e.g. social impact bonds); payment for results on capital improvements (e.g. energy efficiency) and the financing of modernisation programmes (e.g. joint ventures to introduce new technology). Work is under way to develop effective measures of the social impact of investment and to launch the Big Society Bank, which will catalyse the growth of a sustainable social investment market;
  • empowering public sector staff to take control of their own services in new enterprises like mutuals – the creation of mutuals is a critical step in achieving more diversity in public services. However, we recognise that this is a big step to take for both staff and the public body that employs them. We will set out a full range of support available to those who are considering setting up a mutual, in the same way that we seek to stimulate both voluntary and private sector development. This will include a £10 million Mutuals Support Programme to provide support to fledgling mutuals that are being set up to deliver public services by employees leaving the public sector; and
  • actively encouraging new providers, of all sizes and from all sectors, to deliver public services– when we say we want diversity in public services, that is exactly what we mean. We will take active steps to avoid simply switching from one type of monopoly to another. We will launch a positive action programme to improve the awareness of public service opportunities to new providers, especially small and medium-sized enterprises. Many of our policy changes have already opened up attractive new opportunities, for example in the Work Programme and through personal budgets in social care. In addition, we will take positive action on procurement and through regulators to ensure that other opportunities (e.g. in central government procurement) are opened up to new types of provider, be they from the public, private or voluntary sector.

If you want more details, you can access the White Paper here – and the Government has unveiled an Open Public Services website

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Mutuals to be at heart of Open Public Services White Paper to be launched today

Posted on 11/07/2011 | Leave a comment

By David Bicknell

The Government is expected to launch its Open Public Services White Paper in London today, giving details of how so-called ‘John Lewis-style mutuals’, will take over the running of much of the public sector.

The shake-up of the state will hand “choice and control” to communities across the country,  opening large parts of the public sector to the “best possible provider.”

The Open Public Service White Paper  is being mooted as the sector’s biggest overhaul for 50 years, with private firms, voluntary groups and charities cleared to take over the running of  schools, healthcare and council services.

The emphasis is expected to be put on “mutuals”, where staff control the planning and spending decisions for local services. Cabinet Office minister Francis Maude has already  suggested that mutuals could have a  “transformational”  impact on service quality and morale. By 2015, it is estimated,  one in six public sector employees will be working in mutuals.

Already a ‘Mutuals Taskforce’ is in place, supported by a pilot ‘Pathfinder’ programme  to help point the way for would-be mutuals to learn from.

Maude has already pointed to the example of an intermediate care unit in Swindon which was  launched as a pilot last summer, bringing together around 900 nurses, physiotherapists, doctors and other staff previously employed by the primary care trust and local council.

“It’s a mutual where there’s no financial incentive. They will own it, but with no profit share or anything, no financial upside, they will have to take out 30 per cent of their cost over the next four years and they are really excited about it,” Maude told The Independent on Sunday.

If you’re considering setting up a mutual, what are your concerns? What questions would you like the Government to answer about mutuals?

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Firecontrol shows how much Major Projects Authority is needed

Posted on 07/07/2011 | Leave a comment

When an investigative team from BBC File on 4 went to a business estate near Taunton, they saw an empty “hi-tech fortress” that looked like a NASA control room.

Nobody was working there. Nearly an entire wall of the control room was fitted with 50-inch monitors – 20 of them. They were blank.

That centre – and a further eight purpose-built buildings like it – remain empty because control room software has yet to be installed.

The £469m wasted on the centres and the failed IT project to support them – together called Firecontrol – was the subject yesterday of a hearing of the Public Accounts Committee.

Mistaken recommendation

At the hearing Sir Bob Kerslake, Permanent Secretary, Department for Communities and Local Government, said that officials made a “mistaken” recommendation to go-ahead of a new IT and control centres for fire services.  

Kerslake accepted points made the Committee’s chair Margaret Hodge that officials recommended the go-ahead of the Firecontrol IT project without reliable figures on likely costs, savings or benefits

No finalised business case or project plan 

Also absent when the IT procurement went ahead was a finalised project plan or business case, MPs heard yesterday. The full business case for Firecontrol wasn’t published until June 2007, three years after the start of the IT project. A revised business case was published in 2009, the year before the project was cancelled. 

Rush to buy new systems – as with the NHS IT scheme

The Committee was told that procurement of new systems was underway by May 2004, amid a deep level of ignorance, because officials were in a rush.

It was a similar story on the NPfIT: officials were in a hurry to complete the procurement of new systems. And as with the NPfIT, there was no local buy-in. “Firecontrol was flawed from the outset because it did not have the support of the majority of those essential to its success – its users,” said the NAO.

Local fire services were under no statutory duty to use the regional control centres. As with the NPfIT, central government officials thought they could persuade local services to use the centres. They failed.

Firecontrol has lost a minimum of £469m, according to the NAO. The Department cancelled the scheme in December 2010 because of continued uncertainties. The coalition has approved a new project due to cost about £84m – which prompted MPs to ask yesterday why the original scheme could not have been done much cheaper.

What about the officials who made the flawed recommendation to go ahead?

Margaret Hodge, chair of the committee, asked Kerslake why his department did not seek a “ministerial direction” before embarking on a project that was so flawed. Ministerial directions are issued by departments’ most senior civil servants when they disagree with their minister’s decision so strongly that they refuse to be accountable for it.

Kerslake replied that no ministerial direction was issued because it was officials who were recommending the project’s go-ahead.

Said Kerslake: 

“I don’t think it came to that [Ministerial Direction] because the view of officials was to recommend, with some of issues identified as concerns, that the scheme went ahead. This was not a case where a Direction would have applied because the recommendation from officials, as I understand it, was to go ahead with the scheme.”

MPs heard that Kerslake was a non-executive director at the department when the decision was taken to go ahead with Firecontrol. Didn’t he object to the scheme’s approval?

Kerslake said he raised concerns to the board about the large scale of the investment compared to the problem. “The concern I had at the time, whether fire and rescue services were willing to take on this technology, were all points that were discussed. The view of the officials on balance at the time was that the benefits of doing the scheme outweighed the risks and costs.”

Kerslake said that as a non-executive he was on the board in an advisory role.

Conservative MP Richard Bacon, a long-standing member of the committee, asked Kerslake if his scepticism as a non-executive was recorded.

“It was clearly part of the discussion. I have not gone back and checked every note of the meetings.”

Comment:

MP Richard Bacon suggested yesterday that the only accountability for the failure of the project was Sir Robert Kerslake’s having an uncomfortable two hours before the Public Accounts Committee.

As for his officials, the only accountability for the waste of £469m was to sit in seats behind him, periodically passing him notes. An observer at the hearing said public seats in the committee room “seemed to be packed full of advisers passing notes to the four people hauled before the committee”.

It’s a civil service tradition that officials are not generally held responsible for recommendations because the final decision on major projects is taken by the department’s minister; yet ministers will tend to know only what they are told by department’s civil servants. 

If the officials are incompetent in drawing up their recommendations, they may be incompetent in the briefings they give their ministers.

Even so it would be a brave minister who rejected the recommendation of permanent and supposedly expert staff.

That’s why the coalition’s setting up of the Cabinet Office’s Major Projects Authority is such a good move: it will challenge departmental complacency and over-confidence in its own abilities and decisions. 

Cabinet Office Francis Maude announced on 31 March 2011 that “from today all major projects will be scrutinised by the new Major Projects Authority”. 

Most importantly it has powers from the Prime Minister to oversee and direct the effective management of all large-scale projects. Though there are still uncertainties among Cabinet Office officials about the extent to which the Major Projects Authority can intervene in major projects, it has an enforceable mandate from Cameron to scrutinise proposals for major projects; and the Authority is run by the redoubtable Australian David Pitchford who reports to the Cabinet Office’s Chief Operating Officer Ian Watmore whose brief includes making efficiency savings.

With the Major Projects Authority central government has the chance to stop flawed projects such as Firecontrol going ahead. Yesterday’s PAC hearing showed how badly the Authority is needed as an independent challenge. The existence of the Authority is one of the most important developments in government IT for decades – provided it makes effective use of the PM’s mandate. 

Firecontrol chiefs list reasons for project’s collapse.

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Posted in Campaign4Change, npfit, public sector, public services, supplier relationships, Uncategorized

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Would-be mutuals must overcome fear of failure and embrace risk

Posted on 07/07/2011 | Leave a comment

By David Bicknell

A lack of confidence and fear of failure must be overcome if the government’s goal of seeing employee-led mutuals take off is to be achieved.

The government believes that by 2015, one in six public servants could be involved in mutuals. The problem is giving them the confidence to use their undoubted knowledge of public service delivery and take advantage of the flexibility that running your own business brings, as opposed to the frustrations of years of a ‘can’t do’ approach that meekly says ‘..but we’ve always done it this way.”

As a number of speakers at the Civil Service event – including Peter Marsh, vice-chair of the Mutuals Task Force, My CSP head Phil Bartlett, and Mitie’s chief executive Ruby McGregor-Smith – suggested, those within the public sector, and especially the Civil Service – do have the ability to overcome their fears of failure, and indeed, as it emerged from one mutuals seminar, their worries about competing against the private sector or their discomfort about having some ‘conflict of interest’ within the wider public sector about using their knowledge to set up a mutual. As was pointed out, using that knowledge and embracing the flexibility of running your own (employee-owned) ship, is just what the Cabinet Office wants them to do.

More on Civil Service Live to follow. In the meantime, the Guardian is carrying an excellent piece on fear of failure and the acceptance of risks in mutuals.

You can read it at http://www.guardian.co.uk/social-enterprise-network/2011/jul/06/fear-failure-public-service-mutuals

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Posted in Campaign4Change, mutualisation, mutuals, public sector, public services

Lessons from an IT crisis – Tesco Bank

Posted on 06/07/2011 | 8 comments

By Tony Collins

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

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

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

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

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

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

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

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

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

Tesco Bank did some things well.  It:

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

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

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

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

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

What it didn’t do well. It: 

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

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

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

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

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

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

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

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

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

Wednesday 15 June 2011

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

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

Weekend 18/19 June

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

Monday 20 June

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

Tuesday 21 June

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

Says the BBC, quoting a Tesco Bank spokesman:

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

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

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

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

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

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

Wednesday 22 June

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Saturday 25 June

It’s clear some customers are still locked out.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

**

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

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

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

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

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

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

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

Higgins: Yesterday …

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

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

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

Higgins:  Of course we did, and I have …

Lewis: Well not very well then, did you?

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

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

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

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

Higgins: We have not passed that test yet.

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

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

 **

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

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

Monday 27 June (week 2 of the crisis) 

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

Thursday 30 June

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

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

Saturday 2 July

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

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

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

Says David on Money Box:

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

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

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

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

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

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

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

3 and 4 July

I ask Tesco Bank:

– what lessons it has learned

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

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

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

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

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

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

Comment:

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

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

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

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

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Mutuals bring relief after the public sector moratorium

Posted on 05/07/2011 | Leave a comment

The public sector landscape is likely to be dominated by mutuals in the future.  In this guest blog, John Pendlebury-Green and John Jones of Landseer Partners discuss the outlook for service providers in this mutualised world and argue that their approach must be both innovative and flexible.

Last year was a difficult one for service providers to the public sector given the moratorium and general economic slow-down.  Despite a relatively slow start 2011 is looking significantly brighter for existing and new entrant market players.  The Government’s plans to achieve cost savings, develop mutual organisations, and use SMEs and the third sector to develop new ways of delivering services, are moving rapidly from theory to reality.  So, with the white paper on Open Public Services due out in July, now is the right time for both large and SME service providers to look at themselves and work out how they should be playing in this new world.

We wrote about the concept of mutualisation in early 2010. It has taken the Government longer to get to this point than we expected but the number and variety of public sector organisations looking at mutualisation in one form or another is impressive. The opportunities are starting to appear: from Camden Council looking at how all of its services can be delivered to Cleveland Fire Service receiving approval to finalise a business plan and a structure to establish an employee-owned mutual.   In central government the announcement that My Civil Service Pension is going to be placed into a mutual joint venture is the first major “spin out” of a central government service giving employees the opportunity to take a stake in their business.

So with Francis Maude now talking about an expectation of up to a million public sector workers being in mutual organisations by 2015, the scale of the government’s ambition for mutualisation is clear.  With these types of numbers being talked about it makes it obvious that a one-size-fits-all approach by service providers is doomed to fail.

Our view is that service providers, including possible new entrants, will need to invest time and money now by discussing with existing and new clients the art of the possible: what can be achieved in setting up mutual organisations in order to deliver jointly and successfully services that will provide the right outcomes to the customers of the mutual.

This is most likely to be in the form of working with the public sector organisation to help define the vision and outline structure, and identify the stakeholders – from users to the Cabinet Office – who need to agree the idea.  Then the service provider is ideally positioned, given its private sector experience, to help develop the business plan.  The plan needs to cover the services to be provided, the market opportunity to provide additional services and the resourcing and finances needed to make the new business work.

How this works in practice will be closely examined and no doubt later mutuals will learn from any mistakes in setting up the initial ones.  So the success of the pathfinder mutuals and high-profile examples such as My Civil Service Pension will examined very carefully.   It is clear that how the successful private sector service provider and any third sector organisations become part of these new entities, and how the governance, structure and profit share will work, will set the tone for subsequent mutuals.

Now at mid-year in 2011 it is still early days for new ways of working with the public sector.  If events to date have not spurred service providers to action the July white paper should certainly do this. Either this, or the significant number of re-tenders now coming onto the market, should provide some welcome relief compared to the slow down in 2010.

For more details, read the white paper or visit Landseer Partners’ website

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Engaging with the disengaged on sustainability

Posted on 05/07/2011 | Leave a comment

By David Bicknell

Sustainability has made it onto the business agenda of most large organisations. Admittedly some organisations treat the sustainability reality more seriously than others:  some will use it as a competitive enabler, or to beef up their brand identity. Others will use it as a means of cutting costs: i.e. ‘talk green, mean lean.’

Whatever their commitment, there are precious few organisations that have not had some discussions about either sustainability in their supply chain, or their corporate social responsibility, or  how they can engage with their customers on green issues.

Sometimes, however, ‘engaging’ is easier said than done. Preaching to the converted is fine – but it’s the unconverted that need to be enlightened. This was the subject of a recent event in Reading hosted by Clarkslegal and organised and moderated by C8 Consulting.

The attendees included Connect Reading, Kyocera Mita, Global Cool Foundation, Locus, Reading Borough Council, Ennismore Partners, The FD Centre, Integral, Jacobs Engineering, Reading Football Club, Graft Thames Valley, CBS Business Interiors, Thames Water and the Campaign4Change.

One of the key topics discussed was the need to find a way of making sustainability desirable. As Global Cool put it, ‘Climate change doesn’t have an awareness problem. But it does have a marketing problem. Almost everyone is aware of the climate issue, but only a minority are changing their lifestyles to reduce carbon. Remember the old adage, “If what you’re doing isn’t working, do something else.”

Companies sell products which are fabulously profitable. But they do it not by talking about profitability, but by showing how cool and desirable the product is. The same must go for sustainability. That means not talking simply about sustainability – because most people aren’t interested – but showing how lifestyles and products which happen to be sustainable, are in the ‘customer’s’ interests.

Another issue discussed is the challenge of getting SMEs engaged on sustainability. The problem is that in today’s economic climate, most SMEs are running around just trying to keep their businesses afloat. Sustainability – or ‘green’ – just doesn’t register. Even the various loans, grants etc available pass them by, because in many cases, they have to spend to get matching grants ‘to save’.

The idea was mooted that maybe SMEs might have more clout – and more interest in what they could save off their energy bills – if they had a bigger voice. One large voice composed of a million smaller voices carries more clout than one single voice. It’s the difference between a choir and a chorister. Perhaps this model for SMEs demands more exploration. For the moment, however, the sustainability – and potentially lower cost – message is being drowned out by the ‘bigger drumbeat’ for the SME –  of customer retention and acquisition – and survival.

More thoughts on this subject to follow.

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Posted in Campaign4Change, Climate Change, greentech, sustainability

Parliamentary Committee to discuss the role of mutuals this week

Posted on 04/07/2011 | Leave a comment

By David Bicknell

Parliament will discuss the prospects for mutuals at a meeting of the House of Commons Public Administration Select Committee tomorrow morning.

The session, the Committee’s fifth instalment of its Big Society Inquiry, will focus on the Government’s intention to diversify the provision of public services by opening them up to charities, social enterprises, mutuals and the private sector. The Committee will hear from representatives of the voluntary sector and the TUC, Professor Julian Le Grand and Ed Mayo from the Cabinet Office Mutuals Taskforce, and Shona Nichols from business process outsourcing company Capita.

The Committee’s questioning is likely to cover

  • obstacles to voluntary sector organisations delivering public services;
  • the work of the Government’s Mutuals Taskforce in driving forward employee ownership of public services; and
  • the role of the private sector in the Big Society.

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Posted in Campaign4Change, mutualisation, mutuals, public sector, public services

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