Some useful insight into ongoing G-Cloud development

Posted on 12/06/2011 | Leave a comment

By David Bicknell

I came across this blog by Alan Mather on e-govenment, commenting on some of the recent rumour and speculation around the future of G-Cloud, especially in light of some recent comments attributed to Nick Wilson at HP.

Mather’s insight on G-Cloud makes for interesting reading:

“Everything I hear today is that G-Cloud is alive and well. It is, though, a programme, not a thing. There isn’t going to be a big cloud (in the sky) owned by government into which each and every bit of IT will be shovelled, dribbled or piled.

“People inside government continue to work on G-Cloud and, whilst it’s not without [some pretty significant] challenges, it’s making progress. Ten years ago when I was at the centre of government, I would have done such a project with some pretty substantial seed funding from HM Treasury and I would have made a strong case for some kind of mandation – I’d have wanted government to get behind whatever the offer was and direct people to use it. That didn’t happen then – cf gateway, DotP etc – and it isn’t going to happen now. The difference now is that departments phone up the G-Cloud team every day looking for opportunities to join up – to save money, reduce risk, speed delivery and get something done. The pressure is on and departments are looking for ways to reduce that pressure.”

Mather says his understanding is that G-Cloud is, amongst other things “aimed at stimulating the widest possible market by lowering the barriers to entry for provision of services (decluttering the commercials as well as taking services as they are rather than with overwhelming government customisation) and so helping smaller businesses gain entry to the government market.

– Architecture neutral. What’s wanted is bare tin at IaaS, a range of suppliers putting capability on top of bare tin at PaaS and true services that are platform agnostic at SaaS. Government is buying services. They want those to be assured services – secure, reliable and performing to service levels…  and so on.”

Can’t really fault Mather’s thinking here – I look forward to what he has to say in the future.

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All Party Group lauds promise of mutualising public services – but warns against economic motives

Posted on 09/06/2011 | Leave a comment

By David Bicknell

An article in Community Care magazine has said employee-led mutuals could positively transform public services as long as they are not driven by economic motives.

The magazine cites a report by the All-Party Parliamentary Group on Employee Ownership, which found the coalition government had made “significant process” with its commitment to mutualise public services, including social work.

But the all party group warned that, although many employee-led mutuals had reported efficiencies, cost-cutting alone “should not be the prime motivator for seeking out mutual ownership models”.

The MPs, chaired by Conservative MP Jesse Norman, identified some concerns about the timing of the mutuals intitiative. Trade unions in particular have suggested it is being driven by financial considerations rather than the desire to give frontline workers more freedom and control.

“Several witnesses told us that the timing of the public service mutuals initiative, during a time of deep budget cuts at central and local government level, was inflicting severe damage on how the initiative was perceived and how it was being implemented,” the report said.

“The group is concerned to hear that some spin-outs appear solely driven from very senior level, typically under the pressure of the need for immediate short term cuts, with the wider base of employees engaged only after the process had started.

The APPG, set up in 2007 to raise awareness of the benefits of employee ownership, also noted that the “plethora” of employee ownership models available had caused confusion among frontline workers.

Norman said policy makers should do more to connect would-be mutuals with experts and ensure that advice is accessible.

You can download the report here

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UK Roadshow to Showcase Green Technology for Overseas Markets

Posted on 08/06/2011 | 1 comment

By David Bicknell

Peterborough will play host on July 5th to a roadshow showcasing solutions in the green IT or ‘greentech’ technology sectors.

The UK Trade and Investment (UKTI) GreenTech Road Show will bring buyers and decision makers from markets including Australia, Bulgaria, China, Hungary, India, Kuwait, Portugal, Romania, Russia, Turkey and UAE into the UK to look at the UK’s capabilities across the spectrum of ‘green’ technologies. The delegates have specific interests in green energy production, energy efficiency, green building technology, cleaner production technologies, waste management and water and wastewater treatment.  

The event will be a regionally focused day dedicated to developing interactions between UK suppliers and the visiting ‘buyers’ and UK Trade & Investment officers.

The morning will offer briefing sessions aimed at UK companies that are relatively new to exports and will offer advice on export services available from UKTI. Advice will be on hand from UKTI regional contacts and Trade & Investment Officers based in overseas embassies, as well as details of how UKTI is promoting the UK’s Low Carbon know-how around the world.

The event, to be held at the Bull Hotel, will also feature ‘Meet the Buyer’ sessions in the afternoon, giving greentech vendors the opportunity to book 1-1 meetings with either the overseas buyers or Trade & Investment Officers. 

Places on the GreenTech Road Show are free of charge. For more information, email garry.poole@uktradeinvest.gov.uk

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BT doubles the value of its NHS IT business, to £4.1bn, in eight years

Posted on 08/06/2011 | 1 comment

By Tony Collins

BT’s NPfIT business today is worth £4.1bn – nearly double the cost of the original NHS IT contracts, according to a calculation by Campaign4Change.

In December 2003 the Department of Health awarded BT three contracts under the NHS IT programme:

– a ten-year deal, worth £620m to design, deliver and manage the Spine, a national patient record database and transactional messaging service that was essential to the NHS Care Records Service.

– a ten-year deal, worth £996m to become the main IT supplier – local service provider – to all London trusts. The contract was to design, deliver and operate integrated local patient record applications and systems for the NHS in London.

– a seven-year “N3” broadband network deal, worth £530m, to replace the NHS communications network NHSnet.

The three contracts were worth a total of £2.15bn in 2003.

Now BT has confirmed that the total value of its NHS contracts is £4.1bn. This is after change control notices and further NPfIT work, including taking over from Fujitsu at seven NHS sites in the south.  Of this £4.1bn, BT has so far received £2.8bn – about £700m more than the cost of its original contracts; and BT has confirmed it is bidding for further NPfIT work, under NHS Connecting for Health’s Additional Supply Capability and Capacity (ASCC).

On the basis of what they have said in the past, the NPfIT senior responsible owner Sir David Nicholson and officials at the Department of Health and NHS Connecting for Health, will defend all payments to BT as value for money.

Indeed, when Nicholson, the NHS Chief Executive, was asked last month by the chair of the Public Accounts Committee Margaret Hodge whether he was claiming that money spent to date on the NPfIT  had not been wasted and will potentially deliver value for money Nicholson confirmed that he did say this.

“Yes, yes,” replied Nicholson.

However the original NPfIT contracts set down plans for fully-integrated London-wide care Records systems by 2010, which has not happened.

The scale of the increases raises questions of whether officials at the Department of Health are too close to the NPfIT suppliers to be regarded as independent arbiters on contract negotiations and change control notices.

There’s a strong argument for the DH to transfer control of the NPfIT contracts to the Cabinet Office. Nicholson, the DH and CfH will not give up their hold on the NPfIT or the LSP contracts, or disputes. Perhaps David Cameron, who has taken a personal interest in the NPfIT, should order that the Cabinet Office minister Francis Maude take control.

Improvements in the NHS in ways of working, such as the standardising of medical forms for data collection,  and IT-based innovation, are much needed. But not at any cost.

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Newcastle Council to be in vanguard of public services reform, including using mutuals?

Posted on 08/06/2011 | Leave a comment

By David Bicknell

There is an interesting piece in the Guardian’s Society pages today about the ambitions of Newcastle Council in pushing through public services reform.

Peter Hetherington’s article  says that Nick Forbes, the new Labour leader in Newcastle has two problems to grapple with: budget cuts this year of £45m, and reinvigorating the existing management regime.

Forbes is quoted as saying that one of the big challenges is to reinvent the concept of public services in the 21st century in a way that matches Labour’s values of equality and fairness and co-operation. “There’s the opportunity to capitalise on what the government is saying around mutuals and workers’ co-operatives and develop genuinely new models that give service users and staff a stronger ‘say’ but also protect essential public services from the destructive forces of market competition.”

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Audit Commission to Offer Procurement Opportunity for Employee-led Mutuals to bid for projects

Posted on 06/06/2011 | Leave a comment

By David Bicknell

An article published by eGovMonitor has suggested that local authority audits could be outsourced to the private sector by 2012/13.

eGovMonitor suggested that the Audit Commission has been asked to develop a procurement process through which a range of firms could bid for the projects. These would also include employee led mutuals.

“We have been asked to design a procurement process that allows a range of firms to bid, including the possibility of an in-house bid, which could form the basis of a new and distinctive provider in the market, possibly a mutual,” Eugene Sullivan, Chief Executive of the Audit Commission said.

 

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Mutuals: After the Big Society, the Good Society…

Posted on 04/06/2011 | Leave a comment

By David Bicknell

I came across a piece from Public Finance written by Maurice Glasman discussing what Labour’s answer to the Big Society might mean in practice.

There are some interesting thoughts on mutuals here. Glasman writes:

“There is far more to meaningful work than money and self-interest; it is the way we serve and change the world. The workforce is at the heart of this. The Good Society stresses its importance in the private as well as the public sector. This is very different to the Big Society agenda, which does not recognise that capital seeks the highest rate of return and thus creates great pressure to turn both humans and nature into commodities.

“To understand what is at stake here, look at the idea of corporate governance. The Big Society offers two ideas of corporate governance for the public and private sectors. In terms of the state, it prefers a form of mutualisation, developed by Julian Le Grand, in which public services are provided by worker-owned enterprises. There is no balance of interest in the governance of the service provider, and users and funders are excluded. State-funded services have no representation on the board. This is in contrast to the Big Society view of private sector corporate governance, in which the worker has no status at all and managerial sovereignty prevails.

“Our ‘Blue Labour’ approach brings the two together. Reliance on managerial sovereignty is both wasteful and ineffective and does not engage fully the innovation, creativity and vocational energy of the workforce. It is a contractual and assessment-based model that focuses too much on procedure and not enough on developing relationships.

“Instead, a third of the mutual boards should be elected by the workforce. Another third should be represented by users (the involvement of users is an important part of community organising that needs to be undertaken to strengthen society and give voice to disorganised people). The final third of the board should be the local authority or the state, which has a legitimate interest in procedure, wider social goals and its integration into government policy.”

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Mutuals: Financial Times report says the Coalition’s Public Service Reform Plan is On Hold until July

Posted on 03/06/2011 | Leave a comment

By David Bicknell

A report in the Financial Times has suggested that David Cameron’s plan to free public services “from the grip of state control” has been put on hold until July, in the face of opposition from the Liberal Democrats and public concern over the privatisation of health and social care.

The positive aspect of this story, however, is still that the White Paper has been delayed, not shelved, and that  ‘mid-July’  is still only a few weeks away.

The report says the plan to transform public services through greater use of private providers, mutuals and social enterprises has already been cut back and is now the subject of coalition wrangling.

The FT report says: “Downing St insiders confirmed on Wednesday that the vaunted white paper on reform – originally set for publication in January – is now unlikely to be published until mid-July.

“Mr Cameron has already been forced to abandon a proposal in last year’s comprehensive spending review that the white paper should set quotas for handing over public services to independent providers.

“In February, he promised to create “a new presumption” for public services to be open to a range of providers competing to offer a better service.

“Conservative officials said work was under way to create a white paper that set the framework for the coalition’s approach to the public services, including opening up opportunities for small and medium-sized companies and mutuals.

“An earlier draft largely set out existing government plans, including cutting the cost of Whitehall procurement by centralising much of it, encouraging a million public sector employees to form social enterprises and using payment by results for welfare-to-work and offender rehabilitation.

“Nick Clegg, deputy prime minister, is insisting the final white paper does not pave the way for the wholesale privatisation of public services – resisting a push for a big expansion in independent provision by Mr Cameron’s policy adviser Steve Hilton.

“Nick does not want there to be any sense that the public sector can’t be a provider of good quality public services,” said one Lib Dem official.”

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Cabinet Office publishes SME action plans today – a good start.

Posted on 03/06/2011 | 1 comment

By Tony Collins

The Cabinet Office has today published SME “action plans” for each department.

It says the  reforms are “designed” – which is not the same as a commitment – to   “significantly open-up the public sector marketplace to small businesses”.

The new  plans support what the Cabinet Office calls an “aspiration” for the Government to spend  25% of its budgets on SMEs.

The actions range from:

  • breaking large contracts into smaller lots
  • working with major suppliers to increase SME access to sub-contracting opportunities
  • increasing the amount of information that is available to SMEs about contract opportunities
  • holding “product surgeries” for SMEs to pitch innovative ideas
  • piloting new procurement methods that are more open to SMEs.

Some of the documents published today could be more aptly  described as goodwill gestures to SMEs rather than  action plans.  Indeed, when read carefully, some of the action plans appear to be a civil service response to an unwanted ministerial decree.

HM Revenue and Customs, which is tied into an £8bn IT outsourcing deal with Capgemini, uses phrases in its SME action plan that are vague and non-committal, such as “build on the work done …”

These are some of the promises HMRC is making to SMEs:

– From June 2011, HMRC will develop and maintain information on its website relevant for SMEs. The information will include, but will not be limited to, signposting for SMEs to access relevant procurement details and how they can work with the Department. The Department will provide clear contact points for additional information and queries.

– Work with the 12 largest prime HMRC suppliers (representing c80% of 3rd party spend) to ensure they identify and engage with their own SME supply chains, including 3/4th level suppliers and agree actions (such as advertising suitable sub-contracting opportunities on Contracts Finder) with them to increase value of spend.

– Build on the work done on the recent open procedure procurement for Debt Collection Services …

– HMRC to consider appropriate procurements that are suitable for SME competition.

The Home office’s action plan is better, though.  It says it will:

– review forthcoming procurements and develop standardised processes and procedures to remove barriers to SMEs. “This will ensure the method used is as SME friendly as possible for the contract on offer.”  By June 2011.

Alongside publishing the action plans the Cabinet Office is creating a central team, Government Procurement, which will contract for widely-used goods and services for the whole of Government at a single, better price.

This, says the Cabinet Office, will end the “signing of expensive deals by individual departments” and “end poor value contracts such as those where government departments and agencies paid between £350 and £2,000 for the same laptop and between £85 and £240 for the same printer cartridge from the same supplier”.

Central procurement of common items is expected to save more than £3bn a year by 2015 – 25% of the Government’s current annual spending on these items.

Francis Maude says the Government is on track to have saved more than £1bn from tighter spending on discretionary goods and services including consultants and agency staff in the last year.

“Changes to make Government contracts more accessible to SMEs have already led to one not-for-profit SME successfully undercutting larger competitors and winning a £1.6m contract to provide office support services to HM Revenue and Customs,” says the Cabinet Office.

Maude said:

It is bonkers for different parts of Government to be paying vastly different prices for exactly the same goods. We are putting a stop to this madness which has been presided over for too long. Until recently, there wasn’t even any proper central data on procurement spending.

“So, as Sir Philip Green found, major efficiencies are to be found in Government buying. The establishment of Government Procurement means that the days when there was no strategy and no coherence to the way the Government bought goods and services are well and truly at an end…

“We are also determined to press ahead with measures to create a more level playing field so that small organisations and businesses can compete fairly with bigger companies for Government contracts. SMEs can provide better value and more innovative solutions for Government and the actions set out today will support their growth as the economy starts to recover.”

The Cabinet Office says that greater use of the ‘open’ procurement procedure  has increased by 12% across the public sector between March and April alone, helping to ensure that all suitable suppliers have their tender proposals considered.

And following the Innovation Launch Pad, five further Dragons’ Den style ‘product surgeries’ are planned so that innovative SMEs can pitch their proposals directly to Government.

The Government bought £66bn  of goods and services in 2009/10. An Efficiency Review by Sir Philip Green, which was published in October 2010, found that the Government had not made the most of its size, buying power or credit rating.

Green wanted the mandation of “centralised procurement for common categories”.

Are officials undermining ministerial plans to boost SME work?

There is some evidence emerging, however, that the civil service is misinterpreting ministerial will and standardising contracts by taking work away from SMEs and putting it with a few large companies. Campaign4Change will be looking at this in coming weeks.

We also hope this will be investigated by the new Government Procurement team which will be headed byGovernment Chief Procurement Officer, John Collington.

Link:

Home Office SME Action Plan.

HMRC SME Action Plan

All departmental action plans.

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CSC’s future in NHS IT – an analysis

Posted on 02/06/2011 | Leave a comment

By Tony Collins

              We trust the Cabinet Office more than the Department of Health to terminate or re-negotiate CSC’s £3.1bn NPfIT contracts.

  •  CSC’s strong position in NHS IT
  • Could CSC claim hundreds of millions from DH?
  • We’d be over a barrel, warns Connelly
  • More expense to cancel CSC’s contract than complete it, says Connelly
  • Are Connelly’s arguments flawed?
  • What happened to the concept of cutting your losses?
  • Remove life support for CSC’s contracts says Techmarketview 
  • CSC sees NHS IT as global reference site
  • CSC MoU is “ready to go”
  • Coalition reviews of CSC contracts a “stamp in the passport”
  • CSC will split Lorenzo into smaller chunks
  • No one NHS trust will dominate requirements

The share price of CSC, one of the biggest NHS IT suppliers, fell by 11% in New York trading this week, after its financial year-end forecast fell short of analysts’ estimates, according to Bloomberg.

Computer Sciences’ share price fell $4.76, or 11 percent, to $39.33 and although today [2 June 2011] the price is up slightly it is far below the 52-week high of $56.61. Bloomberg says that CSC has been hurt by delays in federal contract decisions and is also working to revise its NHS contract in the U.K. CSC has £3.1bn worth of NPfIT contracts.

CSC’s strong position in NHS IT

Despite the temporary knock in confidence for CSC over its share price, in part because of the NHS uncertainties, CSC remains in a strong negotiating position over the future of its work for the UK health service.  

Could CSC claim hundreds of millions from DH?

Christine Connelly, the Department of Health’s CIO, told the Public Accounts Committee on 23 May 2011 that if the DH terminated its contract with CSC for convenience [rather than terminate for breach of contract] CSC could claim hundreds of millions in compensation.

Connelly also said there is the “potential that the supplier may then come to us and seek damages based on the work in progress that they have on their balance sheet today, with a view—not that I am saying at this point that we would share it—that we have impacted their ability to get return on that asset that we were holding.

“So they may come to us and seek damages as a proportion of that balance sheet value. Again, that may be several hundred million pounds”.

Further, by terminating CSC’s contract, the Department of Health would have to support NHS trusts that had bought CSC systems under the NPfIT.

Connelly said:

“I am not talking about what it costs in terms of running those other systems, but there would be a cost if we decided no longer to have Lorenzo or [iSoft’s] IPM or whatever. We would have to take the people who are currently using those systems and move them to something else; that would be a transition cost.

“There then is likely to be a period where we would still be running the systems that we had now terminated. If you look at what happened to us in the South with Fujitsu, Fujitsu increased the cost of supporting the systems. They almost doubled the cost compared to the contract that we had.

We’d be over a barrel, warns Connelly

“So for the period before we had transitioned the systems across, we would expect to pay some premium on that support and obviously we would seek not to do that, but given that we would then be over a barrel, because we are running systems that one supplier has provided and we have now terminated, if we do not manage that well that could be a very difficult position.

More expense to cancel CSC’s contract than complete it, says Connelly

“So potentially, if you ask me about the absolute maximum [the DH is exposed to on its CSC contracts] we could be exposed to a higher cost than the cost to complete the contract as it stands today.”

Are Connelly’s arguments flawed?

But Connelly’s comments appear to make several assumptions namely that:

a) the DH hasn’t a strong legal case against CSC for breach of contract. In fact the DH should be able to credibly contest any claim by CSC for hundreds of millions of pounds in compensation.

b) CSC could withstand a long legal case against the UK government. In fact Fujitsu wants to settle its legal dispute with the Department because the row could damage its relationship with the coalition.  The policies of the coalition mean that suppliers no longer have isolated relationships with departments. Damage to a relationship in one department could affect a supplier’s relationship with government as a whole.

CSC is one of the top 10 suppliers to the UK Government. It will wish to avoid any dispute with the DH that could affect its relationship with the Cabinet Office’s new Crown representatives.

c) it would cost a fortune supporting NHS trusts that had bought NPfIT systems from CSC. In fact there are several healthcare suppliers – other than CSC and BT – that have been supporting and enhancing NHS trust systems outside of, and within, the NPfIT. They could support former CSC trusts at a fraction of the cost of BT [or CSC].

What happened to the concept of cutting your losses?

Anthony Miller, managing partner at market analyst Techmarketview, says it is “utter rubbish” to suggest that cancelling CSC’s contract will cost more than seeing it through to the bitter end. “Has the Government no idea about the concept of ‘cutting your losses’?” asks Miller.

Remove life support for CSC’s contracts says Techmarketview 

He adds:

“It should be clear to everyone involved that CSC’s NHS IT programme has deteriorated from ‘walking wounded’ to ‘do not resuscitate’. The sooner life support is removed, the better for all concerned.”

CSC sees NHS IT as global reference site

CSC, however, continues to see the NPfIT and its NHS IT work as a global reference site for healthcare IT.

Guy Hains, CSC’s President, Global Healthcare, told analysts last month that the NHS component of its business “is still the largest programme globally [and] is the reference point for most of our conversations with other national governments”.

He added: “It’s that experience, the learning points, the good and the bad, that carry forward into most of our development work we are doing elsewhere…”

CSC MoU is “ready to go”

Hains appeared confident that a new memorandum of understanding on its NPfIT work would be signed imminently. “We’ve got government reviews to complete. That’s imminent. We’ve done a lot of work regarding alignment with the NHS, and the MoU in that sense is ready to go”.

Coalition reviews of CSC contracts a “stamp in the passport”

He referred to the reviews of CSC’s NHS contracts as a “stamp in the passport before we go forward”. He said that creating Lorenzo code is “80% done”, adding: “We’ve got some important work to do and it relates to the clinician use and the very much frontline use of the system, and we’ve been learning with the NHS about the better way that we can deliver that”.

CSC will split Lorenzo into smaller chunks

CSC is to release Lorenzo in smaller chunks. “We’re doing it in ten smaller delivery units rather than two major releases. And we’ll be able to deploy those in a separable, incremented way. There’s no question that that will help digestion as it goes into the NHS”. As for working with early adopters, CSC is going through a “radical change in development”.

Hains said that rather than develop the software and then go through extended testing, “we are bringing the engagement of those lead clinicians and lead trusts upstream right into the requirements, refinement and capture stage, so that will allow us to shorten the time to market for the whole programme”.

No one NHS trust will dominate requirements

CSC is putting “governance into the programme” that means that one single trust doesn’t dominate in its requirements. “We’re getting a more common requirement through an expert user group.”

**

Comment:

The Department of Health gives the impression that it is over a barrel, that it cannot afford to fall out with CSC. But it’s clear to others that it is the Department’s commercial lawyers that are cringing before CSC, asking to be forgiven for being a nuisance. In essence the Department is saying to CSC’s lawyers: “Do with us what you will.”

Can public funds be entrusted to the Department of Health in such circumstances?

Richard Bacon, a Conservative MP on the Public Accounts Committee who has followed the NPfIT for many years, told ComputerworldUK that CSC’s contract should be abandoned. He said that the company “should not be rewarded for failure”. He reacted with disbelief to the suggestion that it would cost more to cancel the contract than complete it.

“I find that idea incredible, staggering,” he said. The Department’s comments could be a negotiating ploy to strengthen its arguments around the continuation of the programme, he added.

He said:

“If it’s actually true that it would cost more to cancel, then it’s a scandal. It would be an enormous indictment of [NHS chief executive] David Nicholson as the project’s Senior Responsible Owner, and of Connecting for Health, which allowed such a deal to be signed. “If it’s the truth, then those officials should be dismissed.”

It’s hard to argue with Bacon’s logic. Indeed we are not sure the Department should be taking a lead in any negotiations with CSC or BT. The NPfIT contracts should be in the hands of the Coalition government, via the Cabinet Office, not the Department of Health’s.

The Cabinet Office represents the taxpayer. The Department of Health’s informatics directorate represents a variety of interests including its own. Those interests seem tied to the continuance of the NPfIT.

*Thanks to David Moss for drawing my attention to the Bloomberg article on CSC’s share price.

Links:

Richard Bacon’s views on NHS IT.

NHS urged to turn off life support for £3bn CSC contract.

NPfIT – Our view on what should happen now.

Why did the NPfIT fail?

Health CIO Christine Connelly hits back at National Audit Office.

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