Coalition to focus on mutualisation instead of outsourcing for public services delivery

By David Bicknell

A recent article on the BBC website has suggested that the government is scaling back plans to use the private sector to deliver public services and placed a greater focus on mutualisation.

According to James Landale, the BBC’s deputy political editor, documents suggest ministers have decided that the “wholesale outsourcing” of public services to the private sector would be politically “unpalatable”.

Instead, ministers are planning to increase the role of charities, social enterprises and employee-owned “mutual” organisations.

Outsourcing was believed to have been a key element of the Coalition Government’s drive to cut costs and reduce the UK’s budget deficit. But the article says, the shift in policy will raise questions about whether the government can make the savings it has promised – or deliver the services it is committed to – just by using charities and mutuals.

More will become clear when the Open Public Services White Paper is due to be published later this month.

Embedded sustainability as a driver for competitive advantage

By David Bicknell

I cam across an interesting piece on the Guardian’s Sustainable Business website the other day all about the concept of ’embedded sustainability’ being used as a driver for competitive advantage.

The article, which is based on a new book by Chris Lasslo and Nadya Zhexembaveva, argues that that the incorporation of environmental, health and social values into core business activities (with no trade-offs in price or quality) is the answer for enduring profit and growth.

It adds that such embedded sustainability makes sense, leading to organisations having a “more decentralised handle on efficiency in its broadest sense, an in-depth awareness of environmental and social trends and related risks and opportunities, and may even lead to innovation and experimentation that encompass more bottom-line benefits.”

Moreover, it goes on, embedded sustainability offers employees and stakeholders new opportunities to find meaning in organisational life.

I guess the idea of embedded sustainability for competitive advantage appeals more to the private sector than the public sector, but in these times of mixed public/private sector/mutualised relationships, perhaps the concept has mileage here too.,

A sign that Cabinet Office reforms will alter behaviour of major IT suppliers

 

By Tony Collins

There are signs that a long-running £700m dispute between Fujitsu and the Department of Health over the NHS IT programme will reach a settlement without a court hearing.

 A settlement, it should be said, will be due largely to reforms of central government initiated by the coalition and Francis Maude, Cabinet Office minister.

Maude’s reforms mean that major suppliers to the government are now managed centrally, at “Crown” level, not contract by contract. So a dispute with one department can affect a supplier’s relationship with government as a whole.

That didn’t happen before, when each department managed separately its relationships with major suppliers.

It’s likely now that Fujitsu will want to improve its relationships with government, particularly since the:

– Tsunami in Japan which has weakened the company’s operations.

– premature ending of Fujitsu’s £330m desktop contract with the Department for Work and Pensions.

The wish for improved relations with government makes it more likely it will reach a settlement over its withdrawal from the National Programme for IT in the NHS – NPfIT – in 2008. Fujitsu was said to have been seeking £700m after its departure. It’s now thought to be seeking a settlement without any formal proceedings.

Comment

It has long been obvious that government should be a “single customer” to its major IT suppliers. Only now is that happening, thanks to the coalition’s reforms. It means that, for the first time in living memory, it’s the government – the customer – that is in control of its major IT suppliers, and not the other way round. 

Few of the top 20 IT and services suppliers to government will now be willing to carry on a dispute with a department when it could cost lost contracts with other departments.

Get on your ‘electric’ bike – a new environmental approach to tackling commuter transport

By David Bicknell

From an environmental point of view, one of the areas that government is going to have to get to grips with is transport with respect to carbon emissions.

It’s well-documented in this post by ecoXchange on its greeninblackandwhite blog. The piece discusses why the focus of central government and the Mayor’s Office in London is only on four-wheeled electric cars, and why these authorities are failing to take on board the benefits  of two wheeled electric bikes, which might be the ideal solution to the likely transport problems facing visitors to the Olympics in 2012.

There’s an economic aspect here too. Rising costs, for business or individual use are a major headache – whether transporting product or people. Overall transport costs have risen by nearly 25% in the last year and are likely to rise by another 30% or more, over the next three years. And that means increased transport subsidies from companies to their commuting employees.

Electric or electric/hybrid cars may help reduce emissions, but will do nothing in terms of reducing congestion, over-crowding or journey times. This debate urgently needs to go beyond the recharging electric cars argument.

Greenpeace report challenges the Cloud industry on the environment

By David Bicknell

Interesting report from Greenpeace on what it describes as “the energy choices that power Cloud Computing.”

“How dirty is your data?” is claimed by Greenpeace to the first ever report on the energy choices made by IT companies including Akamai, Amazon.com (Amazon Web Services), Apple, Facebook, Google, HP, IBM, Microsoft, Twitter, and Yahoo, and it says, highlights the need for greater transparency from global IT brands on the energy and carbon footprint of their Internet infrastructure.

In its highlights from the report, Greenpeace suggests:

• The $1 Billion (USD) Apple iData Center in North Carolina, expected to open this spring, will consume as much as 100 MW of electricity, equivalent to the electricity usage of approximately 80,000 homes in the U.S. or over a quarter million in the E.U.. The surrounding energy grid has less than 5 percent clean energy, with the remaining 95 percent coming from dirty, dangerous sources like coal and nuclear.
• Both Yahoo! and Google seem to understand the importance of a renewable energy supply, with Yahoo! siting most of its data centres near sources of renewable energy, and Google is directly signing power purchasing agreements for renewable energy and investing in solar and wind energy projects in many US states as well as Germany. Their models should be employed and improved upon by other Internet (“cloud computing”) companies.
• Facebook, one of the fastest growing and most popular destinations on the web, is unfortunately on track to be the most dependent cloud computing companies on coal powered electricity with over 53 percent of its facilities estimated to rely on coal to power the Facebook cloud.

In its executive summary, Greenpeace says: “Information Technology (IT) is disruptive. Largely for the better, IT has disrupted the way we travel, communicate, conduct business, produce, socialise and manage our homes and lives. This disruptive ability has the potential to reduce our dependence on dirty energy and make society cleaner, more efficient and powered renewably. But as we applaud the positive, visible impacts and measurable, game-changing potential of IT, we also need to pay attention to what’s behind the curtain.

“The ‘Cloud’ is IT’s biggest innovation and disruption. Cloud computing is converting our work, finances, health and relationships into invisible data, centralised in out-of-the-way storage facilities or data centres. This report seeks to answer an important question about this trend, currently underway across the globe: As Cloud technology disrupts our lives in many positive ways, are the companies that are changing everything failing to address their own growing environmental footprint?”

Key learnings from the report are that:

•Data centres to house the explosion of virtual information
currently consume 1.5-2% of all global electricity; this is growing
at a rate of 12% a year.

•The IT industry points to cloud computing as the new, green
model for our IT infrastructure needs, but few companies provide
data that would allow us to objectively evaluate these claims.

•The technologies of the 21st century are still largely powered by
the dirty coal power of the past, with over half of the companies
rated herein relying on coal for between 50% and 80% of their
energy needs.

•IT innovations have the potential to cut greenhouse gas
emissions across all sectors of the economy, but IT’s own
growing demand for dirty energy remains largely unaddressed by
the world’s biggest IT brands.

•There is a lack of transparency across the industry about IT’s own
greenhouse gas footprint and a need to open up the books on its
energy footprint.

•In emerging markets, where there is limited reliable grid electricity,
there is a tremendous opportunity for telecom operators to show
leadership by investing in renewable energy, but many are relying
on heavily polluting diesel generators to fuel their growth.

•Data centre clusters (Google, Facebook, Apple) are cropping up
in places like North Carolina and the US Midwest, where cheap
and dirty coal-powered electricity is abundant.

•IT companies are failing to prioritise access to clean and
renewable energy in their infrastructure siting decisions.

•Of the 10 brands graded, Akamai, a global content distribution
network, earned top-of-the-class recognition for transparency;
Yahoo! had the strongest infrastructure siting policy; Google &
IBM demonstrated the most comprehensive overall approach to
reduce its carbon footprint to date.

•Across the board, IT companies have thus far failed to commit to
clean energy in the same way they are embracing energy
efficiency, which is holding the sector back from being truly
green

The Guardian view of mutualisation

By David Bicknell

There is an interesting Guardian piece on mutuals published today. It features some quotes from  Campbell McDonald, a director of the employee-owned trust Baxi Partnership, which is working with some of the public sector organisations now setting up mutuals.

“If you are going to do it, there has got to be a set of things that are in place,” he says. Strong leaders will be needed to steer the new organisations, as well as support from government and from those commissioning services at a local level. But mutuals could transform services, he believes. “The prize is that you see big gains in productivity and huge rises in employee motivation. That tends to trigger innovation and will free up the organisation to make things happen more quickly.”

 “If any of this is going to succeed on scale, we cannot allow new organisations to be set up to fail,” he adds. “The mutual option is not a silver bullet, and without a decent number of success stories to point to in two years’ time this movement will struggle to really get off the ground. The most worrying factor right now is that with so many groups of employees considering a mutual way forward, a huge number are still struggling to get the right support and advice at the right time to give them the best chance of survival.”

Two events in May: Mutualisation Briefing and the Trustmarque TE2011 Customer Conference

By David Bicknell

There are a number of public sector events coming up in May. Here is advance warning of a couple that the Campaign4Change has come across.

This one, by Westminster Briefing on 12th May, in Westminster, the latest in a series of briefings  all about mutual ownership models in public services,  discusses the issues for local authorities, employees and communities and has invited the head of the government’s mutuals taskforce, Julian Le Grand, to take part.

The Trustmarque TE2011 Customer Event, ‘Efficiency Through Technology’, on Friday 20th May at the Grand Connaught Rooms in London, features two keynote speakers, championer for British Business and former CBI Director-General Lord Digby Jones and author and futurologist Richard Watson.

The event will provide the first opportunity to discuss with Trustmarque and see demonstrations of some new Cloud based services it is offering, and will also feature  informative seminars,  and provide practical advice for customers. One of the highlights will be a Q&A session with Lord  Jones and a selection of Trustmarque customers, setting the scene for a discussion around some of the key issues arising from the IT industry at present.

Audit Commission to be mutualised?

By David Bicknell

According to an article on the Guardian’s Public Leaders Network, the Audit Commission may be mutualised.

The article suggests that the Communities and  Local Government department has yet to decide on the direction of the commission once it is scrapped. but some experts believe that making the local government watchdog into a competitive mutual should be the preferred option for dealing with local government audits. Others, however, think a mutualised commission could fail to compete against the private sector.

“There are advantages in mutualisation,” says Olivier Roth, a researcher at the New Local Government Network thinktank. “The Audit Commission has contacts with every single local authority and with the comprehensive performance and area assessments, its has experience with audit regimes. It currently audits 70% of local authorities and already has a gigantic market share.”

Recent interviews carried out by the NLGN of senior managers and employees at the Audit Commission, including managing director, Gareth Davies, found broad support for mutualisation.

Other options include selling off the commission as a whole or in parts to private companies.

Cambium report examines public sector attitudes to low carbon and sustainability, while targeting CRC innovation opportunities for suppliers

By David Bicknell

I attended the launch yesterday of a new report targetting the sustainable innovation opportunities offered by the CRC Energy Efficiency Scheme.

The report, by sustainable innovation specialist Cambium, provides a  systematic analysis of the financial and reputational exposure of the 2,770 so called ‘participants’ in the CRC Scheme. This reputational aspect is important with the first performance league tables due out in six months time, in October.

The report, which was launched at Intellect in London with attendance from Intellect, hosting specialist Rackspace and the UK Centre for Economic and Environmental Development (UKCEED) is aimed primarily at suppliers of innovative technologies that can help the organisations affected by this legislation to reduce their likely tax bills, cut energy use and protect their reputations as well as be able to pomote themaselves as responsible businesses.

Cambium believes the report will be of use to trade bodies and CRC Participants, policymakers and public stakeholders, and investors.

The report features an index which examines public and private sector participants for a range of sustainability and energy reduction related indicators and categorises them as leaders, early majority, late majority or laggards within their sector, providing a measure of their likelihood to invest in and adopt energy saving or other innovative technologies, supporting sustainable economic growth. 

The Cambium study identifies and explores the significant differences between the public and privat sector attitudes to a “carbon” and “social awareness” indicator and makes recommendations for better targeting of the market opportunity by suppliers.

There is a release available giving more details here and you can get a copy of the report here

Six entrepreneurs to coach SMEs for Government “Dragons’ Den” panel

 

By Tony Collins

Six entrepreneurs will coach SME representatives before they present their ideas to a Government “Dragon’s Den” panel of officials.

The coaching will help chosen SME representatives improve their  proposals for reforming parts of central government.

Francis Maude, Minister for the Cabinet Office, said the entrepreneurs will coach representatives from SMEs that have submitted successful ideas for innovative and cost-saving Government goods and services to the online Innovation Launch Pad.

The Innovation Launch Pad  opened on the Cabinet Office website in March and closes on 22 April.  SMEs are invited to submit proposals – up to 500 words – on how their goods and services could help save the Government money or deliver better outcomes.

Civil servants will vote for ideas with the greatest potential. The chosen SME representatives will then present their ideas to the Dragon’s Den-style panel of senior government business officials, following coaching by the entrepreneurs.

The entrepreneurs are:

Jon Moulton, founder and managing director of private equity firm Better Capital and member of the British Venture Capital Hall of Fame

Mike Lynch OBE, co-founder of a software start-up that is said by the Cabinet Office to be the UK’s largest software company Autonomy. He is also a trustee at NESTA

Hermann Hauser, CBE, founder of over 20 technology companies including Acorn Computers, who has an honorary CBE for ‘innovative service to the UK enterprise sector’

– Sherry Coutu, founder of two successful businesses in the financial services industry and investor in 35 businesses, and rated as the ‘top CEO mentor in Europe

David Cleevely, co-founder of Abcam and founder of Analysys and Chairman of Cambridge Angels

Stephen Kelly, former CEO of Micro Focus and the Government Crown Representative for mutuals.

The chosen businesses will be invited to a reception at 10 Downing Street.

Stephen Allott, one of nine Crown Representatives appointed by the Cabinet Office to drive procurement savings across Whitehall, told The Telegraph that the initiative would raise the profile of the businesses within Whitehall, although there were no guarantees of contracts at the end of the process,

He said departments were taking the Government’s pledge to acquire more goods and services from small firms seriously.

Francis Maude said: “This Government does not believe there is a one size fits all approach to delivering services.  That is why we want to make it easy for small businesses to tell us their ideas, as they will have a vital role to play in helping us to find new, innovative and more cost effective ways to improve services to the public.  

“We also believe that supporting small business will help to kick-start growth in the economy.  As part of this, we are doing everything we can to open up business to SMEs.

“We have committed to publishing all contracts online for business to see, got rid of the bureaucracy to allow new companies to supply government and appointed Stephen Allott to represent SME interests in Government.

“Our Innovation Launch Pad means that all SMEs now have the opportunity to present their business solutions to us. I am delighted that such senior business figures have volunteered to help us to get the very best out of small business for Government.”

Stephen Allott said: “I am certain that there is substantial opportunity for Government to save money and deliver a better service through much greater use of SMEs.  If you’re an SME with a product or service that could save money, use the Innovation Launch Pad to tell us about it.”

Entrepeneur  Sherry Coutu said:

“The Government buying more goods and services from SMEs is key. One pound of a customer’s money is worth ten times the amount of investment money to a small business.

“Given that 54 percent of jobs are created by six percent of small, fast-growth companies, this is excellent for everyone as small fast growing businesses will continue to drive the economy.”

Jon Moulton said:

“Small businesses in the UK have a fantastic reputation for innovation. The Innovation Launch Pad is a real opportunity for SMEs to showcase their proposals to Government.”

The Innovation Launchpad is here.