Can you outsource to cut costs and boost service levels?

By Tony Collins

At an outsourcing conference on 7 July at the Barbican, London, two of the main discussion points will be around these questions:

– What is the role for outsourcing in cutting the public sector deficit?

– Can outsourcing cut costs and improve service levels?

Organisers of the “Delivering cost-effective public services” conference are hoping to have as a speaker  Katharine Davidson, Director, Efficiency and Reform Group, Cabinet Office, who is a linchpin in the Government’s plans for a radical reform of the machinery of central government.  

Davidson has been invited to give a keynote talk on private sector involvement in the way public services are delivered.

Confirmed speakers include:

– Veronica Mansilla, Project Director, Office of Fair Trading

–  Derrick Anderson, Chief Executive, Lambeth Council 

Sue Gregory, National Director, Inspection Delivery, Ofsted 

Further details are here.

 

First major Government mutualisation announced

Cabinet Office minister Francis Maude, has today announced plans for the mutualisation of the 400-strong My Civil Service Pension , which administers the delivery of Civil Service Pension schemes.

This will be the first major mutualisation of a central government service. Mutuals, as they are known, give employees a financial stake in a business whose ownership is shared between the public and private sectors.

The Cabinet Office is also considering the potential for offering a stake to 1.5 million pension scheme members. 

Maude said:  “Too often there’s been a binary choice between the Government providing a service itself, or outsourcing it to the private sector. These choices have historically been driven by a belief that services have to be controlled centrally – with a one size fits all approach that has left little room for innovation.

“We are looking for more innovative ways to structure services. We know that employees who have a stake in their business, or take ownership of it completely, have more power and motivation to improve the service they run. They can also benefit from partnerships with private or voluntary sector organisations which can bring in capital and expertise.

“For the private sector, which can no longer expect the generous margins of the past, tapping the talent of frontline staff to improve efficiency will be a priority. The state too can keep a stake so that taxpayers benefit from the rising value of an improved service.

“I’m impressed with entrepreneurial zeal of Phil Bartlett and his team at My Civil Service Pension. They are pioneering the mutual joint venture model and the Government is committed to ensuring they have they right support to succeed.”

Phil Bartlett, CEO My Civil Service Pension, said: ” By taking the opportunity to mutualise we can better acknowledge our people and their expertise – and access valuable additional resources and expertise in the private sector.

“This new and innovative structure will give us the agility to exploit opportunities in the changing pension landscape and grow our business, and the taxpayer will benefit from the increased value of an improved and more efficient service.”

Mutualisation is being supported by dedicated resource within the Cabinet Office. Earlier this month Maude announced that the entrepreneur and business leader, Stephen Kelly, has been appointed as the Crown Representative to support the creation of mutuals from existing service teams within central government departments.

He also announced the establishment of an Enterprise Incubator to help civil servants create successful enterprises from within central government, including employee and management teams who wish to form mutual companies under the Right to Provide previously announced by the Cabinet Office.

The Government is developing mutual models through the Mutual Pathfinder programme which is supporting 21 existing and potential mutuals with mentoring and advice from experts in employee ownership.

Every department will put in place ‘rights to provide’ giving staff new rights and support to form mutuals.

The Cabinet Office has appointed Professor Julian Le Grand to head the Mutuals Taskforce which will support staff interested in mutualising their service.

Links:

Government signs over civil service pensions to private sector mutual.

 FSA Mutuals public register.

New Local Government Network to hold mutuals conference

By David Bicknell

With the appointment of Stephen Kelly, the former head of Micro Focus, to be the Crown Commercial Representative to head up the creation of the mutuals from existing teams within central government departments, it seems mutualisation momentum is growing.

The latest event to be organised is one by the New Local Government Network, which plans to hold a conference on 14th June in London, where one of the speakers will be Professor Julian Le Grand, leader of the Mutuals Taskforce.

You can find details of the conference here

Cabinet Office’s chief projects troubleshooter – a good choice

David Pitchford, who has been Executive Director of Major Projects within the Cabinet Office’s Efficiency and Reform Group, is to run the Cabinet Office’s Major Projects Authority which has the power to intervene in failing projects.

Last year Pitchford delivered what Lindsay Scott, co-director of Arras People, called an “amazingly frank assessment of the state of major projects within the UK Government”.

Pitchford said failures of government projects were because of:

– Political pressure
– No business case
– No agreed budget
– 80% of projects launched before 1,2 & 3 have been resolved
– Sole solution approach (options not considered)
– Lack of Commercial capability  – (contract / administration)
– No plan
– No timescale
– No defined benefits

The new Major Projects Authority is run as a partnership with the Treasury and approves projects worth more than £5m.  The Guardian reports that the Authority has an enforceable mandate from the prime minister to oversee and direct the management of all large scale central government projects.

It will be able to:

– tell departments if there is a need for additional assurance

– arrange extra support for a project

– take disputes or problems to ministers.

Departments will be required to provide an integrated assurance and approval plan for every project at its inception. The MPA will approve these before the Cabinet Office and Treasury approves projects, and run an assurance process at key stages to assess whether they are on course to deliver on time, within budget and to the required quality.

It will also compile a portfolio of major projects, reporting on them once a year, and work with departments to improve their skills in the management of projects and programmes.

Cabinet Office minister Francis Maude said the Authority is being set up to improve government’s poor record on project delivery.

“The MPA will work in collaboration with central government departments to help us get firmer control of our major projects both at an individual and portfolio level,” he said. “It will look at projects from High Speed Two (for London to Scotland rail services) to the Rural Payments Agency’s ICT system.”

Comment:

Pitchford’s increasing influence on major projects within the Cabinet Office is welcome, especially after the departures of some other reformers who include John Suffolk and Andy Tait.

G-Gloud advocate Andy Tait leaves Cabinet Office for VMware

By Tony Collins

Andy Tait, a passionate advocate of G-Cloud and the radical reform of government IT-related spending, has left the Cabinet Office to join virtualisation and cloud specialist VMware.

Last year Tait, then Deputy Director, G-Cloud, Apps Store and Data Centre Consolidation at the Cabinet Office said:

“There are 90,000 servers across central government alone and they run at at less than 10% utilisation.”

His departure from the public sector follows that of some other outspoken advocates of innovation and radical reform of central government, including John Gardner, Chief Technology Officer at the Department for Work and Pensions who left to become managing director, international at Spigit, and John Suffolk, Government CIO.

Tait joins VMware as Head of UK Public Services Strategy. He says public sector organisations can take advantage of virtualiation and the cloud to make dramatic savings.

Andy Tait’s responsibilities are moved to Chris Chant, who is Director for DirectGov and Digital Engagement.

VMware hires G-Cloud man.

Businesscloud9.

VMware names new public sector head.

12 “agile” principles

By Tony Collins

The  principles (below), which are largely managerial,  highlight the challenges for government departments and suppliers of adopting agile principles for major IT-related projects such as Universal Credit.

Some in government have said that agile can deliver systems to support political policy quickly, say within two years –  but that’s far too long. Under agile principles, working systems should be delivered between two weeks and two months.

 I particularly like the tenth principle, which defines simplicity as the art of maximizing the amount of work not done; in other words not gold-plating requirements.

The second principle is also especially important for government IT-enabled projects and programmes: it states that changing requirements are welcome, even late in development.

The principles are from the excellent website of project manager Robert Kelly.

12 Principles behind Agile
 
  1. Our highest priority is to satisfy the customer through early and continuous delivery of valuable software.
  2. Welcome changing requirements, even late in development. Agile processes harness change for the customer’s competitive advantage.
  3. Deliver working software frequently, from a couple of weeks to a couple of months, with a preference to the shorter timescale.
  4. Business people and developers must work together daily throughout the project.
  5. Build projects around motivated individuals.  Give them the environment and support they need, and trust them to get the job done.
  6. The most efficient and effective method of conveying information to and within a development team is face-to-face conversation.
  7. Working software is the primary measure of progress.
  8. Agile processes promote sustainable development.  The sponsors, developers, and users should be able to maintain a constant pace indefinitely.
  9. Continuous attention to technical excellence and good design enhances agility.
  10. Simplicity –the art of maximizing the amount of work not done– is essential.
  11. The best architectures, requirements, and designs emerge from self-organizing teams.
  12. At regular intervals, the team reflects on how to become more effective, then tunes and adjusts its behavior accordingly.

Kelly’s contemplation – Robert Kelly’s blog

The Institute foir Government recently produced some case studies from its System Error report.

Report says Maude to unveil incubator fund for mutuals

By David Bicknell

According to a report in the Independent yesterday, the Cabinet Office minister, Francis Maude, will today unveil new services, including an incubator fund, to help thousands of public-sector workers take over government services via mutuals.

Maude has reportedly appointed Stephen Kelly, the former head of Micro Focus, to be the Crown Commercial Representative to head up the creation of the mutuals from existing teams within central government departments. Kelly, who has  advised government on IT projects, will lead the work to ensure the  mutuals are set up to attract the right commercial partners – and to  acquire appropriate funding so they can become successful stand-alone businesses delivering public services.

The Cabinet Office is also set to establish an enterprise incubator to help civil servants create successful enterprises from within government, allowing employee and management teams to form mutual companies under the Right to Provide, which has already been announced. The teams will be able to access expertise and finance from a private-sector partner in a joint venture.

The Independent also reported that Maude is setting up a mutuals programme team to work with government departments to support the new mutuals and to ensure that public services continue.

Potentially, thousands of public-sector employees will be given a significant stake in these organisations, plus the chance to shape the way services are delivered, and also how they are run and how to reward themselves.

Maude’s announcement, if it is made today, will keep up the momentum on mutualisation. With no significant announcement in the Budget, and reports that the planned Public Services White Paper had been put back to May, there were some indications that mutualisation progress had slowed down or stalled.

Government ICT Strategy – industry reactions

By Tony Collins

The Government ICT Strategy, which was published yesterday, has, in general, been welcomed.

Conservative MP Bernard Jenkin, who chairs the Public Administration Select Committee, which is investigating Government IT,  said the ICT Strategy “doesn’t contain any  surprises, dramatic new truths, or revolutionary concepts that weren’t already in the public domain”.

But Francis Maude, the Cabinet Office minister who is responsible for reforming central government, said that the report is “incredibly readable” and a “lapidary formulation of some  important concepts for the future”. Lapidary he defined as “precisely crafted”.

Martyn Hart, chairman of the National Outsourcing Association welcomed the strategy document’s promise to end the “oligopoly of large suppliers that monopolise its ICT provision”.

Hart told Channel Pro that the Government is tied into contracts with large suppliers, which could mean that it struggles to get the best possible service.

Simon Pamplin, director, pre-sales, UK and Ireland of networks specialist Brocade, said the Government’s ICT Strategy should be broadly welcomed by the UK IT industry.

He told Channel Pro it signals a push by government to consolidate its datacentre, network, software and assets as well as migrate to the cloud.

The Guardian newspaper said the ICT Strategy sets a fast pace.

Bill McCluggage, the government deputy chief information officer is quoted in The Guardian as saying:  “It’s the first time that we have a strategy with defined action points and delivery times from six to 24 months.

“We believe that it can all be delivered in two years, while for previous ones it has usually been four to five years.”

Public Service has anonymous quotes from Intellect member companies.  These are some:

“The strategy is much better written than past ones. The theory is great, but at the end of the day it’s about how you make this stuff work.”

**

“Overall the document takes re-use as a central theme and practices what it preaches; much of the content is re-used from past strategies and announcements.”

**

“The strategy is really aspirational, which is good to see. What I want to know is – where will the penalties lie if they don’t deliver?”

**

“Who owns the key actions in the action plan?”

Intellect’s Director General John Higgins said the ICT Strategy “marks a milestone in the government’s reform agenda, with a fresh look at ICT as an enabler of better services for the public”.

He added that the strong leadership in place at the Cabinet Office “ticks one crucial box” and “now it’s time to get down to business”.

Some of the strategy’s intentions will be mandated and standards, contracts and opportunities will be more ‘open’.

“Intellect is pleased to see that the strategy reflects a number of ideas that technology businesses have long seen as vital to delivering successful IT projects. These include:

  • the acknowledgment of the potential savings that can be achieved by consolidating data centres, moving to cloud computing and implementing a government apps store. This has the potential to save more than £2bn and radically change how government does IT
  • plans for a streamlined procurement process that focuses on outcomes – this should lead to better project results and open up opportunities to a host of suppliers, especially SMEs
  • the plans to keep Senior Responsible Owners at the helm of projects until an “appropriate break point” – ensuring continuity and a clearer focus on the end game

Mark Taylor, CEO of open source system integrator, Sirius IT, told ComputerworldUK:  “They’ve made some cosmetic changes but it’s still not really an action plan. It’s a policy that needs teeth.”

The Institute for Government, which recently published a report System Error – fixing the flaws in government IT – said the ICT  Strategy is welcome but the decision not to have an independent overall CIO is “still a concern”.

It said that the Institute’s suggestions on ‘agile’and ‘platform’ feature in the new ICT strategy, which promises that Government will “apply agile methods to procurement and delivery to reduce the risk of project failure” and introduce a “common ICT platform”.

Ian Magee, senior fellow at the Institute for Government and co-author of System Error, said the government had made welcome commitments but said in time it should reconsider not having an independent CIO. He said:

“Too many IT projects are locked in too early, which often wasted time and money when requirements and political priorities changed.

“The new strategy supports our view for a far more flexible approach to IT procurement and delivery, while also ensuring the benefits of commoditisation and standardisation are captured across government.

“The new ICT strategy also emphasises the importance of adopting a stronger, central platform approach, which we support. However, to make this work we believe that it is vital that the Government CIO operates independently of departmental interests and is seen to do so. This strategy will eventually demand a truly independent Government CIO, which we currently do not have”

Challenge for the civil service

He  also emphasised the challenges of turning the strategy into reality.

“Our research showed that implementing many of these changes will be extremely challenging. For example, the transition from a traditional method of project management to an agile approach requires a change of organisational culture and the acquisition of new skills as well as totally rethinking many of the traditional, linear procurement processes.

“This will take time, and require a concerted effort from the government CIO and CIO Council.”

Government Dragon’s Den for SMEs?

By Tony Collins

The Cabinet Office is enabling SMEs to pitch ideas to civil servants on how they could save money or do things more efficiently.

The Cabinet Office says its Innovation Launch Pad is part of a series of measures to make it easier for SMEs to work for government.

SMEs can submit their business ideas until 22 April.

The best ideas will be picked by a community of civil servants and, “after intensive mentoring from some of Britain’s foremost entrepreneurs, those that demonstrate the highest impact will be invited to present their ideas at a ‘Product Surgery’  in the summer”, says the Cabinet Office.

Downing Street will also host a reception for those with the best ideas. The aim is to “stimulate new open competitions in Government markets in which these suppliers will be able to participate”.

Cabinet Office minister Francis Maude said:

“SMEs can offer Government more innovative, more flexible and more cost effective products and services, but we know they often find it difficult to bring their ideas to our attention.

“Through the Innovation Launch Pad, we will get better value for Government and support small business. Government needs more online engagement like this.”

Timetable:

28th March – 22nd April – Business Idea Submission Phase

During the first phase SMEs are invited to enter business ideas. Anyone who has registered will be able to comment on ideas submitted. SMEs will be able to modify their ideas at any time during the first phase in response to comments received.

23rd April – 29th April – Final Comment Phase

Time for comments on ideas submitted near the end of the submission window.  During the final comments phase no new ideas will be accepted.

2nd May-27th May – Voting Phase

Civil servants will vote on ideas using the voting options on the site.  Only those who have registered using legitimate, verified civil service email addresses can vote.

30th May – 1st July – Selection & Presentation Phase

The final selection of ideas will take place and mentoring will be undertaken with those SMEs submitting the best ideas. They will then work with the Cabinet Office’s team of volunteer entrepreneurs on preparing their final presentations for the Product Surgery.

July

Those ideas that demonstrate the highest impact will be invited to present their ideas at a Product Surgery in the summer. Downing Street will host a reception for those with the best ideas.

Links:

Innovation Launch Pad.

FAQs and the “How it Works” pages.

Public Services White Paper Delayed until May

By David Bicknell

Earlier in the week, I wondered whether we would hear anything in the Budget that night offer some clues as to how mutualisation might develop, given that there is much anticipation from interested parties.

Well, we didn’t hear anything from George Osborne. And the reason for that is it looks as if the proposed White Paper on Public Services due to coincide with the Budget has been delayed until after the local elections on 5th May.

There’s some more background on the delay here

The suggestion is that there is a continuing debate over  how the breaking up of public services – an industry valued at an estimated £79bn – will benefit service users, the taxpayer, and employees. Another theory put forward – but yet to be confirmed – is that the White Paper will lean more heavily towards outsourcing and away from localism.