By Tony Collins
In a blog post on ComputerworldUK.com I have asked whether CSC could use 200 UK jobs as a lever in its talks with the Department of Health and the Cabinet Office on a new NPfIT deal (towards end of the blog post).
By Tony Collins
CSC has told investors that its discussions with the UK government on an interim agreement for deploying Lorenzo to the NHS are “continuing positively”.
CSC says that an agreement could commit a certain number of NHS trusts to take Lorenzo. Some of those trusts would be named in the interim agreement and the remainder within six months. CSC refers to them as “committed named trusts”.
[Such a legal commitment for named NHS trusts to take Lorenzo may run counter to the post-NPfIT coalition philosophy of giving trusts the freedom to buy what they want, when they want, and from whom they want. The named trusts might have indicated on a DH questionnaire a wish to take Lorenzo but an agreement between the government and CSC would commit the trusts irrevocably, or the DH could have to pay CSC compensation for non-deployment.]
CSC says the deployed product would be categorized as “base product” or “additional product” for pricing purposes. The DH would commit money to the base product. Other funds would be available centrally available for “additional products, supplemental trust activity and local configuration”.
The DH would give CSC a structured set of payments following certain product deliveries, as well as additional payments to cover various deployments for the named trusts and payments for work already performed.
If the government does not sign a new deal, and allows CSC’s existing contracts to run down until they expire formally in 2015, this could keep further NPfIT-related costs to the taxpayer to a minimum. But it risks legal action from CSC, which says the NHS contract is enforceable and that the NHS has no existing right to terminate the contract, unless for convenience (which is unlikely).
If the government had terminated CSC’s contracts for its convenience (as opposed to alleged breach of contract) it would have had to pay CSC a termination fee capped at £329m as of 29 June 2012. CSC would also have been entitled to compensation for the profit it would have earned for the 12 months after the contract was terminated.
If the contract is not terminated, a new deal not signed, and no legal action is taken by either side, the amounts the UK government would have to pay CSC are likely to be minimised. It is in CSC’s interests to maintain and enhance Lorenzo for those NHS sites that have deployed it.
So will the government sign a new deal with CSC at least to reduce the risks of CSC legal action? Or could the government hold out not signing any agreement until expiry of the contracts in 2015 on the basis that CSC has not delivered all it promised?
If a new deal is signed – and CSC indicates that an agreement is likely – the government may face accusations that it has broken its undertaking to dismantle the NPfIT.
David Camerson intervened personally to have the Cabinet Office’s Major Projects Authority look closely at NPfIT commitments. His “efficiency” minister Francis Maude is likely to resist the signing of any new agreement
But will CSC accept the government’s refusal to sign a new deal, when such a deal could enable CSC to recover at least some of the $1.485bn (£0.95bn) it recorded as an NPfIT contract charge in the third quarter of 2012?
Posted in CSC, e-health, Government IT, health, health records, NHS, npfit, supplier relationships
Tagged Cabinet Office, CSC, Efficiency and Reform Group, Francis Maude, government IT, NHS, npfit
Tony Collins
John Collington has resigned as Government Chief Procurement Officer after little more than a year in the post.
Collington’s resignation is reported by Peter Smith of Spend Matters. Smith says that Collington is to become Chief Operating Officer of Alexander Mann Solutions, a leading “Recruitment Process Outsourcing” firm.
“We might have expected consultancy, or software, but Collington has been involved in shared services in recent months and has a track record in outsourcing from his time at Accenture and I believe even before that.
“He’s got strong operational skills which should play to the COO role …” says Smith.
“Francis Maude gave Collington a glowing testimonial, as we might expect…But then Cabinet Office have to spoil it by talking nonsense …”
The Cabinet Office said Collington has reduced overall spend on goods and services from £51bn to £45bn and spend with SMEs is estimated to have doubled to £6bn, along with a 73 per cent reduction in spend on consultancy and contingent labour.
“We accept he has helped to reduce spend but, given he has no budget of his own, it’s a bit much to say he ‘has reduced overall spend’…” says Smith.
“And as Cabinet Office themselves know very well, they have no clue whether spend with SMEs has doubled, given the robustness (or lack of) around the data …”
It appears that Collington was a believer in incremental reform. He was not a Chris Chant who spoke of the need for radical reform. Chant argued with force that high costs, present ways of working and the dominance of a few major suppliers were unacceptable.
Collington reported to Ian Watmore who was Permanent Secretary at the Cabinet Office. Watmore has also resigned.
**
Nigel Smith, formerly head of the Office of Government Commerce [now subsumed into the Cabinet Office], was one the harshest critics of the way government bought goods and services.
Smith said in June 2010 that up to £220bn – nearly a third of everything government spent – was on procurement. But there were 44,000 buying organisations in the public sector which bought “roughly the same things, or similar things, in basic commodity categories” such as IT and office supplies. There were 42 professional buying organisations in public sector.
He said there was “massive duplication” of activity. We wonder how much has changed since then.
Posted in capacity building, procurement, reducing cost strategically
Tagged Accenture, Cabinet Office, Francis Maude, outsourcing, procurement
By Tony Collins
Cabinet Office minister Francis Maude announced the publication this afternoon of the civil service reform plan which he said contains “nothing dramatic but when implemented will represent “real change”.
He told MPs there will be a cross-government management information system put in place by October which enable departments to be held account. He did not say how. He said that management information in central government is “poor”. Some other points in Maude’s speech in the House of Commons:
– A smaller civil service than at any time since World War Two – but he did not says whether outsourced civil servants were included in his figures.
– There would be no more than eight management layers in the civil service and fewer where possible.
– Shared services should be the norm.
– A “key goal” will be to give civil servants the IT they need to do their jobs properly.
– Former accounting officers can be called back to give evidence to the Public Accounts Committee.
– The Cabinet Office will consult the Civil Service Commission on how ministers can be more involved in the appointment of permament secretaries. Maude told MPs that secretaries of state should have the final say on appointments, after the involvement of the Commission.
– Ministers can appoint senior officials for time-limted executive roles.
– More civil servants need more financial knowledge. There are “serious deficiencies in managing change” said Maude.
– There are “serious gaps” in project management capability. Officials will seek to identify what skills are missing.
– Civil servants do not believe their managers are not strong enough in leading and managing change. Policy skills have been rated as more important than operational skills. In future some permanent secretaries will need at least two years experience in a commercial and operational role. There will be an equal balance in future between senior officials with skills in policy advice and those with operational experience.
– Poor performance will be “rigorously addressed”. There will be a civil service appraisal system in which the bottom 10% will have to prove they should stay in their jobs.
– Permanent secretaries wll have their objectives published.
– Information on the performance of major projects will be unprecedented.
Maude said the reform plan is a first stage and part of a policy of continuous improvement.
Edward Leigh, former chairman of the Public Accounts Committee said it was time that permanent secretaries were chosen for their implementation and operational abilities rather than their ability to write a memo in Latin.
Posted in Campaign4Change, change management
Tagged Cabinet Office, Francis Maude, government IT