Cornwall Council outsource – procurement process is halted

We’ve been keeping up to date with the Cornwall outsourcing partnership story over the last couple of months. This week, a full council meeting ended with a vote against the proposal, followed rapidly by the resignation of the council leader, Alec Robertson, and a number of the other “Cabinet “ members who supported the idea.  You can read more here.

We won’t go through all the details again, other than to say the venture seemed ill-thought through, particularly given the failure of a fairly similar venture up the road in Somerset (the Southwest One JV). And the Cornwall Cabinet over-ruling the full council a couple of months ago struck us as simply undemocratic, whilst the projections of 500 new jobs seemed hopeful to say the least.

Whilst the project isn't formally dead yet, yesterday CSC announced they have withdrawn from the process, leaving BT as the only bidder. That is obviously no basis for a competitive final tendering stage to drive value, and it looks like the initiative is dead in the Cornish water. (And well done to Dave Orr and Tony Collins who did a lot to educate the councillors to some of the questions and issues that weren’t being exposed by the proponents of the scheme).

There’s now quite a track record of failed attempts to do dramatic mega-outsourcing in the local authority world. Suffolk’s plans a while ago ended in resignations; Milton Keynes pulled out of a deal recently; Barnet has been another council with problems since they announced plans to radically increase outsourcing.

Yet there’s no doubt councils need some new ways of doing things, and I’m not starry eyed about the competence and capability of many of our public organisations. So I would hope that these setbacks don’t lead to a wholesale rejection of private sector involvement, although my personal view is that these huge deals aren’t generally the best way of doing things.

So we really need someone to take a dispassionate look at what is working and what isn’t (or hasn’t) in local government outsourcing. There must be very useful and relevant lessons learnt, both positive and negative, that should be extracted and communicated. I’m not sure who would do this in the absence of the Audit Commission – are the National  Audit Office ready to take this on yet?

I don’t know, but it feels like something that needs doing, sooner rather than later.

Voices (4)

  1. Cassandra:

    Robertson was removed from office following a vote of no confidence – which is very different to a resignation!

  2. Dave Orr:

    The Guardian thinks that big monolithic outsources in the public sector are falling out of favour (the private sector having already been there, done that & “got the T-shirt” e.g. Sainsburys and Accenture, ASDA, AXA etc):

    http://www.guardian.co.uk/society/patrick-butler-cuts-blog/2012/oct/18/tory-council-privatisation-cuts-dilemma-cornwall-outsourcing?newsfeed=true

    “At risk of over-simplification, it seems there are those, like Robertson, who appear to believe with revolutionary fervour that the age of austerity demands There Is No Alternative to the bold, mass business-isation of council services; and those, like Currie, who appear to have higher risk thresholds, a more cautious assessment of the potential efficiency gains of outsourcing, and more pressing concerns about accountability and political control of services.”

    This this illuminating article by John Tizard “No outsourcing bonanza in local government”, a former Capita executive, now an academic and consultant, explains why, for a whole range of reasons, many of them invoked by opponents of the Cornwall plan, local government’s appetite for grand, monolithic outsourcing projects and joint ventures is diminishing.

    http://opinion.publicfinance.co.uk/2012/09/no-outsourcing-bonanza-in-local-government/

    “My own experience of working and speaking with local authority political and executive leaders leads me to believe that the appetite for major outsourcing may be less than the Localis survey suggests. There are several reasons for this.

    The general view seems to be that the evidence of cost savings, particularly when service quality is taken into account, has in fact been mixed when services are outsourced; and, what is more, the public sector is generally more efficient than it was when outsourcing was being introduced and major savings were being made. Consequently, outsourcing offers smaller if any financial benefits than hitherto.

    Many local authorities are desperate to make savings quickly and outsourcing can often appear ‘less’ attractive given the cost of procurement and the fact that savings may not be realised for several years.

    At a time of unprecedented uncertainty, politicians and chief executives are worried about locking elements of their budgets into long-term contracts that have historically proven so inflexible and expensive to change or re-negotiate.

    There is an increasing view across the political spectrum that the public sector and the services it either delivers or procures should add social value and wider public value. Indeed, the Social Value Act now places a duty on public bodies to take this into account when procuring goods and services. Inevitably, businesses do not always score as highly on a social value count as the third and social sectors or, indeed, the public sector itself.

    There is a view too that there is a values problem in some parts of the private sector. The City bonus culture and the banking scandals taken together with the recent reported experiences, performance and behaviours of some outsourcing companies have also led to a questioning of the efficacy and efficiency of businesses being involved in public service delivery. Political leaders will be very aware of and concerned about public opinion when considering service delivery models.

    I am not suggesting for a moment that there will not be more outsourcing to the business sector. Rather, I think, it likely that such outsourcing will be on a different basis to much that has happened before – and without the scale of growth that some had expected.”

  3. Rob:

    “There is nothing worse than a sharp image of a fuzzy concept”. (Ansel Adams)

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