From Hubris to High Court (almost) – The Story of Southwest One (Part 1)

(We are delighted to have finally persuaded Dave Orr to write for us, and as a Somerset citizen, he will be laying out the fascinating story of Southwest One over the next few weeks - a story that everyone involved in outsourcing should note with interest... and we'll tell you a bit more about Dave himself next time).

Apart from glorious countryside, hills and moors, rural Somerset is probably best known for a rustic blend of cider, cheese, cricket, the Wurzels and the Glastonbury Festival. Oh….we also split atoms and some whopping new nuclear reactors at Hinkley Point are coming, if only EDF and the UK Government can settle on a price. Another procurement story about negotiations going nuclear!

Somerset was an unlikely setting for a high-profile joint venture with global multinational IBM, involving a big Council (Somerset County), a small Council (Taunton Deane) and a Police Service (Avon & Somerset, with the Somerset population making up only 1/3rd of the Police patch).

Adding a Police service in with two councils made it a unique joint venture, as it could now be said to be “cross-sectoral”. What do Councils and the Police have in common? Not enough to stick together is now the answer!

The procurement got started in 2005 and was led by the former Somerset County Council Chief Executive Alan Jones. His leadership style was charismatic, high-profile, rich on hyperbolic PR and essentially autocratic. The County Council was led by the Lib Dems and characterised by a political leadership that was content to follow in the wake of Alan Jones’s executive lead.

Under Alan Jones, Somerset had become very good at passing New Labour rating exams and in 2004/05 was rated at the top 4* “Excellent” national rating for councils.

Many a poor yokel across Zummerzet, sitting in the pub quaffing flagons of zider, could be heard to say “Did ‘ee know? – Them thar Countee Counceel be Four Starrr now”. No they didn’t, of course, they were complaining about how high council tax was.

The County flag outside of County Hall was amended to show the 4 stars. When the top score for Use of Resources was finally attained, the Council had a + sign added to the four stars and Somerset invented a new 4*+ rating (like A* in A levels). From this high point of pass grade inflation, Alan Jones declared that Somerset would now seek to be rated as “Beyond Excellence” through a joint venture “with a World Class partner”.

The hubristic scene was now set for a wholly foreseeable disaster.

The first controversial act by Jones, was to appoint a Sue Barnes in 2005, without competitive interview, to a Director position at a salary of £90K per year in charge of procuring the joint venture. Ms Barnes led a procurement project named ISiS (Improving Services in Somerset) that eventually became the joint venture contract in 2007 with IBM for Southwest One.

Barnes was then discovered to be the wife of the now retired Chief Constable Colin Port, who led the Avon & Somerset Police in the very same joint venture.

When a BBC regional news programme explored the appointment without competition and the clear potential for conflicts of interest, they were threatened with libel proceedings by the Avon & Somerset Police Authority, using Carter Ruck and £96K of public funding, before the case was eventually dropped. “Eyes Passim” as Private Eye did and would say!

Barnes had previously led the joint venture between Suffolk County Council and one smaller Suffolk Borough Council with BT. That joint venture eventually ended unsatisfactorily as well.

She had made the elemental procurement error in Suffolk of not having an EU-compliant framework agreement, so that when other Suffolk District Councils thought of joining, they found they would have to conduct a full EU tender and the joint venture would have competed in open market with fresh suppliers, simply to add a new public partner.

Somerset benefited from that expensive oversight in Suffolk and Ms Barnes did have a (4 + 2) year framework agreement available to all SW Councils and signed by many of them, to avoid the Suffolk pitfall.

Under Ms Barnes leadership, Somerset did not support the use of further independent 4Ps (remember them?) Gateway Reviews, but reverted to relatively benign paid-for consultancy reports by KPMG. They were so high-level and full of caveats, that no legal redress for any later failure would ever be possible.

The external regulator, the Audit Commission, saw Project ISiS as a new type of “strategic partnership” and in support of New Labour policy, so granted a wide leeway for the project and the joint venture, right up until failure was announced in Feb 2012. Then the Audit Commission was de-commissioned, with the same individual auditor who had failed to raise any serious concerns, retiring.

Like so many light-touch regulators, the Audit Commission repeatedly gave Southwest One positive reports, without ever qualifying the accounts, even as problems with SAP implementation mounted in 2009 and procurement savings were not being made in line with forecasts.

Next week: Part 2…  the Southwest One story continues with the procurement errors made in letting the contract.

Voices (8)

  1. James Garrett:

    That the wheels came off Southwest One was never a surprise to those who followed its shaky journey from the start. http://www.youtube.com/watch?v=rmW99D-r2MQ

  2. Prof Dexter Whitfield:

    I find the idea that the Conservatives ‘sabotaged’ the contract as fanciful and plainly inept. It implies the model is ‘right’ but was ‘spoilt’ by the Tories (ie gets IBM, Lib Dems and council officers/police off the hook. This is nonsense. It implies a high degree of strategic and political thinking and execution, of which there is no evidence.

    Prof. Dexter Whitfield, European Services Strategy Unit

  3. Dave Orr:

    Duh! Sorry. The correct link is

    http://www.computerweekly.com/blogs/public-sector/2013/05/somerset-dodges-questions-over.html

    By David Orr on May 2, 2013 7:02 AM | Reply

    One last point. When Somerset took up the lawsuit they formed a Joint Members Advisory Panel with councillors from the opposition Lib Dem and Labour parties on it & the out of court settlement was agreed with that group.

    None of the Lib Dems or Labour demurred and the out of court settlement, like the original contract in 2007, had cross-party support.

    The Lib Dems signed the contract with IBM for Southwest One in 2007 and yet they did not make this an election issue? Why not??

    In fact, on all the election leaflets, Southwest One is simply swept under the carpet. All political parties in Somerset do that because everyone comes out of the disastrous IBM contract for Southwest One smelling of dung!

    The Lib Dem Leader Nick Clegg preferred to focus on BBC regional news on the £36K repairing a fish pond at Somerset County Hall rather than mentioning the net £60m lost from Somerset to IBM via Southwest One.

    Conspiracy or c**k-up?

    Let the reader choose!

    ____________________________________________________________________

    By David Orr on May 2, 2013 2:47 PM | Reply

    Mark – Come one – Please answer the glaring, unanswered question.

    If SW1 was great under the Lib Dems and the Conservatives wrecked it, then why total silence before today’s election?

    Not a word or peep at all. Nothing, zilch, nada!

    Two weeks ago, I pressed my Lib Dem Ward Councillor (Hazel Prior-Sankey) and Lib Dem Opposition Leader (Sam Crabb) to tell me what their policy on IBM/SW1 would be, if they won the election (voting is today 2nd may).

    I AM STILL WAITING FOR AN ANSWER……

    If your theory was correct, then why wouldn’t IBM/SW1 be an election issue, with the Lib Dems openly holding the Conservatives to account for their sabotage and the costly failure?

    Why then do the Lib Dems talk about £36K duck pond repairs instead?

  4. Dave Orr:

    I respect Mark Ballard. It is important in a free society that all views are heard.

    Mark has a theory that has, in my opinion, yet to be fully evidenced that Somerset CC deliberately sabotaged SW1 for “political” reasons.

    That would require a plot whereby a Conservative Council does not take any SW1-based savings, whilst cutting £70m of sensitive, local services and ending up losing a judicial review to shut libraries, at significant financial and political cost.

    Mark updated his conspiracy theory just before the County Council elections in early May and I commented with counter-points below the article: I drew attention to the fact that in 2011/12 Taunton Deane had similar savings shortfalls.

    Somerset dodges questions over its throttling of Southwest One

    ComputerWeekly.com

    Paul Harding, performance & client manager for Taunton Deane Borough Council, a neighbouring authority that joined the Southwest One venture, said Southwest …

    ___________________________________________________________________________

    As I said in blog comments to Mark’s article – Let the reader decide….

  5. Bill Cinelow:

    Suggest readers actually head to see Mark Ballard @ Computer Weekly as he really has the right story whatever David tries to throw up here : http://www.computerweekly.com/news/2240178310/Somerset-Council-blocked-60m-Southwest-One-outsourcing-savings

  6. Prof Dexter Whitfield:

    We exposed the flawed structure and high risks of this project in a detailed assessment for Somerset and Taunton Deane UNSION branches: http://www.european-services-strategy.org.uk/publications/public-bodies/strategic-service-delivery-partnerships/somerset-isis-or-crisis-an-assessment-of-the-p/

    Prof Dexter Whitfield, European Services Strategy Unit

  7. James Garrett:

    A pity the editor didn’t trust the spelling of his correspondent for, as any fule no, Hinckley is in Leicestershire and Hinkley Point is in Somerset. Hinckley Point doesn’t exist. (Editor’s note; thank-you! Corrected now).

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