Making outsourced public services accountable

(After our post yesterday on FOI and private companies, here's the counter view, brilliantly put by Dave Orr, campaigner for better procurement and transparency in public services).

As the private sector commissioning and outsourcing bandwagon gather ever increasing pace, have we forgotten about the need for public accountability, amidst the drive for making cuts and claimed value for money?

A public body is defined here. In the USA, some public bodies have most or all of their public services outsourced. Council meetings are a handful of people meeting every few years simply to re-let a series of contracts. Is this a route we want to unwittingly go down across England and Wales? In my local Council I can:

  • Vote every 2, 3 or 4 years;
  • Stand as a Councillor at elections
  • Inspect papers, agendas and minutes before committee meetings;
  • Attend committee meetings and ask questions publicly (which have to be answered);
  • Contact my local Councillor to act for me on an issue;
  • Submit Freedom of Information (FOI) questions;
  • Inspect the accounts every year and ask questions (which have to be answered);
  • Exercise my statutory rights to appeal wrong doing to the District Auditor.

South West One Limited (SW1) is a controversial joint venture in Somerset between IBM (75% shareholder) and Somerset County and Taunton Deane Borough Councils with the local Police (25% shareholders). Two Councillors are on the SW1 Board, but the Companies Act compels them to act in the best interests of the Limited Company. One of the County Councillors left the Audit Committee because he felt unable to criticise the poorly configured SAP IT system implementation in public, due to the conflict of interest. He then sought & received an indemnity from the County Council (at taxpayers’ expense) to cover him.

SW1 receives virtually all of its income from the public purse and delivers public services, yet it is impossible for local taxpayers to:

  • Hold the Company to account for failing to deliver the “assured savings” or the poorly configured SAP IT system;
  • Attend any public part of a Board meetings (accepting commercially confidential information is excluded);
  • Ask public questions;
  • Ask elected Councillors to tell what they have done or said;
  • Publicly inspect and ask questions about the published Limited Company accounts;
  • Exercise the right to involve the District Auditor if wrong doing is suspected.

If our public services are all outsourced or “commissioned”, taxpayers and citizens can do none of the above things, as currently Limited Companies are not considered “public bodies”. For SW1 this is currently the subject of an Information Tribunal appeal. Does that loss of accountability matter?

If you are procuring something specifiable and measurable, it might not e.g. emptying the bins; running payroll; buying “widgets”. But if you are procuring complex people-based care or health services for the elderly, people with learning disabilities or vulnerable children, then public accountability matters a great deal.

Turnout in local council elections is already very low, so would a “commissioning/outsourcing” public service delivery model diminish engagement further, as Councillors would have little power or direction left to them?

Do you or your family want to be part of a society where:

  • Your care and health are unaccountable to you and your family?
  • Your care and health are unaccountable to those you elect to represent you?
  • You have to rely upon “light touch” regulatory bodies (or self regulation) to oversee marketised, unaccountable public services?
  • There is no way back to locally accountable public services ever again, as the in-house services have been dismantled and cannot be brought back?
  • A few big multinational companies dominate and there is eventually only limited competition (as in energy and large Government contract markets)?
  • Your local vote changes nothing because the service contracts (typically 10+ years) outlast the term of the elected Council (typically 2, 3 or 4 years)?

Should those of us who are elderly or those of us who need social or health care be concerned about this lack of accountability in the outsourcing/commissioning model for public service delivery?

I think we should.

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Voices (6)

  1. Dan:

    When it comes to procurement, if more than 50% of an organisations budget comes from the public sector, then its generally regarded as being a public sector organisation for the purpose of the procurement rules. No reason a similar rule couldn’t be introduced for FOI

  2. Dave Orr:

    Very good, Dave. Gets the point over very clear and succinctly.

    I think your next step should be to lobby for a structure by which such companies would be subject to the FOI laws, etc under certain conditions: eg.

    Over [75%] of their funding comes from the public sector (central or local government) or from bodies themselves funded in such a way ( to avoid the setting up of intermediate companies)

    The services offered by such companies were from a defined set of caring services, security, utilities, etc.

    Such a contract lasts for more than [3] years: to avoid all contracts for widgets being captured.

    Something about staff having been TUPEd into such companies.

    The aim should be for this to be taken up by a political party or group, either locally or nationally, with the view to get something in one of the manifestos for the 2015 election.

    Hope this is helpful.

    Professor Chris Lewis

  3. David Orr:

    Well No actually.

    In response to specific questiosn and even FOIs, Somerset County Council will respond with generic “Not Us Guv” citing overall contract spend etc. Here is a very recent example:

    Q1c How much has been paid to IBM/SW1 to date for the SCC web site?

    “In 2007, Somerset County Council joined the Southwest One partnership (along with Taunton Deane Borough Council, Avon & Somerset Police and IBM). When this joint venture was formed, the responsibility for some of our services, including the technical provision associated with our website(s) was transferred to the new company.

    As a publically listed company, Southwest One is not required to furnish any information under the Freedom of Information Act in the same way that local government organisations (such as Somerset County Council) are. If you would like to find out more about Southwest One, please visit their website:

    Somerset County Council does not have a breakdown of the cost of delivering only website related services as they are integrated with all other services provided by Southwest One.

    The total value of the Somerset County Council Contract with Southwest One is £201 million over 10 years.
    The duration of the Southwest One contract is 10 years and the expiry date of the Southwest One Contract is 2017.
    The contract is currently under review”.

  4. John Diffenthal:

    You say “For SW1 this is currently the subject of an Information Tribunal appeal. Does that loss of accountability matter?”

    Surely only the activity can be delegated by the Council, the accountability remains, particularly since the Council should have been involved in the development and approval of the specification under which SW1 is functioning (or not as the case may be …).

  5. Nigel Behan:

    There is no reason why elected councillors should not be able to be accountable to the people who elect them. It would be interesting if the history and development of how councils operate could be analysed so that lessons can be learnt for democratic accountability.

    We need new structures in democracy which genuinely engage (rather than focus groups). Localism seems full of contradictory holes?

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