Staffordshire, Somerset – more on procurement outsourcing

We had another bumper set of comments on our article covering the Staffordshire Council outsource of procurement.  If you haven’t read them, do go and have a look here. There were very pertinent comments around the wisdom of gainshare contracts; questions about why councils aren’t collaborating more; and some technical debate around EU Regs and whether Staffordshire have allowed enough time in the process.

The consensus on that was that they are legally compliant, just; but it is all being done in great haste apparently, which sounds some alarm bells.

And one person said this: “The council already has a company working with them to look at the processes and identify where the inefficiencies and savings can be made..”

Interesting – anyone know which company that is?

Another outsourcing contract that was implemented in a hurry was the South-West One venture in Somerset, which we’ve featured before and includes procurement along with other back-office services. Regular readers will know Dave Orr, our regular source of information about the venture, and an ex-Somerset Council employee, who has continued to spread the word about the issues that have arisen with the contract and service.

Orr has now got Tony Collins interested and blogging about it. Collins is former Executive Editor at Computer Weekly and has done a great job over the years digging into various public sector IT projects. For instance, he was one of the first to sound alarms about the NHS IT programme.

So, he’s now taken up the South-West One story on his Campaign4Change website, and an excellent article it is too. He finished by calling for a review of the programme.

When a plane crashes the law in most countries requires an independent investigation, one that is often carried out in opposition to the parties that may have much to hide. It is a pity that in computer project disasters independent investigations are not required. In the case of Southwest One a genuinely independent investigation and report could help to show what Somerset, its partners, IBM and Southwest One need to do to get the finances back on an even keel.

Now an independent review seems an excellent idea, and one we would support in any way possible. It doesn’t have to be – and shouldn’t be - a witch-hunt. But if we’re going to see more and more outsourcing in local government, which seems to be the trend at the moment, then we need to understand what works well and what doesn’t. Lessons learned – whether positive or negative – are incredibly valuable.

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  1. David Orr:

    Peter – I make my arguments as a resident & taxpayer. Council employees (or ex employees) remain taxpayers & citizens & public service users.

    Somerset are not the only ones having trouble with the controversial South West One joint venture.

    The District Council partner Taunton Deane have recently had reccommend an increase in borrowing of £2.1m to cover a shortfall in savings by SW1, that by now should have paid off their original “investment” in SAP and other “transformation projects”. The extra £2.1m of borrowing will result in additional interest charges of £61K/year.

    It has all now become political as Taunton Deane are reported to be the only SW council to be putting up Council Tax & by the maximum 3.5%. Worse still, council tenants will be hard hit by a 7% rise in council house rents at £5/week – a real burden for struggling families with SW pay rises reported as averaging 0%.

    By a “karmic symmetry”, the shortfall in Taunton Deane budget matches the SW1 savings shortfall. By not taking Eric Pickles one-off grant to keep Council Tax frozen, Taunton Deane gain a modest £50K, which is in turn lost to the extra £61K interest from the above loan.

    The Taunton Deane Council Leader John Williams pledged just last April that if elected he would not put up Council Tax and has:

    He has said that SW1 savings are falling short because the spend has dropped – ergo the savings drop too. The problem with that argument is the scale of the shortfalls almost half way thorugh a 10-year contract: Local Government has had around 30% of cuts, whilst Taunton Deane savings are 70% short and Somerset County Council 85% short.

    The SW1 adventure is a plane crash………yet other planes are lining up on the outsourcing runway awaiting take off “into the Blue Skies” above.

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