Would be very interesting for this blog to follow what Ernst and Young are up to. Grayling must be worried to have brought them in as consultants at this stage and very determined to press ahead at all costs. It can only be financial viability that is his main concern so just who in the list of bidders is he so worried about?
Do not let the Ernst and Young thing go, it is important
Ask why Ernst and Young are involved...keep on this please
Sometimes I feel as if I'm playing three-dimensional chess, but with no opponent visible and some pieces missing from the board. The message is as emphatic as it is enigmatic. It sounds important and from someone, or some people, who are quite knowledgeable, but what does it mean?
We know that government, and the MoJ in particular are not that good at drawing up contracts and are no match for those wily contractors like our old friends Serco and G4S. Here's a story from the summer about an NHS contract in Cornwall as reported in the Independent:-
However, another report into Serco out yesterday, this time from the Public Accounts Committee (PAC), also went largely ignored: the scandalous way its out-of-hours GP service in Cornwall treated taxpayers and potentially left sick people alone and without care in the evenings. One in five calls were abandoned after patients gave up waiting. Only 52 per cent were answered inside a minute and a half. Dismal, dismal service. But rather than hire more staff to pick up the phone to patients promptly and improve matters, Serco simply lied about its performance. Two employees falsified the data. That meant Serco hit its targets, was paid by taxpayers for its success, and the contract manager in charge pocketed a nice bonus.
This was a fairly small contract, worth about £7m a year, but it matters deeply. Not only because of the suffering it caused ill patients and their relatives trying to get critical advice. Not only because it resulted in more people being transferred to the ambulance service, overburdening that already stretched part of the NHS. Not just because it highlighted the risk of dishonesty in outsourced contracts. But because the NHS is going to be using more and more private contractors to take on its day-to-day work in the future. It will be dealing with big, sophisticated players like Serco increasingly, and potentially getting rings run around it by clever negotiators on six-figure salaries.
Then a reader, maybe the same person, I don't know, flagged this up from a journal I've never heard of before called Spend Matters UK/Europe:-
The Times on Friday reported that the UK’s Cabinet Office was leading a drive to bring in ‘hundreds’ of external experts to help major programmes and projects across government, many with a major procurement element.
“The experts from management consultants and other industries will help to turn around difficult schemes such as Universal Credit, High Speed rail (HS2), and electronic tagging. They will also help to monitor new contracts and bulk purchasing across the public sector”.
You might interpret this as a sensible way of injecting expertise into the public sector. Or you might see it as a huge climb-down from a government that made a big thing about having less dependence on external paid advisers compared to the previous Labour government. Because however this is dressed up, it is in effect an Emergency Call – “send for the consultants”! It’s not clear whether this is a different bunch of people to the 100 or so Bill Crothers told the Public Accounts Committee recently he was recruiting for the Crown Commercial Service. But I thought they were going to be full-time procurement staff to man the centralised procurement team – this sounds a little different?
What is clear though is that after three and a half years in power, the government has failed in one key sense. It has not managed to develop the commercial and project management skills internally to deliver what it wants to deliver in terms of these programmes. Hence the need for external support. Actually, 3 years isn’t that long really in terms of trying to make a radical improvement in capability, but it’s not clear that we’re even moving in the right direction. Or – just maybe – some of these programmes are simply undeliverable because of their size and complexity (as we have discussed before).
Maybe some of these programmes are undeliverable eh? Blimey fancy that! Anyway the article goes on a bit further to say:-
The Times also reported on an expansion of the Crown Commercial Representative scheme. I’m again not clear whether this is new information, as Cabinet Office had already said this was happening a while back.
“…the Government is also hiring “world-class leaders” from the private sector to work with the 39 key contractors such as Serco, Capita and G4S. The Cabinet Office has recruited 15 and is about to appoint a further six or seven. A Whitehall source said that these specialists — known as Crown Representatives — would be hired for 12 months and paid £500 a day”.
It turns out that this journal has quite a bit to say about the whole government contracting out business and has some very big concerns, as here when discussing the impending 'outsourcing' of the Highways Agency:-
So I hadn’t picked up on this till the weekend, very remiss of me. Apparently the UK Department for Transport is considering a GoCo (government owned, contractor operated) model for the Highways Agency, the organisation that plans, builds and maintains the UK’s major road system. The GoCo structure first came to prominence when it worked well during the Olympic construction programme, and more recently it has caused some controversy when the Ministry of Defence announced that the Defence Equipment and Support organisation (DE&S) might become a GoCo. Now the Highways Agency is clearly not as sensitive as DE&S. Balfour Beatty contracting for and managing road building programmes doesn’t create the same frisson as the possibility of Bechtel running the UK’s nuclear submarine construction programme. But even this proposal does raise again some fundamental questions about the GoCo concept.
This proposal is based around the GoCo being “more efficient” than a public sector Agency. But why should that be the case? If it is a question of skills, why can’t we get the right skills into the public sector? And if that is simply that the salaries aren’t attractive enough, can’t that be solved without moving to a GoCo? If we don’t have the people / skills to manage current contracts in the Agency, hence the need for a GoCo, how are we going to manage the GoCo contract, which will by definition be bigger and more critical than any current contract? Can the improved performance of the GoCo more than compensate for the (presumably) higher salaries GoCo staff will command, and the profits / return to shareholders that will be required? Is the move to GoCos “hollowing out” Government – are we moving to a situation where government will just be the buyer / commissioner of services, which will be delivered by the private sector? There are indications that this is happening, in Welfare to Work, prisons and probation, defence, even health (Foundation Trusts are virtually private sector organisations, we might argue)?
Picking up the last point – it is fascinating that this is taking place without any serious philosophical debate about the role of the state, or even discussion about what the government’s “core business” should be. In the private sector, we would hope that good procurement leaders would stimulate strategic debate about the boundaries of the organisation, and insource / outsource decisions. Yet it’s not clear whether these discussions are happening within government.
We’re certainly not hearing about it if it is happening – or are decisions are being made on either tactical or ideological grounds, or based on a simple believe that the private sector is just inherently “better” or more efficient than the public? We’re not opposed here to private sector involvement. And I wouldn’t advocate for a moment that the Labour Party should take a simplistic stance to oppose that in all cases. But perhaps the time is right for some more visible and open debate about what is going on.
Now for a journal that we must suppose is aimed at this whole business sector, it's quite revelatory to see them questioning whether it's all workable and even such a good idea at all in the absence of any meaningful public debate.
Finally, here's the MoJ's own Contract Management Review, handily published just before Christmas and whilst we were all otherwise engaged in buying loads of shite. It doesn't make comforting reading for those who worry about such matters down the road at HM Treasury or I suspect at No 10. It basically tells us what we already know - the MoJ are not up to the job and it's all going horribly wrong.
Maybe TR is in in rather more trouble than we realise? But does it really need a highly-paid consultant to tell us we've got the makings of an epic omnishambles on our hands?