Monday, 28 November 2016

Future delivery of digital and ICT services

Today, I took part in a committee meeting which called in a report on the  the future delivery of digital and ICT services by Glasgow City Council. The report was called in by four SNP councillors and myself for further scrutiny. I was able to present key concerns about the proposed arrangements to deliver ICT services when the current contract comes to an end. 

Critical is the calculation of long-term costs. I asked what account has been taken of outcome of the business case established when Serco was awarded a 10 year, £265m contract in February 2008 to deliver ICT and Property Services to Glasgow City Council.
Service Glasgow LLP (trading as ACCESS), a Limited Liability Partnership jointly owned by Serco and GCC was formed soon after to deliver the contract from 1 April 2008. The contract was to deliver savings to GCC in the order of £70m over 10 years, according to GCC’s Business Case. 

The projected savings arise mainly from a guaranteed reducing charging profile over 10 years. Serco has committed to underwrite the performance of ACCESS to provide the services for 30% less by the end of the 10 year term and so the savings are guaranteed to GCC. These savings were to be achieved by increased productivity, requiring less staff to deliver the services and significant reductions against the third party supply chain of £12.4m inherited from GCC. I enquired if the costings have been reviewed, evaluated and used to help inform the development of the proposals emerging for the services from 1st April 2018?

In the committee report at 6(3), it refers to an annual budget of £57m with a 7 year budget of £399m. The provision of this annual budget would appear to be significantly higher that was originally set out in the contract established in 2008. I asked for reasons for this annual budget and ongoing costs for the next 7 years. I enquired how does the budget process for the existing contract inform development of the budget for the new proposal.

Another concern is the assessment criteria. At 2.3 in the report, it refers to key criteria for the assessment.

The current contract focused on benefits and protections for Glasgow City Council to ensure that Best Value continues to be achieved. These include providing GCC with:
  • A single point of accountability;
  • Streamlined governance processes;
  • Economies of scale;
  • Standardisation of systems and processes;
  • Established track record of delivery.

The overarching commercial framework provides the Council with cost certainty and protects the Council by transferring the financial and delivery risk to ACCESS (which is underwritten by Serco), while continuing to share any additional benefits.

This new proposal has been developed without reference to the above list of criteria. It refers to;
  • service delivery and ability to innovate
  • affordability
  • risk transfer to the party best placed to manage it and
  • time to implement the option

It seems to be a lack of continuity in terms of assessment of:
  • A single point of accountability;
  • Streamlined governance processes;
  • Economies of scale;
  • Standardisation of systems and processes;

Due to the significant change in the criteria used in the assessment process, it would appear that the current contract arrangements provided by a joint venture model are less likely to emerge as the preference for future service provision.

I asked what process has led to the key criteria being chosen. Also, why did the criteria change from the list used as part of the current contract arrangements? I am particularly concerned about a council assessment process removing any reference to provision of "a single point of accountability". This proposal involves millions of pounds of public funding and there appears to be a lack of any consideration to ensure accountability for decision-making within the contract.

There is reference to a list of principles at set out in section 3 of the report.

At 3.5 there is reference to protection for staff:
Terms and Conditions, including pensions, protected
No compulsory redundancies
No compulsory relocation from Glasgow

How is this going to be achieved without current governance arrangements, processes and procedures? Reference to structure of the current ACCESS Board was not provided. What is the Project Board? How will the contract report to councillors and committees? What about the adoption of the Living Wage? How will the proposal guarantee job security? How will all current terms, conditions and employment status be retained for all staff? How will current pensions arrangements be guaranteed for all staff?

There is no mention of property and asset management in the list of principles. How will this contract support Facilities Management and Preventative Maintenance? How does the contract support carbon management and sustainability of our assets?

There is reference to details provided in section 6 risk transfer.The Council is now completely reliant on ICT to run services such as Education and Social Care. There is move to a paperless office and mobile services. The context of the proposal including changes since 2008 are not mentioned and trends for the next 7 years are not detailed. I asked what about the risks associated with financial systems and impacts of any failures. I sought details of safeguards to be in place if the ICT is outwith council control and there is significant failures in service delivery.

I mentioned the consultation with the council family and ALEOs to develop the proposal. There is no reference to any discussions across the council services and ALEOs. I asked for information about consultation to develop the principles as set out in section 3.

After committee deliberations between 1.30- 4pm, there was a vote on a motion by Green and SNP councillors to refer the report back to the Executive Committee seeking independent appraisal of all of the options for the future of digital and ICT services. This was passed by 8 votes to 7 votes.

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