There was a disturbing headline in yesterdays Guardian on the write off of £56M by the Ministry of Justice, on a system to coordinate some of the records of its 90,000 employees that was apparently already late and over budget. The total budget for the scheme was £116M so the implication is that this was less than half way through although the report has a very confusing timeline, and lacked detail. The company that was underperforming is called Steria, a French owned company. One could easily imagine that their failure in this matter would mean that they would have to work very hard ever to be considered again for further Government contract. In another element of the story it transpires that the Government part owns an agency called Shared Services Connected Limited which was set up by the Cabinet Office who own 25% with Steria owning 75%. One of the reasons why the MOJ scheme was written off is that it was discovered within Government that both MOJ and the Cabinet Office were embarking on a similar scheme and so it was agreed that both Departments would work together within one scheme which seems eminently sensible. So with this discovery, made rather late in the day in Whitehall, a Company that was late and over budget on one contract looks set to complete another contract, with the Government as a minor stakeholder. The terrible implication is that this French Company is being rewarded for its failure in delivering on a previous contract by a second attempt on the current one, one that is bound to be bigger. The new proposal seems to include the use of some form of offshoring scheme with 200 ‘more’ jobs being created in India as an integral part of its provision.
There are several strands to this story which I have reflected on.
The Government spends £700Bn every year, so £56M is 0.000008% of Government spending. However such sums are sufficient to resource organisations such as the Royal Family (£38M) or Charity Commission (£21M). With Ministers such as Pickles and Maude expecting local Government to account for every wasted £500, someone must be held accountable for this appalling duplication which is inexcusable. How does Whitehall explain its incompetence?
When companies or institutions employ lots of people, they need to have robust and efficient schemes to ensure that the people get paid on time and that their personnel information is retained and that as they make buying decisions, that these are monitored in an effective manner. To fail to spend on such vital systems is usually a false economy, as costly as such schemes can be in the short term. What have these departments been doing until now?
One of the mechanisms that most public sector organisations employ when organising their procurement is to attempt to outline the future expense areas and invite companies and sometimes charities to express an interest in such expenditure. These are then assessed for suitability for a range of hypothetical contracts. The successful bidders are listed on a procurement framework. However sometimes only a few do respond, and over time expectations change and some of those listed can even go out of business over the life of the framework agreement. Setting up procurement frameworks works incredibly well in a context where the market is stable and the demand is predictable. Frameworks work badly when the technology and businesses involved exist in context of change and innovation. One could argue that if the cost of running procurement frameworks in the latter case was instead applied to more intelligent purchasing systems, that the public would get much better value for its money. The over dependence or inappropriate use of frameworks can explain why some Companies are included in the same procurement processes time and time again, even where some of us might expect different questions to be asked. Whatever the reason for Steria to appear twice for two very similar schemes when they have failed in the first suggests that the system has failed us as taxpayers.
There is a joint venture between Steria and the Cabinet Office, how can we the taxpayer know if the decisions to award the joint venture this contract was in our best interest. This raises major questions about this particular procurement process.
My final frustration with this story involving our wasted money is that Steria, in the private sector should have understood what contracts they were involved in, including those as part of a joint venture with a different Government Department. When they became aware that there was a potential benefit in linking two different projects, why did they not raise the suggestion themselves? As someone who works for a small private sector organisation that delivers numerous public sector contracts that amount to a few hundred pounds each, we constantly look for ways of improving our own performance, but also of saving our clients including the public sector money too. If Steria are not that sort of Company, they don’t deserve to earn any of our money for their work. According to their own website they are a “Trusted Transformation partner with a highly collaborative approach” so why did they not collaborate in this matter?