A great British Prime Minister, Benjamin Disraeli, is responsible for the quotation that introduces this item. It is especially relevant today as Taunton Deane and West Somerset Councils tread down the dangerous path of a merger. They boast that it will provide extraordinary savings. But much of the maths is suspect or, worse. I would invite you to read the following article published today by a very well established and respected technical journalist:
Well done to Unite for challenging council’s joint venture “savings” claim
By Tony Collins
When councils make unexplained (and self-congratulatory) claims that they have made savings at the end of a joint venture, it will usually raise a series of questions.
So well done to Nigel Behan of the Unite union for putting a series of FOI questions to Taunton Deane Borough Council about its joint venture with IBM, as part of Southwest One.
In an “Efficiency Plan” published on its website last month, Taunton Deane
Borough Council announced that it was “part of the ground-breaking Southwest
One shared services joint venture partnership, between Somerset County
Council, Avon and Somerset Police and IBM”.
“This ten year partnership, which is now drawing to a close, has delivered significant savings to the Council and has made an important contribution to our finances.”
Unite is not so sure. Its officials believe the joint venture has, for Taunton Deane, broken even at best. Its FOI questions to the council:
- Please will you provide the unitary charge payable by TDBC to
Southwest One/IBM for each financial year from 2007-2008 to date?
- For each financial year since 2007-2008 what was the cost of
letting and managing the contract – including legal costs, procurement costs etc. etc.?
- Re IT – software, hardware and peripherals. What was the value in 2007 of all IT (Hardware, software, peripherals and infrastructure) and what is the value of these assets now, ie what has been the depreciation on this asset class since 2007? What will cost of replacing these?
- What are the net savings achieved by Southwest One for Taunton Deane Borough Council for each financial year since 2007-2008? Will you define “significant savings” (provide a measurable test)?
Taunton Deane Borough Council’s claim of savings was imperious, self-serving and unexplained. The council’s Efficiency Plan looks like a glossy commercial brochure that local residents have had no option but to pay for.
Were a newspaper to make a controversial claim without any explanation or justification, its readers would be entitled to question the article’s veracity.
Taunton Deane’s joint venture peripherally involved a costly legal action between the two main parties to the joint venture: IBM and Somerset County Council.
To make a claim of savings in such circumstances is like officials claiming a mission to space was a success even though the spacecraft blew up.
No rational judgement can be made without a detailed weighing up of the costs and benefits.
Even then the costs and benefits may be subjective. What costs have been excluded from the “savings” figure? What were the baseline costs on which the savings have been measured? And were those baseline figures audited as accurate – or were they intelligent guesses? Have any benefits been double-counted? Are the benefits audited?
Do we also need to remind ourselves that current Leader John Williams is yet again talking about £3.1m of forecast IT-based “transformation” savings for the controversial Taunton Deane and West Somerset Councils merger as if it is actual money rather than an optimistic forecast from a hired IT consultancy (Civica – who have been paid £300K to make the forecast)?
John Williams (and for that matter CEO Penny James and Finance Director Shirlene Adams) were the architects of the deal with IBM for SW1. John Williams was Leader throughout Project ISiS (leading to SW1) until after IBM were selected as the preferred bidder in January 2007. Had he not lost the election in 2007, he would have willingly signed “in the small hours of a Saturday in early September 2007”.
TDBC has now essentially misled the Government about the IBM/SW1 outsource in the published “Efficiency Plan” and none of the anecdotal savings claimed have been netted off for all of the staffing, consultancy, legal etc costs of getting into and managing this controversial contract.
IT, when properly managed and clearly understood, certainly can help organisation be more efficient, agile and improve service.
However, “Big Bang” IT is fearsomely difficult to get right, deliver on time and budget across all sectors of the economy (private and public) – see NHS IT, LLoyds TSB, Universal Credit, NPower (also IBM and SAP), Vodafone etc.
The whole Project ISiS and SW1 saga is a hard lesson in aspiring to “transform” through the power of “magic IT” and outsourcing the responsibility for delivery to a profit-focused contractor without a functioning internal IT Service to help manage the complexity of managing someone else to deliver key parts of your business.
SCC has learnt lessons and has recreated a viable IT Service that manages a multi-sourcing strategy using a variety of suppliers to “take back control”. They have invested £4m into refreshing the IT estate and getting the IT back up to date at the end of the contract with IBM for SW1.
Post-SW1 – What does the TDBC IT Service look like now? A handful of IT people left and, trust me, skills and capability gaps abound.
Ironically, after SAP, TDBC are going back to the same finance and payroll systems you had with SCC prior to 2007 – Back to the future!
John Williams is about to pull the “magic IT” trick to claim the dreaded T-word “transformation” multi-million £s savings all over again, even when it is quite wrongly conflated with a “political” merger of West Somerset and Taunton Deane Councils that has no direct relationship to IT-based “transformation” savings, as TDBC & WSC already share services administratively!!!
Back in 2007, none of us knew any better – Surely, in 2016, after the IBM and SW1 debacle, we all do now?