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DeliciousAudit Commission's take on SSPs is 'fundamentally flawed'
Wednesday, February 27, 2008
The Audit Commission’s recent report, For Better, For Worse, provides a much needed national analysis of Strategic Service-delivery Partnerships. But the report is fundamentally flawed. The report is devoid of any substantive statistics and lacks analytical comparisons and clarity in its conclusions. The exclusion of employment from the study is, at best, inept.
The credibility of the research is undermined by the failure to disaggregate SSPs with different scope of services, governance and employment models. The limited sample and lack of rigorous analysis means that both the positive and negative conclusions lack an evidence base. The 8.3 per cent mean savings forecast, which is a fraction of the original claims made for SSP projects and "perceptions" of value for money should have triggered a much more rigorous analysis.
A great deal is made of private sector investment in the promotion of SSPs by officers and elected members. The reality, of course, is that SSPs are funded by public money and whilst the private sector may frontload some investment, this is financed by the local authority. Private contractors may finance contact centres or regional business centres where they will continue to own the asset and recharge the local authority for their use. So why did the Commission not investigate the private sector’s financial investment in SSPs?
SSPs have been promoted in most authorities as generators of additional jobs, Regional Business Centres and more recently social and economic transformation. What direct and indirect benefits were promised, to whom, and when?
The report has nothing to contribute about the relative merits of TUPE transfers, TUPE Plus and secondment. It ignores the increasing offshoring of ICT development and public service delivery. Are there any differences in performance, governance, value for money, and service quality between SSPs which are delivered through Joint Venture Companies (transfer or secondment of staff) and SSPs where staff have been transferred to a private contractor?
The commission’s claim that the information on which its findings are based is "commercially confidential" makes a mockery of transparency, performance management, democratic accountability and community engagement.
Local authorities are subjected to inspection, assessment and auditing by the Audit Commission. The commission is also a vehicle by which government policy is explained and articulated. It is not unreasonable for local government, service users, staff and trade unions to expect a similar degree of rigour in the assessment of national policies.
So why poor quality of research and the secrecy? Five basic questions arise.
Firstly, is SSP performance worse than that portrayed in the report and the commission is trying to deflect criticism of one of New Labour’s cherished partnership models?
Secondly, has the commission failed to fully understand the scope and complexity of SSPs, which would account for the partial and superficial analysis.
Thirdly, did the commission decide that it did not want to upset the business lobby and the private contractors (such as BT, Capita, IBM, Liberata, Mouchel Parkman and Vertex, the market leaders in SSPs).
Fourthly, does the commission really believe that the names of contractors, their performance on multi-million pound public service contracts, the terms and conditions of contracts, the implementation of social and economic commitments and employment practices is ‘commercially confidential’? If so, on what public interest grounds do they base this decision?
Finally, is the report a product of legal conservatism, the commission’s lawyers fearful of private sector legal action?
The answer is probably a mixture of all five. It is hoped that this study is a one-off occurrence and does not set a pattern for future research on commissioning, contestability and other PPPs.
The commission may be guilty of attempting to ‘fix the market’ by denying public access to public information and selecting what performance and market information is made available. How can contestability have any meaning if only selective information is publicly available?
Local authorities face claims of ‘failure’, yet the Audit Commission is at pains not to provide any information which can substantiate the performance assessment of private contractors delivering public services in SSPs. This is typical of the ‘if it goes wrong it must be the client, not the contractors fault’ school of public management.
The House of Commons Public Accounts Committee should launch a formal investigation to assess the performance of SSPs. The Audit Commission should extend its research programme on SSPs with more indepth analysis and immediately create a publicly accessible evidence base.
Government guidance on SSPs should be strengthened. Local authorities currently in the SSP procurement process should reassess their business case to take account of the commission’s findings.
It is ironic, at a time when outcomes are considered the first priority, that the inputs and process of research are again revealed to be more important. Get the fundamentals wrong, then the rest is not credible.
Dexter Whitfield is director at the European Services Strategy Unit and adjunct associate professor at the Australian Institute for Social Research, University of Adelaide
Dexter Whitfield’s piece on the Audit Commission’s For Better, For Worse report misses the point, both of its purpose and therefore its methodology. The Commission did not set out to produce the definitive, academic assessment of the costs and benefits of SSPs. Our aim was to help other local authorities learn from the experience of 14 specific and different strategic service delivery partnership (SSP) arrangements.
As an organisation that operates independently of central government, local government, the private sector and all vested interests, we have provided important evidence and useful insights on an issue of controversy. The report accurately and dispassionately reflects the variation of experience following detailed investigation of those case-studies. The Commission is grateful to those who shared their learnings for other local authorities’ benefit, and ultimately the benefit of service users and tax payers.
SSPs are complex relationships and our findings revealed varied experience and results; though councils are positive about their potential, not all have yet delivered. We concluded that councils should only enter into these relationships in a well considered fashion and should not be seduced by the warm language of partnership. We are pleased that Professor Whitfield advises local authorities to “... take account of the Commission’s findings” since that was our purpose.
Audit Commission
I welcome the Audit Commission’s response to the critique of their study on SSPs. The Commission’s study, and accompanying the consultant’s report, was much more than a collection of 14 case studies. It is disingenuous to claim otherwise when the study is subsequently criticised. Local authorities can only learn from definitive analyses of the full costs and benefits and a published evidence base. Learning from case studies alone is limited although they have a useful role in a wider analysis.
The Commission recognises that SSPs are controversial. Even more reason that their study should have included the impact on employment, private sector investment, alternative in-house options and a more rigorous value-for-money assessment. The Commission avoids comment on the blanket use of ‘commercial confidentiality’ – this position is surely unsustainable.
ESSU has published a database on SSP contracts which is available, together with the full 20-page critique of the Audit Commission study, at www.european-services-strategy.org.uk.
Dexter Whitfield - European Services Strategy Unit
Dear Audit Commission,
Why are the Government-recommended "Gateway Reviews" (through the Office of Gov Commerce- OGC) for large/complexd/risky tendered contracts not made mandatory in Local Government, as they are in Central Government?
As the Government provide free expert contract tendering & Gateway Review support through the 4Ps agency, then why aren't Local Authorities compelled to use 4Ps to carry out the Gateway Reviews?
Should 4Ps be part of the Audit Commission?
Should large contract projects whilst being tendered, be considered a part of the CPA assessment & annual audit to ensure that they are being carried out properly?
10 + years and £0.5 billion is a lot of money and risk in anyone's terms isn't it?
Finally, how can elected members carry out their monitoring/scrutiny role on behalf of their constituents, the public, taxpayers and service users if "Commercial In Confidence" is excessivley used as a means of preventing that Governance and Scrutiny??
Concerned Officer.
Member of Staff - Somerset County Council
Dear Colleague,
Unison did properly write their concerns about the tendering process for project ISiS (leading to Southwest One) to the Audit Commission on 23 July 207. The letter is publicly published here:
http://www.somersetcountyunison.org/pdf/ISiS/ISiSletterToAC230707.pdf
The Audit Commission have now taken over as our Auditors at Somerset County Council from 2007/08 - these are periodic switches and I believe that they are here for 4 years in total?
The Audit Commissioner has asked the previous auditors (Grant Thornton) to reply to the Unison letter from July 2007 and that is due to be debated at the Finance and Resources commitee on 28 March. The audit commission's additional auditing remit is public on:
http://www.somerset.gov.uk/council/board22/2007%20December%2014%20Item%206%20External%20Audit%20–%20Addition%20to%20the%20Audit%20Plan%20-Review%20of%20Southwest%20One%20Project%20Appendix.pdf
It has taken a very long time for the July 2007 Unison letter to be answered and during that delay the contract was signed to a very tight deadline in September - part of Unison's legitimate concerns.
We can all agree that serving the people of Somerset is our common purpose. However, there are those of us who legitimately wonder whether a complex 10-year £0.5billion contract with the US multinational IBM is the best way to do that.
I welcome the Audit Commission reviewing these contract management arrangements with Southwest One.
I guess that in 2-3 years time we will see how well things have turned out and whether Unison's concerns were valid? And if all those promised savings & benefits claimed on contract signing have actually materialised?
I am also a Somerset voter, council taxpayer and services user.
Somerset Unison member.
Unison member - Taunton
Dear All
Just a couple of quick points!
1. If the service was not run by a JVC/SSP type of arrangement (say in-house) would we have access to the financial details,rigorous analysis and the "business case" as members of the public and service users (not forgetting we are also interested in the use of public funds)?
2. Can the Audit Commission explain what the "p"s in the 4ps stands for?
3. When consideration is given to half a billion pound contract being awarded to a huge multi-national corporation is it considered reasonable to have no public consultation?
4. If the bodies that signed upto the framework agreement join Southwest One then would IBM have access to police records,social services records,school records and health records? And do you think insurance companies would appreciate it if this information was,say,analysed and made available to the "market"?
Just a few points. Comments would be appreciated!
Thanks
Nigel Behan, Branch Secretary, Somerset County UNISON
www.somersetcountyunison.org
Nigel Behan - Somerset County UNISON