Wednesday 5 August 2009
Saturday 1 August 2009
SOUTHWEST ONE SCANDAL
Speech in the House of Commons, June 17th 2008. Liddell-Grainger spills the beans on Alan Jones, Colin Port and IBM
I am grateful for the chance to introduce this debate. Before I go into detail, it is my duty to declare two specific and important interests in this matter. First and foremost, I am obviously a Conservative, and it was the last Conservative Government who introduced the private finance initiative in 1992. I have absolutely no objections whatsoever to well-planned PFIs. They make good financial sense, the risk capital comes from the private sector and a decent cut of any reward is designed to end up in the public purse. The Treasury measures success by the simple yardstick that PFIs must be fair, and above all, accountable. They have a highly detailed standard contract procedure, which is understood by all parties. Private finance initiatives have their critics, and things can go wrong, but they are the most tried and trusted example of private partnerships.
My second declaration of interest is much more important. I have a financial stake in the private partnership that we are considering. I live in Somerset and pay taxes to Somerset county council. I have thus become a small shareholder in a huge new joint venture, brokered by the county and run by the global computer giant, IBM. The company is called Southwest One.
The Under-Secretary of State for Communities and Local Government, the hon. Member for Gloucester (Mr. Dhanda), will be familiar with many of my concerns because we have discussed the matter privately and in this place. He listened to my speech in Westminster Hall on 26 March on the subject, and I thank him for his response to it. During that debate, I clearly expressed my anxieties about the way in which the company came into being. I feared corruption, and I made that clear at the time. I can prove that lies have been told and, tonight, I will produce fresh evidence.
I should like to make one thing crystal clear. Some have wrongly accused me of sheltering behind the protection of parliamentary privilege. That is incorrect. I have repeated outside everything that I have ever said about Southwest One here. My website and my blog—modesty forbids, but it is called Mogg the Blog—bear ample testimony to that. I have laid myself open to any legal challenge and, as yet, no one has dared challenge me.
Southwest One is formed of two councils—Somerset county and Taunton Deane borough—plus one police authority, Avon and Somerset constabulary. I remind the House that its business partner is IBM. Hon. Members will be surprised to learn that IBM owns 75 per cent. of the company. That means that, if Southwest One ever makes a profit, the “Big Blue” will pocket three quarters of it. It is a 10-year venture, which was supposed to save money. Somerset council claims that it will save it £200 million—£20 million a year. Yet the county offers no logical explanation or business realisation plan. Why? There is not one.
There is a document, which falsely describes itself as the business realisation plan, but it contains not one single fact or figure. Instead, it is an exercise in vivid imagination, probably written by—dare I say it, and show my venerable age—Andy Pandy. Let me give an example. The document states:
“Improved supplier service levels will result in authorities delivering higher performance.”
Excuse me—what is the precise predicted improvement year after year? We do not have any numbers—but there are no numbers. It is all aspirational garbage.
When did the document appear? Only the other day, after persistent demands under the Freedom of Information Act 2000 from angry trade unionists. I pay tribute to Unison, which has not stopped its campaign. As a taxpayer and Somerset Member of Parliament, I share its anger and frustration. I gently say that I hope that the Minister does, too. It is no way in which to conduct intelligent business.
The Government already rightly publish excellent advice on how to do things. Business Link describes best practice thus:
“Success in a joint venture depends on thorough research and analysis of aims and objectives. This should be followed up with effective communication of the business plan to everyone involved.”
However, the architects of the joint venture company have strangled information to such a tiny trickle that nobody outside the magic inner circle knows what is going on.
Not one elected councillor of any persuasion has been given unrestricted access to the 3,000 page contract, which was signed last September. Most of it stays hidden. Councillors, the unions and the public who, like me, pay for all that, have been treated like mushrooms. We have been left in the dark and, every now and then, some smug soul chucks a bucket of manure over us. The last big bucket of dung was delivered yesterday by the very man who boasted that not a single job would be put at risk by the deal.
As the Under-Secretary knows, I am talking about the chief executive of Somerset county council—a man who has lied consistently to everyone at all stages. Yesterday, he calmly told an audience of more than 200 councillors, almost in a throwaway line, that restructuring services throughout Somerset would probably mean a 30 per cent. cut in the total work force. That would mean Somerset county shedding 5,000 jobs in front-line services and almost 200 each for the five district councils. However, some of those councils do not employ 200 people directly.
Mr. Jones was not authorised or expected to say what he did; it just slipped from his lips like a blob of saliva. He is a man who claims to be guaranteeing the jobs in Southwest One, but he has now told us that thousands of other jobs will be sacrificed by the people of Somerset. That is the ultimate betrayal, and the unions and others now call him Alan “Judas” Jones. The current leader of the council, Jill Shortland, is trying tonight to explain away his words, by claiming that any job losses can be achieved by natural wastage. But the only natural wastage that most people want to see is the immediate departure of that incredibly dangerous man, who has cocked up and covered up for far too long.
We do not even know for sure who is on the board of Southwest One. There are quite a few bods from IBM, naturally, and a couple of harmless councillors who would not say boo to a goose or recognise a balance sheet if it bit them, like a goose, on the bottom, as wellas the chief constable of Avon and Somerset police force, who apparently has the right to sit on a public board. I do not think that I have heard of an arrangement quite as dodgy as that. I am also reliably informed that the chief executive of Somerset county council is another regular attendee at board meetings, but that is hearsay. Mr. Jones has always sworn blind that he plays no active part in Southwest One. I am afraid that that now looks like another whopping lie.
I intend to dwell on Mr. Jones for quite a while. He more than any other public official has been involved in the formation of the company, and it is his ruthless tactics that we must expose. Mr. Jones has a habit of falling out with people and then covering it up. The first effective manager of ISiS—the improving services in Somerset programme, which was the precursor to Southwest One—was a bright and attractive young lady called Jenny Hastings, a constituent. She and Mr. Jones worked effectively and closely, but then there was the falling-out.
All councils have a procedure for resolving grievances—we all know that; we are Members of this place—but in that case there must have been something extremely difficult to resolve. The timing was uncomfortable. The Audit Commission was about to examine the county’s books. Somerset’s quest for five shining stars would have fallen flat on its face if the chief executive had been embroiled in a tacky public industrial tribunal. It took the services of ACAS to thrash out an agreement, under which Mrs. Hastings departed amicably—and silently.
The process also cost an awful lot of public money. I would like to know how much. I made a request under the Freedom of Information Act 2000 more than a year ago, but the council is still dragging its feet and delaying a response.
Mr. Jones’s reputation in county hall is a legend—a remarkable achievement. I am told by the unions that anthrax is more popular than Alan Jones, but I would not know personally. I am no friend of the Liberal Democrats—the Minister knows that, and you certainly do, Mr. Speaker—who hold political control, but I am appalled and horrified by the manner in which Alan Jones manipulates them. There is no better example of that than what happened to one councillor, who was the deputy leader of the Liberal Democrats on the county council.
Chris Ruane (Vale of Clwyd) (Lab): Name him!
Mr. Liddell-Grainger: I thank the hon. Gentleman—that councillor’s name is Paul Buchanan. As Liberal Democrats go, he has the sharpest of brains. He was on the ISiS project, he worked with Jenny Hastings and he knows where all the bodies are buried. He has made no secret of the fact that Alan Jones would be out if he became leader, which he was destined to do. Unfortunately, that claim may have been a bit of an error. Last April, Alan Jones reported Paul Buchanan to the Standards Board for England—no fewer than 50 different trumped-up charges were made against the man.
I sit on the Select Committee on Public Administration, but I am afraid that I do not have a high opinion of the Standards Board for England. The Government’s motives for creating it were sound, and rightly so. After all, we must expect high standards of all our elected councillors and elected representatives. However, the Standards Board system allows injustice.
Alan Jones was able to make those absurd complaints, and because of the way the board is set up, it is obliged to take them seriously, regardless of their nature. As a direct result, Jones silenced his most powerful internal critic. Suddenly, anything and everything that Councillor Paul Buchanan might have been able to say fell under the cloak of sub judice. That scuppered his political chances as well—conveniently. Irrespective of political persuasion, nobody wants a new leader with a shadow of an investigation hanging over him, so the Liberal Democrats ditched their best man, and little Mr. Jones must have relished every second of it.
The original 50 charges, incidentally, were rejected very quickly indeed, but Jones, as usual, came back with fresh new charges. Inexcusably, the Standards Board is still wading through them. This dreadful system has permitted a brutal injustice in order to protect a dangerous unelected megalomaniac as he pursues the goal of a high-risk and very dangerous private partnership.
I am now in a position to prove that one high-level official in county hall acted in support of the chief executive and gave false testimony to the Standards Board. The Secretary of State said in March, and the Minister repeated it in my Westminster Hall debate, that I should take up my concerns with the district auditor. I thank the Minister for that advice; I have done so. However, I am sad to report that the district auditor considers my evidence outside the strict remit of his accountancy, so I have no option other than to call in the Serious Fraud Office.
I am also concerned about the involvement of the Avon and Somerset police in all this. Alan Jones hired the wife of the chief constable to negotiate directly with the preferred bidder, IBM. Now the chief constable himself has the right to sit on the board. I believe that that is too close for comfort and sets a dangerous precedent. Mr. Jones is now beginning to admit some of the ghastly truth about this deal. It will lead to job cuts. Even the police—Avon and Somerset constabulary—are talking seriously of shunting and shredding the front-line office staff in 19 police stations across the force area. The Minister is based in Gloucestershire and I am sure that he would have something to say if his police force were affected.
Southwest One is currently trying to drum up extra trade in Essex, Torbay, Plymouth and Cornwall. Cornwall is becoming a unitary authority and I would say to that council, “Please look carefully at what you are doing; you are being led by the nose; if you go down this line, your expenses, accounts and accountability will be given to IBM based in Southampton”. The same goes for Plymouth. They are both good councils; both need, dare I say it, guidance away from this mad scheme. I think that they should be afraid; they should be very, very afraid.
The ethos of Southwest One is cut-price. The figures do not add up because there are no figures to see. If the other authorities sign up, they will be recklessly risking public money, but this is the way that IBM likes to do business: cutting margins, cheeseparing, getting less for more. The more it makes, the more it takes. Remember that IBM owns 75 per cent. of the action. New software arrives soon; it is called “SAP”, but everywhere SAP has been sold to local government, there have been huge operational problems and big costly overspends. That has happened in Bradford, it is about to happen in Somerset and we are going to pay through the nose for it as taxpayers and as local people.
IBM put in the Rural Payments Agency computers, but we would have been better off with a bag of kiddies’ counting beans than with the mess that was made there. I do not blame the Government; I blame the systems. IBM lost the Department for Transport £970 million—do not take my word for it; the National Audit Office nailed it a couple of weeks ago. IBM cares about only one client—IBM—but that is business, is it not? One has to be tough to flourish and picking a global partner requires similar expertise to be able to counter and understand what is happening. That is what is missing, and that is what I want to address.
Councillors in Somerset have had to rely on reports from a small group of officers, unaccountable to anyone, whose future careers are entwined with Southwest One. Councillors have found it incredibly difficult to represent the public interest because they are not getting impartial advice.
I have a handful of positive suggestions for the Minister to consider. When it comes to Government projects, it is mandatory for the 4Ps agency to do regular reviews. Why not extend that to local government? Just an idea. How about beefing up the Audit Commission so that it can handle these highly complex deals? Either that or allow the National Audit Office to do the job, which would of course come under the Select Committees of this House. Specialist training for councillors on scrutiny committees would be welcome. They could learn about, and hopefully understand, what they ought to be looking for. Please, can we have clear Government guidance on the use of the magical cover-up phrase “commercial confidentiality”? In Somerset, that phrase has been used time and time again to explain away unnecessary secrecy. It is the motto of the county now. It has dropped whatever it used to be and it is now “Commercial confidentiality”. It is used at every turn. Finally, a good deal is only as good as the cost and benefit realisation plan. We must have a mandatory standard.
I am trying to be constructive for the future because I believe that, in Somerset at least, the project has been a complete disaster. Wool has been pulled over the eyes of the elected councillors and Alan Jones is clicking away with his knitting needles. I have been challenged to go and look at the contract. I have offered to take two forensic accountants, one business lawyer, Sir John Banham if he will come—I hope that he will—and possibly a couple of other people to help me. It will take six to seven days to go through it. However, I will not be allowed to see the whole contract or the whole business plan. I will not be allowed to see the correspondence on what made the deal possible and why the group was chosen over British Telecom and Capita. It is joke. It is a sham. The group is hiding. Why?
The unions have been ignored and a cover-up has been the order of the day. It is, I am afraid—I say this gently—no good for the Minister to say that this is a matter for the councils concerned. It has moved on from there. I am afraid that it is no good telling me anymore that the district auditor is the person to go to. We have brought the matter up with the Minister and in business questions already.
Somerset’s crisis today is going to be someone else’s tomorrow, without a shadow of a doubt. We need ministerial intervention, and I am afraid, to put it crudely, we need it pretty darn quick before the disaster gets worse.
My second declaration of interest is much more important. I have a financial stake in the private partnership that we are considering. I live in Somerset and pay taxes to Somerset county council. I have thus become a small shareholder in a huge new joint venture, brokered by the county and run by the global computer giant, IBM. The company is called Southwest One.
The Under-Secretary of State for Communities and Local Government, the hon. Member for Gloucester (Mr. Dhanda), will be familiar with many of my concerns because we have discussed the matter privately and in this place. He listened to my speech in Westminster Hall on 26 March on the subject, and I thank him for his response to it. During that debate, I clearly expressed my anxieties about the way in which the company came into being. I feared corruption, and I made that clear at the time. I can prove that lies have been told and, tonight, I will produce fresh evidence.
I should like to make one thing crystal clear. Some have wrongly accused me of sheltering behind the protection of parliamentary privilege. That is incorrect. I have repeated outside everything that I have ever said about Southwest One here. My website and my blog—modesty forbids, but it is called Mogg the Blog—bear ample testimony to that. I have laid myself open to any legal challenge and, as yet, no one has dared challenge me.
Southwest One is formed of two councils—Somerset county and Taunton Deane borough—plus one police authority, Avon and Somerset constabulary. I remind the House that its business partner is IBM. Hon. Members will be surprised to learn that IBM owns 75 per cent. of the company. That means that, if Southwest One ever makes a profit, the “Big Blue” will pocket three quarters of it. It is a 10-year venture, which was supposed to save money. Somerset council claims that it will save it £200 million—£20 million a year. Yet the county offers no logical explanation or business realisation plan. Why? There is not one.
There is a document, which falsely describes itself as the business realisation plan, but it contains not one single fact or figure. Instead, it is an exercise in vivid imagination, probably written by—dare I say it, and show my venerable age—Andy Pandy. Let me give an example. The document states:
“Improved supplier service levels will result in authorities delivering higher performance.”
Excuse me—what is the precise predicted improvement year after year? We do not have any numbers—but there are no numbers. It is all aspirational garbage.
When did the document appear? Only the other day, after persistent demands under the Freedom of Information Act 2000 from angry trade unionists. I pay tribute to Unison, which has not stopped its campaign. As a taxpayer and Somerset Member of Parliament, I share its anger and frustration. I gently say that I hope that the Minister does, too. It is no way in which to conduct intelligent business.
The Government already rightly publish excellent advice on how to do things. Business Link describes best practice thus:
“Success in a joint venture depends on thorough research and analysis of aims and objectives. This should be followed up with effective communication of the business plan to everyone involved.”
However, the architects of the joint venture company have strangled information to such a tiny trickle that nobody outside the magic inner circle knows what is going on.
Not one elected councillor of any persuasion has been given unrestricted access to the 3,000 page contract, which was signed last September. Most of it stays hidden. Councillors, the unions and the public who, like me, pay for all that, have been treated like mushrooms. We have been left in the dark and, every now and then, some smug soul chucks a bucket of manure over us. The last big bucket of dung was delivered yesterday by the very man who boasted that not a single job would be put at risk by the deal.
As the Under-Secretary knows, I am talking about the chief executive of Somerset county council—a man who has lied consistently to everyone at all stages. Yesterday, he calmly told an audience of more than 200 councillors, almost in a throwaway line, that restructuring services throughout Somerset would probably mean a 30 per cent. cut in the total work force. That would mean Somerset county shedding 5,000 jobs in front-line services and almost 200 each for the five district councils. However, some of those councils do not employ 200 people directly.
Mr. Jones was not authorised or expected to say what he did; it just slipped from his lips like a blob of saliva. He is a man who claims to be guaranteeing the jobs in Southwest One, but he has now told us that thousands of other jobs will be sacrificed by the people of Somerset. That is the ultimate betrayal, and the unions and others now call him Alan “Judas” Jones. The current leader of the council, Jill Shortland, is trying tonight to explain away his words, by claiming that any job losses can be achieved by natural wastage. But the only natural wastage that most people want to see is the immediate departure of that incredibly dangerous man, who has cocked up and covered up for far too long.
We do not even know for sure who is on the board of Southwest One. There are quite a few bods from IBM, naturally, and a couple of harmless councillors who would not say boo to a goose or recognise a balance sheet if it bit them, like a goose, on the bottom, as wellas the chief constable of Avon and Somerset police force, who apparently has the right to sit on a public board. I do not think that I have heard of an arrangement quite as dodgy as that. I am also reliably informed that the chief executive of Somerset county council is another regular attendee at board meetings, but that is hearsay. Mr. Jones has always sworn blind that he plays no active part in Southwest One. I am afraid that that now looks like another whopping lie.
I intend to dwell on Mr. Jones for quite a while. He more than any other public official has been involved in the formation of the company, and it is his ruthless tactics that we must expose. Mr. Jones has a habit of falling out with people and then covering it up. The first effective manager of ISiS—the improving services in Somerset programme, which was the precursor to Southwest One—was a bright and attractive young lady called Jenny Hastings, a constituent. She and Mr. Jones worked effectively and closely, but then there was the falling-out.
All councils have a procedure for resolving grievances—we all know that; we are Members of this place—but in that case there must have been something extremely difficult to resolve. The timing was uncomfortable. The Audit Commission was about to examine the county’s books. Somerset’s quest for five shining stars would have fallen flat on its face if the chief executive had been embroiled in a tacky public industrial tribunal. It took the services of ACAS to thrash out an agreement, under which Mrs. Hastings departed amicably—and silently.
The process also cost an awful lot of public money. I would like to know how much. I made a request under the Freedom of Information Act 2000 more than a year ago, but the council is still dragging its feet and delaying a response.
Mr. Jones’s reputation in county hall is a legend—a remarkable achievement. I am told by the unions that anthrax is more popular than Alan Jones, but I would not know personally. I am no friend of the Liberal Democrats—the Minister knows that, and you certainly do, Mr. Speaker—who hold political control, but I am appalled and horrified by the manner in which Alan Jones manipulates them. There is no better example of that than what happened to one councillor, who was the deputy leader of the Liberal Democrats on the county council.
Chris Ruane (Vale of Clwyd) (Lab): Name him!
Mr. Liddell-Grainger: I thank the hon. Gentleman—that councillor’s name is Paul Buchanan. As Liberal Democrats go, he has the sharpest of brains. He was on the ISiS project, he worked with Jenny Hastings and he knows where all the bodies are buried. He has made no secret of the fact that Alan Jones would be out if he became leader, which he was destined to do. Unfortunately, that claim may have been a bit of an error. Last April, Alan Jones reported Paul Buchanan to the Standards Board for England—no fewer than 50 different trumped-up charges were made against the man.
I sit on the Select Committee on Public Administration, but I am afraid that I do not have a high opinion of the Standards Board for England. The Government’s motives for creating it were sound, and rightly so. After all, we must expect high standards of all our elected councillors and elected representatives. However, the Standards Board system allows injustice.
Alan Jones was able to make those absurd complaints, and because of the way the board is set up, it is obliged to take them seriously, regardless of their nature. As a direct result, Jones silenced his most powerful internal critic. Suddenly, anything and everything that Councillor Paul Buchanan might have been able to say fell under the cloak of sub judice. That scuppered his political chances as well—conveniently. Irrespective of political persuasion, nobody wants a new leader with a shadow of an investigation hanging over him, so the Liberal Democrats ditched their best man, and little Mr. Jones must have relished every second of it.
The original 50 charges, incidentally, were rejected very quickly indeed, but Jones, as usual, came back with fresh new charges. Inexcusably, the Standards Board is still wading through them. This dreadful system has permitted a brutal injustice in order to protect a dangerous unelected megalomaniac as he pursues the goal of a high-risk and very dangerous private partnership.
I am now in a position to prove that one high-level official in county hall acted in support of the chief executive and gave false testimony to the Standards Board. The Secretary of State said in March, and the Minister repeated it in my Westminster Hall debate, that I should take up my concerns with the district auditor. I thank the Minister for that advice; I have done so. However, I am sad to report that the district auditor considers my evidence outside the strict remit of his accountancy, so I have no option other than to call in the Serious Fraud Office.
I am also concerned about the involvement of the Avon and Somerset police in all this. Alan Jones hired the wife of the chief constable to negotiate directly with the preferred bidder, IBM. Now the chief constable himself has the right to sit on the board. I believe that that is too close for comfort and sets a dangerous precedent. Mr. Jones is now beginning to admit some of the ghastly truth about this deal. It will lead to job cuts. Even the police—Avon and Somerset constabulary—are talking seriously of shunting and shredding the front-line office staff in 19 police stations across the force area. The Minister is based in Gloucestershire and I am sure that he would have something to say if his police force were affected.
Southwest One is currently trying to drum up extra trade in Essex, Torbay, Plymouth and Cornwall. Cornwall is becoming a unitary authority and I would say to that council, “Please look carefully at what you are doing; you are being led by the nose; if you go down this line, your expenses, accounts and accountability will be given to IBM based in Southampton”. The same goes for Plymouth. They are both good councils; both need, dare I say it, guidance away from this mad scheme. I think that they should be afraid; they should be very, very afraid.
The ethos of Southwest One is cut-price. The figures do not add up because there are no figures to see. If the other authorities sign up, they will be recklessly risking public money, but this is the way that IBM likes to do business: cutting margins, cheeseparing, getting less for more. The more it makes, the more it takes. Remember that IBM owns 75 per cent. of the action. New software arrives soon; it is called “SAP”, but everywhere SAP has been sold to local government, there have been huge operational problems and big costly overspends. That has happened in Bradford, it is about to happen in Somerset and we are going to pay through the nose for it as taxpayers and as local people.
IBM put in the Rural Payments Agency computers, but we would have been better off with a bag of kiddies’ counting beans than with the mess that was made there. I do not blame the Government; I blame the systems. IBM lost the Department for Transport £970 million—do not take my word for it; the National Audit Office nailed it a couple of weeks ago. IBM cares about only one client—IBM—but that is business, is it not? One has to be tough to flourish and picking a global partner requires similar expertise to be able to counter and understand what is happening. That is what is missing, and that is what I want to address.
Councillors in Somerset have had to rely on reports from a small group of officers, unaccountable to anyone, whose future careers are entwined with Southwest One. Councillors have found it incredibly difficult to represent the public interest because they are not getting impartial advice.
I have a handful of positive suggestions for the Minister to consider. When it comes to Government projects, it is mandatory for the 4Ps agency to do regular reviews. Why not extend that to local government? Just an idea. How about beefing up the Audit Commission so that it can handle these highly complex deals? Either that or allow the National Audit Office to do the job, which would of course come under the Select Committees of this House. Specialist training for councillors on scrutiny committees would be welcome. They could learn about, and hopefully understand, what they ought to be looking for. Please, can we have clear Government guidance on the use of the magical cover-up phrase “commercial confidentiality”? In Somerset, that phrase has been used time and time again to explain away unnecessary secrecy. It is the motto of the county now. It has dropped whatever it used to be and it is now “Commercial confidentiality”. It is used at every turn. Finally, a good deal is only as good as the cost and benefit realisation plan. We must have a mandatory standard.
I am trying to be constructive for the future because I believe that, in Somerset at least, the project has been a complete disaster. Wool has been pulled over the eyes of the elected councillors and Alan Jones is clicking away with his knitting needles. I have been challenged to go and look at the contract. I have offered to take two forensic accountants, one business lawyer, Sir John Banham if he will come—I hope that he will—and possibly a couple of other people to help me. It will take six to seven days to go through it. However, I will not be allowed to see the whole contract or the whole business plan. I will not be allowed to see the correspondence on what made the deal possible and why the group was chosen over British Telecom and Capita. It is joke. It is a sham. The group is hiding. Why?
The unions have been ignored and a cover-up has been the order of the day. It is, I am afraid—I say this gently—no good for the Minister to say that this is a matter for the councils concerned. It has moved on from there. I am afraid that it is no good telling me anymore that the district auditor is the person to go to. We have brought the matter up with the Minister and in business questions already.
Somerset’s crisis today is going to be someone else’s tomorrow, without a shadow of a doubt. We need ministerial intervention, and I am afraid, to put it crudely, we need it pretty darn quick before the disaster gets worse.
AUDITING SOUTHWEST ONE
(C
opied from Ian Liddell-Grainger's website in June 2009)
opied from Ian Liddell-Grainger's website in June 2009)10 Mar 2009
Audit Commission
1.29 pm
Mr. Ian Liddell-Grainger (Bridgwater) (Con): I am grateful to be discussing the Audit Commission, and I should like to offer a brief history lesson. In 1846—the Minister may remember it well—the first sewing machine was developed in America, the Irish potato famine began and, believe it or not, official audits were introduced in English local government. We should have come a long way in the intervening 163 years, but progress does not always follow an upward path—certainly not when it comes to auditing local councils.
In 1983, the then Conservative Government established the independent Audit Commission. It seemed like a good idea at the time, but unfortunately the work load has snowballed. The commission was given more councils, authorities and trusts to keep a watchful eye on, and today it is responsible for checking the books of 11,000 complex public bodies that spend £200 billion of our money, including everything from town halls to health trusts, fire authorities and the police, which is a pig of a lot of paperwork to handle in anyone’s book.
However, delightfully, the commission is not exactly overstaffed. It employs 2,500 people, which is slim government. I have no problem with that, but it works out at one harassed human being for every four public authorities. In other words, the work is a superhuman challenge. I have not come here to decry what the commission tries to do—I have absolutely no doubt that those people give it their best shot given their resources—but I am seriously worried about some of its operations.
I shall go into detail about the local authority that I have the terrible misfortune to know best: Somerset county council. We are all painfully familiar with the tales of mismanagement and greed from the world of banking and it is widely acknowledged even by senior Cabinet Ministers that light-touch regulation was a dangerous error. There are growing calls for the Financial Services Authority to be beefed up or got rid of so that we can tackle tomorrow’s Fred the Shreds. I am concerned that the bad practice that almost wrecked the reputation of British banking is now creeping into the public sector.
The Minister will be delighted that we have our own Fred the Shred in Somerset. His name is Alan Jones, the chief executive of the county council. He was taken on in 2003 for £90,000 a year, which makes MPs look cheap, and now takes home £160,000, which is more than the Prime Minister. That scale of inflation is enough to make any grown man groan. Actually, Jones the Groan is in charge of a so-called four-star authority. Listening to him, one could be mistaken for thinking that every element under the county’s control is pure heaven, but that is highly deceptive, to say the least.
The star awards are a denigrated currency. So many councils have collected them that the commission is scrapping the prizes. Like green shield stamps, the awards have become tacky and worthless. Star ratings do not even register at my favourite Somerset local, “The Dog and Duck”. People care only about the quality of service and how much it costs, not about stars. Unfortunately, the commission’s stars have also bred a greedy race for high salaries. Today, we see the ludicrous spectacle of many chief executives earning far more than the Prime Minister. That cannot be right.
The executives behave like premier league football managers, shifting from council to council on still richer packages, simply because they are on some silly star rating system. Research by the commission recently found that council chief executives’ pay has risen by more than a third in the past four years. We are envious of that. It is a shameful legacy of the commission that it has created a market for local government fat cats and bloated egos, few of whom have larger egos than Jones the Groan.
Jones the Groan had a big, expensive business idea. Like all great schemes, it was destined to be paid for by the likes of us. I was deeply suspicious from the word go and brought it to the Government’s attention. Last year, I secured a debate in the Chamber about the formation of a new joint venture company, which is now called Southwest One. A joint venture implies partnership, but that partnership is far from equal. Three public bodies, which are all meant to be answerable to the commission, are involved: Somerset county council, Taunton Deane borough council, and the Avon and Somerset police. They did a deal with IBM, a multi-billion pound company, and took over hundreds of staff, mostly in information technology. Together, they intended to trade throughout Britain as Southwest One.
Before the company even started, it was heralded as a great success story that was guaranteed to save £200 million for the hard-pressed taxpayers of Somerset. The Government will not be surprised that so far it has not saved a brass farthing. Unfortunately, IBM continues to own 75 per cent. of the company, which means that every time it provides a service to its joint venture clients, three quarters of the returns go into IBM’s pockets. IBM did not get where it is today through charity. Last year, it turned over $98 billion and made $10 billion profit.
The Somerset deal means that IBM always gets its rake-off and other partners cannot be encouraged to join. Jones the Groan and his team have not persuaded any other council to get involved. Through the commission, Devon and Cornwall looked at the arrangements. Because they did not join, Jones the Groan called them “institutional chauvinists”—it seems we do not do charm in Somerset. The initial contract was signed in September 2007 with the commission’s knowledge and was amended in March last year when Avon and Somerset police joined. The contract, which runs to 3,000 pages, is still secret. I asked the commission to look at it, but that is not in its remit. Councillors are allowed to inspect the paperwork only if they sign a gagging order to stop them revealing anything about any aspect of the deal. That is bizarre and, I suspect, highly undemocratic. The odour of rotting fish is quite normal in county hall these days.
I shall go through some of the history. Alan Jones, the chief executive, hired a special brain to take the project through—a lady called Sue Barnes. She got the job and a lucrative contract with no interview. Mrs. Barnes uses her maiden name. Her married name is Mrs. Port, and she is the wife of the chief constable of Avon and Somerset police. That may be a coincidence, but Mr. Port’s force is now a member of Southwest One, and he has put himself on the company’s board. Board directors of Southwest One have a direct responsibility to protect not only the commercial interests of the company, but also Somerset’s taxpayers. Inevitably, that produces conflict with his role as head of the Avon and Somerset police.
Did anyone in the Home Office, the Association of Chief Police Officers or the commission raise a murmur about that? No, they did not. Silence is golden. Anyone who did anything about it, including the BBC, got a letter from Carter-Ruck, with whom many of us will be familiar. It cost us £90,000 to defend Mr. Port. Again, the commission did nothing. What is the matter with the commission? On every occasion that I have asked about the arrangements, I have been told that they are outside the commission’s remit and that it cannot look at them. The commission was set up to uphold the best principles, and should be working to do so, but in practice its powers are at best severely limited and in some cases negligible.
Last year, I received an anonymous brown envelope containing a load of documents—no doubt I will be arrested for that after the debate—the transcript of an interview with a very senior officer at the county council, the corporate director of resources, Mr. Roger Kershaw. It showed how Mr. Kershaw’s original evidence to the Standards Board had been altered. Large sections were deleted, probably by Mr. Kershaw himself or Jones the Groan, his boss. The bits that went missing implicated Mrs. Barnes, the chief constable’s wife, for holding a secret meeting with IBM at a crucial stage in the bidding process. It even described how Mrs. Barnes had been, in effect, dismissed straight afterwards, but mysteriously was still around when the contract for Southwest One was signed. At the time, that looked like a deliberate attempt to suppress evidence concerning a contract that involved £400 million of taxpayers’ money.
Last year, in the House, I called that corruption. I hope the Minister understands that I do not use the word lightly. I was advised in writing by the Secretary of State for Communities and Local Government to take my concerns to the district auditor, and I did so. The district auditor even came to see me, but I was not encouraged by his response, which was that such things were outside his remit. I wrote to him and got the same reply, so I ask the Minister: whose remit is it? When such evidence comes to light, we want to know, in a democratic nation, where it has come from.
The district auditor was equally dismissive when I told him about Roger Kershaw’s professional conflict of interest. Mr. Kershaw just happens to be Somerset county council’s line manager for Southwest One. He is also the section 151 officer, whose duty is to ensure that everything is done by the book. He runs with the fox and the hounds, but guess what? According to the district auditor, that is not within his remit either.
Do not get me wrong. I do not think that it is the Audit Commission’s fault; it is the system’s. We—I say that collectively—have failed to provide enough legal muscle, people and money to do the job. We may, unfortunately, trust too much in the process of democratic accountability. We ought to give far greater support and training to local councillors who must scrutinise complex—in this case, bad—deals such as Southwest One. In Somerset, the public are forced to rely on a “Dad’s Army” Captain Mainwaring-style figure of fun, a one-time small-town banker—there is an old cockney rhyme for that—called Mr. Crabb. That individual, God help us, is Somerset’s equivalent of the Chancellor of the Exchequer, without the eyebrows. He is a part-time councillor who runs a French property business and spends most of his time in Edinburgh. He has been shown to be at best incompetent and at worst stupid. His political opposite number is a well-meaning councillor who sells golf balls.
Those councillors are well-meaning people who want to do the best that they can, but they are totally out of their depth. There are two other potential defenders of the public interest on the board of Southwest One, but they too are woefully inexperienced elected members. To put it crudely, IBM can afford the best financial and legal brains on the market. We cannot compete, either as councillors or as Members. The councillors are forced to take advice from a small group of highly paid officers whose careers are entwined in the matter. They are treated like mushrooms—I am sure that the Minister can guess what is coming; they are kept in the dark, and every now and again the door opens and in comes the manure.
The crude fact is that there is no effective accountability. That should change. I believe strongly—as I know the Minister does, because of where he comes from—that electors deserve councillors who are properly taught to do their job and know where to get impartial advice. I hope that he will side with me. That is the only way for tyrannical chief executives to be challenged before they do lasting harm to this country’s democratic process. I am totally with the Government in seeking more openness and honesty in council chiefs. I applaud the Minister’s pledge to force chief executives to come clean about their salaries, bonuses and pension perks. We have to do that, so why should they not do it too? They get a lot more than we do. I do not want my county run by unelected fat cats, and I do not want Jones the Groan rewarded for his obvious and utter failures.
The current politicians are not exercising control, and nor is the Audit Commission. The commission lacks the time, people and power to get to the bottom of any problem. I note that it is trying to recruit a new principal auditor for the south-west. The pay scale is £33,000 a year. By contrast, Roger Kershaw, the equivalent in Somerset county council, takes home £110,000, not counting all the other bits. Money talks. How can the commission hire the best staff if it cannot compete on pay?
When the auditors turn up to inspect a local authority, how do they work? They are not like a murder squad. They cannot turn over a council, searching every nook and cranny. A finance man from a big county described the Audit Commission’s task to me:
“They listen to what councils say. They look at internal audit work and things they raised last year. They do some sampling to see if there is anything that challenges what they have been told. They listen to objections raised by interested parties. But unless they are pointed in the right direction, it is sometimes like lookingfor a needle in a haystack. And their first priority is to reassure themselves that the accounts present the transactions in the year in a fair and transparent way.”
Imagine taking in a car for an MOT and being cross-examined, “Is it running well? How are the tyres? Any other problems? Oh well, we’ll sign you off, great.”
Auditors who lean so heavily on client input can hardly be described as independent, let alone thorough, and there are not enough of them. Last year, there was so much adverse publicity about the formation of Southwest One that the Audit Commission finally took a look at the matter. I suspect that ministerial push was behind it. That particular exercise cost £8,900. The district auditor charged £345 an hour. He skimmed through one of the most detailed and complex contracts in recent history, which was probably three and half days’ work. It was not a proper audit; it was a snapshot. It was light-touch regulation all over again.
A complete council audit is far from cheap. A lot of councils have complained about Audit Commission charges. Somerset had to cough up £257,300 last year. That raises another important issue of doubt. How can the independent Audit Commission’s word be trusted when the client pays all the bills? Will the Minister consider reducing grants to local government by the amount required to create a central audit fund? That way auditors could be fully independent and free from the accusation that whoever pays the piper calls the tune.
Have the Government considered a merger between the National Audit Office, the Audit Commission, the government consultants 4ps and the Office of Government Commerce? On large, risky ventures such as Southwest One, local government auditors should be able to call on additional resources to ensure that the highest standards are applied in the public interest. On another point, key milestones called gateway reviews are mandatory in large national projects. Why are they not also mandatory for large local government projects such as ISiS and Southwest One? I ask in a spirit of constructive debate, because I do not know the answer.
I consulted many experts before this debate—I have been going on about the issue for two years—and have reached the sorry conclusion that the Audit Commission is no longer fit for task. This year, to everyone’s derision, Somerset county council received from the auditors the highest value for money rating possible. They might as well have given an Oscar to a tub of lard for all the good that has done. Somerset borrowed £35 million to buy an unproven computer system from IBM that is already drastically late. That is not value for money. The council also ignored all professional advice and invested £25 million in Icelandic banks. That is not value for money either, but what would the Audit Commission know? Some £10 million of its reserves also went to Iceland. We have all been caught up.
We pay for such costly mistakes. We deserve better: better audits, better scrutiny, and a much tighter rein on the likes of Jones the Groan and all the useless people around him. If we do not get that, we will all end up paying in the long run.
Audit Commission
1.29 pm
Mr. Ian Liddell-Grainger (Bridgwater) (Con): I am grateful to be discussing the Audit Commission, and I should like to offer a brief history lesson. In 1846—the Minister may remember it well—the first sewing machine was developed in America, the Irish potato famine began and, believe it or not, official audits were introduced in English local government. We should have come a long way in the intervening 163 years, but progress does not always follow an upward path—certainly not when it comes to auditing local councils.
In 1983, the then Conservative Government established the independent Audit Commission. It seemed like a good idea at the time, but unfortunately the work load has snowballed. The commission was given more councils, authorities and trusts to keep a watchful eye on, and today it is responsible for checking the books of 11,000 complex public bodies that spend £200 billion of our money, including everything from town halls to health trusts, fire authorities and the police, which is a pig of a lot of paperwork to handle in anyone’s book.
However, delightfully, the commission is not exactly overstaffed. It employs 2,500 people, which is slim government. I have no problem with that, but it works out at one harassed human being for every four public authorities. In other words, the work is a superhuman challenge. I have not come here to decry what the commission tries to do—I have absolutely no doubt that those people give it their best shot given their resources—but I am seriously worried about some of its operations.
I shall go into detail about the local authority that I have the terrible misfortune to know best: Somerset county council. We are all painfully familiar with the tales of mismanagement and greed from the world of banking and it is widely acknowledged even by senior Cabinet Ministers that light-touch regulation was a dangerous error. There are growing calls for the Financial Services Authority to be beefed up or got rid of so that we can tackle tomorrow’s Fred the Shreds. I am concerned that the bad practice that almost wrecked the reputation of British banking is now creeping into the public sector.
The Minister will be delighted that we have our own Fred the Shred in Somerset. His name is Alan Jones, the chief executive of the county council. He was taken on in 2003 for £90,000 a year, which makes MPs look cheap, and now takes home £160,000, which is more than the Prime Minister. That scale of inflation is enough to make any grown man groan. Actually, Jones the Groan is in charge of a so-called four-star authority. Listening to him, one could be mistaken for thinking that every element under the county’s control is pure heaven, but that is highly deceptive, to say the least.
The star awards are a denigrated currency. So many councils have collected them that the commission is scrapping the prizes. Like green shield stamps, the awards have become tacky and worthless. Star ratings do not even register at my favourite Somerset local, “The Dog and Duck”. People care only about the quality of service and how much it costs, not about stars. Unfortunately, the commission’s stars have also bred a greedy race for high salaries. Today, we see the ludicrous spectacle of many chief executives earning far more than the Prime Minister. That cannot be right.
The executives behave like premier league football managers, shifting from council to council on still richer packages, simply because they are on some silly star rating system. Research by the commission recently found that council chief executives’ pay has risen by more than a third in the past four years. We are envious of that. It is a shameful legacy of the commission that it has created a market for local government fat cats and bloated egos, few of whom have larger egos than Jones the Groan.
Jones the Groan had a big, expensive business idea. Like all great schemes, it was destined to be paid for by the likes of us. I was deeply suspicious from the word go and brought it to the Government’s attention. Last year, I secured a debate in the Chamber about the formation of a new joint venture company, which is now called Southwest One. A joint venture implies partnership, but that partnership is far from equal. Three public bodies, which are all meant to be answerable to the commission, are involved: Somerset county council, Taunton Deane borough council, and the Avon and Somerset police. They did a deal with IBM, a multi-billion pound company, and took over hundreds of staff, mostly in information technology. Together, they intended to trade throughout Britain as Southwest One.
Before the company even started, it was heralded as a great success story that was guaranteed to save £200 million for the hard-pressed taxpayers of Somerset. The Government will not be surprised that so far it has not saved a brass farthing. Unfortunately, IBM continues to own 75 per cent. of the company, which means that every time it provides a service to its joint venture clients, three quarters of the returns go into IBM’s pockets. IBM did not get where it is today through charity. Last year, it turned over $98 billion and made $10 billion profit.
The Somerset deal means that IBM always gets its rake-off and other partners cannot be encouraged to join. Jones the Groan and his team have not persuaded any other council to get involved. Through the commission, Devon and Cornwall looked at the arrangements. Because they did not join, Jones the Groan called them “institutional chauvinists”—it seems we do not do charm in Somerset. The initial contract was signed in September 2007 with the commission’s knowledge and was amended in March last year when Avon and Somerset police joined. The contract, which runs to 3,000 pages, is still secret. I asked the commission to look at it, but that is not in its remit. Councillors are allowed to inspect the paperwork only if they sign a gagging order to stop them revealing anything about any aspect of the deal. That is bizarre and, I suspect, highly undemocratic. The odour of rotting fish is quite normal in county hall these days.
I shall go through some of the history. Alan Jones, the chief executive, hired a special brain to take the project through—a lady called Sue Barnes. She got the job and a lucrative contract with no interview. Mrs. Barnes uses her maiden name. Her married name is Mrs. Port, and she is the wife of the chief constable of Avon and Somerset police. That may be a coincidence, but Mr. Port’s force is now a member of Southwest One, and he has put himself on the company’s board. Board directors of Southwest One have a direct responsibility to protect not only the commercial interests of the company, but also Somerset’s taxpayers. Inevitably, that produces conflict with his role as head of the Avon and Somerset police.
Did anyone in the Home Office, the Association of Chief Police Officers or the commission raise a murmur about that? No, they did not. Silence is golden. Anyone who did anything about it, including the BBC, got a letter from Carter-Ruck, with whom many of us will be familiar. It cost us £90,000 to defend Mr. Port. Again, the commission did nothing. What is the matter with the commission? On every occasion that I have asked about the arrangements, I have been told that they are outside the commission’s remit and that it cannot look at them. The commission was set up to uphold the best principles, and should be working to do so, but in practice its powers are at best severely limited and in some cases negligible.
Last year, I received an anonymous brown envelope containing a load of documents—no doubt I will be arrested for that after the debate—the transcript of an interview with a very senior officer at the county council, the corporate director of resources, Mr. Roger Kershaw. It showed how Mr. Kershaw’s original evidence to the Standards Board had been altered. Large sections were deleted, probably by Mr. Kershaw himself or Jones the Groan, his boss. The bits that went missing implicated Mrs. Barnes, the chief constable’s wife, for holding a secret meeting with IBM at a crucial stage in the bidding process. It even described how Mrs. Barnes had been, in effect, dismissed straight afterwards, but mysteriously was still around when the contract for Southwest One was signed. At the time, that looked like a deliberate attempt to suppress evidence concerning a contract that involved £400 million of taxpayers’ money.
Last year, in the House, I called that corruption. I hope the Minister understands that I do not use the word lightly. I was advised in writing by the Secretary of State for Communities and Local Government to take my concerns to the district auditor, and I did so. The district auditor even came to see me, but I was not encouraged by his response, which was that such things were outside his remit. I wrote to him and got the same reply, so I ask the Minister: whose remit is it? When such evidence comes to light, we want to know, in a democratic nation, where it has come from.
The district auditor was equally dismissive when I told him about Roger Kershaw’s professional conflict of interest. Mr. Kershaw just happens to be Somerset county council’s line manager for Southwest One. He is also the section 151 officer, whose duty is to ensure that everything is done by the book. He runs with the fox and the hounds, but guess what? According to the district auditor, that is not within his remit either.
Do not get me wrong. I do not think that it is the Audit Commission’s fault; it is the system’s. We—I say that collectively—have failed to provide enough legal muscle, people and money to do the job. We may, unfortunately, trust too much in the process of democratic accountability. We ought to give far greater support and training to local councillors who must scrutinise complex—in this case, bad—deals such as Southwest One. In Somerset, the public are forced to rely on a “Dad’s Army” Captain Mainwaring-style figure of fun, a one-time small-town banker—there is an old cockney rhyme for that—called Mr. Crabb. That individual, God help us, is Somerset’s equivalent of the Chancellor of the Exchequer, without the eyebrows. He is a part-time councillor who runs a French property business and spends most of his time in Edinburgh. He has been shown to be at best incompetent and at worst stupid. His political opposite number is a well-meaning councillor who sells golf balls.
Those councillors are well-meaning people who want to do the best that they can, but they are totally out of their depth. There are two other potential defenders of the public interest on the board of Southwest One, but they too are woefully inexperienced elected members. To put it crudely, IBM can afford the best financial and legal brains on the market. We cannot compete, either as councillors or as Members. The councillors are forced to take advice from a small group of highly paid officers whose careers are entwined in the matter. They are treated like mushrooms—I am sure that the Minister can guess what is coming; they are kept in the dark, and every now and again the door opens and in comes the manure.
The crude fact is that there is no effective accountability. That should change. I believe strongly—as I know the Minister does, because of where he comes from—that electors deserve councillors who are properly taught to do their job and know where to get impartial advice. I hope that he will side with me. That is the only way for tyrannical chief executives to be challenged before they do lasting harm to this country’s democratic process. I am totally with the Government in seeking more openness and honesty in council chiefs. I applaud the Minister’s pledge to force chief executives to come clean about their salaries, bonuses and pension perks. We have to do that, so why should they not do it too? They get a lot more than we do. I do not want my county run by unelected fat cats, and I do not want Jones the Groan rewarded for his obvious and utter failures.
The current politicians are not exercising control, and nor is the Audit Commission. The commission lacks the time, people and power to get to the bottom of any problem. I note that it is trying to recruit a new principal auditor for the south-west. The pay scale is £33,000 a year. By contrast, Roger Kershaw, the equivalent in Somerset county council, takes home £110,000, not counting all the other bits. Money talks. How can the commission hire the best staff if it cannot compete on pay?
When the auditors turn up to inspect a local authority, how do they work? They are not like a murder squad. They cannot turn over a council, searching every nook and cranny. A finance man from a big county described the Audit Commission’s task to me:
“They listen to what councils say. They look at internal audit work and things they raised last year. They do some sampling to see if there is anything that challenges what they have been told. They listen to objections raised by interested parties. But unless they are pointed in the right direction, it is sometimes like lookingfor a needle in a haystack. And their first priority is to reassure themselves that the accounts present the transactions in the year in a fair and transparent way.”
Imagine taking in a car for an MOT and being cross-examined, “Is it running well? How are the tyres? Any other problems? Oh well, we’ll sign you off, great.”
Auditors who lean so heavily on client input can hardly be described as independent, let alone thorough, and there are not enough of them. Last year, there was so much adverse publicity about the formation of Southwest One that the Audit Commission finally took a look at the matter. I suspect that ministerial push was behind it. That particular exercise cost £8,900. The district auditor charged £345 an hour. He skimmed through one of the most detailed and complex contracts in recent history, which was probably three and half days’ work. It was not a proper audit; it was a snapshot. It was light-touch regulation all over again.
A complete council audit is far from cheap. A lot of councils have complained about Audit Commission charges. Somerset had to cough up £257,300 last year. That raises another important issue of doubt. How can the independent Audit Commission’s word be trusted when the client pays all the bills? Will the Minister consider reducing grants to local government by the amount required to create a central audit fund? That way auditors could be fully independent and free from the accusation that whoever pays the piper calls the tune.
Have the Government considered a merger between the National Audit Office, the Audit Commission, the government consultants 4ps and the Office of Government Commerce? On large, risky ventures such as Southwest One, local government auditors should be able to call on additional resources to ensure that the highest standards are applied in the public interest. On another point, key milestones called gateway reviews are mandatory in large national projects. Why are they not also mandatory for large local government projects such as ISiS and Southwest One? I ask in a spirit of constructive debate, because I do not know the answer.
I consulted many experts before this debate—I have been going on about the issue for two years—and have reached the sorry conclusion that the Audit Commission is no longer fit for task. This year, to everyone’s derision, Somerset county council received from the auditors the highest value for money rating possible. They might as well have given an Oscar to a tub of lard for all the good that has done. Somerset borrowed £35 million to buy an unproven computer system from IBM that is already drastically late. That is not value for money. The council also ignored all professional advice and invested £25 million in Icelandic banks. That is not value for money either, but what would the Audit Commission know? Some £10 million of its reserves also went to Iceland. We have all been caught up.
We pay for such costly mistakes. We deserve better: better audits, better scrutiny, and a much tighter rein on the likes of Jones the Groan and all the useless people around him. If we do not get that, we will all end up paying in the long run.
SOUTHWEST ONE, IBM and SAP
IBM insisted on installing SAP for SouthWest One's joint members. It was meant to be up and running in February 2009, the date was postponsed until April 1st, and continued problems meant that even in June 2009 the system was operating badly. This posting is also copied from Liddell-Grainger's websiteJune 4th 2009.
Another leaked document from the beleaguered folk at County Hall struggling to deal with a system isn't fit for purpose:
"Approximately 1000 invoices are being received at the Accounts Payable Team in County Hall each day and there are seven people employed full time to deal with this. Invoices of up to £20k are being pushed through without any checks being made. This is just to clear them. There are daily payment runs, sometimes eleven runs a day. Business rates have been paid late. There have been several County Court Summons about this. SAP contains an application called "webcycle" which is meant to track invoices. It doesn't work. The Accounts Payable team are forced to make hundreds of emergency CHAPS payments (at £15 a go) simply to pay customers. Staff responsible for County Council Imprest bank accounts have been told they can overdraw - never mind the costs. The new remittance advice notes only tell customers how much they are being paid, not what each payment is for! Some bills have been paid to the wrong suppliers. Some suppliers have been paid twice for the same service!"
The only sensible news is that Somerset County Council has frozen two monthly payments to IBM (around £5million) because of the cock-ups.
May 23rd 2009.
Councillor David Greene plays the didgeridoo and picks up £25,000 a year for being (allegedly) an "expert" on SouthWest One. He's on the Board of the company. He ought to know what he's talking about. On May 20th he presented a report to full council.
"We took the decision to ‘go live’ with the delivery of the finance and procurement aspect of SAP on 1 April, and are planning to implement the rest of the SAP modules in the summer to bring the whole system on line".
This is nonsense. SAP is a disaster. And within 48 hours Alan Jones had to tell everyone something completely different:
Councillor David Greene plays the didgeridoo and picks up £25,000 a year for being (allegedly) an "expert" on SouthWest One. He's on the Board of the company. He ought to know what he's talking about. On May 20th he presented a report to full council.
"We took the decision to ‘go live’ with the delivery of the finance and procurement aspect of SAP on 1 April, and are planning to implement the rest of the SAP modules in the summer to bring the whole system on line".
This is nonsense. SAP is a disaster. And within 48 hours Alan Jones had to tell everyone something completely different:
Sent: Fri 22/05/2009 15:12To: AllUsersSubject: SAP UpdateI am writing to update you as to where we have reached with the implementation of the SAP project. I know in particular you are keen to hear when we intend to go live with the additional modules - SAP HR/Payroll, CRM and Portal. It is clear now that we will not be in a position to go live on 1 June as planned. The South West One Project Team has recently confirmed this and we are currently discussing with them an alternative project plan. We will notify you of revised dates when we have concluded those detailed discussions. I would like to emphasise that we do not intend to go live with the additional modules until we receive adequate assurances that the system has been properly installed and tested. We are working with the South West One Project Team to ensure that we will have these assurances.However we do need to contuinue to prepare, so please support requests you may receive to get involved in testing and training processes.Many of you will have had your help desk calls closed this week. This is because of many generic fixes that have led to groups of calls being closed. However we know some of you still have specific problems. If your particular issue has still not been resolved please relog it quoting your original ticket number. We will continue to monitor progress closely on help desk calls next week with a view to closing as many as possible. We are continuing to reduce the number of invoices in the system waiting to be paid. The calls from suppliers chasing payment should begin to tail off shortly.Again can we thank you for your patience and your resilience as we deliver the SAP project.
Alan Jones
Chief Executive
But, as ever, Alan never tells the full horror story. Here are some fresh tales from the Trabant front line
1. Dillington House was in danger of close-down due to suppliers refusing to supply goods as they had not been paid and Dillington were unable to raise orders through SAP
2. Volunteer car drivers have not received their out of pocket expenses from SCC - many have refused to continue to provide the service
3. SCC Managers buying high priced stationery & copier paper from local suppliers on corporate credit cards because we are unable to place orders with preferred suppliers
4. £285,000 worth of goods were paid last week without any checks being made just to help clear the back log
5. A number of County Court Summons have been served on County Hall for non payment of goods
May 15th 2009.
At SCC we are reliably informed there are now 40,000 different invoices waiting to be paid (because SAP doesn't work)!
News from the Police - and, like all news about SAP - its also bad. There is a UK wide police support unit called the National Association of Applied Learning Technologies, set up (in part) by the Met. It helps to train officers in 43 different forces. EXCEPT AVON & SOMERSET! The reason? Colin Port - a key director of SouthWest One (and part-time Chief Constable) - is having SAP installed, and SAP can't run with NCALT. Result? All NCALT training cancelled! Want to see what they're missing?
UPDATE.....now SouthWest One admits the NCALT fault in a newswire dated this very afternoon:
Transformation Programme #24 In this week's e-newswire;
Spotlight feature - important information, hints and tips about raising a shopping cart, for requisitioners
Let the helpdesk know if the issues you've reported have been resolved in the meantime
Self Service e-learning on NCALT is being updated
Please send any invoices received to “AP Scanning Department” without date stamps
A reminder to respond to emails sent to you by the Accounts Payable team to provide additional information for unresolved invoices
The support team are working through all of the SAP issues raised to the helpdesk, and find in many cases that the issues have now been resolved. If you have reported to helpdesk an issue previously that has now been fixed, please let the helpdesk team know so they can close the ticket promptly.E-learning update for SWOne staff on secondment from Avon & Somerset Police The training team and Police Change team have agreed to remove the Employee Self Service (ESS), Manager Self Service (MSS) and Work Force Management (WFM) e-learning courses from NCALT. The e-learning team will be reviewing and updating the content, and once this has been completed and approved the new versions of these e-learning courses will be published to NCALT. You will receive a notice when the new versions of the e-learning courses are available. Sending Invoices for scanning If you have received an invoice, please send it through the internal mail to “AP Scanning Department” without stamping the invoice. The scanning team are experiencing difficulties scanning invoices into SAP due to date stamps on the invoice obscuring key information.
But you read it all here first!
May 10th 2009. Latest SAP disasters....starting with an insider's account of how few customers have been paid:
“There are 2000 payments worth over £20k EACH stuck in the system...”
Meantime a team of "SAP consultants" have been flown in from India to try and sort the mess out. They are working in a Taunton basement!
http://www.aspola.org.uk/cache/PDF/Document3478_85680.pdf
The Police are now admitting, in public, that SAP doesn’t work. The document is available to anyone on the Police Authority Website. It openly tells how tests of SAP failed. And if a public document says it so clearly, chances are the real situation is a whole lot worse.
http://www.culture.gov.uk/images/publications/IBM_DBIRResponse.pdf
On March 28th IBM responded to a Government consultation document called “Digital Britain” with a report citing all sorts of wildly exaggerated claims about the success of SAP. They say that SCC and Taunton Deane have identified a 15% cut in “avoidable calls” because of the introduction of the new “portal” (in English this means the new website) The document fails to point out that the “portal” has been delayed yet again, probably until the autumn, because SAP doesn’t work properly. Nice to know that IBM are deliberately misinforming the Government!
Alan Jones seems to have been told to shut up about SAP. His initial e-mails to staff provided such a get-out card for IBM that no matter how bad SAP becomes it will be publicly deemed a "success" simply because Jones said so!The extraordinary e-mails issued by Alan Jones during April are in date order below. Latest SAP news comes from his deputy, David Taylor - and it is obvious that things are still going badly wrong. Indeed I am told that the launch of the new Somerset website is to be delayed indefinitely and that SAP will be unable to pay staff until July....or August...or beyond:
Alan Jones
Chief Executive
But, as ever, Alan never tells the full horror story. Here are some fresh tales from the Trabant front line
1. Dillington House was in danger of close-down due to suppliers refusing to supply goods as they had not been paid and Dillington were unable to raise orders through SAP
2. Volunteer car drivers have not received their out of pocket expenses from SCC - many have refused to continue to provide the service
3. SCC Managers buying high priced stationery & copier paper from local suppliers on corporate credit cards because we are unable to place orders with preferred suppliers
4. £285,000 worth of goods were paid last week without any checks being made just to help clear the back log
5. A number of County Court Summons have been served on County Hall for non payment of goods
May 15th 2009.
At SCC we are reliably informed there are now 40,000 different invoices waiting to be paid (because SAP doesn't work)!
News from the Police - and, like all news about SAP - its also bad. There is a UK wide police support unit called the National Association of Applied Learning Technologies, set up (in part) by the Met. It helps to train officers in 43 different forces. EXCEPT AVON & SOMERSET! The reason? Colin Port - a key director of SouthWest One (and part-time Chief Constable) - is having SAP installed, and SAP can't run with NCALT. Result? All NCALT training cancelled! Want to see what they're missing?
UPDATE.....now SouthWest One admits the NCALT fault in a newswire dated this very afternoon:
Transformation Programme #24 In this week's e-newswire;
Spotlight feature - important information, hints and tips about raising a shopping cart, for requisitioners
Let the helpdesk know if the issues you've reported have been resolved in the meantime
Self Service e-learning on NCALT is being updated
Please send any invoices received to “AP Scanning Department” without date stamps
A reminder to respond to emails sent to you by the Accounts Payable team to provide additional information for unresolved invoices
The support team are working through all of the SAP issues raised to the helpdesk, and find in many cases that the issues have now been resolved. If you have reported to helpdesk an issue previously that has now been fixed, please let the helpdesk team know so they can close the ticket promptly.E-learning update for SWOne staff on secondment from Avon & Somerset Police The training team and Police Change team have agreed to remove the Employee Self Service (ESS), Manager Self Service (MSS) and Work Force Management (WFM) e-learning courses from NCALT. The e-learning team will be reviewing and updating the content, and once this has been completed and approved the new versions of these e-learning courses will be published to NCALT. You will receive a notice when the new versions of the e-learning courses are available. Sending Invoices for scanning If you have received an invoice, please send it through the internal mail to “AP Scanning Department” without stamping the invoice. The scanning team are experiencing difficulties scanning invoices into SAP due to date stamps on the invoice obscuring key information.
But you read it all here first!
May 10th 2009. Latest SAP disasters....starting with an insider's account of how few customers have been paid:
“There are 2000 payments worth over £20k EACH stuck in the system...”
Meantime a team of "SAP consultants" have been flown in from India to try and sort the mess out. They are working in a Taunton basement!
http://www.aspola.org.uk/cache/PDF/Document3478_85680.pdf
The Police are now admitting, in public, that SAP doesn’t work. The document is available to anyone on the Police Authority Website. It openly tells how tests of SAP failed. And if a public document says it so clearly, chances are the real situation is a whole lot worse.
http://www.culture.gov.uk/images/publications/IBM_DBIRResponse.pdf
On March 28th IBM responded to a Government consultation document called “Digital Britain” with a report citing all sorts of wildly exaggerated claims about the success of SAP. They say that SCC and Taunton Deane have identified a 15% cut in “avoidable calls” because of the introduction of the new “portal” (in English this means the new website) The document fails to point out that the “portal” has been delayed yet again, probably until the autumn, because SAP doesn’t work properly. Nice to know that IBM are deliberately misinforming the Government!
Alan Jones seems to have been told to shut up about SAP. His initial e-mails to staff provided such a get-out card for IBM that no matter how bad SAP becomes it will be publicly deemed a "success" simply because Jones said so!The extraordinary e-mails issued by Alan Jones during April are in date order below. Latest SAP news comes from his deputy, David Taylor - and it is obvious that things are still going badly wrong. Indeed I am told that the launch of the new Somerset website is to be delayed indefinitely and that SAP will be unable to pay staff until July....or August...or beyond:
From: Robert GunningSent: Fri 01/05/2009 16:56To: AllUsersSubject: SAP Update from David Taylor.
On Wednesday I sent out a note to all staff about SAP and the problems we have all faced over the past month. I started then by thanking everyone for their hard work and patience. I’d like to do so again now. Your efforts really are appreciated. The senior management team really does understand the frustrations that some of the issues have caused. This weekend a team of people will be working throughout Saturday, Sunday and Bank Holiday Monday to finally clear the backlog of SAP invoices that were generated by problems when we first launched. This will be an important achievement and I’m really grateful to those who are giving up their Bank Holiday to do this work. We are working through a list of people who do not have IDs or passwords and again there is a big effort to make this happen. As I mentioned earlier this week, anyone with issues should report them immediately to their Superuser or Change Team. We are making steady progress with SAP and with a big push over the next few days we will really crack many of the issues. Once again, I can reassure you that I understand the problems people have faced I will make sure that the pressure is kept on to get it right. Finally can I thank those who sent in questions to propergander@somerset.gov.uk. As there were only a handful sent in, I thought I’d again offer the opportunity for you to send in a question. I will make sure we have the answers for you. Thanks again for your hard work and perseverance and for those not working, enjoy that rarest of things, a Bank Holiday in the spring sunshine. David Taylor
On Wednesday I sent out a note to all staff about SAP and the problems we have all faced over the past month. I started then by thanking everyone for their hard work and patience. I’d like to do so again now. Your efforts really are appreciated. The senior management team really does understand the frustrations that some of the issues have caused. This weekend a team of people will be working throughout Saturday, Sunday and Bank Holiday Monday to finally clear the backlog of SAP invoices that were generated by problems when we first launched. This will be an important achievement and I’m really grateful to those who are giving up their Bank Holiday to do this work. We are working through a list of people who do not have IDs or passwords and again there is a big effort to make this happen. As I mentioned earlier this week, anyone with issues should report them immediately to their Superuser or Change Team. We are making steady progress with SAP and with a big push over the next few days we will really crack many of the issues. Once again, I can reassure you that I understand the problems people have faced I will make sure that the pressure is kept on to get it right. Finally can I thank those who sent in questions to propergander@somerset.gov.uk. As there were only a handful sent in, I thought I’d again offer the opportunity for you to send in a question. I will make sure we have the answers for you. Thanks again for your hard work and perseverance and for those not working, enjoy that rarest of things, a Bank Holiday in the spring sunshine. David Taylor
From: Deborah PorterSent: 29 April 2009 17:02To: AllUsersSubject: SAP update
Message from David Taylor
Deputy Chief Executive
I thought I would give you all an update on where we are with SAP, to let you all know that ongoing problems have the highest priority within the council, and to set out a timetable for improvement.
First though, I’d like to thank everyone for their patience over the past few weeks. We have been open about the fact that we have had problems, and that the system has not delivered as well as it should. So a personal thank you from me and the senior team for dealing with the issues that you have faced. We are now one month in and have made a huge amount of progress since SAP went liveeven though there is still a way to go. There are fixes in place, the SAP system itself is now working far better but I know that in some areas it is still a frustrating experience. We are working flat out to sort these remaining issues and problems.
I thought it useful to highlight some key targets that have been achieved. There was a well documented backlog of suppliers’ invoices. That has now largely been cleared. We have extra floorwalkers in place, more staff taken on to process work, and all key authorising personnel now have access to the system. And I have asked all Directorates to hold daily meetings to feed specific problems into the early morning SAP Board that meets every day. This meeting raises with Southwest One and the SAP Project Team each and every issue and gets agreement as to what must be put in place and when, to resolve these this is recognition of how important the impact of the problems has been to our staff.
In the meantime, anyone with issues should report them immediately to their Superuser or Change Team to ensure it is escalated into your directorate meeting. In summary, SAP is improving daily, I know how difficult is has been and I will ensure that the pressure is kept on to make sure we get it right. We have set clear targets that we want to achieve and will be reviewing these at the end of the week. Finally, I’m sure many of you will have questions and I’m happy to answer as many as possible. Please email them to the communications team at propergander@somerset.gov.uk and we’ll send out a Question and Answer sheet picking out the main themes by the end of the week. Thanks again for your hard work and perseverance.
David
Message from David Taylor
Deputy Chief Executive
I thought I would give you all an update on where we are with SAP, to let you all know that ongoing problems have the highest priority within the council, and to set out a timetable for improvement.
First though, I’d like to thank everyone for their patience over the past few weeks. We have been open about the fact that we have had problems, and that the system has not delivered as well as it should. So a personal thank you from me and the senior team for dealing with the issues that you have faced. We are now one month in and have made a huge amount of progress since SAP went liveeven though there is still a way to go. There are fixes in place, the SAP system itself is now working far better but I know that in some areas it is still a frustrating experience. We are working flat out to sort these remaining issues and problems.
I thought it useful to highlight some key targets that have been achieved. There was a well documented backlog of suppliers’ invoices. That has now largely been cleared. We have extra floorwalkers in place, more staff taken on to process work, and all key authorising personnel now have access to the system. And I have asked all Directorates to hold daily meetings to feed specific problems into the early morning SAP Board that meets every day. This meeting raises with Southwest One and the SAP Project Team each and every issue and gets agreement as to what must be put in place and when, to resolve these this is recognition of how important the impact of the problems has been to our staff.
In the meantime, anyone with issues should report them immediately to their Superuser or Change Team to ensure it is escalated into your directorate meeting. In summary, SAP is improving daily, I know how difficult is has been and I will ensure that the pressure is kept on to make sure we get it right. We have set clear targets that we want to achieve and will be reviewing these at the end of the week. Finally, I’m sure many of you will have questions and I’m happy to answer as many as possible. Please email them to the communications team at propergander@somerset.gov.uk and we’ll send out a Question and Answer sheet picking out the main themes by the end of the week. Thanks again for your hard work and perseverance.
David
From:Alan JonesSent: Fri 17/04/2009 13:04To: AllUsersSubject: SAP Update/More Bollocks
Dear Colleagues,
First of all, on behalf of SMB and everyone involved with the SAP project, I would like to record our sincere thanks to all staff for working with us this past week in implementing the SAP system and for providing valuable feedback each day to drive improvements. Things are moving forward, and I am monitoring progress every morning with colleagues from our organisation, from Southwest One, and from IBM. David Taylor will continue to chair this group across the course of next week whilst I am on leave, but you should be assured that this project remains our top priority. Overnight, the SAP system was enhanced to allow all 'Requisitioners' (people who order goods and services) to do so in a more streamlined manner. You will now see when you go into the system to create an order that all our delivery addresses have been loaded, and staff can directly enter cost codes from their respective cost centres to accompany the order. Should you need them, we have posted all the cost codes on the intranet or you can of course speak to your finance support team for help.
We ran a successful 'BACS' run yesterday, but still needed to process a handful of payments manually, and I want this number to continue to decrease or disappear as soon as possible. Supplementing the on-line 'e' training many of you will have undertaken in recent weeks will be further one to one sessions with 'floor walkers' and also SAP 'surgeries' across next week and beyond.
Finally, we have agreed with colleagues in the procurement service that they will help us to clear the backlog of orders which have been placed this week and they are working on this task now. I know we're not there yet, but I also know that we will make SAP a success by continuing to work together, thank you again for supporting this approach.
Alan.--------------------------Sent on the move
Dear Colleagues,
First of all, on behalf of SMB and everyone involved with the SAP project, I would like to record our sincere thanks to all staff for working with us this past week in implementing the SAP system and for providing valuable feedback each day to drive improvements. Things are moving forward, and I am monitoring progress every morning with colleagues from our organisation, from Southwest One, and from IBM. David Taylor will continue to chair this group across the course of next week whilst I am on leave, but you should be assured that this project remains our top priority. Overnight, the SAP system was enhanced to allow all 'Requisitioners' (people who order goods and services) to do so in a more streamlined manner. You will now see when you go into the system to create an order that all our delivery addresses have been loaded, and staff can directly enter cost codes from their respective cost centres to accompany the order. Should you need them, we have posted all the cost codes on the intranet or you can of course speak to your finance support team for help.
We ran a successful 'BACS' run yesterday, but still needed to process a handful of payments manually, and I want this number to continue to decrease or disappear as soon as possible. Supplementing the on-line 'e' training many of you will have undertaken in recent weeks will be further one to one sessions with 'floor walkers' and also SAP 'surgeries' across next week and beyond.
Finally, we have agreed with colleagues in the procurement service that they will help us to clear the backlog of orders which have been placed this week and they are working on this task now. I know we're not there yet, but I also know that we will make SAP a success by continuing to work together, thank you again for supporting this approach.
Alan.--------------------------Sent on the move
From: Alan JonesSent: 15 April 2009 16:02To: AllUsersSubject: SAP updateDear Colleagues,
With a fair number of staff on leave this week, SAP user numbers have also dipped today. Despite that, the number of procurements made using SAP again rose sharply.However, rather than recount every day to you what we know has been performed on the system, I am more concerned today to know if some users are having to resort to other means to carry out day to day operations. We are of course aware that there are still difficulties in raising requisitions and the team is working hard to resolve them. If you need to make some urgent purchases and SAP is not delivering the functionality you require, please let your super users know.A number of you have emailed me directly and I am always happy to receive this instant feedback. Where appropriate, I have forwarded your messages and concerns on to the appropriate staff to resolve but your quickest route to an answer is via your super users, who may be able to answer things instantly.My management team and I meet every morning with key project and transformation managers and being able to relay your comments to them is very helpful to ensure we concentrate our efforts on those areas where we will get the best and quickest return.Following today’s meeting, I have had conversations with Richard Jones, the Chief Executive of South West One, on his return from leave, to brief him of the issues that we are facing and enlist his support to resolve them. I also called Julian David, Vice President of IBM’s Public Sector Business to alert him. He has promised to make sure that everyone at IBM understand the urgency of resolving these matters and has reiterated what we already know, that IBM will work as long and hard as it takes to sort these implementation problems out.
Best wishes.
Alan
With a fair number of staff on leave this week, SAP user numbers have also dipped today. Despite that, the number of procurements made using SAP again rose sharply.However, rather than recount every day to you what we know has been performed on the system, I am more concerned today to know if some users are having to resort to other means to carry out day to day operations. We are of course aware that there are still difficulties in raising requisitions and the team is working hard to resolve them. If you need to make some urgent purchases and SAP is not delivering the functionality you require, please let your super users know.A number of you have emailed me directly and I am always happy to receive this instant feedback. Where appropriate, I have forwarded your messages and concerns on to the appropriate staff to resolve but your quickest route to an answer is via your super users, who may be able to answer things instantly.My management team and I meet every morning with key project and transformation managers and being able to relay your comments to them is very helpful to ensure we concentrate our efforts on those areas where we will get the best and quickest return.Following today’s meeting, I have had conversations with Richard Jones, the Chief Executive of South West One, on his return from leave, to brief him of the issues that we are facing and enlist his support to resolve them. I also called Julian David, Vice President of IBM’s Public Sector Business to alert him. He has promised to make sure that everyone at IBM understand the urgency of resolving these matters and has reiterated what we already know, that IBM will work as long and hard as it takes to sort these implementation problems out.
Best wishes.
Alan
From:Alan JonesSent: 14 April 2009 14:48To: AllUsersSubject: SAP updateDear colleagues,
At my Management Team briefing this morning we heard about the progress made with the SAP rollout since last Thursday.We continue to see daily progress in many aspects of the SAP system. Progress is slow but steady. Although we see more users on the system making transactions, it is clear that it will take some time before staff become familiar with the scale and potential of SAP.There are still difficulties in raising requisitions and the team is working hard to resolve them If you have raised a call to the help desk and you have not had a solution to your particular query yet, please do not think that we are not working on it. Many calls have been logged for similar issues and we are working on a general resolution to these. You may not receive a response to you personally as we are concentrating on resolving issues affecting several callers. In many cases we are finding that the loading of new data is likely to address your concerns by the following day. We are grateful for your assistance in doing whatever you can do to familiarise yourself with SAP and resolve issues personally. Remember also that we have a number of 'floor walkers' out there to help you and also a large number of designated 'super-users' who will provide assistance.
Alan
From:Alan JonesSent: Wed 08/04/2009 17:04To: AllUsersSubject: SAP Update
Dear Colleagues,
Further to my e-mail yesterday, a great deal of work continues each day, and throughout the night to deliver the full functionality of our SAP system. At a meeting with my Directors today, we have received a full briefing from the senior Project Manager and Project Sponsor on the latest position.All calls which have been received by the ICT helpdesk, the issues which have been escalated to our 'Super Users' and the messages from our Change Team are being logged and resolved as quickly as possible, and your feedback is valued through these channels. We have seen good progress. There is clearly much more work to do, but I want every member of staff to understand that we do care about the difficulties you are facing, and we are working hard to make sure they are resolved quickly.The biggest concern we are working to resolve is related to procurement, and the ability to order goods and services. This problem mainly relates to making sure every user, or 'requisitioner' has the correct budget codes assigned to them. We have prioritised the County Council's Requisitioners to ensure that these business critical people are supported appropriately.As I said stated yesterday, this is a huge project, and it is not without its challenges. No new system of this scale and complexity can be introduced into an organisation like the County Council without some implementation difficulties. It is perfectly normal for those issues to be worked out in the first full month of its operation.Whist we expect continued turbulence over the coming weeks, particularly when the further elements of the SAP system are launched, please be assured that your concerns are being monitored and addressed quickly. We have also put in place contingency arrangements to ensure that your service requirements are fully supported. At senior management level, we will continue to receive a daily briefing in my office to ensure we understand what is going on ‘one the ground’ and to keep you informed of the latest position.Once again, thank you for your patience. This system will improve every day and become fully functional over the next few weeks. As it does and as you become more familiar with it, the current concerns will recede and we will find that we are in a much stronger place to manage our services than we were before.
Regards,
Alan
At my Management Team briefing this morning we heard about the progress made with the SAP rollout since last Thursday.We continue to see daily progress in many aspects of the SAP system. Progress is slow but steady. Although we see more users on the system making transactions, it is clear that it will take some time before staff become familiar with the scale and potential of SAP.There are still difficulties in raising requisitions and the team is working hard to resolve them If you have raised a call to the help desk and you have not had a solution to your particular query yet, please do not think that we are not working on it. Many calls have been logged for similar issues and we are working on a general resolution to these. You may not receive a response to you personally as we are concentrating on resolving issues affecting several callers. In many cases we are finding that the loading of new data is likely to address your concerns by the following day. We are grateful for your assistance in doing whatever you can do to familiarise yourself with SAP and resolve issues personally. Remember also that we have a number of 'floor walkers' out there to help you and also a large number of designated 'super-users' who will provide assistance.
Alan
From:Alan JonesSent: Wed 08/04/2009 17:04To: AllUsersSubject: SAP Update
Dear Colleagues,
Further to my e-mail yesterday, a great deal of work continues each day, and throughout the night to deliver the full functionality of our SAP system. At a meeting with my Directors today, we have received a full briefing from the senior Project Manager and Project Sponsor on the latest position.All calls which have been received by the ICT helpdesk, the issues which have been escalated to our 'Super Users' and the messages from our Change Team are being logged and resolved as quickly as possible, and your feedback is valued through these channels. We have seen good progress. There is clearly much more work to do, but I want every member of staff to understand that we do care about the difficulties you are facing, and we are working hard to make sure they are resolved quickly.The biggest concern we are working to resolve is related to procurement, and the ability to order goods and services. This problem mainly relates to making sure every user, or 'requisitioner' has the correct budget codes assigned to them. We have prioritised the County Council's Requisitioners to ensure that these business critical people are supported appropriately.As I said stated yesterday, this is a huge project, and it is not without its challenges. No new system of this scale and complexity can be introduced into an organisation like the County Council without some implementation difficulties. It is perfectly normal for those issues to be worked out in the first full month of its operation.Whist we expect continued turbulence over the coming weeks, particularly when the further elements of the SAP system are launched, please be assured that your concerns are being monitored and addressed quickly. We have also put in place contingency arrangements to ensure that your service requirements are fully supported. At senior management level, we will continue to receive a daily briefing in my office to ensure we understand what is going on ‘one the ground’ and to keep you informed of the latest position.Once again, thank you for your patience. This system will improve every day and become fully functional over the next few weeks. As it does and as you become more familiar with it, the current concerns will recede and we will find that we are in a much stronger place to manage our services than we were before.
Regards,
Alan
From: Alan JonesSent: 07 April 2009 14:24To: AllUsersSubject: SAPDear Colleagues,As you know SAP was launched last week for SCC, TDBC, the Police and Southwest One. I’m conscious, however, thatfor some staff SAP has not yet gone live or is not yet capable of offering complete functionality. Many of you will be aware and some of you have reported to me, that we have encountered a number of teething problems, mainly technical issues, in using SAP for the first time. I am grateful for your patience and support in helping to resolve these issues.I’m sure you will appreciate that this an extremely complex system and its installation and configuration is a huge task. It is perfectly normal for ICT projects of this scale and complexity to encounter problems during implementation. Despite all the detailed planning and preparation by our staff and those in South West One, many of these glitches can only be ironed out - frustrating though it is - during implementation. The set up needs to be absolutely right or SAP will not perform as well as we all want it to in the longer term.The main engine of SAP is working - it has been tested, and some staff have been able to process and create orders on the system. However, some staff have not been able to do so for a number of reasons. Please accept my apologies if you are one of those affected. I know that change managers are advising staff how best to deal with this, as we work to resolve these faults as quickly as we can.The project team and the change managers are working together to keep staff informed about the glitches discovered and the progress on resolution. The help desk feeds back twice a day on the nature of calls logged and the team can then focus on the most commonly reported issues. One of these is that some staff have not yet received their ID and log-on. This affects currently less than 150 staff across all 4 organisations out of the 3,670 created in this phase of the roll out. This issue should be resolved today. The single biggest issue creating calls to the help desk is that for some people the correct SAP attributes for an individual’s role have not been loaded. This was a massive data load of over 30,000 records and some have failed. This problem was most prevalent within the Environment Directorate. We have had to reload this data and it will take some time to correct the attributes for all 3,670 users. We hope that the majority of these will be corrected in the next few days and apologise for this delay.Another commonly reported issue is that some staff cannot raise requisitions because they cannot access e-catalogues. This is a technical issue that has been referred back to SAP and we await their advice as to how to resolve this. In the meantime, we advise using the catalogues wherever possible on the vendor’s website and then using free text orders as a temporary measure. The SAP project team is working relentlessly -day and night - to fix all the issues raised via the help desk, so that we can resume normal service as soon as possible.The project team provides an update on progress twice a day at 9.00 and 5.30 and we feed this onto change managers as soon as we have it. We are doing all we can to ease users through this massive transition. Thank you for your patience in the meantime and I will continue to keep you informed of developments.Alan-------------------------- Sent on the move
Any new problems that emerge will be reported here (and there will certainly be problems) SAP cost Somerset £35 million. Alan Jones has been apologising for it ever since.
Question: If SAP is such a "great success" (backed by the global power of IBM) why is SouthWest One so desperate to find someone who knows what he's doing to try and fix it? They're offering £2000 a week!
You have to admire his gall in turning the truth on its head. Every Friday Somerset's Chief Executive blows his own trumpet and publishes the results for his 'loyal' team to swallow and absorb. Friday April 3rd was no exception - pure undiluted spin:
Despite the fact that 80 percent of the great SAP project is still delayed Jones writes:
"To have developed and implemented this order of change in such a large organisation on time and on budget, was –notwithstanding the glitches and frustrations – a great success"
Any new problems that emerge will be reported here (and there will certainly be problems) SAP cost Somerset £35 million. Alan Jones has been apologising for it ever since.
Question: If SAP is such a "great success" (backed by the global power of IBM) why is SouthWest One so desperate to find someone who knows what he's doing to try and fix it? They're offering £2000 a week!
You have to admire his gall in turning the truth on its head. Every Friday Somerset's Chief Executive blows his own trumpet and publishes the results for his 'loyal' team to swallow and absorb. Friday April 3rd was no exception - pure undiluted spin:
Despite the fact that 80 percent of the great SAP project is still delayed Jones writes:
"To have developed and implemented this order of change in such a large organisation on time and on budget, was –notwithstanding the glitches and frustrations – a great success"
SOUTHWEST ONE and IBM
(This posting was copied from the website of Ian Liddell-Grainger MP in June 2009. Since publication political control of Somerset County has changed. An investigation into the formation of SouthWest One has been ordered by the new Tory administration. But SouthWest One still operates. IBM owns 80 per cent of it)SouthWest One is a Joint Venture company set up by Somerset County Council, Taunton Deane Council and now including Avon and Somerset Police. It is a huge and risky venture. It could cost taxpayers £400 million. I believe there has been excessive secrecy about the negotiations to form it, justifyable suspicion about the roles of several leading players and a totally unrealistic business plan. Not that I have seen the business plan. Like so much else it was kept secret. I made a Parliamentary speech about the subject on March 26th 2008.
Southwest One and IBM - Westminster Hall
11 am
Mr. Ian Liddell-Grainger (Bridgwater) (Con): It is a pleasure to serve under your chairmanship again, Mr. Jones. I am very grateful for the chance to bring the subject of this debate before the House. I shall raise extremely urgent matters that involve the public interest and may have grave implications way beyond the county of Somerset. I believe that public money is being misappropriated and I fear—I do not mince my words—corruption.
My concern relates to the creation of a new company designed to take over important responsibilities from local authorities and others without any proper scrutiny or accountability. The company is called Southwest One. People will not find it listed in the Somerset telephone directory. It has not yet submitted any company reports. It describes itself as a joint venture exercise between two councils and the multinational computer giant IBM. Its registered address is IBM’s UK base in Portsmouth.
A joint venture implies a partnership, but this partnership is far from equal. It is my clear understanding that IBM will continue to own 81 per cent. of the operation. There are nine members of the interim board, seven of whom are high-powered IBM executives. The company did not get where it is today through charity. Last year, IBM turned over $98 billion and made a $10 billion profit, so where is the democratic balance in the new joint venture?
Did the two Somerset councils bring their sharpest business brains into the fray? Did they heck. In fact, there are only two potential defenders of the public interest on the board, but I am afraid that they are woefully inexperienced and gullible Liberal Democrat councillors. Their forensic ability to tackle a global concern such as IBM is severely limited. One of them is nominally in charge of Taunton’s car parks. The other strums in a Yeovil jazz band and, I am reliably informed, can sometimes get a tune out of a didgeridoo. Half a million council tax payers are now represented by two rank amateurs. That is a joke. Both would be baffled by a balance sheet. They are the patsies of this bizarre outfit. It is tacky tokenism in the name of accountability.
When dealing with the delivery of local council services, top-class accountability is vital. The Government know that and we know it. Do not take my word for it: the Audit Commission has real concerns about shared service partnerships such as Southwest One. In January, it published an important report that stated:
“Councils should only deliver services through SSPs if they are prepared to manage them effectively.”
Effective management ought to mean an awful lot more than two well meaning volunteers on the board of the organisation.
The Liberal Democrats run Somerset county council and Taunton Deane borough council. Their leaders pay lavish lip service to working for the people, but if their words were worth a row of beans, they would have stopped this nonsense—this madness—in its tracks. Already Southwest One has taken over the employment of 800 staff formerly on the payroll of Somerset county council and Taunton Deane borough council. Interestingly, the payslips for those employees still come from the councils, but their long-term employment rights are now stunningly vague. They have been “guaranteed” that their jobs are secure, but the small print of the guarantee—believe it or not—is not available for inspection, even if they knew what was going on.
Southwest One is an outfit born in secrecy and reliant on secrecy. Trade unionists who ask responsible questions are branded traitors. Joe Stalin would have been proud of the company. Southwest One is destined to gobble up more than £400 million of public money providing just two councils with services over the next 10 years.
The creators promised that the scheme would save a lot of money—£200 million, which is the equivalent of a £20 million cut from existing budgets every year. Last night, I was bombarded with documents from Somerset county council hoping to convince me of the savings. I read them all. They all mentioned the magic word “guarantee”, but it is all aspiration; it is not an explanation of what is going on. Somerset people are being asked to believe in fairies, and we do not. Painless savings cannot be made unless there are real economies of scale, and they certainly cannot be guaranteed. In other words, many public authorities need to be on board to justify the cost, and even then some brutal job cutting will be needed as well.
Assuming that the instigators of the scheme were not complete idiots, there had to be a viable plan to get several local authorities involved at once. There was: Somerset county council’s bid to become a giant unitary authority. Last year, the council appealed to the Government for permission to take over the responsibilities of five district councils. It was a half-baked and stupid idea. The sums had not been done. It was said that there could be a saving of £27 million and that only 65 jobs would be got rid of—lunacy. The plan would have left Somerset people democratically unrepresented at local level and created the most unwieldy local government monster.
The unitary plan was driven by one dangerous but very determined individual. His name is Alan Jones and he is the chief executive of Somerset county council. Rather like Joseph Stalin, he does not give a fig about democracy. He is, in his dreams at least, a ruthless business man—a pint-sized Alan Sugar. If his unitary plan had succeeded, the core business of Southwest One would have been ready made, and those involved would have been laughing all the way to the bank.
However, the Government’s civil servants took one look at Somerset’s proposals and rejected them out of hand. They made no sense economically or democratically. Suddenly, the rug was pulled from underneath and the new joint venture company was left struggling for clients and credibility. A desperate bid for extra business was launched. Devon county council was approached, and Cornwall too—let us spread our wings; let us march to the periphery. Both, as I understand it, gave Southwest One an instant, and correct, thumbs-down, goodbye, you are the weakest link.
We all knew that Southwest One could not survive, let alone prosper, with the work of a single county council and a tiddly little borough council. It needed richer, fatter clients and, what is more, it needed them fast. Last Thursday, Avon and Somerset police finally signed up to a contract to become the latest member of this strange secret society. Soon it will hand over to Southwest One much of the boring back-room work, such as financial services, human resources, information technology, facilities management, procurement and even inquiry offices.
The police do not like to be seen cracking open the Bollinger; it tends to give criminals the wrong idea. The thin blue line had fixed grins last Thursday, and no wonder. The forces of law and order had paid rock-bottom, bargain-basement prices to join Southwest One. Perhaps they were the sprat designed to catch the mackerel. It is said that IBM wanted to bag as much back-room police work as it could from all over the UK, but no one will get this “buy one, get one free” deal in the future. Somerset county council and Taunton Deane council will have to cough up £40 million a year to transfer 800 people to the Southwest One payroll. Avon and Somerset police has 600 back-room staff, but they are all coming in at half the price. The police contribution is so small that it amounts to a bribe. If the police were not already in it up to their necks, I would be demanding a police investigation.
How did it all start? We are assured that it was from the purest of motives. Somerset county council wanted to save money, so a few years back, it invented a project called “Improving services in Somerset” (ISIS). It was a lofty ideal that no one could disagree with. However, if one examined the small print, one would find that most of it was missing. ISIS appointed a project director on a two-year consultancy to help get things going. The appointment was made under what is known as the “urgency procedure”, so the individual was given the job without going through the council’s normal strict selection process. Only two people were involved, one of whom was the county council chief executive—Stalin himself—Mr. Alan “Sugar” Jones. “You are hired,” he said.
The new project director was Sue Barnes, who had excellent qualifications and substantial experience in local government. Sue Barnes is a constituent of mine, and she happens to be married to Mr. Colin Port, the chief constable of Avon and Somerset police. At best, that is an uncomfortable coincidence. Although Sue Barnes was not an officer in the council, she was given unusual delegated powers to conduct commercial negotiations.
According to Somerset county council’s auditors, Grant Thornton, there was no “conflict of interest” in the odd relationship. Let the phrase “conflict of interest” echo for a second or two, while I continue to be struck by the irony of Grant Thornton’s language. At the same time as auditing Somerset county council’s books, that well-known accountancy firm was also responsible for vetting the books of the Avon and Somerset police force. Furthermore, I think that Grant Thornton was working on behalf of the Audit Commission when Somerset county council was awarded its four stars. Do we think that is odd or what?
It is strange how times change. Grant Thornton is no longer hired by the Audit Commission. All current investigations into Somerset are being handled by the commission’s own experts. I am told that this time, they are going through the books of Somerset county with a fine-tooth comb. Yesterday’s four-star council could be presiding over a five-star scandal.
I received a letter today from the Secretary of State for Communities and Local Government, the right hon. Member for Salford (Hazel Blears) in which she raises the connection with Southwest One partnership. She said:
“The arrangements that Somerset County Council and Taunton and Deane Borough Council have made in entering into the joint venture partnership are primarily a matter for them: you should certainly direct any concerns you may have about the procurement process followed to the councils concerned, or to the District Auditor.”
That sums it up. Even the Government see that something is not right. I do not blame the police authority for signing the deal with Southwest One. Given the deal that the police were offered, they would have been absolute twits to turn it down, but I remain deeply suspicious about Southwest One itself. For example, how did IBM become the preferred partner in the first place?
Originally, British Telecom and Capita produced detailed pictures. At least, they are home-grown companies. Capita has more hands-on experience of local government work than almost any other organisation. What was the competitive tendering process? We do not know the precise ifs and buts because of the extraordinary degree of confidentiality surrounding the whole affair, but we know that after any competitive tendering, there has to be an evaluation—the safeguard whereby local government officials can assure themselves that everything they have done is hunky-dory. I know that the Minister understands what I am talking about.
There is a specialist team in Government which does nothing else but evaluate councils. It is known as the “four Ps”, which stands for public-private partnership programmes. As the Government know, those guys are the experts and, more to the point, their service is free. In the early stages of ISIS, the four Ps were called in, but when it came to vetting IBM, the Governmentboffins got an extremely cold shoulder; they were fired.
Instead, the project director, Mrs. Colin Port—remember who she is?—recommended an entirely different evaluation process so, at an undisclosed cost to every taxpayer in Somerset, a private consultancy firm was hired. The consultancy company is called Maana, which is a Polynesian word that means “mature wisdom, with a hint of magic”—in other words, expensive eyewash.
The men from Maana previously worked for Suffolk county council. Guess what? Mrs. Port used to work there. It is always so much easier dealing with people we know, is it not? However, this time Maana was asked some searching questions about IBM’s business plans. The consultancy completed unedited reports that have never been made public, despite repeated requests made under the Freedom of Information Act 2000. Like so much of this appalling story, secrecy, underhandedness and deviousness rule.
However, there are some things that we know. We know that IBM was hired by the colleagues of the Secretary of State for Environment, Food and Rural Affairs to run the computer agency at the Rural Payments Agency. I know farmers who still have slight concerns about that. I know that the IT system used by the Rural Payments Agency is similar to the one that IBM wants to use at Southwest One. We also know that it is a hugely costly system with a track record of going wonky and not working. Are the vast consultancy bills a cock-up? Every time one asks, one is told something different. The system is embarrassingly German. There again, what is a few million Deutschmarks here and there? As a matter of fact, there is nothing wrong with the main IT system currently used by Somerset county council, and there never has been. It has been saving money. It could easily be expanded. More important, however, it is 100 per cent. British.
As of now, a team of geeks are working their hearts out to make the software work. The software was originally written to serve the city of Bradford. Now it is being converted to the functions of Somerset. We were promised that ISIS and Southwest One would provide an improved service and real jobs. The House will be interested to know that the important work of producing a new computer system for the two councils and one for the police authority is being undertaken, not in Taunton, Bridgwater or Wales, but in India. That is also a secret—like all the details of the contract that were signed at 5 o’clock on a weekend morning between Somerset county council, Taunton Deane and IBM. We are not allowed to see the small print, or even the big print.
We are obliged to take a few face-value promises and guarantees of savings. We are expected to believe the unbelievable, swallow the lies, and to turn a blind eye to the growing suspicion of dodgy dealing and underhanded deals. My purpose is to open up this issue so that the Government can do something before it is too late. We appear to be lumbered with an arrangement that ties the hands of politicians and people for 10 years, but the details are totally secret. That is inequitable. I do not think that any of us would disagree that the Minister and his officials have a duty to ensure absolute probity in the spending of public money.
The Minister could demand to see the detailed arrangements for all partners in Southwest One. Such partnerships are high-risk for the public purse unlessthere is a robust evaluation, monitoring and control system. Excessive secrecy inevitably erodes public confidence and inadequate democratic control washes it away altogether, which is why I want the Minister to consider this simple remedy: in future, such partnership arrangements should be subject to mandatory review by impartial organisations that represent, or report directly, to the Audit Commission and Parliament.
Southwest One is currently being investigated by the Audit Commission. I am respectfully seeking firm assurances that the recommendations of the audit will be fully implemented. The 10-year deal, which was pushed through by Stalinesque methods, is hazardous. The Lib Dems on the county council pathetically allowed it to happen—they did not even try to control the deal, and it could now tie the hands of all subsequent elected politicians regardless of their party.
I invite the Minister to investigate how one non-elected chief executive, Alan Jones, forced through such a mad, corrupt, barking scheme. Even Joseph Stalin did not go beyond five-year plans.
Mr. Ian Liddell-Grainger (Bridgwater) (Con): It is a pleasure to serve under your chairmanship again, Mr. Jones. I am very grateful for the chance to bring the subject of this debate before the House. I shall raise extremely urgent matters that involve the public interest and may have grave implications way beyond the county of Somerset. I believe that public money is being misappropriated and I fear—I do not mince my words—corruption.
My concern relates to the creation of a new company designed to take over important responsibilities from local authorities and others without any proper scrutiny or accountability. The company is called Southwest One. People will not find it listed in the Somerset telephone directory. It has not yet submitted any company reports. It describes itself as a joint venture exercise between two councils and the multinational computer giant IBM. Its registered address is IBM’s UK base in Portsmouth.
A joint venture implies a partnership, but this partnership is far from equal. It is my clear understanding that IBM will continue to own 81 per cent. of the operation. There are nine members of the interim board, seven of whom are high-powered IBM executives. The company did not get where it is today through charity. Last year, IBM turned over $98 billion and made a $10 billion profit, so where is the democratic balance in the new joint venture?
Did the two Somerset councils bring their sharpest business brains into the fray? Did they heck. In fact, there are only two potential defenders of the public interest on the board, but I am afraid that they are woefully inexperienced and gullible Liberal Democrat councillors. Their forensic ability to tackle a global concern such as IBM is severely limited. One of them is nominally in charge of Taunton’s car parks. The other strums in a Yeovil jazz band and, I am reliably informed, can sometimes get a tune out of a didgeridoo. Half a million council tax payers are now represented by two rank amateurs. That is a joke. Both would be baffled by a balance sheet. They are the patsies of this bizarre outfit. It is tacky tokenism in the name of accountability.
When dealing with the delivery of local council services, top-class accountability is vital. The Government know that and we know it. Do not take my word for it: the Audit Commission has real concerns about shared service partnerships such as Southwest One. In January, it published an important report that stated:
“Councils should only deliver services through SSPs if they are prepared to manage them effectively.”
Effective management ought to mean an awful lot more than two well meaning volunteers on the board of the organisation.
The Liberal Democrats run Somerset county council and Taunton Deane borough council. Their leaders pay lavish lip service to working for the people, but if their words were worth a row of beans, they would have stopped this nonsense—this madness—in its tracks. Already Southwest One has taken over the employment of 800 staff formerly on the payroll of Somerset county council and Taunton Deane borough council. Interestingly, the payslips for those employees still come from the councils, but their long-term employment rights are now stunningly vague. They have been “guaranteed” that their jobs are secure, but the small print of the guarantee—believe it or not—is not available for inspection, even if they knew what was going on.
Southwest One is an outfit born in secrecy and reliant on secrecy. Trade unionists who ask responsible questions are branded traitors. Joe Stalin would have been proud of the company. Southwest One is destined to gobble up more than £400 million of public money providing just two councils with services over the next 10 years.
The creators promised that the scheme would save a lot of money—£200 million, which is the equivalent of a £20 million cut from existing budgets every year. Last night, I was bombarded with documents from Somerset county council hoping to convince me of the savings. I read them all. They all mentioned the magic word “guarantee”, but it is all aspiration; it is not an explanation of what is going on. Somerset people are being asked to believe in fairies, and we do not. Painless savings cannot be made unless there are real economies of scale, and they certainly cannot be guaranteed. In other words, many public authorities need to be on board to justify the cost, and even then some brutal job cutting will be needed as well.
Assuming that the instigators of the scheme were not complete idiots, there had to be a viable plan to get several local authorities involved at once. There was: Somerset county council’s bid to become a giant unitary authority. Last year, the council appealed to the Government for permission to take over the responsibilities of five district councils. It was a half-baked and stupid idea. The sums had not been done. It was said that there could be a saving of £27 million and that only 65 jobs would be got rid of—lunacy. The plan would have left Somerset people democratically unrepresented at local level and created the most unwieldy local government monster.
The unitary plan was driven by one dangerous but very determined individual. His name is Alan Jones and he is the chief executive of Somerset county council. Rather like Joseph Stalin, he does not give a fig about democracy. He is, in his dreams at least, a ruthless business man—a pint-sized Alan Sugar. If his unitary plan had succeeded, the core business of Southwest One would have been ready made, and those involved would have been laughing all the way to the bank.
However, the Government’s civil servants took one look at Somerset’s proposals and rejected them out of hand. They made no sense economically or democratically. Suddenly, the rug was pulled from underneath and the new joint venture company was left struggling for clients and credibility. A desperate bid for extra business was launched. Devon county council was approached, and Cornwall too—let us spread our wings; let us march to the periphery. Both, as I understand it, gave Southwest One an instant, and correct, thumbs-down, goodbye, you are the weakest link.
We all knew that Southwest One could not survive, let alone prosper, with the work of a single county council and a tiddly little borough council. It needed richer, fatter clients and, what is more, it needed them fast. Last Thursday, Avon and Somerset police finally signed up to a contract to become the latest member of this strange secret society. Soon it will hand over to Southwest One much of the boring back-room work, such as financial services, human resources, information technology, facilities management, procurement and even inquiry offices.
The police do not like to be seen cracking open the Bollinger; it tends to give criminals the wrong idea. The thin blue line had fixed grins last Thursday, and no wonder. The forces of law and order had paid rock-bottom, bargain-basement prices to join Southwest One. Perhaps they were the sprat designed to catch the mackerel. It is said that IBM wanted to bag as much back-room police work as it could from all over the UK, but no one will get this “buy one, get one free” deal in the future. Somerset county council and Taunton Deane council will have to cough up £40 million a year to transfer 800 people to the Southwest One payroll. Avon and Somerset police has 600 back-room staff, but they are all coming in at half the price. The police contribution is so small that it amounts to a bribe. If the police were not already in it up to their necks, I would be demanding a police investigation.
How did it all start? We are assured that it was from the purest of motives. Somerset county council wanted to save money, so a few years back, it invented a project called “Improving services in Somerset” (ISIS). It was a lofty ideal that no one could disagree with. However, if one examined the small print, one would find that most of it was missing. ISIS appointed a project director on a two-year consultancy to help get things going. The appointment was made under what is known as the “urgency procedure”, so the individual was given the job without going through the council’s normal strict selection process. Only two people were involved, one of whom was the county council chief executive—Stalin himself—Mr. Alan “Sugar” Jones. “You are hired,” he said.
The new project director was Sue Barnes, who had excellent qualifications and substantial experience in local government. Sue Barnes is a constituent of mine, and she happens to be married to Mr. Colin Port, the chief constable of Avon and Somerset police. At best, that is an uncomfortable coincidence. Although Sue Barnes was not an officer in the council, she was given unusual delegated powers to conduct commercial negotiations.
According to Somerset county council’s auditors, Grant Thornton, there was no “conflict of interest” in the odd relationship. Let the phrase “conflict of interest” echo for a second or two, while I continue to be struck by the irony of Grant Thornton’s language. At the same time as auditing Somerset county council’s books, that well-known accountancy firm was also responsible for vetting the books of the Avon and Somerset police force. Furthermore, I think that Grant Thornton was working on behalf of the Audit Commission when Somerset county council was awarded its four stars. Do we think that is odd or what?
It is strange how times change. Grant Thornton is no longer hired by the Audit Commission. All current investigations into Somerset are being handled by the commission’s own experts. I am told that this time, they are going through the books of Somerset county with a fine-tooth comb. Yesterday’s four-star council could be presiding over a five-star scandal.
I received a letter today from the Secretary of State for Communities and Local Government, the right hon. Member for Salford (Hazel Blears) in which she raises the connection with Southwest One partnership. She said:
“The arrangements that Somerset County Council and Taunton and Deane Borough Council have made in entering into the joint venture partnership are primarily a matter for them: you should certainly direct any concerns you may have about the procurement process followed to the councils concerned, or to the District Auditor.”
That sums it up. Even the Government see that something is not right. I do not blame the police authority for signing the deal with Southwest One. Given the deal that the police were offered, they would have been absolute twits to turn it down, but I remain deeply suspicious about Southwest One itself. For example, how did IBM become the preferred partner in the first place?
Originally, British Telecom and Capita produced detailed pictures. At least, they are home-grown companies. Capita has more hands-on experience of local government work than almost any other organisation. What was the competitive tendering process? We do not know the precise ifs and buts because of the extraordinary degree of confidentiality surrounding the whole affair, but we know that after any competitive tendering, there has to be an evaluation—the safeguard whereby local government officials can assure themselves that everything they have done is hunky-dory. I know that the Minister understands what I am talking about.
There is a specialist team in Government which does nothing else but evaluate councils. It is known as the “four Ps”, which stands for public-private partnership programmes. As the Government know, those guys are the experts and, more to the point, their service is free. In the early stages of ISIS, the four Ps were called in, but when it came to vetting IBM, the Governmentboffins got an extremely cold shoulder; they were fired.
Instead, the project director, Mrs. Colin Port—remember who she is?—recommended an entirely different evaluation process so, at an undisclosed cost to every taxpayer in Somerset, a private consultancy firm was hired. The consultancy company is called Maana, which is a Polynesian word that means “mature wisdom, with a hint of magic”—in other words, expensive eyewash.
The men from Maana previously worked for Suffolk county council. Guess what? Mrs. Port used to work there. It is always so much easier dealing with people we know, is it not? However, this time Maana was asked some searching questions about IBM’s business plans. The consultancy completed unedited reports that have never been made public, despite repeated requests made under the Freedom of Information Act 2000. Like so much of this appalling story, secrecy, underhandedness and deviousness rule.
However, there are some things that we know. We know that IBM was hired by the colleagues of the Secretary of State for Environment, Food and Rural Affairs to run the computer agency at the Rural Payments Agency. I know farmers who still have slight concerns about that. I know that the IT system used by the Rural Payments Agency is similar to the one that IBM wants to use at Southwest One. We also know that it is a hugely costly system with a track record of going wonky and not working. Are the vast consultancy bills a cock-up? Every time one asks, one is told something different. The system is embarrassingly German. There again, what is a few million Deutschmarks here and there? As a matter of fact, there is nothing wrong with the main IT system currently used by Somerset county council, and there never has been. It has been saving money. It could easily be expanded. More important, however, it is 100 per cent. British.
As of now, a team of geeks are working their hearts out to make the software work. The software was originally written to serve the city of Bradford. Now it is being converted to the functions of Somerset. We were promised that ISIS and Southwest One would provide an improved service and real jobs. The House will be interested to know that the important work of producing a new computer system for the two councils and one for the police authority is being undertaken, not in Taunton, Bridgwater or Wales, but in India. That is also a secret—like all the details of the contract that were signed at 5 o’clock on a weekend morning between Somerset county council, Taunton Deane and IBM. We are not allowed to see the small print, or even the big print.
We are obliged to take a few face-value promises and guarantees of savings. We are expected to believe the unbelievable, swallow the lies, and to turn a blind eye to the growing suspicion of dodgy dealing and underhanded deals. My purpose is to open up this issue so that the Government can do something before it is too late. We appear to be lumbered with an arrangement that ties the hands of politicians and people for 10 years, but the details are totally secret. That is inequitable. I do not think that any of us would disagree that the Minister and his officials have a duty to ensure absolute probity in the spending of public money.
The Minister could demand to see the detailed arrangements for all partners in Southwest One. Such partnerships are high-risk for the public purse unlessthere is a robust evaluation, monitoring and control system. Excessive secrecy inevitably erodes public confidence and inadequate democratic control washes it away altogether, which is why I want the Minister to consider this simple remedy: in future, such partnership arrangements should be subject to mandatory review by impartial organisations that represent, or report directly, to the Audit Commission and Parliament.
Southwest One is currently being investigated by the Audit Commission. I am respectfully seeking firm assurances that the recommendations of the audit will be fully implemented. The 10-year deal, which was pushed through by Stalinesque methods, is hazardous. The Lib Dems on the county council pathetically allowed it to happen—they did not even try to control the deal, and it could now tie the hands of all subsequent elected politicians regardless of their party.
I invite the Minister to investigate how one non-elected chief executive, Alan Jones, forced through such a mad, corrupt, barking scheme. Even Joseph Stalin did not go beyond five-year plans.
Tuesday 28 July 2009
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- ......we are a UK-based group of journalists, activists and concerned politicians devoted to tracking and exposing IBM and its stealthy progress of extracting millions of pounds of public money from central government, gullible local authorities and others.