Wednesday, 28 November 2012

Two years on …… are Council services ‘quicker, better and cheaper’?

In October 2010 North Somerset Council embarked on a controversial £100m contract with private contractor Agilisys to run the Council's support services.

At the time Councillors claimed Agilisys would provide a better, more reliable service and improve customer satisfaction, all at lower cost. UNISON opposed the privatisation of support services and seriously questioned the Council's claims.

A year into the contract UNISON surveyed a cross section of members employed by Agilisys and the Council to obtain their views and experiences on how the contract was working.

Not a single member employed by the Council who was surveyed thought the contract had fulfilled the promise that services would be ‘quicker, better or cheaper’.

Of Agilisys and Liberata staff surveyed, almost half (46%) disagreed or strongly disagreed with the statement that services had improved since being outsourced, with only 21% saying they had got better.

Increased workload and pressure, low morale, office environment and poor communications were identified as particular issues of concern.

A detailed report of our survey findings was published on the branch blog  at:

UNISON then pressed the Council to commission an independent review of the performance of the contract during its first year. This is standard practice for most big council contracts elsewhere.

In December 2011 the Council finally agreed to carry out a review and engaged management consultants KPMG to carry it out. The KPMG report was presented to Council officers in April 2012. However the report was kept secret and not made public for eight months.

Following a request using the Freedom of Information Act (FoI) the Council eventually released a copy of KPMGs ‘Final Summary Report’ in November 2012. The Council has however refused to provide a more detailed report, claiming that none exists. This claim is being challenged, using the FoI. It is a criminal offence to hide the existence of requested information to prevent it being released.

However the summary KPMG report is itself illuminating and in our view damning.

It says that although performance reports indicate that the contract is performing at the level contractually agreed, this positive picture does not correspond with staff feedback about poor quality services in some areas. This suggests that poor performance is not being picked up as a result of inadequate contract management and as a result of using the wrong performance measures.

The report also reveals that over a year into the contract 16 of the 38 agreed performance indicators in the contract are not being reported on!

UNISON warned the Council back in 2010 that it was proposing to put insufficient resources into managing and monitoring the contract, but our warnings were ignored.

The KPMG report also reveals that savings from procurement are significantly lower than promised - £740,000 savings now predicted by the end of 2012/13, instead of the promised £2.4m. Indeed real savings from procurement at the end of this financial year will be just £360,000. All this makes it highly unlikely that the promised savings of £5m by 2014/15 will ever be achieved.

KPMG also reported that council directorates found Agilisys input into procurement reviews was ‘often not helpful’

KPMG also reported that staff expectations have not been met on the quality and delivery of the new FMS. And that Directorates are frustrated by the lack of effective engagement with them and their inability to influence the design of systems and developments to meet their specific service needs.

This finding comes as no surprise to UNISON. Contracts of this type are often inflexible in the way they are implemented.

Oddly the report tries to give some credit to Agilisys for helping to facilitate the delivery of savings in 2011/12 that had already been identified by the Council itself. Perhaps this is not surprising with so little in the report to commend the contract itself.

KPMG do say that in the first year investment in service developments have exceeded predictions, although front-loading investment is common in contracts of this type with the costs being recovered by the contractor in later years. It also says a significant number of new jobs have been created locally, although these claims need to be investigated further as the job creation benefits of this type of contract are notoriously difficult to validate. However any net increase in the numbers of jobs would be welcomed.

The KPMG report raises very serious questions about the credibility of the contract and the promises made. Although the Council has adopted a number of recommendations designed to improve the performance of the contract UNISON is worried that some targets may be reduced to make it easier for Agilisys to hit them. We are also concerned that additional payments made to Agilisys under the contract may not have been correctly calculated, something that is implicitly acknowledged by the KPMG report.

Finally it is very clear that KPMG regard confidence in the contract as low
The Council’s initial reluctance to carry out the review, and its subsequent reluctance to publish the review are an on-going cause of concern for UNISON. There are many questions that still need answering and we will be pursuing these over the coming months, not least why the Council continues to deny the existence of a more detailed report that we strongly believe does exist. Unless the Council is completely open and commits itself to a continuing and frequent process of independent reports there is a real fear that the Agilisys contract will become another expensive contract failure all too familiar in local government.

The Summary Report can be downloaded at:

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