NORTH SOMERSET COUNCIL HID REPORT ON £100 MILLION CONTRACT - AT WHAT COST TO COUNCIL TAX PAYERS?
Since October 2012 UNISON has been using Freedom of Information (FOI) requests in order to see a report on the review of North Somerset Council's £100 million, ten year Support Services contract with Agilisys. The contract was originally awarded in October 2010 and involved Agilisys (with sub-contractor Liberata) providing council services including ICT, Human Resources, Payroll, Facilities Management, Procurement, the Council's Contact Centre, and Revenues and Benefits. At the time UNISON opposed the contract and challenged the Council's claim that it would result in improved services and better value for money. It was also UNISON that pressed the council to undertake the review one year into the contract - this is good practice for contracts of this size in order to ensure that they are performing at the required level and providing value for money for council tax payers.
The review was undertaken by management consultants KPMG in December 2011, and their report was presented to the Council in April 2012, but it was not made public. Following a request by UNISON under the Freedom of Information Act in November 2012 the Council eventually released a copy of a ‘Final Summary Report’ of the review, with a section blacked out or redacted. When we asked the Council to publish the more detailed report that the summary was obviously based on, it refused claiming that no such report existed. In fact the Council said the ‘final summary report’ was the full report! After more FOI requests to the Council, in June 2013 a complaint was lodged with the UK’s Information Commissioner using the Freedom of Information Act.
In January 2014, after an investigation lasting over six months the Information Commissioner has concluded that a more detailed report does in fact exist and ordered the Council to hand it over. It also ordered the Council to disclose the contents of a paragraph in the summary report that had been blacked out because the Council and Agilisys said it could harm the commercial interests of Agilisys if published. At the time Agilisys was bidding for another contract elsewhere.
UNISON has now been provided with the unredacted version of the Final Summary Report, as well as the Final Detailed Report. The redacted text was from page 3 of the Final Summary Report, which was effectively KPMG's findings in brief. The paragraph began with: "The Council has seen a number of benefits from the introduction of the Support Services Partnership (SSP) such as job creation and a greater focus on business change, as well as reduced costs for support services." The Council then blacked out the following two sentences: "However, the aspects of the partnership that have not worked well, such as the quality of some transactional services, have resulted in officer mistrust and a lack of contractor and client team credibility. This mistrust is based on experience of the transactional services delivered, and on the perception that the SSP is underperforming more widely because only the client team and contractors have a clear understanding of what the contract was set out to deliver."
The differences between the Final Summary Report and the Final Detailed Report, whose existence the council denied, are minimal in terms of length - the Summary is 15 pages long, whereas the Detailed Report is 22 pages. But the differences in content are significant and may point to the reasons the Council denied the report's existence. The differences are KPMG's comments and recommendations on Leadership, Governance and Flexibility which are in the Detailed Report, but not the Summary Report.
It is very worrying for us that the Council and Agilisys have spent well over a year refusing to publish concerns outlined in the report about the poor quality of some services, inadequate contract management, failure to report on all Key Performance Indicators, using the wrong performance measures, failure to make promised procurement savings, and potential issues with correctly calculating so-called variable payments - that is payments for additional services. All of these issues mean that this contract may not be providing value for money for the council and council tax payers. We are also concerned about the amount of money that has been wasted by the council trying to bury the report, as well as their unsuccessful attempt to pursue the Information Commissioner to prevent its publication. The KPMG report itself adds further weight to the argument that (at the time) the contract was not performing satisfactorily and not delivering the value for money promised. Because of the amount of time that has passed between the Council receiving the report and it being ordered to make the report public - almost 2 years - the Council are now claiming that any criticisms of the contract identified by KPMG have been addressed, and obviously UNISON is pleased that this has happened. But we still have concerns on the following recent statements by the council:
· Numbers of jobs created by Agilisys, without the contract specifying what "job" actually means, i.e. is it full or part-time, is it skilled and well paid or low paid, and with no recognition of the numbers of redundancies Agilisys have also made.
· High levels of satisfaction with working for the council revealed by this year's staff survey, without any recognition of the fact that this is still well down on the all time high recorded in 2006, and current high levels of staff dissatisfaction with office environment, hot desks, and ICT - all of which are part of the Agilisys led Office Amalgamation programme.
· Agilisys' apparent failure to take into account Health and Safety requirements in the new Town Hall Gateway and the resulting increased workload for council staff.
The release of the KPMG report now quite by coincidence comes at a time when the council themselves are in negotiations with Agilisys to extend the Support Services contract and transfer more council jobs and services to Agilisys. These negotiations seem to have been prompted by a recent report undertaken by Price Waterhouse Cooper, who were commissioned by the Council to help them make further savings as a result of government funding cuts. In our view these negotiations are being hurried, with a report going to the Executive meeting on 15th April, and then the renegotiated contract being approved at a Council meeting on 6th May. The council have hired a consultant to help with the negotiations with Agilisys at a cost of £100,000. But to our knowledge the council have no in-house service improvement plan to act as a comparator, and neither are they going through a competitive bidding process to see what other organisations could provide. This means the council cannot be sure that they are getting value for money from Agilisys. In fact without all this information Agilisys can pretty much name their price. This also runs the risk of wasting more money and costing much needed jobs.
North Somerset UNISON has written to all North Somerset councillors outlining our concerns about the Agilisys contract. We will also be demanding an end to the culture of secrecy that has grown up around this contract. A culture that has resulted in the Council denying the existence of a Report and not even sharing it with councillors. In fact one councillor has told us that if it wasn't for UNISON's perseverance in getting this report through freedom of information, councillors themselves would never have seen it. We will also be requesting that all papers in connection with the renegotiated contract are made publicly available before any decision is taken on transferring more jobs and services to Agilisys. These documents include the business case which Agilisys has produced arguing why they should take on more council services.
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. It is our view that these huge contracts rarely deliver the benefits promised. And the secrecy that surrounds them makes it very difficult to hold to account the councillors and senior managers who promote them. As for the Agilisys contract, UNISON is more convinced than ever that it was a big mistake and one we will be paying for, for years to come.
KPMG Final Summary Report redacted version
KPMG Final Summary Report unredacted version
KPMG Final Detailed Report
North Somerset Council Response to the KPMG Report
The Information Commissioner's Decisions can be found at the following links: