Statement and Further Questions
We are speaking today about the Future of the Learning Disability Service. There are many similarities with the ISiS Programme (which led to Southwest One) and this proposed privatization. Professor Dexter Whitfield produced a list of main risks prior to the letting of the contract to IBM.
- Operational failure to meet the performance and investment requirements.
- Partnership failure
- Shared services failure
- Savings smaller than planned
- Inward investment lower than forecast
We believe based on the evidence (or rather lack of) that these apply in this case to privatise a large part of Somerset County Council. SCC has produced “Lessons Learnt” reports based on the controversial Southwest One contract. Have these Lessons Learnt been rigorously applied to this programme? We have listed below further questions about the procurement process and the need for an In House Service Improvement and Innovation Plan.
Appendix G (Risks) is not to that standard of Risk registers that are regularly reported to the Audit Committee. There are no likelihood and impact figures in the format that SCC uses.
There are also key risks missing, in particular, the likelihood of new business and the associated costs and impact on the Business Case.
There is no clarity either on the impact and uncertainty of services likely to be affected by this proposed outsource in other parts of SCC.
We are asking you today to defer the decision and have a serious look at an In House service improvement and innovation plan.
Q1 Paper A states (Financial Implications)) that:
“The recommendation to award the contracts would result in a forecast small reduction in the expected cost to SCC for this service over the 6 year life of the contract. However, the contracts would bring more certainty to that cost and will bring service improvements.
There is an increase in costs in years 1 and 2 of the contracts as the service is in transition and begins to modernise some of its arrangements, but some of this cost can be funded through transformation budgets and capital receipts. The Council will need to increase its planned programme to generate capital receipts to do this and these can come from any asset sales and are not linked to assets providing services for LD. There is an implication that some SCC overheads will need to be reduced due to a reduction in the head count of staff directly employed by the Council.”
a) 1) At Scrutiny it was announced that the upfront funding in the proposed early years was £4.9m. Was this £4.9 million also used in the comparative costs of continuing to run the service directly?
2) What is the purpose of giving this money to the sole bidder (Dimensions) and how will you know it has been effectively spent?
b) At Scrutiny it was also announced that they expected savings of £8m over the 6 years of the proposed contract. How much of the forecast savings in the business case is from new business from other local authority areas and within Somerset? If no new business is won will the business case remain viable? Has the cost of a fully resourced client function for 6 years of the contract been included in the Business Case?
c) How much of the savings are based on staff salary reductions and downgrading of staff?
d) Will service users carry the risk if there is no new business and how has it been evidenced that somehow a Social Enterprise that does not exist will be able attract new business?
e) Why hasn’t the existing in house service been allowed to innovate and improve to meet the requirements?
f) If a Social Enterprise is set up then Scrutiny recommended that “surplus” should remain in Somerset. An in house service would ensure that all funding is spent in Somerset. How will the contract guarantee that Surpluses made in Somerset Stay in Somerset?
g) Why is the Business Case hidden from public view if there is only one bidder, the proposal is Not for Profit and this is taxpayers’ money?
h) What happens if the savings are, like Southwest One (SW1), slower to be realised and less than forecast?
Q2 Paragraph 2.1 Paper A states:
“The financial submission by Dimensions has been evaluated against the known costs for the LDPS and how the Council would take that service forward in the future.”
a) When will the known costs of the In House LDPS be released so that we can check them?
b) Will the costs and associated information be released into the public domain immediately?
Q3 Appendix A “Objectives”