What replaces Compulsory Competitive Tendering for Councils?

A few years ago, if there was one thing likely to send a chill down the spine of your average local authority IT manager it was the phrase Compulsory Competitive Tendering or CCT as it was otherwise known ? the practice whereby town halls had little option other than to invite outside contractors to bid to provide key services.

It was an initiative redolent of high Thatcherism, designed to force the pace of change in municipal government by simultaneously driving down in-house costs, breaking the grip of unions and imposing, putatively at least, the ruthless rule of efficiency.

Although the policy was not peculiar to council IT departments, they found themselves very much in the firing line ? accounting, as they still continue to do, for one of the largest chunks of local authority expenditure.

That CCT was despised by left-wing councils was no surprise. If anything, bating Labour probably gave the initiative its edge in the eyes of many Conservatives. It was hardly surprising, either, that ? within the first 100 days of the Blair Government ? the death knell was sounded for CCT, which is now to be replaced by the less prescriptive Best Value mandate. Quite what Best Value means is a moot point, though it has not deterred local government minister Hilary Armstrong from declaring that the replacement policy will be implemented ?as soon as parliamentary time allows?.

But the time needed for legislation means that the shift can?t happen as quickly as some would like. There is also uncertainty about which of the councils scheduled for CCT will still be obliged to go through with it. The primary legislation for Best Value is unlikely to kick in for two years. Meanwhile, about 30 local authorities will have the opportunity to join a pilot scheme during the coming months.

Many IT directors in local government see the new approach as offering greater flexibility than CCT. Rob Whiteman, assistant director of finance and support services at South London?s Lewisham Council, says: ?This is a more challenging regime ? the ball is in our court to demonstrate that we?re providing a quality service.

?Under Labour?s new policy, every council service ? not just a few ? will have to demonstrate that they offer best value. It means more responsibility and autonomy.?

Doubtless, councils will be relieved to be allowed to put forward their own ideas on how Best Value should be defined and implemented. ?After having CCT rules imposed on us for so long, we can now be more creative,? says Whiteman, with no hint of irony.

So where does this leave the council computer departments?

?Rather than looking at IT as a discrete area and as an end in itself, all services with a need to demonstrate value will be exploring IT to see how it can help provide better services,? predicts Whiteman.

Bob Dunn, IT director at the City and County of Cardiff and vice president of Socitm ? the Society for Local Government IT Managers ? says: ?CCT encouraged you to contract out services, whereas we?re interested in a more co-operative equation that generates more resources, while allowing several of the players to get on with what they are good at.?

Dunn also welcomes what he sees as a shift of emphasis by the Blair Government in the vision of electronic service delivery. ?Labour seems to acknowledge that it needs to be close to the public and sees local authorities as having a pivotal role.? By contrast, he says, there was a perception that the Tory?s open government initiative, government.direct ? hooking the state machinery up to the Internet and public at large ? was at risk of completely excluding the UK?s councils.

But if Tony Blair and his party want to encourage greater use of IT to forge better links between Whitehall, local government and the general public, it still leaves the thorny issue of funding up in the air. CCT, by its very nature, forced competitiveness and, in its time, arguably reduced costs.

By contrast, Best Value is a nebulous policy, particularly in the way it might be implemented. Moreover, if there is a swing back to local authorities running their own IT operations, but with the added challenge of using information technology to inform the masses of shifting council policies, services and such like, who at the end of the day will foot the growing bill?

It is a grey area that also casts doubts over how far local councils should go in outsourcing their IT, a practice that ? in Tory-run authorities, at least ? often went in tandem with CCT and slashing costs.

According to Dunn: ?Best Value will not be the end of outsourcing. But, in future, outsourcing may be carried out more selectively. In the past it was often a political choice. There will still be a role for it, but it will become a means to providing Best Value.?

He adds: ?The current thinking seems to be that one big outsourcing contract is usually a mistake. It doesn?t solve your problems and you may have additional difficulties managing the contract.

?To tie all your IT up for a five-year, monolithic contract means that you risk missing out on changes in technology, including price reductions ? especially while the prices of Unix systems are dropping by 40% a year. You also risk losing your expertise.?

Outsourcing selectively, however, could be a different matter ? so long as Labour?s hitherto vague guidelines on Best Value are given firmer shape by the time the new policy is rolled down the ramp. Cambridgeshire Council, for instance, outsources mainframe operations to Integris (part of Bull), while Bull itself manages the network. But the council?s Caroline Bramley says that this was a choice made by Cambridgeshire for business reasons, and not one enforced by politicians: ?It was just a sensible decision for us,? she insists.

Elsewhere, EDS? new contract with Lewisham Council ? in which Ross Perot?s old outfit is helping to provide the framework for change, and right from the outset was not even seeking an outsourcing deal ? could be construed as a sign of the latest thinking. EDS already had local government contracts with the likes of Brent, Wandsworth and Kingston ? all process management outsources, according to EDS? local government director Steve Simpson. But Simpson reveals: ?Our latest local government contract with Lewisham is a bit different. It has come to us for technology, not for outsourcing. Lewisham believed that it had a good in-house team and a good chance of winning a bid under CCT, but it decided to bring us in to help.?

One explanation might be the well-publicised disasters with workflow and image processing encountered by other local authorities, where authorities have thrown hardware and software at their current process. ?We know you have to re-engineer the processes and design the technology around it. We?ve done it before,? says Simpson.

The Lewisham contract is worth about #1m to EDS, in sharp contrast to its #50m outsourcing deal at Brent Council. But Simpson explains: ?We constantly battle against the notion that we?re interested only in big outsourcing contracts. We?re not ? we will do whatever the client wants.? At Lewisham, Rob Whiteman says: ?We are working with EDS to streamline our revenues and benefits operation. It may be that we still face CCT, or it may be that we deal with it under Best Value.

?Either way, EDS is helping us develop a tool that will allow us to change our business in a flexible way through workflow and imaging technology.? Whiteman sees the situation as being mutually beneficial. ?We get input from a leading private sector player, while EDS is demonstrating that it can work with the public sector in another way than outsourcing,? he comments.

An authority which has already won its in-house bid for revenues functions is North London?s Newham Council.

Simon Norbury, director of IT, explains that the bid was a joint one between the respective computer and revenue divisions.

?What we did is in tune with Best Value: the support team gets market tested through the service the public sees.? As an internal bid, Norbury feels that the in-house team ?started with one hand tied behind our back, because of the ?grass is greener? view.

?We had to prove that we could be innovative,? Norbury continues. ?The contract is for five years and we had to show what we could do over that period. We were already using document imaging and we showed how we planned to develop that in future with workflow and other technologies.

?We plan to adopt an episode-based approach to dealing with customers? needs by providing a single interface to multiple IT systems. So, for example, if someone has lost their job they will be able to get access to benefits advice, retraining and job vacancies within the council ? all the information they need from one point, without being pushed around from pillar to post.?

ICL contributed to the win, Norbury reveals. ?We employed the company to help us put the bid together ? it has a lot of experience in preparing bids. ICL was able to challenge what we were thinking at each stage to make sure our proposals were sound.?

So what next? Karen Swinden comments: ?We?re waiting to see how far the Labour Government will keep its promises as regards CCT, capping, and also changing the laws in terms of how local government can link with business. In opposition, the Labour Party indicated that it might change the law in order to allow local authorities to set up public or private companies as a means of economic regeneration. It?s not allowed at the moment and it?s something that has to change.?

Meanwhile, as Bob Dunn explains: ?The challenge we face is to do more with less ? to break up a problem and get funding and resources piece by piece. ?We have challenging and very busy times ahead,? Dunn adds.

Express delivery Citizen Direct

A new report by government IT analyst Kable on the future of public service delivery, Citizen Direct, was launched by Martin Bell at the House of Commons in June. The report calls for a more ?customer focused? style of government service delivery focused on particular episodes of an individual?s life ? such as losing a job, bereavement or moving home. An earlier Kable report entitled Tomorrow?s Town Hall deals specifically with local government. Technology such as call centres and the Web are among the channels envisaged for service delivery. Copies of the report are available from sponsors Ernst & Young, ICL, Mercury Communications, Cable & Wireless, Sema Group, and Sequent, or from Kable itself on (0171) 608 0900.

Helping the have-nots Internet kiosk pilot scheme

Manchester?s Moss Side is taking part in a six-month pilot scheme that is putting Internet kiosks in sites such as a branch of Asda, libraries and even a Big Issue office. The project is led by Sema Group with participation from NEC, Manchester City Council, Manchester Community Information Network and VirginNet. It?s half funded by the EU under the Tardis (Targeted Distribution of Information and Services) scheme ? a programme for researching provision of information to the ?technologically disadvantaged?.

The target audience is members of the community who would not otherwise have Net access, closing the gap between what Sema?s business development director, Vin Sumner, calls ?the haves and have-nots in cyberspace?. The kiosks use touch-screen technology and are designed to be self-explanatory. But nearby staff will be trained to help, with users rationed to one hour of surfing at a time. Local information is being provided by participants and others, while there are also links to an Internet job site.

Push technology and user profiling will similarly be deployed to tailor the system to people who choose not to be identified or prefer nicknames, so that customised information ? such as specific advice for the jobless or homeless ? can still be provided.

Best Value: Labour?s principles

?Implementing Best Value is a duty which local authorities owe to local people, both as taxpayers and the customers of local authority services. Performance plans should support the process of local accountability to the electorate.

?Achieving Best Value is not just about economy and efficiency, but also about effectiveness and the quality of local services ? the setting of targets and performance against these should therefore underpin the new regime.

?The duty should apply to a wider range of services than those now covered by CCT. Details will be worked up jointly with departments, the Audit Commission and the local government authority.

?There is no presumption that services must be privatised, and once the regime is in place there will be no general requirement for councils to put their services out to tender. But there is no reason why services should be delivered directly if other more efficient means are available. What matters is what works.

?Competition will continue to be an important management tool, a test of Best Value and an important feature in performance plans. But it will not be the only management tool and is not in itself enough to demonstrate that Best Value is being achieved.

?Central government will continue to set the basic framework for service provision, which will in some areas now include national standards. ?Local targets should have regard to national targets, and to performance indicators and targets set by the Audit Commission in order to support comparative competition between authorities and groups of authorities. ?Both national and local targets should be built on the performance information that is, in any case, needed by good managers.

?Auditors should confirm the integrity and comparability of performance information.

?Auditors will report publicly on whether Best Value has been achieved and should contribute constructively to plans for remedial action. This will include agreeing measurable targets for improvement and reporting on progress against an agreed plan.

?There should be provision for intervention at the direction of the Secretary of State on the advice of the Audit Commission when an authority has failed to take agreed remedial action, or has failed to achieve realistic targets for improvement.

?The form of intervention should be appropriate to the nature of failure. Where an authority has made limited use of competition, and, as an exception to the rule, intervention may include a requirement that a service or services should be put to competition. Intervention might also take the form of a requirement that an authority should accept external management support and may relate either to specific services, or to the management of the council.

Preparations for the big day The year 2000

For some local authorities, coping with the year 2000 date change fiasco is still an unknown quantity. Some worry they might have to defer more exciting IT projects in favour of mundane tasks associated with compliance. Most councils are at the stage of auditing their systems and assessing the scale of the problem, believes Bob Dunn of the City and County of Cardiff. Some of the biggest challenges face local authorities with bespoke financial management systems linked to perhaps hundreds of decentralised systems in widely scattered buildings. One council is reported to be thinking of replacing all of its systems to get around the millennium problem, but time is getting short for an undertaking of that scale. Dunn says: ?Although the mainframe is the obvious problem area because of the big systems that run on it, an organisation such as Cardiff has about 3,500 PCs on desktops. All must be checked to see whether the PC and software versions are compliant.

Networking The Cardiff Experience

Local government reorganisation has created the City and County of Cardiff. This replaces the old bodies, the Cardiff City Council and South Glamorgan County Council. The new authority ? the largest in Wales with a population of 300,000 spread over a wide area ? is using Bay Networks partner LanBase to upgrade its networking capabilities. LanBase has put in an ATM backbone and is upgrading departmental LANs and the links to them. For the longer term, there are plans to provide ATM connectivity to remote sites, provide that MAN (metropolitan area network) requirements can be met at an affordable price. The new authority has set up an intranet and provided its internal users with Internet access. As well as supporting the needs of the authority?s internal users, the network is intended to facilitate the installation of multimedia kiosks in 700 remote sites including housing offices, schools and libraries.