Agenda item

The Staff Side would like to ask the following question:

Unite have noted that all of the reports concerning the IT contract that have gone to various committees, have been part 2 reports.

The written response provided and the response to the 23rd March Executive do not suggest that these wider costs, borne partly by staff, have been reported and therefore factored into decisions.

Were the wider costs to the Council reflected in these reports? 

Background Information-Previous Question and Answer

There was a question from the Staff Side at the previous LJCC meeting pertaining to the IT contract, which was not answered on the evening of the meeting, and it was agreed that a written answer be disseminated to the Committee in due course.

The question and subsequent answer is detailed below. Please note that the original question was split into 2 sections, so there are effectively 2 questions and 2 answers.

The original question is written in the red text and the answer is in the blue text:  

The Council has just announced the awarding of the IT contract to BT with estimated savings of 10%.  Is this further savings on top of the SunGard contract subsumed by Capita that was intended to give 25% savings? 

The SunGard /Capita contract replaced two contracts, one run by Liberata for IT services and one by Demovo for telephony. The contract was also awarded jointly with Lewisham.  Amalgamating two services into one contract and letting jointly with Lewisham gave savings of approximately 25% overall. The discount for the joint arrangement with Lewisham amounted  to 17% of the total savings. The withdrawal of Lewisham at  the contractual break point would have led to the joint arrangements savings element being lost from 1^st April 2016 .

The Part 2 Executive reports which have been considered by the E&R PDS Committee, and the Contracts Working Group, detailed how the BT savings would be achieved. This was not a straightforward calculation as the 2 contracts were not like for like; the BT framework had elements included that were outside the scope of the Capita contract. These arose from projected changes post 2016 including, the efficiencies that come from the framework model of procurement, the inclusion in the main contract price of certain charges e.g.–the People`s Network, where Capita  made a separate charge, and server hardware maintenance being included in the overall  contract price, and the flexibility we have around the consumption based model. Overall the BT contract is projected to give an estimated initial 11% saving compared to the revised Capita contract costs without Lewisham.

Now we are at the change of contracts is there a “final account” / report to the Contracts Committee setting out any true savings achieved and does this reflect in any way the wider costs to the service through IT failures to the IT service?

The contractor has delivered on budget. Key Performance Indicator information has been reported to E&R PDS and latterly at the Contract Working Group. Sums payable for breaches of the KPI’s have been deducted and total £134,076.  Further deductions are likely for the last 3 month period of the contract. It must be remembered that IT issues can arise from  a variety of sources including but not limited to user error, hardware failures, data corruption, issues with third party suppliers and software and external events, as well as issues arising from contractor performance. Whilst there is increasing dependency on IT, not all tasks undertaken are dependent on IT.

The Council meeting on 22 February included a similar question but directed at certain IT systems, to take one extract then on email system availability,  the position in the last 12 months was:

The contract requires 99% minimum system availability and on key systems. The Contractor has met the 99% minimum availability KPI throughout the contract. Reports are regularly made to the relevant member bodies on performance of key contractors and this includes IT.

Additional Background Information:

There was an original report concerning this matter that went to the Executive on 17^th September 2015, this was a part 2 report.

An updated report on the award of the new IT contract went to the Executive on 14^th October 2015, with pre-decision scrutiny by E&R PDS on 8^th October 2015. This was also a part 2 report.

The issue was considered by Contracts Working Group, and all their meetings are part 2.

The Staff Side asked the following question:

“Unite have noted that all of the reports concerning the IT contract that have gone to various committees, have been part 2 reports.

The written response provided and the response to the 23rd March Executive do not suggest that these wider costs, borne partly by staff, have been reported and therefore factored into decisions.

Were the wider costs to the Council reflected in these reports?” 

The Employer’s Side answered by stating that the report to the Executive and Resources PDS Committee meeting on 12th March 2015 was a public report, and contained a detailed review of contractor performance. Other reports dealing with contracting options were quite properly part 2 reports.

Under the CAPITA contact, there was a requirement to have a minimum system availability of 99%. The contractor met this performance standard throughout the contract period, and in the last 5 quarters of the contract, commencing at Year 4 Quarter 4 and running through to contract end at Year 5 Quarter 4, the system availability was  99.62%, 99.6%, 99.47%; 99.5% and 99.47%.

The Employer’s Side highlighted that it was important to be aware that the contractor had responsibility for core systems, e.g. Outlook and Lync, but was not responsible for directly supporting “line of business” applications. The ICT contractor’s responsibility was to ensure the operating platform was kept up to date.  This would be achieved by proper maintenance, security updates/ back-ups, and engaging with the Application Vendor if there were issues.

The Employer’s Side referenced the previous response: 

 “It must be remembered that  IT issues can arise from  a variety of sources including but not limited to user error , hardware failures, data corruption, issues with third party suppliers and software and external events, as well as issues arising from contractor performance . Whilst there is increasing dependency on IT, not all tasks undertaken are dependent on IT.”

It was acknowledged that system availability dipped below 99.6% for the final 3 quarters of the contract. However the contractor did meet the KPI requirements; system availability was in line with the previous contract, and for the reason set out, it was neither possible or appropriate to undertake the suggested calculation.

Gill Slater responded by presenting an overview of the various costs and savings of the previous and current IT contracts. She expressed the view that the data presented did not allow for the wider costs that may have been experienced due to systems failure, and that all costs should be fairly reported. The Staff Side contended that the Liberata contract demonstrated significant failings of a contracted out service. The Staff Side expressed the view that if wider costs were not reported, then that was a significant worry; they felt that all contracts should be open and vigorously assessed.

Lesley Moore (Director of Commissioning) responded by stating that all the elements of costs and savings with and without the partnership with Lewisham (for the previous IT contract with Capita), had been clearly outlined. It was the case that all the elements of the contract had been transparent. She explained that the new contractual arrangement with BT was better for the Council. Officers had investigated in depth, the possibilities and frameworks that could be developed for a new IT contract. They came to the conclusion that the best option was a new IT contract with BT, and it was estimated that the new contract would provide additional savings of 11% against the Capita contract after Lewisham had dropped out of the partnership.

The Director stated that all of this information was clear, and that there was no ambiguity—the right information had been given. She stated that the retendering of the IT contract was the correct course of action, as it had resulted in greater efficiencies, reliability and cost savings. 

Councillor Colin Smith stated that in his view, the IT systems that he used were working very effectively, and he was pleased with the new BT IT contract. He stated that if it was the case that systems failures were presenting staff from doing their work, then that would be unacceptable. If such cases existed, then they should be highlighted so that action could be taken to find a resolution.

Councillor Angela Wilkins stated that she was a member of the Contracts Sub Committee and that it was indeed the case that there were costs to the Council due to systems failure of the Capita contract. She suggested that the Staff Side be offered the opportunity at the meeting to highlight any problems that they had experienced with systems failure. The Chairman responded that this suggestion was not timely or appropriate, and that Members had previously asked the Staff Side to evidence failings to Council management.

Gill Slater clarified that the Staff Side were not stating that there was anything wrong with the current BT contract. Their aim was to point out that the Capita contract was a failure, but was nevertheless reported in glowing terms by Capita as they were allowed to self-report.

Cllr Colin Smith stated that any systems failures and the impact on services should be reported to Duncan Bridgewater given his strategic lead role for customer service, and that contractors could be penalised for system failures if appropriate within the contract.