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An informed blogger on Suffolk CC’s poor contract scrutiny

Kevan Lim who was a Labour county councillor in Suffolk until 2009 is writing his blog again, after a few months off, and is strong voice.  In a detailed post headed Is BT ripping off Suffolk? he goes through the history or procurement and scrutiny arrangements (or current lack of them) before concluding:

The County Council is about to start the biggest divestment of services in its history under the New Strategic Direction policy. Such a change will require greater control of contracts not less. The more external providers of services you have the greater the need to be regularly reviewing their services and making sure you are getting value for money.

The banking crisis was a perfect example of the National failure of regulation and scrutiny. Now the County Council is creating its own Suffolk Banking crisis.

As things stand the current County Council appears incapable of managing its external providers and that is a scary thought whilst the current leadership of the County Council remain which may cost us all.

It is worth reading it all to see how he reaches this conclusion.

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  1. boz says

    Kevin writes an impressive and detailed account of the lead up to the contract award and the early days of the contract. The story for Kevin largely ends in 2007 – before the costs of the contract started to take off.

    Given that most of the key players are still alive and well it seems strange that no attempt is made to analysis what went wrong.

    From information that is now available from several sources it is clear that:
    • The key contract schedules that should have specified the work that the contractor was to do were not completed to a level of detail that would clarify what was or was not included in the contract
    • The Council wrote a “new” contract rather than used one of the standard Model contracts written by HMG lawyers
    • The Governance arrangements were flawed with no proper links between the SCC Board members and the client side within the Council
    • The scrutiny arrangements were poor and ineffective.
    • The SCC retained Client side was weak and far too small. Good practice suggests as a rule of thumb that !.5% of the costs of the contract should be retained by the Client to manage the contract and direct the strategy. A client side team of 12 – 15 people would have been sensible. (SCC did belatedly beef up the client side in 2009)
    • As Kevin noted the Procurement specialism was undervalued and marginalized within SCC
    • The risk of change requests and contractual claims were identified at the outset but the risk mitigation strategy was not understood or used by SCC
    • Service level agreements measured the wrong things
    • Senior people in the Council perceived the contractor as their friends. The Contractor saw the Council as naïve and at times comical
    • The investment into the services was not tracked
    • The original business case was never updated so there was lack of clarity as to why costs were rising and the mechanism that were being used by the contractor to deliver the “growth” that they wanted.
    • The objectives of the organization was not aligned because the commercial incentives for the contractor to maximize profits were not controlled in the way the “Founding fathers” had envisaged.

    Given the importance of balancing the books at a local and national level one can only hope that these and similar contracts are properly managed and scrutinized in the future