“Is there anything you would not privatise?” That was the question I asked Brian Coleman, the controversial chair of London’s Fire Authority — a public body which sadly is in the grip of an ideologically-driven Conservative administration thanks to shameless gerrymandering by London’s Tory mayor Boris Johnson and unelected political appointees.
My question to him was prompted by the Tories’ current plans to privatise the London fire 999 emergency control room.
Mr Coleman’s answer? It was a bald and brazen “No”: there’s nothing he wouldn’t try to privatise if he could.
It’s true that in the London fire service we don’t have a direct labour force building our own fire stations — that’s done by contractors. We don’t manufacture our own fire engines. We don’t even own or maintain them ourselves (although that is proving to be a less-than-happy arrangement).
So I’m happy to say there should be no fixed or pre-defined approach to deciding whether a public service should be provided by the public sector, the private sector, in partnership, or via innovative ‘third sector’ organisations such as mutuals and employee-led.
In seeking the best quality and the most cost-effective price for the taxpayer, the tests we should apply include – is there a genuine external market in the service? Can you get economies of scale or cost savings from shared management overheads? Are there specialist skills not available in-house? Can funding be raised more cheaply?
But by applying those tests, current proposals to outsource both the new IT software system AND the staff to operate the emergency control centre make no sense. There’s no competitive market: you can only have one call handling system for one emergency response service.
No, this proposal is purely ideologically-driven, with a contract signing date just a month before elections which may well change political control. Following an OJEU invitation to tender, shortlisted bidders are being assessed this month and the process is firmly underway.
The background to this sorry tale – which is profoundly worrying to long-standing and hard-working London Fire and Emergency Planning Authority (LFEPA) staff and ultimately could put at risk Londoners’ safety and security – is the last government’s failed FiReControl project. This ill-fated scheme intended to create nine regional control centres, cutting across separate county brigades and replacing 46 individual control centres. It left London with a huge centre in Merton which LFEPA is having to take over.
Over half-a-billion pounds of taxpayers’ money was wasted, much on IT contracts with the private sector. The whole fiasco, driven by the obsessions of the last Labour government, was savaged by the all-party House of Commons Public Accounts Committee in September.
Sadly, the dreadful result of following an ideologically driven-approach seems to have been lost on London’s Conservatives and on Boris Johnson and his appointees.
* Mike Tuffrey AM is a Liberal Democrat member of LFEPA and a member of the London Assembly where he leads on budget, environment, planning and housing.
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6 Comments
“So I’m happy to say there should be no fixed or pre-defined approach to deciding whether a public service should be provided by the public sector, the private sector, in partnership, or via innovative ‘third sector’ organisations such as mutuals and employee-led.
In seeking the best quality and the most cost-effective price for the taxpayer, the tests we should apply include – is there a genuine external market in the service? Can you get economies of scale or cost savings from shared management overheads? Are there specialist skills not available in-house? Can funding be raised more cheaply?”
All excellent points. can we apply them to the NHS as well?
I think Mike’s wrong here. The only reason there isn’t a competitive market where a contractor can achieve economies of scale is that London is the only fire service looking at doing this. If all fire services were required to look for the most effective and cost-effective provider in an appropriately-regulated competitive market, the point would be moot.
Even if that’s not happening, surely the right and only question to ask is whether provision of a service by an external contractor is more effective and cost-effective than providing it in-house? Mike doesn’t try to answer this question, merely hinting at a past project failure, and using that to justify his own “ideological” bias against the private sector.
Well, there is massive political opposition to even considering the possibility that a genuine external market might exist in healthcare, so probably not. But hopefully they can be applied to some subsections of the NHS, like their IT contracts.
The description of the “commercial case” is flawed in that the question asked in the business case is “are there enough potential providers of the service to assure competition during the procurement”? That depends on an understanding of the service that is to be procured. The assertion is based on the assumption that the service is expected to compete with other potential providers once it’s up and running.
The requirement is for a high assurance control centre capable of handling a specified number of calls per period, presumably to the same level or better than currently. There are plenty companies out there that could compete to deliver that. Further down the line there may be questions about whether the infrastructure is client owned or not, as recompetition or renegotiation becomes a challenge when the high assurance control centre belongs to one of the potential vendors. Transfer clauses in the initial contract could mitigate for that though.
Regrettably idealogical opposition to outsourcing is just as unhelpful as an uncritical wish to outsource, although at leat in the latter case the public sector provider can compete or market test to demonstrate that the service is already being provided in a cost effective manner. Asserting that outsourcing is a “bad thing ™” doesn’t allow an informed judgement to be made.
Economy of scale worked well for NHS IT contracts! Brings to mind the Mitchell and Webb sketch about debt consolidation companies…
Part of the problem with NHS IT is that there hasn’t been a market. There have been huge single-provider contracts rather than creating an IT ecosystem of interoperable components, which can be delivered by SMEs and large-scale integrators alike, where bits that don’t work can be replaced, and their suppliers disrecommended for future work. Systems which are Too Big To Fail will invite the usual suspects to do shoddy work for ludicrous prices.