West Sussex Labour councillors tell Tory county council “it’s time to fold” on Capita services outsourcing “gamble”
West Sussex Labour Group Leader Councillor Michael Jones (Southgate and Gossops Green) has spoken out at today’s West Sussex County Council meeting of the Performance and Finance Committee on the debate over the insourcing of another significant chunk of the Capita contract which outsourced support services from the county council.
- The Support Services Outsourcing contract was set up in 2012 and still has two years to go of its ten-year contract. It was a strong part of former Tory leader of the county council, Louise Goldsmith, and her abortive attempts for a “commissioning council” where the vision was for virtually all of the councils’ services to be outsourced from the county council to private companies. The contract was meant to be a flagship for this cut down version of local government provision, but soon ran into problems and the wider project to extend this much further by the West Sussex Tories was quietly abandoned.
- 13 services areas were outsourced in 2012 but a number have now been returned to WSCC, and in one case (pensions administration) had to be returned to Hampshire County Council as WSCC no longer had the ability to provide its own pension administration service.
- Returned, or ‘insourced’, services over the past few years have included:
- Pensions admin
- HR (human resources)
- PA (personal assistant) admin support
- MASH (children’s safeguarding)
- This week, county councillors are scrutinising the latest service, Service Finance, which the council feels is essential to bring back in-house to be run directly by the county council.
- The report to the committee states the reason for doing this is to enable the Council to gain greater control and flexibility to deliver largely statutory services for various reasons. What, however, is not made clear is the reasons for the urgency. The decision has abruptly appeared in the council’s forward plan from nowhere, and is due to take effect in a few weeks’ time. It is apparent something urgent is driving this development, given the current contract is due to come to an end in two years’ time.
- With Service Finance now added to this list, this means a TUPE transfer of 61 staff from Capita back to the council will be required.
- In looking into the problems relating to the Service Finance, the Labour Group have become concerned that the following things may be happening:
- Delays are faced in obtaining information from Capita so that WSCC staff can effectively recover debt; which could be prejudicing the chances of recovery.
- an inflexible, rigid relationship based on a service level agreement that did not provide information WSCC staff needed to do their jobs effectively.
- WSCC staff often pick up safeguarding matters which haven’t been recognised previously by the Capita processes, such as potential misuse of funds by representatives. Responding to safeguarding is then additionally delayed as the process of referral takes some time due to Capita’s processes.
- Social workers using the Welfare Benefits Advice service face problems with delays. Adult Services social workers very often can’t do their job until the welfare benefits assessment has been completed and it is alleged that Capita is slow in getting them done. If the client has not responded and issues been resolved within 14 days Capita send it straight back to the social worker who then has to re-refer from scratch.
- The council is potentially getting landed with bills for care that would previously otherwise have been funded by customers. The council should be quantifying the cost of this as some have speculated it could be amounting to hundreds of thousands of pounds.
Speaking at the meeting, Cllr Jones said: “Once again, we face another insourcing of services from Capita we were frequently assured it was perfectly fine to allow a private company to run instead of the council. This has become such a familiar occurrence now at West Sussex county council, it is rapidly becoming the local government version of Groundhog Day.
This might look like ‘death by a thousand cuts’ to the contract, but in reality Capita is being allowed to offload the parts of the contract they have signally failed to make a success of and cherry-pick the bits which are most profitable to them. If there is no money to be made from the service, that Capita does not want it and has no incentive to make a success of it, which accounts for poor service delivery. This is the stark reality of a ‘partnership’ that has been fraught with that in-built tension since day one.
The Capita contract was always a huge gamble. The Council has played its hand poorly and still does not know when to walk away and fold.”
Cllr Jones also added that the council did not understand the true cost of the contract: “So much money has already gone down the drain managing this bad contract, coping with its under-performance, and correcting the serious errors that have been made. Then there is the cost of in-sourcing like this: the time and energy it takes from a council which should be focussed on its improvement journey.
“If the council will not make any serious effort to measure the waste associated with the contract and understand its true costs, it will find it hard to make the right decisions on the contract’s future. I suspect that many council officers want to bring the whole thing back in-house but the ideology of the majority Conservative group has been preventing this up until now.
“I believe that in preparation for the end of the contract in October 2022, the council must commission its own external research, to measure the true cost of the contract. I also believe that the council’s local trade union UNISON should be involved in that research as a key stakeholder, based on their knowledge and the key report they produced several years ago which brought many of the problems to light.
“I believe that we need to staunch the flow now. In my view, the original outsourcing was a major strategic error, far too motivated – and compromised – by an ideological urge to roll back the public sector.
“But, as a committee we cannot divorce the immediate need to bring back Service Finance in-house with the wider problems that this is a symptom of. Some might view this discussion as a dry one about back office administration, but actually the reality of the problems caused by those poor processes can result in human suffering, delay, cost and opportunity cost for this council.
“In fact, I believe that up until recently too many senior councillors have been in denial and I remember from past meetings it has been a too familiar refrain from its defenders that everything else has been working fine. This is right up until the point we learn of the next service that is brought back in, when we hear the mantra all over again.
“I believe we need to invite the Leader to action this external research. In my view, the previous Conservative leadership regime was too invested in the original contract and its terms to admit that it had failed in many important respects, but that is not so true of the new leadership. The simple fact is the council he leads will not be fixed until it has reliable, efficient and accurate support services and we need to be frank about that.”
The Tory Cabinet Member responsible for internal back office services claimed that he was not dogmatic about service provision, and always went for what worked, despite Cllr Jones’ evidence. The committee then agreed to support the recommendation to bring the Service Finance function back in-house, run by the county council.