Lords caught short on strategic asset management and procurement

Yesterday I discussed Ennis' toilets. It wasn't my intention to return to the subject of WCs so quickly, however, that was before I learnt of the pressing need for the refurbishment of toilets in the Palace of Westminster. Once again two toilets are the focus and this time at a budget cost of £100k.

Don't get me wrong, I believe the toilets should be refurbished in keeping with the historic nature of the building but not necessarily now. I question is the strategy.

If I am right there is currently a discussion taking place on the wider options for renovating the Houses of Parliament. It seems very strange to treat the toilet renovation discretely and procure the renovation prior to the wider appraisal of renovation options. This decision does not appear remotely helpful for those who recognise the need for a strategic approach to investment plans and asset management.  I'm not saying it will happen, but what if £100k is spent on renovating the toilets and then, as a result of the wider renovation, they are trashed? What if the wider renovation decides a overhaul of the plumbing is required, will that be more expensive as a result of trying to avoid damage to the separately restored loos?

This renovation could have been an exemplar to the many public sector bodies who manage the UKs portfolio of historic, iconic municipal buildings, sadly, it seems that opportunity may be missed.

The cost of spending an Irish penny

Yesterday I discussed the case of the missing artworks from Leinster House. Today, provides another opportunity to discuss the big issues of Irish procurement, 'how much should it cost to spend a penny in Ennis?'.

This first caught my attention when I read a piece in the hard copy of the Sunday Independent "Two public toilets cost £1.4m a year" - surprisingly I couldn't find a copy of the 'News in Brief' piece online.

However, I gradually began flush out the facts. First, it seems that the report has 'misreported in that it should be £140k as opposed to £1.4m. It can be assumed that had the council made such an error they would have been considered incompetent.

But toilets in Ennis are a serious issue - only a few months ago it was alleged the toilets has become the residence of two homeless persons, one of whom sadly died. Another big issue is the failure to use the toilets and urinating in public - the solution to that is argued to be the appointment of a 'urine warden' and 'naming and shaming' the offenders. I suppose the next stage will be a debate whether or not pictures will be published and, if so, would that represent an infringement of human rights.

However, the toilets in question appear to be 'superloos' with automatic door opening after 20 mins and have alarms fitted, the contractor makes daily inspections.The public pay for the 'convenience' through a 25c fee but that only amounts to a revenue of €3,158 a year against with the contractor paid €70k for each toilet. Only 34 people, on average appear to use the two toilets each day.

The Sunday Independent piece suggested that a councillor wants a renegotiation of the contract but are there other options?

Perhaps:

• Increase the cost of spending a penny from 25c to €1, as already advocated by some;
• Reduce from two toilets to one;
• Close the toilets during the day and insist that those who need to spend a penny do so in local public houses, then only open the toilets during the night;
• Allow members of the public to use toilets in any of the council offices, which I assume have manned security;
• Relocate the toilets to a more 'convenient' place so that usage increases;
• Have the toilets sponsored by local traders;
• As Ireland's only Information Age Town' could mobile apps be used as tools for marketing business which will let members of the public use their 'facilities' and act as a means for drawing those caught short;
• As an Information Age Town ask the public to come up with a solution;

The challenges facing public procurement in Ireland seem to go beyond taking the cents.

A Father Ted moment

I’m sure you remember the Father Ted TV series which featured the lives of some Priests put out of harms way on Craggy Island. Father Ted seemed to have been exiled due to a misunderstanding around church funds ‘resting’ in his bank account.

Well I've been spending a few days in Galway, last night, when looking for a quick meal I experienced unbelievable Irish hospitality. I went to check the menu of one hostelry and was presented with a map for orientating myself round the restaurant and a collection of coupons. My wife and I were then able to experience the various food options available free of charge, I’d pancakes with maple syrup, chicken curry, a turkey dinner with all the trimmings, carrot cake, cupcakes and a few mocktails. I tell you, you couldn’t make it up.  You may recall the catchphrase of Father Ted's housekeeper, Mrs Doyle, “ah, go on, …”.

This morning I then read of the Office of Public Works (OPW) search for 20 artworks in Leinster House (the Irish equivalent of the Houses of Parliament). Apparently a large number went missing after the change of power in the Irish General Election of 2010 but “some of the artworks were listed as unlocated since 2008 and several of these are original prints, which are editioned prints, and they may have been located outside the Leinster House complex”.  The OPW spokesperson continued: “With the last change in government, there was a major turnaround of personnel and office spaces and this resulted in an unprecedented number of artworks being moved and redistributed throughout the Leinster House complex”.  

No one is actually suggesting the missing paints have been stolen; they just appear to be ‘resting’ somewhere they shouldn’t be and whoever they are ‘resting’ with doesn’t seem aware of the strange presence of non-purchased artworks. Perhaps they will join some of those wonderful 'finds in the atic'  in a future Antiques Roadshow or perhaps it just a Father Ted moment and Irish ministers and mandarins misunderstanding Irish hospitality.

HS2 Contingencies

It's six months since I first highlighted concerns with HS2.

In the latest twist it has been announced HS2 may cost £42.6bn as opposed to the original £33bn - let's remember that we're still in the early stages of this project.

But what struck me as strange was George Osborne's interesting explanation of the £14.6bn contingency sum on Sky News:

"... one of the reasons why the cost has gone up is we're actually building in more contingency to make sure that we don't actually overrun. We've got a proper budget from the start that way we know we can afford" (27 June 2013).

If the chancellor is correct and we had a proper budget from the start (or is this the start?), what was the original £33bn?

Is the contingency a slush fund or a contingency fund? A contingency is to cover costs which could not reasonably been foreseen. It isn't intended to cover increases due to changes in specifications, clients intentions, costs of materials, contract omissions, or new regulations.

It would be really useful to understand what this 'contingency' of £14bn is allowed to cover and what it won't? It will also be interesting to understand how it will be managed? Can we now assume the Treasury have said, "the absolute maximum HS2 will cost is £42.6bn"? If that's the case, who will be held accountable for overruns? I suppose another way of looking at it would be, who involved in making these commitments will be around in 2032?

A spending review anomaly for procurement policy

The Spending Review provides an opportunity to gain some insights into public procurement policy, so it is worth looking slightly deeper than the common headlines of cuts, cuts, cuts.

The nugget which I want to highlight is the freedom gained by Arts Council England and the national museums to opt out of government procurement procedures. 

First it is worth reflecting on what I think was the last relevant report on DCMS procurement by the National Audit Office - at that time, (admittedly November 2005) the view was:

"Procurement is an area where the Culture, Media and Sport sector can achieve significant savings and improvements. Whilst the sector has made some progress in improving its procurement capabilities and practices, a great deal more can be done. A greater level of commitment from organisations to adopting good practice, as well as addressing specific issues such as greater collaboration between organisations when buying common goods and services, will result in greater value for money." (Sir John Bourne, 30 November, 2005).

Is the new freedom to opt out of government procurement procedures an acknowledgement that DCMS has so significantly improved procurement that they should be cut loose from the constraints applicable elsewhere in the sector? If that is the case, which I doubt, it would be useful to understand how they have brought about greater collaboration, which just has not been achieved elsewhere in the public sector, for example, the police?

Is the freedom an acknowledgement that existing government procurement procedures are inappropriate? If so, why release one part of the sector rather sort out the procedures for all departments?

Did Arts Council England and the national museums actually ask for this freedom, if so what was the business justification? What precedent has been set and how will it be applied to the next petition for 'opting out'?

What particular areas of government procurement procedures will Arts Council England and the national museums be released from and have those relaxations been risk assessed? Are major construction projects, grants, and commodity goods and services included? Have new procedures been drafted, if so, can we hear what the proposed new procedures are? Will those procedures be 'leaner'?

Assuming government procurement procedures exist to provide value for money, achieve public policy and provide a shield to protect those involved in public procurement from criticism; how will those objectives now been satisfied?

On the heels of so much debate on greater use of 'centralised' contracts, has the so called 'mandating' just been set aside?

Will the independence bring with it reduced costs for what is procured? If yes, then some serious questions need to be asked about the 'centralisation agenda'? If costs increase, how will that be justified? Will a baseline for future comparison even be established and published?

To be truthful, I just can't understand the freedom as it seems to go against the tide - I'd like to have heard the view of Francis Maude, Margaret Hodge and Bernard Jenkin?

A balanced approach to probation outsourcing

I've discussed the outsourcing of the probation service on a number of occasions but today revealed a strange 'spin' which requires re-balance and critique if the best option and approach is to be selected.

We have learnt that "Officials have warned the Justice Secretary", but then that the warning is actually in the form of a risk register. Of course there should be a risk register which identifies risks in as objective a manner as possible, but risks 'might happen', it doesn't mean they 'will happen'. Is it fair refer to inclusion is a risk register as a 'warning'?

Then we learn that a "a criminal justice expert said the Probation's sell-off is being carried out too hastily; there is too much risk. It is highly likely that service delivery will collapse and public protection will be undermined. The Government must think again". Well if you heard that from a 'criminal justice 'expert' you'd assume an objective opinion, but if you were then told that 'expert' had been a trade union representative of the probation service perhaps you'd consider the opinion highly subjective and more than a little biased?

The Times. which report that they have seen the risk register, appear to have been a victim of spin and not managed the risk of being a pawn well.

From a procurement perspective, whether or not we agree with outsourcing, we should applaud comprehensive risk registers, but we should also avoid being too influenced by subjective opinions. Professional procurement requires robust options appraisal and risk management as opposed to scare mongering.

Procurement gamesmanship for non-public bodies

Thankfully the G8 has helped remind us that Belfast is experiencing a peace which many would have thought unattainable. But all is not well on the procurement pitch. A challenge has now been lodged by a bidding partnership who feel left out of the opportunity to bid for the Gaelic Athletic Association's £70m stadium renovation. As yet the basis of the challenge is unclear but it can be assumed it is based on the fact that while the GAA are not a public body, a significant percentage of the funding is coming from the NI Executive which is a public body.

We will watch closely how this develops but it is important to remember that non-public sector CPOs can be caught by public procurement directives if they are spending money provided by the public sector.

Questions which will be worth hearing the answers to include:

1. The basis of the challenge?
2. What will be the basis of the GAA defence?
3. What were the credentials of those who advised the GAA on the procurement approach?
4. Did the challengers object to the GAA regarding the procurement process? If they did, when did they object and what response did they receive?
5. Was the procurement Regulated?
6. If the procurement was not Regulated, what will the basis of challenge? 
7. Did the GAA recognise the procurement as potentially a Regulated procurement?
8. What is the GAA's approach to procurement in general?
9. Did the GAA adhere to their own procurement rules, regardless of whether or not the Regulations apply? 
10. Did the NI Executive, the funders, make the GAA aware that the Regulations would apply? 
11. Did the NI Executive provide any procurement advice/guidance in the procurement process?
12. Did the NI Executive sign-off the procurement approach? if they did, was it adhered to?
13. Was there a duty on the NI Executive to make the GAA aware that the Regulations would apply?
14. Were the challengers unlawfully disqualified from the competition? If so, in what way?
15. If the court rules the challengers were unlawfully disqualified from the process, will they be reintroduced to the process?
16. If the challengers are reintroduced into the process, and they subsequently are successful in winning the contract, what additional benefits for the public purse will have been gained which would otherwise have been lost?
17. If the court rules in favour of the challengers, will the NI Executive carry out its own inquiry into what has gone wrong?
18. If the court rules in favour of the challengers, what will be the cost of the mistake to the public purse?
19. If the court rules in favour of the challengers, will someone in the NI Executive be held accountable?
20. Did LOCOG's procurement approach to the Regulations provide a relevant precedent?

We live and learn, hopefully.