In our September 2016 print issue of Professional Security, we are featuring that old and impossible to answer definitively question – to keep in-house, or outsource?
The decision may depend on the sector, tradition or fashion, convenience, expertise and price. To air two stereotypes, the private sector is penny-wise and businesses may look to save money by outsourcing whatever is not their core business; while the public sector may be set in its ways, more unionised and less driven to outsource. Such stereotypes if they ever existed no longer apply to the public sector. In its latest accounts for 2015-16, Crown Commercial Services (CCS) reports that £12.8 billion of public sector procurement spend was channelled through its central deals.
This included £6.8 billion of central government spend and £6 billion of wider public sector spend. Savings for local and central government and the NHS ran into the hundreds of millions; the aim is £2 billion of savings by 2020. The Crown Commercial Service (CCS) was set up in 2014 as a trading fund and executive agency of the Cabinet Office. Its purpose; to deliver savings for central government and the wider public sector in procurement of common goods and services, from furniture to insurance and including guarding. As an aside, the accounts note one case of attempted fraud in 2015/16. “The case was an attempted ‘executive impersonation’ fraud whereby fraudsters pretend to be a senior executive, to trick the finance department into transferring money into an account. The attempted fraud was identified promptly and no payment was made ..”
Is outsourcing good – for the service, whether customers or staff, or the public purse? Services at Yarl’s Wood did not fully meet the needs of users, in part because there was a lack of clarity about which contractor was responsible for what. So said the National Audit Office (NAO) in its report into the management arrangements of the new contracts between the Home Office and Serco and NHS England’s with G4S. Briefly, Yarl’s Wood in Bedfordshire is an Immigration Removal Centre that holds women, adult families and, on a short-term basis, men whose cases are being assessed.
The Home Office is responsible for all aspects of Yarl’s Wood except healthcare, which is now the responsibility of NHS England. After the award of new contracts, Serco has run the residential services (for £8.8m) under contract to the Home Office since April 2015 and G4S has run the health services under contract to NHS England (for £1.2m) since September 2014. It’s one thing to point to shortcomings; the ones setting the contract have to act on that. Yet the NAO report that the Home Office did not reflect lessons from previous inspections when it agreed the service specification with Serco. Many of the concerns raised by HM Inspectorate of Prisons in its 2015 inspection, for example, were raised in 2011 and 2013 prior to the new contracts.
And what contracts reward or penalise can have good, or bad, outcomes. The NAO noted that in the new contract the Home Office significantly increased the penalty for residents absconding, even though no resident had ever absconded, and now requires Serco to escort residents to out-of-area hospitals which are unfamiliar to staff and therefore carry higher risk. The Home Office has published guidelines on the use of restraints and handcuffs and a risk assessment must be performed before they are used. Partly as a result of these contractual changes, Serco adapted its risk assessment procedures for hospital visits in October 2015. Whereas three percent of women were handcuffed for hospital visits between October 2014 and April 2015 this figure rose to 11 percent for the same period the following year.
The NAO pointed to G4S as slow to meet its contractual obligations for training, for example to all its staff at Yarl’s Wood on mental health issues. If a supplier does not do what it’s paid to do, what power does the procurer have? According to the NAO, NHS England did not withhold payments on the two occasions when it issued a ‘breach notice’ for G4S performance problems because it considered that they were quickly resolved. It has not set out how much it expects to recover in the event that G4S fail to deliver elements of the service it pays for.
Putting the same issue another way, what should you measure, whether the contract is being met, and how – what are the performance indicators, in the jargon? The auditors described the Home Office contract as ‘over-engineered’. The Home Office contract contained 120 key performance indicators (KPIs); it’s reportedly reducing them to 30. And what’s the data? The Home Office and NHS England rely on Serco and G4S to self-report their performance against the contracts as part of their performance management.
The NAO report in summing up says that many measures to secure value for money in public services do not easily apply to services for people who may be vulnerable. “Unlike some public services, Yarl’s Wood residents are not able to choose a different provider if they are unhappy with the service they receive.” As the report noted, in March 2015, a Channel 4 undercover documentary on Yarl’s Wood made allegations about staff treatment of residents.
For the full 50-page report visit https://www.nao.org.uk/wp-content/uploads/2016/07/Yarls-Wood-Immigration-Removal-Centre.pdf.
Separately, a month after the Medway Secure Training Centre in Kent transferred from G4S to the National Offender Management Service (NOMS), OFSTED inspectors have deemed its overall effectiveness to be ‘inadequate’, after an unannounced inspection of May 2016.
Inspectors acknowledged that ‘staff are clearly devastated by the revelations’ made in January and that ‘this self-reflection is a positive quality’.
Managing director for G4S custodial and detention services, Jerry Petherick, who took over the management of the company’s two secure training centres shortly before Medway transferred to NOMS, called the report deeply disappointing, ‘coming as it does after a number of years in which OFSTED rated Medway as good or outstanding’. “This was clearly a period of intense disruption which created uncertainty and instability for the young people and staff at the centre and it proved extremely challenging to maintain appropriate staffing levels and standards. The management of Medway STC has now been transferred to NOMS, and the lessons learned at Medway will be applied through a far-reaching review of our standards, skills and processes at Oakhill, our remaining STC near Milton Keynes. I fully expect this to translate into substantial changes to the way in which the centre is run.
“We will be giving our full support to the new Youth Custody Improvement Board, as it begins its important work to assess the entire youth secure estate, to ensure that young people in custody are safe and that standards of behaviour management are improved upon.”
London boroughs
Amey was recently awarded contracts worth over £62.5 million as four more London boroughs sign up to the company’s Total Facilities Management (TFM) framework.
The framework was established in 2013 as an integrated approach to TFM between three London boroughs (Hammersmith and Fulham, Kensington and Chelsea and Westminster) and is the first contract of its kind in the UK.
In the past year the London Boroughs of Camden, Bexley, Walham Forest and Haringey have also joined the framework; awarding contracts valued at £10m, £12.5m, £20m and £20m respectively. The contracts will see Amey deliver services including cleaning, security, landscaping as well as planned mechanical and electrical services.
University
Bouygues Energies & Services has been awarded a five year contract to deliver Hard FM, Helpdesk Services and Energy Solutions at the University of London. The contract went live at the end of March and takes in around 40 residential and academic sites in London as well as the uni’s central building, Senate House. Services include Planned and Reactive Maintenance, FM Helpdesk and CAFM system for Hard FM and third party services, Energy Management and Performance Services, Lifecycle Management, Additional works and Projects. Andrew Reed, Contract Director for Bouygues Energies & Services said: “We are exceptionally proud to have this opportunity to work in partnership with such an outstanding academic organisation. This is a really important success for the business and provides a platform for continued growth in the education sector.”
