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Procurement

More on the Wrong Ways…

Nick Kempe – February 10th, 2022

More on the wrong way to design a National Care Service

The scandal over the Scottish Government’s decision to outsource the design of the National Care Service continues to run.  The latest issue of Private Eye sums up the overall issues succinctly:

“After winning last year’s Scottish Parliament elections, Nicola Sturgeon said her proposed new National Care Service (NCS) would be the “most important public-sector innovation since the establishment of the National Care Service”.  She then awarded the initial £100,000 contract for designing this public-sector innovation to PwC, the private accounting and consultancy giant.

In September 2020, Sturgeon had endorsed a statement by Richard Leonard, Scottish Labour leader at the time, that “a National Care Service must remove the profit motive from the delivery of care”.  A year later she was not only outsourcing the service’s design but also putting it into the hands of a firm with a vested interest in further outsourcing.  What would she do as an encore?

The answer came two weeks ago when the Scottish Government decided who should get a £546,000 contract to develop a “high-level roadmap for delivery” for the NCS.  Six tenders were received.  The winner was another of the Eye’s old friends with a further interest in outsourcing: KPMG!”

So how did this happen?   

Craig Dalzell last week touched on Nicola Sturgeon’s exchange with Jackie Baillie in the Scottish Parliament on 27thJanuary failed to answer how much the Scottish Government is spending on outsourcing the design of the NCS and involved the usual parliamentary point scoring.  But the defence of the decision to award the contract to KPMG, which was read out by the First Minister, was also very revealing about how government now operates and deserves to be considered further:   

“It is entirely appropriate for the government to procure specialist services to support the development of our National Care Service proposals………All contracts awarded by the Scottish Government are subject to robust contract management and adhere to the principles of transparency.  Any outputs procured in relation to the NCS will be published to make sure they are publicly available”.

Robust procedures?  The Scottish Government announced the award of the KPMG contract, which had been tendered through the UK’s Crown Commercial Services framework agreement, in early January.  This was two weeks after it had been revealed that the UK Cabinet Office had instigated an inquiry into contracts awarded to KPMG and the firm had as a result withdrawn from bidding from UK contracts.  Common Weal’s Care Reform Group is trying to establish through Freedom of Information whether the Scottish Government was aware of the inquiry when it took the decision to give the contract to KPMG, probably on 7th December.   Three days after Nicola Sturgeon’s response in the Scottish Parliament, Martin Williams in the Herald on Sunday revealed that KPMG had also decided to withdraw from bidding for Scottish contracts. Even if the Scottish Government didn’t know about the Cabinet Office Inquiry in early December, it could still have publicly called on KPMG to withdraw from the contract but has chosen not to.

Transparency?  The EU derived procurement procedures which are used across the UK were designed to create transparency for businesses, not the public. When the term “fairness” is used it refers to “fair competition” between businesses, not fairness for the people who work and need care services.  In the case of contracts tendered through framework agreements, the only people who get to see those contracts are suppliers who have been approved for those frameworks (which last for four years).  Under framework agreements public transparency is limited to naming the successful tenderer and the value of the contract within 28 days of it being awarded.  That is why the value of the further contract to design digital services for the New National Care Service, which is being evaluated this week – Common Weal has been passed some of the contract documentation by a provider – is not public.  By the time these contracts are announced, it is too late for anyone to influence the outcome. 

The Scottish Government’s decision to use the Crown Commercial Services Framework Agreement to advertise the tender was far from fair in terms of “competition”.  Basically, none of the organisations in Scotland that have expertise on care were on this framework or would have considered applying when it was advertised – it was a UK  framework after all.  The Scottish Government didn’t have to use a UK wide framework, it could have conducted an open tender advertised across Scotland, but chose not to do so.   

Asked why the Scottish Government was using KPMG when there is a wealth of experience of social care in Scotland, the First Minister ducked the question:

“Where it makes sense to use external expertise to free up civil servants to focus on the policy development and implementation, we will do that as other governments do”

If the Scottish Government lacks expertise, why not use that which exists in Scotland and do so through partnership, not procurement?  The bigger question this raises is how could a government which so lacks capacity and expertise – it has asked KPMG to describe how the current system and its finances operate – possibly believe its sensible for it to take on the management of a National Care Service as it is proposing to do?

 Nicola Sturgeon then dug an even deeper hole for the Scottish Government:

“Let me given one example, a contract to analyse the consultation responses (i.e. the PWC contract). It’s routine for analysis of consultation responses to be analysed independently, this work is often put out in an open and fair procurement process and actually that very independence is normally considered a good thing”.

If the civil service is not to be trusted to analyse consultation responses independently – and by implication objectively –  why should we the public trust that civil service to take over the management of care services?  

The answer to these challenges lie not in outsourcing, which in the case of responses to the NCS consultation has resulted in what should be regarded as the intellectual property rights of the public being handed to PwC. The answer is to re-build the capacity of democratic government structures and public service provision in Scotland through local authorities.

1 thought on “More on the Wrong Ways…”

  1. Nick, Great, keep digging! As you know, these spurious arguments were recently used to justify setting up a quango/wealth consortium to distribute funds to Scottish third sector organisations;
    Likewise, the Scottish Social Security Programme has used lots of contractors to get IT and other essential work done.
    Apparently, the Civil Service in Scotland seems to lack capacity for a whole range of tasks?! Sir Humprey Appleby would be horrified!

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