Shedding light on council multi-million contracts overdue

This website has, more than once, made the point that public services when outsourced to private companies rarely deliver equivalent service for the public, but they almost always ensure rich pickings for private profit.

The shambolic hand-over of Croydon Council’s website to Crapita is one recent example.

The ludicrous situation, in the midst of the public exam season, of having places at study tables in our borough’s Central Library “rationed” by the back-door privateers and black-listers, Carillion, is another.

In many cases, the problem with the service delivery appears to centre on our council’s supervision of the contract.

Now, our loyal reader sends us a couple of photographs from Hillier Gardens in Waddon which show examples of how Skanska is getting on with the installation of new street lights around the borough.

Skanska 1

This first photo, above, was taken in April.

“Are we working considerately?” Skanska asks. We can only assume that the question is a rhetorical one, with the proposed completion dates slipping from March 14, to March 24, and then below the white box (they’ve run out of space) to April 7, as penned in by the operators.

Our loyal reader has been in contact again today.

“Still waiting,” they write. “Each time we complain about holes, they just change date on sign.”

And here, in black and purple, is the latest evidence:

Skanska 2

June 9, of course, was two days ago. Another target missed.

Is it all Skanska’s fault?

As we reported in January, when entire sections of the borough were thrown into darkness in the long winter nights, in the matter of Skanska we are able to compare the contractors’ performance with another borough, because when Croydon Council did the deal it was agreed in tandem with another south London local authority, Lewisham.

The juicy 25-year deal with what was then Conservative-run Croydon and Labour-run Lewisham councils, under a Private Finance Initiative part-funded with £151 million of cash from central government, will see all Croydon’s 42,000 streetlights replaced with the ugly, feature-less modernist columns.

The stumps of “dead” street light columns are appearing across the borough, left behind long after the old light has been decommissioned by Skanska.

Overall, the project includes an initial five-year period for the replacement of lights, traffic signs and street bollards. Skanska then get the maintenance and repair contract until 2036. The official blurb offered by the councils when presenting the new lighting contract claimed that it is “possible to detect faults quicker due allowing the street lighting to be maintained much more efficiently”. Oh yeah.

Croydon Council’s website has carried few, if any, updates on the progress of the street light replacement. The suspicion has been that this is because the programme has been lagging behind schedule in Croydon almost from Day One. Lewisham Council’s website, however, does include works updates.

This suggests that, like a good contractor, Skanska is providing reports on its progress to Lewisham. In Lewisham, Skanska is delivering its works largely to schedule. It would be reasonable to assume that Skanska have been delivering the same performance reports in Croydon. It’s just that Croydon Council can’t be bothered to pass that information on to its Council Tax-payers.

Hopefully, Croydon’s new council administration will soon be able to shed a little more light on the situation.

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This entry was posted in Capita, Carillion, Council Tax, Croydon Council, Libraries, Skanska, Street lighting and tagged , , , , , , . Bookmark the permalink.

7 Responses to Shedding light on council multi-million contracts overdue

  1. davidcallam says:

    The principle of outsourcing is very simple:you let a contract to provide a specific service at a price, including the contractor’s profit, that is significantly lower than your existing costs.
    However, it isn’t quite that straightforward in practice: there are all kinds of considerations that effect the price. The less oversight you require, the cheaper the contract is likely to be, because oversight has a cost attached.
    Also, the better your negotiator the more cost-effective the contract. At one time contractors were bringing in freelance negotiators, while public bodies were using floundering senior executives, well intentioned but lacking in practical experience.
    The imbalances come to light at a later stage, possibly when there are large changes of management or eye-watering invoices for simple tasks, like £100 to change a light bulb.
    In this case, is it possible that Lewisham has a more tightly drawn contract than Croydon: one that requires regular updates?

  2. east1956 says:

    The challenge for many major public sector contracts is managing performance effectively, and this is often undermined by inadequate staffing of the contracts management operation. Large service contracts can easily have tens of thousands of transactions per annum, and to manage them someone competent has to go out and physically check that the works have been done. Unfortunately successive rounds of public sector cuts have reduced to the number of such people.

    Then there is a need to maintain an appropriate contractual distance between the client and the contractor. Easily described, but harder to maintain when the two bodies have work closely with each other and the public sector client frequently lacks the resources. Also close collaborative working tends to foster an environment where close personal relationships develop and the public sector client finds it hard to be ruthless.

    While we might all think that the public sector is in the stronger position, it is not unknown for a private sector organisation to hint that they might “walk off the job” if the client takes an “unreasonably” tough stance. The danger for the public sector client is that if that happened the service would come to an abrupt halt, it would be involved in expensive and protracted litigation and it would have to put the contract back out to tender, which can take anything up to two years. In the mean time the public are on the phone complaining, MP’s & Cllrs are jumping up and down, and Inside Croydon is publicising the problems.

    It is also not unknown in some procurements for public servants to lose sight of their objectives and to confuse them with the contractors. Many contractors are very good at “clienting” during the mobilisation and initial implementation stages where they basically “seduce” the inexperienced client officers, & remember many public sector officers have no experience of working with the private sector. Often the composition of project teams in some public sector organisations does not reflect the range of real skills and experience required, and sometimes individuals will have lobbied for key positions believing that it will lead to promotion – nothing like having the procurement of a major contract on your CV to help your career!

    Neither is it unknown for the contractor’s “A” Team to be deployed in the early stages, only to be replaced by the B & C Teams once the contract is secured & bedded down.

    At the root of the problem in many cases is that “you get what you pay for”. So long as politicians promise to reduce taxation year on year on the basis of ever greater efficiency improvements, the public sector reaches a stage where there is no more fat left to cut away. So something has to give, and that is often the contracts management operations. Contracts management operations are neither sexy or politically influential activities and so they tend to be below the horizon as far as many decision makers are concerned.

    To compound it all the weight given to Price over Quality during tendering has incentivised companies to bid below the economically viable threshold for the services. To remain in business they must cut corners. To seek to eliminate this, greater emphasis can be awarded to Quality. But inherently this will result in a progressive upward drift in contract values as companies are challenged to prove they can actually deliver. There are public sector bodies that are addressing this and being much more robust in their management of contracts. These authorities are also having to accept that to achieve improvements they have to invest in developing effective management & auditing approaches, which do not come cheap.

    If we want to change the situation, next time the politicians come around promising to deliver services ever more cheaply and thus lower our taxes, we must challenge them to describe in detail exactly how this would be achieved and at what impact to other services.

  3. derekthrower says:

    I think Lawyers may be about to have a field day trying to unravel all the dodgy dealings of the previous lot.

  4. In Selhurst New Lights appeared in April along Gloucester Road Selhurst New Road, Selhurst Place & Roden Gardens but after a few months the Selhurst Place & Roden Gardens ones are on 24 hours a day but Gloucester Road and Selhurst New Road rely on the old lights as new ones are in darkness,

  5. east1956 says:

    It is indeed highly likely that LB Lewisham is more effective at procuring & managing these contracts. Lewisham has been a defacto “graduate school” for a large number of very effective public sector officers, who have a deservedly high reputation generally. In the very early 1990’s it outperformed other London boroughs in terms of regeneration, and ended the decade as the leading borough to adopt project management and procurement standards. It also went through some very bad times, and had to learn tough lessons.

    Lewisham and Croydon are like chalk & cheese. Lewisham tends to want to innovate and to pick up on new developments, and is very outward looking. The members have traditionally been very hands on and demanded very high standards from officers. It also awarded authority to quite junior officers and was able to attract a lot of hi-flyers.
    Croydon on the other hand has tended to be introspective and reluctant to adopt developing standards of excellence. It tends to garner authority at the top and junior officers consequently don’t develop experience. Despite the razzamatazz, Croydon isn’t an authority with reputation for vision or innovation.

    However the above are generalisations, and there are plenty of ex-Lewisham employees that are a profound liability.

  6. Skanska came down our close to replace the bulkhead at the top of two lampposts.We live within the Waldrons conservation area. They had to clear quite a bit of trees and bushes which they did with all the care of a bulldozer and then left all the cut branches and debris dumped in the undergrowth. I cleared a lot up but to add insult to injury the branches were not taken by Veoila along with the green waste collection!! Madness!!

  7. Interesting to note that Skanska have opted for standard SON luminaires (albeit updated with remote control and reporting facilities), with the long term maintenance required in changing the lamps on a regular basis – rather than the more long term cost-effective (high initial outlay), more efficient, lower energy and lower maintenance LED options that other councils are sensibly going for…

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