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The Failure of Southwest One: What Can We Learn?
By Allan Watton on April 9, InSomerset County Council struck a deal to outsource various services to a joint venture company. That company — Southwest One SW1 — was intended to serve as a trailblazer that demonstrated how public and private organisations could work together to benefit the communities of the South West and further afield.
However, at the end of March the death knell of the relationship was marked by news that Somerset County Council had settled out of court with SW1. That news followed a string of high-profile stories of poor performance and unwillingness from other public sector organisations to buy into the service delivery model.
The key question that emerges out of the ashes of what has been a disappointing failure for Somerset County Council and its public sector partners is quite simple: Why did it fail? The partnership was set up to work in the interests of all parties and provide an outsourcing model that could be adopted nationwide.
Where did it all go wrong? The model was innovative — a company backed by both public and private organisations with the involvement of a county council, a borough council and a police force Avon and Somerset. Not only would the cost of services be reduced and service levels improved, they would put a proportion of the profits generated from efficiency savings back into public sector pockets so that other services could be provided and developed for the benefit of the respective communities.
The leading issue was a reported belief amongst certain councillors that IBM were primarily interested in turning a profit, not improving services.
This belief was only strengthened by initial reports that SW1 was not delivering the contractually agreed savings. The situation was worsened by an apparent unwillingness from other councils to buy into the scheme.
This was soon followed by news of potential legal action from SW1 against Somerset County Council due to a dispute over procurement savings. Contained within this unfortunate story is a key lesson to be learned and applied in any form outsourcing between public and private sector.
It is an oft-overlooked issue but should in fact be a primary concern in both the procurement and governance of strategic commissioning contracts. The agreement was formed under a cloud of controversy, with disagreement as to the potential success of the venture at the highest level of authority within Somerset County Council.
It was reported that some councillors were uncomfortable with the clash between a services-driven culture and what they perceived to be an entirely profit-driven culture.
These issues were exacerbated by a lack of buy-in from other councils — it seemed that the political ramifications and concerns regarding a loss of control over service delivery from public authorities further afield had been grossly underestimated. Quite simply, whilst it seems logical that the sharing of services would be a good thing, Southwest One was unable to encourage other public sector organisations to join its merry band of troops.
From the press reports, it seems service levels began to drop and the relationship began to deteriorate. At that point, someone somewhere within both IBM and the public sector partners must have deemed there was seemingly no other option than to fight.
IBM claimed they were meeting targets but Somerset County Council disagreed and withheld payments in lieu of claimed poor performance by SW1.
This is an issue that almost always raises its head to an extent when it comes to public sector outsourcing.
Public authorities are driven by a need to lower costs and improve services for the community, while private organisations are driven by profit.Divorce, miscarriage, career knock-backs – the big moments in life often come through crisis and make us who we are, so don’t airbrush them out, says Elizabeth Day.
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Failure is the state or condition of not meeting a desirable or intended objective, and may be viewed as the opposite of success. Product failure ranges from failure to sell the product to fracture of the product, in the worst cases leading to personal injury, the province of forensic engineering.
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