Capita's excess hits Slashdot

[SYNACK]

I thought our local providers were bad for price gouging but if this article is to be beleived they may be 'comparitivly' ethical. Yikes, I'll run their site for that ammount.

 

Slashdot Your Rights Online Story | £32k a Day For Birmingham Council Website

 

£2.8million for council website as 26,000 face job cuts - UK Wired News

Birmingham Wired have uncovered that Birmingham City Council spent £2.8 million on a council website, with their IT system costing the tax-payer over £48 million since 2006. Meanwhile the council puts 26,000 staff have had their jobs threatened with potential redundancy.

The website cost £2.8million was exposed after a Freedom of Information Act request to Birmingham City Countil. Many being less than impressed with the outcome. In contrast, the second most expensive council website - Essex Council, spent £800,000.

The website was created by the outsourcing company Capita.

Capita, a London based company state on their website:

 

"To date we’ve invested £48.4m in a combination of staff training, network upgrades, server replacements, hardware and software – and we continue to drive efficiency through innovation"

 

Capita posted a recession-busting half-year turnover of £1.3bn, with profits up 15% to £163.1 million, meanwhile many are predicting the "worst round of council job losses for a generation" with at least 25,000 workers nationally under-threat of losing their jobs.

[Little-Miss]

oh FFS!!! That sounds about right!!

[AngryTechnician]

A lot more detail on this story can be found here: The report on birmingham.gov.uk is published | Podnosh

 

Notably, the council's own (long and refreshingly frank) report on the website denies the £2.8m figure was purely website costs (page 22):

 

"...there appears to be a perception that BCC has spent £2.8 million on a new website. This is patently not the case, as the Web CMS project involved far more than a new website."

 

This figure was apparently for the entire "Web CMS" project which also seems to cover the council intranet and web apps platform, and includes hardware & infrastructure costs (see page 7). However, the £2.8m figure wasn't even final - it actually ballooned further to £3.033m (page 28).

 

The council does admit on page 29 that that "Overall, it is generally believed that BCC overpaid for this project." but in the same breath admits "The authors of this Report have no detailed evidence of costs and are therefore unable to make definitive statements."

 

So basically, "the website didn't cost £2.8m because that was spent on other things too, it actually cost £3m but we don't know what it was spent on." Clear?

[Edu-IT]

How on earth did a CMS cost so much?!

[webman]

Edu-IT: Err, Capita.. local government.. ?

[Edu-IT]

Edu-IT: Err, Capita.. local government.. ?

Oh, yes, sorry! Penny didn't drop.

 

I've just looked at the website and for that price I'd have expected friendly URLs throughout at least. WordPress does that and it's free. ;-)

[localzuk]

Why do so many government agencies end up with Capita for everything?

 

Also, how do they constantly end up over-budget? Surely this sort of thing can be written into a contract!

 

We all know full well that there would be dozens of web firms out there who would've loved to do this sort of job!

[GrumbleDook]

Local Govt and Central Govt have to abide by UK and EU procurement law ... this means they either employ people in-house to do it all or they put it out to tender. Capita are *very* good at winning tenders for this sort of thing. The fact that these things go over-budget (ie originally allocated budget in the project) is down to 3 factors.

 

1 : Scope Creep - The original project was bid for, won by someone and it starts ... only for he winning bidder to find out that the council has not given over all the facts or requirements, or there is a change of legislation or need. this means the project has to change and adapt. The council has 2 options and the company has 2 options. The fist is the same for both of them ... they can decide teh project cannot go on and they look to get out of the contract. There may be penalties for this to compensate one side or the other for work put in already or for failing to complete the contract. The other option for the council is to look at what contingency (or tolerance) they have to be able to keep the project running. The winning company will *not* have seen all the figures so they don't know if the council has more money in the pot to cover any possible rise in costs. It might be that to cancel now and restart the procurement will cost more than the rise in costs to the existing company. The option for the company is to reduce the scope of work in other areas ... instead of doing x, y & z ... if the council also need a & b but on the same money, then the company says it will have to drop doing z. This does happen quite a lot ... but you end up with the problem of the cost of a+b is less than that of z ... z is actually equal to a+b+the costs to change the planning around+other bits ... and then you find the council *has* to have z after all ... and to add z back in 3/4 of the way through the project means that it actually nows costs z+extra plannign costs ...

 

2 : Project management of these things is a dark art (even when you are applying tried and tested PM principles and have standard operating and reporting procedures) .... and it is up to the council to make sure it runs properly. Poor PM from the supplier is something the council can come down and and hit them with penalties (they get service credits now ... meaning that additional work can be done at no cost!)

 

3 : Costs change. When someone bids for a contract and wins it, it is usually with a bit of leeway as to what the cost is. This could be down to things like the exchange rate (if getting large amounts of hardware, the use of cotracted specialists from other countries, etc), changes to taxes (NI going up, etc) and so on ... sometimes it works for the good, sometimes it hits hard. The recession has caused a problem with this from what I have seen so far and from chatting to colleagues in other councils.

 

One of the refreshing things (as the angry technican has already pointed out) is that they have learnt lessons and are openly sharing them with other councils too ... It is too late for existing contracts, but can defintely help with future contracts.

[vikpaw]

@grumbledook - what do you know about project management?!

[CyberNerd]

How on earth did a CMS cost so much?!

 

Probably because it was allowing residents to pay Council Tax online - and therefore needed a link to the Capita databases. I suspect the cost also included the council tax database upgrade, along with the hardware necessary to do it, client updrades etc. You know what SIMS is like, Capitas stranglehold over local govt is no less, they just pay more for licensing than we do. Of course, if they had used a more open database system in the first place they wouldn't have had to go to Crapita for the CMS.

[pete]

*bets 40% of the cost is having to make changes after the council had signed off they were happy*

 

"So you're happy with everything so far?"

"Yup, go ahead" *signs off*

*ring* *ring*

"Er.....we've had a meeting and decided we need to record dog poo incidents as well, linked to a google maps page so people can graph dog poo in their local area"

"Right......., you realise we'll have to redo x,y and z to accomodate since we've done the follow-on work after you signed off?"

"We know, but dog poo is important!"

"Ok.....I need to pave my patio with gold now"

[AngryTechnician]

One of the refreshing things (as the angry technican has already pointed out) is that they have learnt lessons and are openly sharing them with other councils too ... It is too late for existing contracts, but can defintely help with future contracts.

 

The tragedy is that Capita know these lessons by heart. A decent supplier would have made those sorts of recommendations up front to help the client avoid these problems (I have dealt with a supplier recently who did just this). Somehow I doubt Capita bothered, especially since it's not in their interest to keep costs down and, as GrumbleDook said, they are very good at winning these sorts of contracts despite their track record at delivering.

[torledo]

Probably because it was allowing residents to pay Council Tax online - and therefore needed a link to the Capita databases. I suspect the cost also included the council tax database upgrade, along with the hardware necessary to do it, client updrades etc. You know what SIMS is like, Capitas stranglehold over local govt is no less, they just pay more for licensing than we do. Of course, if they had used a more open database system in the first place they wouldn't have had to go to Crapita for the CMS.

 

there may be some truth to that, re the costs for interfacing with other systems to allow for online self-service, bill payments etc. although not likely the bit about councils using capita products [ie SIMS] as the datastore for their enterprise systems. For big companies think ERP and CRM. and so Oracle or SAP in a lot of cases. But no doubt capita or it's partners can provide SAP consultancy for local govt.

 

But i'm sure i've read of other smaller authorities have been able to allow residents do such 'self-service' online as part of the scope of their web projects within far more modest budgets. You can't underestimate the cost and complexity of an enterprise CMS though [i'm talking about specific use of a CMS product not reference to an overall 'web cms' project].

 

Licensing costs alone are routinely six figures, then there's the consultancy/bespoke configuration costs. So i'm not sure what you mean by 'more open database' if your referring to the line of business apps, well yes, there's a certain amount of being locked in with specific vendor ERP systems..for historical reasons as much as anything, but most large org case studies i've seen for 'web cms' projects feature the usual .net or JAVA [mainly java come to think of it ] based enterprise CMS with sophisticated features and ability to scale and handle high numbers of concurrent users editing content. these don't come cheap.

[CyberNerd]

there may be some truth to that, re the costs for interfacing with other systems to allow for online self-service, bill payments etc. although not likely the bit about councils using capita products [ie SIMS] as the datastore for their enterprise systems. For big companies think ERP and CRM. and so Oracle or SAP in a lot of cases. But no doubt capita or it's partners can provide SAP consultancy for local govt.

 

I know for fact that capita have a revenues and benefits system called 'academy' that is used by local authorities for council tax, it uses a similar model to SIMS and capita pull similar tricks as they do with SIMS in education. we are just another market for them.

 

 

Licensing costs alone are routinely six figures, then there's the consultancy/bespoke configuration costs. So i'm not sure what you mean by 'more open database' if your referring to the line of business apps, well yes, there's a certain amount of being locked in with specific vendor ERP systems..for historical reasons as much as anything, but most large org case studies i've seen for 'web cms' projects feature the usual .net or JAVA [mainly java come to think of it ] based enterprise CMS with sophisticated features and ability to scale and handle high numbers of concurrent users editing content. these don't come cheap.

 

yes, but historically the same systems were run much more cheaply on council run cobal/fortran. The last govt offered huge grants to councils to move them from these ageing systems because the cost of maintaining and integrating them was so high - the argument given was that it would lower costs. Now companies such as capita are profiteering this move. 'openness' - at the least I would expect a cost and license free API that uses open standards to allow competitors to integrate with the product - built into the original contract.

Edited September 13, 2010 by CyberNerd

[GrumbleDook]

@grumbledook - what do you know about project management?!

 

Right now ... more than I ever wanted ... please take out my brain, wash it in Coca-Cola* and stick it back in.

 

*other fizzy, sugary beverages are available!

[torledo]

I know for fact that capita have a revenues and benefits system called 'academy' that is used by local authorities for council tax, it uses a similar model to SIMS and capita pull similar tricks as they do with SIMS in education. we are just another market for them.

 

fair enough. i'm sure the local authorites have a mixture of specific apps from different suppliers aswell as legacy systems, but some authorites have shown a preference to standardise [if that's the right word] with a single vendor a range of business applications. obviously it's impossible to do this for the hundreds of software systems in use and various vendors over the years. I suppose this is what makes web enabling more challenging...

 

 

yes, but historically the same systems were run much more cheaply on council run cobal/fortran. The last govt offered huge grants to councils to move them from these ageing systems because the cost of maintaining and integrating them was so high - the argument given was that it would lower costs. Now companies such as capita are profiteering this move. 'openness' - at the least I would expect a cost and license free API that uses open standards to allow competitors to integrate with the product - built into the original contract.

 

i agree, but even such a move to more open business systems would not obviate the need for an enterprise web cms. not sure how much integration requirements with variety of proprietary systems forms part of the enterprise cms price premium. might be in the consultancy costs where that really starts to mount up.

Edited September 13, 2010 by torledo

[CyberNerd]

but some authorites have shown a preference to standardise [if that's the right word] with a single vendor a range of business applications. obviously it's impossible to do this for the hundreds of software systems in use and various vendors over the years. I suppose this is what makes web enabling more challenging...

 

Not only that, but many local and district councils have been 'forced into' using the same Capita (or otherwise) systems that there County council neighbours use (comparison to SIMS/SLG/Partnership Xchange anyone???). They had a promise of better future integration (clearly accompanied with higher costs). IIRC our borough council spent £200k in consultancy before they decided not to go ahead linking the councils with the same (capita) system.

Edited September 13, 2010 by CyberNerd