One of my photos

Some thoughts on today’s Fastway meeting

January 13th, 2006 · Posted by Skuds in Politics · No Comments · Politics

I could not stay for the entire meeting, but read through much of the paperwork and listened to some of the questions and answers, which prompted a few random and unconnected thoughts.

  • I could not believe how much more serious and businesslike the meeting was than any of the borough council ones I have been to. Not very exciting to watch, mind you, but refreshing. Maybe its just a Crawley thing and we are all stroppy, rude and boisterous here and it shows in our meetings. A more charitable spin on that would be to say we are more lively and colourful.
  • The sound system in the town hall is still atrocious. I found it hard to catch eveything that was being said. If the meeting had behaved like a CBC meeting I would have heard nothing. Likewise, the few members of the public were quiet too which helped make it audible. That sound system has never really worked well, and I am starting to think that it never will.
  • I had a feeling that the people running the county council were the most adept local politicians I have ever encountered. Unfortunately I am talking about the senior officers. There are often suggestions that the borough council is too officer-led and I really felt that the county council is too.
  • And that seems to be at the root of these Fastway problems. It really looks like there is a culture or atmosphere down in Chichester where project workers can find something like a £6 million hole in a project but feel that its not something they need to bother the councillors about.
  • The discussions were about such dry-as-dust topics as management information systems, reporting systems, project management methods and suchlike. Fortunately that overlaps with my experience working in such fields in large organisations so I could get a handle on it.
  • Some of the specifics in the paperwork were quite scary. At one point there was £4m funding from an external partner but they spent £3m of it themselves directly leaving only a balance of £1m to go in the pot. However the whole £4m was counted as funding making it look like there was £3m more available than there really was. It looked to me like there was an assumption in the report than only £1m should have been included as funding, but personally I think they should have included the whole £4m but also included the £3m of spending so that the correct overall cost of the project could be known. I wonder if any other external partners have had work done which they paid for directly so that the total cost of the whole system is being understated.
  • According to the summary of events prepared by East Sussex CC’s audit, as late as March 2005 it looks like the Highways & Transport department actually thought there was an underspend, so at a time when the council were committing funds milions of pounds in excess of their budget they actually thought it was coming in below budget. You don’t get a better indication of an institutional failure in processes that that. I am surprised that more has not been made of that comment, particularly by the cabinet and leader. Our suspicions of underhand behaviour and hiding the overpend until the elections, were based on the assumption that nobody could be that stupid, but apparently somebody was.
  • One reason for all the confusion might be that the word ‘budget’ seems to be used in a number of different ways. Anyone who has worked for a large company will have come across this. Budget can mean the total amount of funding available, or it can mean the amount approved for spending, or it can mean the amount expected to be spent, or the amount approved or expected in any given year. The distinction between spending of money and commitment of money is another area of confusion. At the moment Fastway may have spent less than was expected, but commitments have been made (in the form of purchase orders) whcih will lead to future bills which exceed the budget.
  • I heard the term ‘blank cheque’ used by one member of the panel, and seeing the reports it is apparent that as far as utilities are concerned a local authority does more or less have to do that. I have some sympathy for the procurement people faced with such a situation – the report says “There are no contractual agreements with utilities. The estimates they provide for works to be undertaken can vary significantly from actual amounts.” This means, I assume, that a utility can say a job will cost about £10,000 so you order the work and then they say it actually cost them £20,000 and you have to pay up. I can’t see any commercial organisation willing to put up with such an arrangement.
  • A lot was made about the council’s SAP system for accounting and reporting. Having a quick look at the action plan and its implications for IT systems made me think that I would not be surprised if the cost of carrying out the action plan could easily compare to the overspend being talked about. Not only that, it would not prevent overspending on future projects but merely make everyone aware of overspending sooner. That was made very clear in the paperwork and verbally.
  • I would hate to be the person in the council’s IT department on whose desk the last point in the action plan arrives. It is to investigate providing an interface between MS Project and SAP. Lovely. It doesn’t sound like much, but that is going to give someone a real headache, especially if it is a two-way interface. I can remember how much time it took trying to align a PC-based management reporting system with a mainframe-based one at ICL in the 80s and although technology has moved on the principles are the same.
  • Is it too late to buy shares in whichever SAP consultancy the county council use? I reckon they are in for a major pay-day. SAP is notorious for requiring lots of additional modules or work after initial implementation and any consultancy or dealer knows that they will make more money from variations and additions than from the initial contract.
  • My gut feeling is that that some suppliers, whether utilities, building contractors, consultants or whoever, really took advantage of some slack procedures and then the council did not have the means to realise this was happening. It would be too ironic if whoever they get in to make the expensive system improvements needed to fix it did the same thing.
  • Can these various suppliers smell an easy target or something? There was a scam where a bogus company sent out invoices to hundreds of organisations on the assumption that a certain proportion would just pay them. The council have behaved like one of those victims. In my company you have to get a purchase order authorised and only then will the procurement department place an order for you. When the invoice comes in they will not pay it if it is for more than the order. In the council’s own internal audit report they say they found an example of an invoice £82,700 more than the order! (Not on Fastway but on a school building project)
  • At the moment the SAP system does not prevent the processing of invoices greater than the value of the original order. There is a recommendation to change that, but I still can’t believe something so fundamental and contrary to common sense was in place.
  • Much as I find him a bit ridiculous for insisting on his military title (Why do people do that? I always call him “Mister”. Maybe thats why he always pretends not to know me despite having been on a committee with me for two years ) and adopting the name Tex, I am not so sure these calls for Pemberton’s resignation are valid. Not on these grounds anyway. You could hold him responsible for the duration and extent of the traffic chaos or the poor design of bus shelters or other such practical matters, but as far as the money goes he looks like being a hapless victim. As we can see, money is being forked out on other projects in excess of order values (and therefore budgets?). The system is broke and has been for a long time: it must have been overspending all over the place in small amounts – which all add up. Whether he and his colleagues, or the officers, should have spotted this pattern earlier before it happened on a large scale is another discussion.

Very dull thoughts perhaps, but then it was a very dull meeting.

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