Council IT contract delivers less than half 'required' savings

by DOUG COLLIE

A £92 million IT contract awarded to CGI Ltd in 2016 has delivered only 46% of 'required' savings for Scottish Borders Council so far which means more than £1.7 millions has had to be temporarily removed from other local government budgets.

The council's deal with CGI received a high profile launch in March 2016 when a SBC press release promised it would bring a Scottish Centre of Excellence to the Scottish Borders and inject over £100 million into the local economy. In addition 200 highly skilled new jobs would be created in the Scottish Borders with apprenticeships at Borders College.

Other features of the long-term contract outlined in the news release included: 

"A new Enterprise Resource Planning (ERP) solution will replace our current Finance and HR systems. A modern digital platform will be implemented to make it simpler for residents to interact with us and receive feedback.A showcase of options to address some of the major connectivity challenges that exist in the Borders. This includes the unbundling of six exchanges to allow CGI to deliver a superfast broadband offering to schools, communities and businesses."

So far public pronouncements from SBC on progress with the IT transformation project under the thirteen-year deal with CGI have been scarce. But a council minute which records a question and answer regarding the topic does give some insight into what is happening.

At a recent meeting of SBC Councillor Stuart Bell (SNP), leader of the opposition group at Newtown St Boswells asked: "In March 2016 the Council agreed a contract for delivery of ICT services. Associated with that were transformation programme savings dependant on the delivery of a step change in the ICT services; starting in 2016/17. What were these targeted savings per year through to the present financial year and what is the level of savings actually achieved per year, on a permanent basis, up to the present date?"

The response from Councillor Simon Mountford (Con), Executive Member for Transformation and HR [Human Resources] covered a variety of headings. But information on savings shows the contract did not live up to expectations in its first three years.

Councillor Mountford told Councillor Bell: "The original business case for ICT services approved by Council in March 2016 contained ambitious targets which were dependent upon the delivery of new technology. 

"The savings required in 2016/17 per the business case was £0.747 million. The saving required in 2017/18 was £1.393 million and in 18/19 was £1.164 million, an incremental total over the 3 years of £3.304 million. The savings actually delivered against this original target were zero in 2016/17, £0.572 million in 17/18 and £0.942 million in 18/19. Savings have increased year on year. To date recurrent permanent savings of £1.514 million have been delivered on an incremental basis. The savings on a cumulative basis are £ 2.086 million to date.

"Since 2016/17 the Council has delivered 46% of the savings originally envisaged by the Business Case on a permanent basis. The remaining 54% of savings required by the Business Case were delivered on a temporary basis from other budgets. The Council’s budget was balanced overall in 2016, 2017 and 2018 with small under spends delivered in each year."

The reply from Councillor Mountford also told Councillor Bell: "The contract with CGI is designed to place SBC at the forefront of technology in local government in Scotland. The benefits to be delivered go way beyond financial savings. 

"To date the benefits delivered include:- addressing under capacity and vulnerabilities associated with key person risk within the former in-house ICT staffing structure, removing risk associated with ICT recruitment, providing access to the technical expertise of a major international ICT provider, major investment undertaken to future proof the Council’s ICT infrastructure, including:- a new help desk, moving file storage and backup facilities to the cloud, increased broadband capacity in our schools, providing greater resilience to ever increasing cyber security threats and a planned full refresh of the Council’s curricular and office based desk top estate.

"Much work, often not obvious to end users, has been completed to date to address legacy issues with the council’s complicated ICT infrastructure and ensure this is fit for purpose both now and in the future. The contract is also designed to deliver significant financial benefits through the introduction of new systems and ways of working and where delays have been encountered these have been reported to members along with performance monitoring information. Where necessary the associated savings have been re-profiled with alternative temporary measures put in place."

Issues associated with the delivery of ICT infrastructure had impacted on the Council’s transformation programme, added Councillor Mountford.

In an upbeat conclusion to his answer he claimed: " It is anticipated that IT transformation savings required by the budget will be realised in full in the longer term during the course of the strategic partnership with CGI and more savings than originally envisaged may be possible."