Examination of witnesses (Questions 260
- 279)
WEDNESDAY 12 JANUARY 2000
MR BRIAN
OAKLEY-SMITH
and MR DEREK
FOREMAN
260. But you would not consult the local community
at all?
(Mr Oakley-Smith) Of course; yes.
(Mr Foreman) Yes.
261. How?
(Mr Oakley-Smith) The whole process would be as transparent
as we could possibly make it, and we would not wait until a crisis
arose, we would be talking to the education authority in advance
to try to identify the sort of people who might be helpful; and
if the situation was deteriorating in any particular school we
would be involved intimately in that situation, trying to put
it right.
262. Yes, I understand, if you talk to the local
education authority; how would you engage with the community?
(Mr Foreman) We will not be engaging with the community
solely on this, we will need to put in place, and have already
made proposals in our submission earlier on about the sorts of
consultative arrangements that we will have with community groups
of one kind or another, whether it is parents, or the wider community,
and so forth, and we will need to be talking about a whole range
of things a great deal of the time, it is not only when a problem
arises. We need, well, any authority does, but particularly in
the inner-city areas, we will need to be talking with parent groups,
adult groups, various representative groups on the committee.
We must not give you the impression that all this is inventing
wheels, necessarily, a lot of that operates in Islington already,
and would do in any other authority; one would not simply just
replace those, one would take those over, it is not a question
of having a brand new arrangement, as I say, for consulting those.
I am trying, not very successfully, to get across our role as
the professional advisers. We will not call it the chief education
officer, our senior person will be called the director of school
services, but, effectively, it is the education officer and the
supporting staff for that post will be carrying out the role that
officers would be in a local authority elsewhere; a lot of that
involves talking to the community, talking to parents.
Chairman: I want to move on now to the contracting
process. Dr Harris.
Dr Harris
263. Thank you, Chairman. I just want to explore
the difficulty that the political process causes private companies;
this is a special case, of course, and it is useful to discuss
it, because although it was a difficult situation you had hoped
it would be stable, and you have been negotiating in good faith
and bidding in a long process, hoping that you would be in a stable
environment, and unfortunately for you, as a private company,
the democratic process has pressed on regardless, which must have
been at least inconvenient. I just want to explore whether that
has caused particular problems for you, because the new leader
of the council is quoted, in Liberal Democrat News, a paper
I commend to the Committee (without much confidence that my commendation
will be acted on), as saying: "The first act I will have
to perform as the new leader will be to sign an annual contract
with a private company to run the Borough's services. We"
(the new group) "have renegotiated some key aspects with
the Government and they have allowed us to retain more democratic
accountability than the Minister would ever have allowed the previous
administration." Which, I think, probably relates to the
fact that they are not going to contract out to the Trust. Now,
have you not found that to be moving the goal-posts in the middle
of what was quite a long and, presumably, expensive contracting
process for you, and can you say whether that has caused difficulties,
because, obviously, you would rather wish that had not taken place,
I presume?
(Mr Oakley-Smith) No.
(Mr Foreman) No. I can understand why you say that,
but I think the jury is out, frankly. The Education Trust, which
had been there, was a concept, it was not fully developed, they
had not yet come up with full terms of reference, and so forth.
I think our concern would be, not is, would be, that we believe
that, whatever is put in place as a result of the Commission,
there is a need for some form of forum, which is wider than an
education committee, in which all the various partners can interact,
and the Trust might have been one vehicle for performing that,
I can think of others, it depends, and will have some influence,
I hope, on what the Commission does; we will certainly be commenting
to the Commission, along with other people. So that could be a
difficulty, if that does not exist, but I do not presume at the
moment it will not exist.
264. Because the renegotiation, with more democratic
accountability, as claimed, has not caused any problems to you,
except having to adjust to a new situation?
(Mr Foreman) No.
(Mr Oakley-Smith) No, because it needed to be based
on partnership and co-operation anyway, so a slight shift in the
emphasis only underlines the fact that we are in it together.
In a sense, a change of political party makes the difference that
the new regime are caught up even more in the new arrangements
than perhaps the old regime might have been, but it only underlines
the fact that if we fail then it is the children and the people
of Islington who will lose, and both the politicians and ourselves
will be accountable.
Mr St Aubyn
265. Before we actually get right into the contracting
process, I want to go back to the earlier line of questioning,
because we are interested here in how your doing this job can
make a difference to the way the LEA was doing it. And the question
occurred to me, in terms of these additional governors that might
come into a failing school, do you think there is anything about
your being there that may persuade some of these you describe,
almost that are super-governors, that are trouble-shooting types,
who will come into the situation and help turn it around, whereas,
previously, under the previous structure, they would not have
been prepared to come forward and do that? Is there any sort of
particular back-up, or other feature, that you are offering that
you think will persuade some of these people to come and exercise
their talents to help turn these schools round?
(Mr Oakley-Smith) We hope we will have acted in a
way that will make them redundant, or the need for them redundant.
I do not know, it is very difficult to be specific, but clearly
one of the things that we and the politicians both have to do
is to establish an environment, a positive environment, of success.
There is an awful lot of potential for succeeding in Islington,
and if we establish that type of confidence then it may be difficult
to prove the connection but it should make those people who might
otherwise have been perhaps less than willing to come forward,
it might just influence them into coming forward, and we would
certainly want to work with existing governors, with the governors
forum, and so on, to try to find the people who will undertake
what is a difficult and could be a pretty thankless task.
266. You will have your own training programmes
for governors, and so on, you will develop in your own way?
(Mr Oakley-Smith) Yes.
267. Do you think there will be distinct advantages
now over what was offered before, and you discuss that, as part
of your contract?
(Mr Oakley-Smith) I would sincerely hope so, yes.
Chairman: I want to get on to the contracting
process now and draw this particular line of questioning to a
halt, and call Nick to open up on the contracting process.
Mr St Aubyn
268. I think, in your opening remarks, you mentioned
the degree of stamina that was required to get through this negotiation;
do you think the reason you are successful is you have just survived
an endurance test that others were not prepared to go through
to the end?
(Mr Oakley-Smith) There was a temptation to think
that they were just going to continue until everybody had dropped
bar one, which does not fill you full of confidence that the people
who survive that process are then capable and fit to do the job;
it did feel a bit like that. On the other hand, although it has
been a painful and demanding process, there will be no other authority
in the country that has had such a rigorous review of all its
systems from top to bottom. When we became the preferred bidder
we thought that we would be congratulated, but we were actually
greeted with a reminder that we were only the least imperfect
of those who had bid and that there was still a long way to go,
and part of the negotiating process has been an attempt to make
sure that we are absolutely up to speed on every aspect, ranging
from the very technical through to the professional, and so on.
So we are extremely well prepared, in that sense. We have still
got to exercise all the skills of professional leadership, which
are the key, but we have got a base now which is much firmer than
perhaps any authority in the country, in that sense.
269. As you have said, you have had to incur
considerable expense in doing so. I wonder how much you are prepared
to tell us about what were the costs for each of those who were
brought into the invitation to negotiate stage, how much do you
estimate a typical participant at that level had committed, in
terms of cost?
(Mr Oakley-Smith) It is very difficult to put a figure
on it because a lot of it is opportunity costs, but it certainly
has taken up 80 or 90 per cent of your time, Derek, over the whole
of the autumn period, so that you would have to be a company that
could continue to run your existing business and withstand the
removal from the other areas of the business of key people.
270. And, presumably, since you became preferred
bidder, the costs have mounted additionally?
(Mr Oakley-Smith) Yes; yes, indeed.
271. If at that stage the negotiation broke
down, did you have any comeback on the council for the amount
of time you would have committed at that point?
(Mr Foreman) No; it was made quite clear in the opening
invitation to tender that everything up to award of contract fell
to the contractor to finance, not the authority.
272. As you may know, in my constituency of
Guildford we went through an arduous tendering process for the
management of a single school, and when those who had been through
that went before our Committee all but the one who succeeded said
they would be very reluctant to go through that process again.
Do you think that the way these negotiations, tenders, have gone
is actually going to turn people off trying to do it again?
(Mr Foreman) I think, beyond stating the blindingly
obvious, which was, Islington was the first, and even though others
may not be exactly the same, there will be a lot of lessons learned
for everybody from Islington, in terms of speeding up the processes
and making sure that short-cuts are acceptable short-cuts and
not unacceptable ones. So I would not actually assume that anything
else would be quite on the same scale again.
273. Sorry, let me just be sure about this.
You are saying, this endurance test was basically due to being
on the learning curve—
(Mr Foreman) Part of it.
274. Not due to any legal requirement or impediment
to dealing with the process in a faster way?
(Mr Foreman) Largely, the former. The reason I say
largely rather than yes is that some of those legal issues had
to be thought through at the time, from first principles. The
outcome was fairly clear that everybody wanted to achieve, but
quite how you achieve it is a moot point; so that has taken time.
But I think that perhaps the big improvement that one might make
in the process is, a huge amount of effort went in, in Islington,
certainly, in defining the output specification, and that was
very helpful, and so all contractors received that and could respond
to it. I think, on reflection, it would have been useful if a
similar amount of work had gone into defining the finances of
the authority, because each of the contractors had to form, in
a sense, their own view, and maybe if there was a rather larger
and better defined core on the education finances, which again
was presented to each of the four contractors, then you would
spend less time trying to put your own particular twist on that
and more time showing how you could add value.
275. So, having been through it, do you think
that there is, if you like, a standard tender process that could
be developed from this experience, which would mean that in future
those in your position looking to take on these contracts would
know exactly what they were in for, and therefore there would
be the savings and the economies of scale, and each time an LEA
was looking to contract out its services you would have a set
pack, if you like, on which you could, at least at the invitation
to tender stage, be assessed?
(Mr Foreman) From a company point of view, the answer
to that would be yes, but, as I understand it, I think you have
to add the fairly strong qualification, if you were taking over
the whole of an authority, the way we are Islington, if you were
taking over services, rather than the service, then this would
not provide you with quite the same blueprint.
(Mr Oakley-Smith) I think the critical difference
is that, if you have got a combination of a situation where the
authority is seen to be failing in some respect and it needs fairly
immediate attention, as opposed to an authority that is perfectly
successful but it decides to choose to put out part of its service,
in the latter case you are working from an effective basis, where
they will know what they want, they will be able to make the specification,
the information is all reliable, and so on; that is a fairly easy
process to control and you have got both parties to the contract
are efficient and effective. But where you are trying to negotiate
some form of outsourcing against a failing situation you need
to have some mechanism for dealing with the failing situation
and the immediacy of it, and to some extent you need to be able
to put that right before you have got an adequate basis for negotiating
a longer-term contract. And I think if that situation is grasped
then it is going to be possible to simplify the contracting-out
process.
276. So, in a sense, the idea that you can call
in the private sector to sort out the problem is not quite true,
because you have got to sort out the problem up to a point first,
before you define what the private sector is coming in to do?
(Mr Oakley-Smith) The private sector could do both.
277. Right; absolutely. So you think you could
have one type of firm, or firms wearing only one hat, defining
the contract, while others then bid for it?
(Mr Oakley-Smith) Yes.
(Mr Foreman) That is not a million miles from where
you are at the moment, with the consultancy firms on the Secretary
of State's accredited list and the function providers. I think
what is missing possibly is, really coming back to the point you
were making earlier on, where you really need the niche experience
in another consultancy, perhaps, in order to ensure that that
diagnosis and prescription started you rather faster down the
road of dealing with it. Because, some authorities, doubtless
Islington, I could not speak from experience, the authority themselves
did not sit around, having had a poor OFSTED, and say, "Oh,
well, then, we will just wait till the end of the contracting
process;" in the meantime, they got on with making improvements.
So that has represented a shifting scene as well, because, something
which would have been heavily criticised in the OFSTED report,
by the time we came to make up our minds precisely how we would
deal with it the picture had changed somewhat, for the better,
I am glad to say, but nevertheless had changed.
278. You mentioned the role of the private contractors
in defining it, you mentioned what was happening in the local
education authority; how much contact did you have, or have you
had, and the other bidders, with people who live in Islington,
have there been any public meetings where you have been asked
to make a presentation to local parents and teachers as to what
you are about and why you are there?
(Mr Oakley-Smith) No; there has been a separation.
Whilst we have been bidders, and indeed even when we were the
preferred bidder, we were precluded from acting directly with
anybody in Islington; so that has been one of the difficulties,
that the tendering process has been kept in a separate compartment,
and, indeed, the consultants who have been advising and managing
it, their brief has been to manage the tendering process, not
to manage the situation in the authority.
279. You cannot really speak for the other tenderers,
perhaps, but do you think it would have been an advantage if at
some point you had been able to present to the public in Islington
what your mission in this situation was?
(Mr Oakley-Smith) I think it would have been very
complicated, and I am not sure that the heads would have thanked
anybody to have had to relate to four different bidders. I think
they were already feeling pretty demoralised about the whole affair.
There is undoubtedly a problem, that people in Islington feel
they have not been involved in the process, but there are practical
difficulties, while you have got four bidders, for example, in
them all making their pitch at the same time.
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