• 11th June 2010: Campaign for Better Transport investigates fair lorry road charging for mainland Britain
• 24th May 2010: Over £6 billion of UK public spending cuts announced
• April 11th 2010: ICT Services Model Agreement - Negotiating Guide
• February 16th 2010: Local government PPPs: a growth market

11th June 2010: Campaign for Better Transport investigates fair lorry road charging for mainland Britain

Supported by DeNové, Olswang and T‑Systems, the Campaign for Better Transport has embarked upon a study which aims to investigate how fair road charging for lorries can help secure a sustainable future for road haulage in the UK.

Lorries from outside the UK contribute nothing in terms of upkeep to roads or to external costs, creating an imbalance with UK freight operators. A number of other European countries are addressing this issue through charging or toll schemes for lorries. The new UK Government has signaled an interest in imposing charges on lorries using UK roads, but there are many questions about how this might be done.

The Campaign for Better Transport, supported by DeNové, Olswang and T‑Systems, has embarked upon a research study which sets out clear objectives in relation to the haulage industry in terms of:

• Reducing overall user costs
• Reducing overall external costs
• Creating a level playing field with foreign operators
• Raising standards.

The study is scheduled for publication in July 2010 and will analyse how a package of measures, including lorry road user charging (LRUC), could achieve these. Research will review different options for implementing LRUC in the UK, drawing on the experience from other schemes already in place, for example in Germany, Austria and Switzerland. The study will conclude with an exemplary package for LRUC in mainland Britain which is likely to include:

• Method of charge collection and enforcement
• Safety, environmental and other programmes within which LRUC would be implemented
• Ways in which revenues would be recycled
• Other associated regulatory or tax changes
• Likely impacts on rail and choice of port.

24th May 2010: Over £6 billion of UK public spending cuts announced

The UK's new coalition government has taken its first major step to reduce the UK government's public spending. DeNové is analysing what this announcement means for private sector companies who are looking to win business from UK public sector procurements. The general scenario is as expected. The public sector cake is reduced in size, and is likely to reduce further in the next years. Although there will be less cash around, this announcement represents both an opportunity as well as a threat for private sector business. The proportion of public sector services contracted to the private sector is likely to grow in order to achieve the efficiency savings demanded by the new government.

The Chancellor of the Exchequer, Rt Hon George Osborne MP and the Chief Secretary to the Treasury, Rt Hon David Laws MP, jointly announced over £6 billion in savings with some £500 million of this targeted for re-investment. The savings will be required to be made during this financial year. In terms of the split of savings within specific government departments for 2010/11:

• Department for Transport: £683 million
• Communities and Local Government: £780 million
• Local Government DEL: £405 million
• Business: £836 million
• Home Office: £367 million
• Department for Education: £670 million
• Ministry of Justice: £325 million
• Law Officers’ Departments: £18 million
• Foreign Office: £55 million
• Department of Energy and Climate Change: £85 million
• Environment, Food and Rural Affairs: £162 million
• Culture, Media and Sport: £88 million
• Work and Pensions: £535 million
• Chancellor’s Departments: £451 million
• Cabinet Office: £79 million
• Devolved Administrations: £704 million
• Departmental control totals will be adjusted at the Budget.

Some £1.16 billion of these cuts will be achieved from grants provided to local authorities. Ring-fences around £1.7 billion of grants to local authorities in 2010/11 will be removed so that local authorities have more control over how they spend public money and where their savings are made.

Health, Defense and International Development will be required to identify savings, but these savings will be re-invested into the departments. Savings in these departments are not included in the £ 6.243 billion. Similarly, the government is to protect the budgets for Schools, Sure Start and spending on 16-19 year olds in 2010/11.

The Chancellor announced that legislation will end Child Trust Fund payments that will save £320million in 2010/11, rising to £520million in 2011/12.

A significant percentage of the government’s spending reductions are said to be ‘cutting out waste’ for which there is not expected to be any significant impact on the quality of public services. These areas were identified as:

• £1.15billion in cutting discretionary areas such as consultancy, advertising and travel costs.
• £1.7billion from delaying and stopping contracts and projects, including immediate negotiations to achieve cost reductions from the 70 major suppliers to government
• £600million from cutting the costs of quangos.
• £170million from reductions in property costs.
• £95million from IT
• And at least £120million from freezing Civil Service recruitment.

The reduction and removal of many quangos will introduce a new stakeholder scenario within the public sector. An example of this is the government’s decision to close Becta, the education IT agency that was responsible for policy and procurement for school’s ICT requirements. This responsibility will now be absorbed by the Department of Education.

A new Efficiency Group, chaired by David Laws and by Cabinet Office Minister Francis Maude, will assist government departments in renegotiating contracts, and it will oversee an immediate freeze on unnecessary spending on consultancy, advertising and new ICT spend over £1m.

Today’s announcement pre-empts the UK’s emergency budget planned for 22nd June.

The full script of speeches delivered today can be found at
www.hm-treasury.gov.uk

April 11th 2010: ICT Services Model Agreement - Negotiating Guide

The OGC, in collaboration with their delivery partner ‘Partnerships UK’ and Intellect (the UK Trade Association for the technology industry) have developed and published an ‘ICT Services Model Agreement Guide’. This work was undertaken in recognition of the increased involvement of private sector companies in the provision of public sector services in the UK and the complexity of negotiations that take place. The resulting document is essential reading for both procuring Authority personnel and supplier bid teams.

The guide aims to improve understanding of those provisions which can be especially problematic in negotiation. It concentrates on the following ‘elephants’:

• Supply Chain Rights
• Due Diligence
• Authority Termination for Convenience
• Limits of Liability and Indemnities

It is hoped that the guidance will facilitate greater cohesive understanding of the provisions between the negotiating parties, thus helping to reduce the length of procurement projects and produce contracts that offer better value for money.

As a business development consultancy specialising in the technology sector, DeNové welcomes this initiative. Our understanding of public sector procurement rules has helped our clients to win high value outsourcing deals efficiently and effectively. The negotiating guidance will help DeNové to increase our performance even further and to provide our clients with bid project cost savings.

The full title of the guidance document is ‘ICT Services Model Agreement and Guidance – a negotiating guide for the public sector’ and can be downloaded from the Partnerships UK website: www.partnershipsuk.org.uk/ICTguidance.

February 16th 2010: Local government PPPs: a growth market

The UK Government’s spending now represents almost half of the total value of the UK economy. As the UK national government finds itself under increasing pressure to reduce public spending so, in turn, local authorities are also gearing up to find efficiencies for public services. One solution that is becoming increasingly appealing to local authorities is to out-source services to private sector suppliers. This is not a new concept, but financial pressures are motivating UK local authorities to look to extend traditional service outsourcing to public/private partnerships (PPPs) that embrace a strategic relationship and a much greater share of the total ‘basket’ of services. This trend is likely to extend through 2010 when it is expected that the media stories on public sector spending, the anticipated Spring budget, and the prospect of a general election will all help to focus the public’s mind, and therefore the politicians’ and civil servants’ minds, on public sector finances.

One additional factor for all parties to consider is a possible rationalisation of public spending on nationally funded initiatives and special task groups. Responsibility for these initiatives targeted at e.g. anti-social behaviour, may be devolved to local authority control and adjustments made to national and local authority budgets as a result.

The move towards PPPs and service out sourcing, the pressure to find savings and efficiencies, combined with a likely adjustment of budgetary responsibility, could result in a growth in local government contract tenders over the next few years and greater opportunity for the private sector. We have also seen that council initiatives for service transformation are often led by ICT service procurements, which means that this market growth is having an immediate impact for technology sector companies.

Local authorities negotiate their budgets with national government once every three years. The next spending round is in April 2011, which means that local authorities may not be hit by dramatic budget cuts this year. However, many councils are already planning and implementing changes in order to shape up for the predicted budget reductions next year. Therefore, senior executives of private sector companies who are interested in developing their market share in the local government service outsourcing market are taking action now.

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