Essex outsource services to IBM to follow Canadian model

IBM have won the huge £5.4 billion, eight year, contract from Essex County Council for a mass privatisation of their services. This follows a report in March that IBM were competing for the contract with TI Systems. It promises to leave Essex residents very well placed to withstand the inevitable coming squeeze on Town Hall budgets. As well as driving up standards of service the aim is to secure savings of 20% on the Council's annual £1.2 billion budget.

The boldness and radicalism of what is planned can hardly be denied. There don't appear to be any sacred cows being hidden away from IBM. Libraries, social care, highways, school management are all under review. Services already contracted out will be reviewed. Sometimes Essex will buy in services from other Councils - sometimes sell services to other councils. But it sounds as though it is being implemented in a sensible, practical manner. The process will be rolled out service by service. IBM won't run everything themselves. If the service can be more efficiently subcontracted or remain in-house that will happen. The Council will remain management partners.

I suppose what Essex are doing will be attacked as "ideological" and naturally Conservatives are indeed ideologically attracted to a smaller role for the state. But it sounds very much as though the IBM/Essex approach will be open minded and pragmatic. What works best is what will happen.

Cutting back on overmanning will be crucial. This will not only be in reducing duplication and reducing admin. It will also look at how services are delivered. The Council leader Lord Hanningfield is interested in outcomes. He says: “In future we won’t be specifying how a pothole is repaired but we will insist that there are no more potholes in that road for five years.” Simon Humberstone of IBM says care for the elderly could be improved at lower cost. He says: “We can set up a hoist and send one worker instead of two. This is both cheaper and allows more one-to-one time between staff and patient.”

There will be plenty of scare mongering from the Left and posturing from the unions. However IBM have a proven track record of success in streamlining service delivery for the Canadian Government under the Service Canada programme. Those wondering whether a Conservative Government in the UK will be willing to make the reforms needed will take heart from what is happening in Essex. Party Chairman Eric Pickles is quoted saying: "This is the future." Lord Hanningfield is a front bench spokesman in the Lords and so could well become a Minister in a Cameron Government.

Essex today. Britain tomorrow.