A year on from the damning report on its procurement contracts, the Ministry of Justice is getting its house in order, its director of commercial and contract management, Vincent Godfrey, tells Colin Marrs
This Christmas was happier for Ministry of Justice officials than a year ago. In December 2013, the department had just been excoriated by an internal review of its procurement contracts carried out by its non-executive director, Tim Breedon. His report, prompted by a series of major outsourcing scandals, concluded that the ministry did “not have sufficient understanding of its own duties in delivering end-to-end services”.
A year on, and Vincent Godfrey expresses satisfaction with the department’s progress on implementing its resultant “far-reaching” reform programme. The ministry’s director of commercial and contract management says the report was “not the most flattering read so far as the department is concerned” but was nonetheless vital in unearthing areas for improvement. “Really there isn’t anything of any significance that it didn’t cover,” he says. “So it gave us a really good starting point and a platform to build on.”
The two failures which had grabbed the headlines – and prompted the review – were the electronic monitoring contracts with suppliers G4S and Serco, and the court interpreters contract with Capita. On the former, Godfrey reveals that at peak levels, the department was paying for around 19,000 people to be monitored, when in actual fact only 14,500 were actually tagged and being monitored. This overcharging eventually resulted in £177.5m being repaid to the department. Staffing issues relating to the interpreters contract brought “total chaos” to the courts system, according to the Public Accounts Committee in 2012.
“We have dropped the notion that contract management is solely an issue for the commercial director – it isn’t."
Godfrey starts by stressing that both contracts had their origins in the days when justice fell within the remit of the Home Office. “So I think you are talking about, in both instances, problems that manifested themselves from a few years ago,” he says. And, although he admits serious failings with the interpreters’ framework, in mitigation he pleads: “People neglect the fact that we’ve saved around £12 million a year.
We have higher standards of assurance in the contracts, and actually performance for the most part is pretty good.”
Godfrey does not underplay the extent of the reforms needed at the department, however, with Breedon’s review revealing multiple failures in contract management. “I think contract management had become a bit of a poor relation and disenfranchised from procurement,” he says. “So while we put an awful lot of effort into procurement, contract management hadn’t had the same level of focus and investment.”
In response, last October management of procurement and contracts were brought together in a single directorate. “We’ve changed our name to commercial and contract management to reflect the fact that we are professionally responsible for contract management, and we have authority over all of our contracts,” explains Godfrey. “While the business may own the contract, professionally I oversee the contracts and now have the authority over them.”
On some individual contracts, Breedon’s review also identified a lack of clarity over lines of management responsibility. Godfrey says that a new “multi-disciplinary” approach has been adopted. “We have dropped the notion that contract management is solely an issue for the commercial director – it isn’t. It’s about bringing the operational, the commercial and the analytical functions together.”
Godfrey says that some contracts, such as on private prisons, were already well run, while others lacked clear ownership and demarcation of roles. “It wasn’t quite Heinz 57 varieties,” he says, “but it wasn’t consistent. It is very clearly articulated now. The MoJ has a standard model now that we deploy on all of our contracts, and people understand their roles within that.”
As an example, Godfrey says that the electric monitoring contract team was previously very small, led by a middle manager, and staffed by “what you would describe as people with quite broad but not specific skillsets”. “It is now led by a senior civil servant who was appointed specifically for the job, and the people who are appointed to the team are specialists in contract management, as well as having some experience of what operational contract management is about,” he says.
A contract-by-contract review of the 45 highest risk contracts within the department has identified the skills necessary to improve monitoring. Godfrey is not specific on the overall increases in staff numbers which have resulted, but says: “Broadly speaking, on electronic monitoring we’ve more than doubled the number working on that contract, and if you look at the new probation contracts, for example, we will have in excess of 100 people managing them.”
Greater expectations are also being placed on suppliers, with changes to the information required by the department during the tender process. Following the tagging debacle, G4S and Serco were required to provide assurance that their internal processes had changed. And now, Godfrey says, the department is taking a much closer interest in all bidders’ company structures and policies relating to transparency of data and whistleblowing.
Godfrey says that the notoriously tight European regulations relating to procurement have not proved a barrier. “Taking into consideration past performance, evaluating companies in pre-qualification and in tenders about the way they’re structured and how they propose to manage their relationships with government and so on, are all perfectly valid things to do provided you set it out clearly yourself, providing you’re transparent and providing you adhere to the principles of equal treatment,” he says.
Internal training is another important strand in transforming the department’s procurement performance. Every senior civil servant in the department has now been through commercial awareness training, and more staff are being put through training accredited by the International Association for Contract & Commercial Management, Godfrey says.
This initiative is one of a number that have been carried out in conjunction with the Cabinet Office. A separate report by chief procurement officer Bill Crothers, released at the same time as Breedon’s investigation, gave the Crown Commercial Services greater powers over oversight on procurement in all departments.
"I’ve never come across a situation where the MoJ has an objective that is contrary to the Cabinet Office.”
Godfrey plays down any suggestion that this involvement is perceived as unwanted interference. “We are both interested in efficiency and delivering public service,” he says. “I don’t think there’s any variance in those objectives, quite frankly. I’ve never come across a situation where the MoJ has an objective that is contrary to the Cabinet Office.”
Where discussions do arise, they are focused on how, rather than whether, to achieve the aims, says Godfrey. “The discussion is how you do it and how you go about doing it, because inevitably you’re not going to be able to achieve absolutely everything. It’s about the nuances of execution.”
Central government strictures on increasing the number of small and medium-sized enterprises winning government contracts are also largely being met, Godfrey says, with around 35% of MoJ procurement spend going to SMEs in 2012/13 – far exceeding the government’s aspiration of 25%.
However, Godfrey admits that this has been less easy in some delivery areas than others. “In some areas, undoubtedly, I still think there is a bit more of a limited choice of suppliers. I think ICT in some areas is still not as diverse as we would want it to be, and we haven’t shifted the market as much as we would have wanted to.”
But he rejects criticisms from unions that a “monopoly of corporate giants” dominate many of the department’s large delivery contracts. Pointing to the freshly-signed probation deals, he says: “This is high risk, high value, complex stuff, and obviously it’s a significant piece of our business and core operational delivery. But there’s no G4S and Serco or Capita in there. All of those contracts have gone to other parties, and predominantly to consortia that feature third sector, voluntary and community mutuals, and a lot of local delivery organisations as well.”
Unions have bitterly fought the probation reforms, arguing that they have been rushed through without proper testing. It is an analysis rejected by Godfrey. “We have already outsourced unpaid work in probation in London to Serco, so we have outsourced significant probation contracts before. It’s proved to be lower cost and better performing than previously, and it’s London – it’s the biggest patch there is.” In addition, payment by results pilots relating to reoffending rates at Doncaster and Peterborough prisons have also provided valuable learning, he says.
Thanks partly to the department’s reforms, and partly to improved supplier performance, delivery is steadily improving, Godfrey says. On the interpreters contracts he says that, despite remaining patchy performance in some areas, in many places the target of meeting 98% of interpreter requests is being met. “If you look at a league table of who causes disruption to courts, interpreters is negligible,” he says.
But despite the achievements of the past year, turning things round will take more time. “We’ve still got a way to go,” he admits. “I mean, let’s not pretend this is fixed by any stretch of the imagination.”
Godfrey says the MoJ has come from a “very low ebb”, although points out it is not the only department in that situation. “I think we’ve got examples that, given the value, risk and complexity of what we do, are the match for anything that goes on anywhere else,” he says. “Unfortunately, when things do go wrong, it goes wrong very publicly for us, perhaps unlike some other organisations.”