The high price of outsourcing: effects of Devon Highways contract changeover still being felt one year on

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A full year after Skanska replaced South West Highways as the maintenance contractor for Devon Highways, the effects of the changeover are still being felt. Draining cleaning equipment ordered by the new contractor is still arriving, 12 months after they took over.

7975873195_5fc2c2f845_k-768x576It is clear that all involved greatly underestimated the transition costs. A ‘demobilising’ effect in the last 6 months of the old contract was followed by low operational efficiency in the first couple of months of the new one, and Skanska have spent the last year learning how to do the job. (SWH, which originally took over Devon’s own direct labour department, had been doing it for 20 years).

The difficulties of transferring 250 staff to the new contractor and of managing the software transition were also underestimated. It all makes me wonder if provider changeovers – even when they’re planned and orderly and there isn’t a Carillion-style failure – aren’t a major downside of outsourcing Council services.

While we’re thinking about this, do remember that planning for Devon’s NHS Integrated Care System (formerly known as the Accountable Care System) has included provision for the effects of ‘provider failure’. Is this acceptable? Delays in filling potholes are one thing – delays in the NHS caused by costly handovers between providers could be quite another, even if planned.

I will be a member of a task group on Highways set up yesterday by Devon County Council’s Corporate Infrastructure and Regulatory Services Scrutiny Committee.

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