Passing the baton on the BTP merger

With less than 18 months until the integration of BTP in Scotland into Police Scotland, the fact that the project remains un-costed has prompted criticism from MSPs, as well as uneasy questions from Scottish Police Authority (SPA) members.

For the SPA, the question of costs presents members with a dilemma. Authority members are expected to provide ongoing assurance and scrutiny around integration, and where applicable, authorise expenditure. Yet in this case, the information is not available. As the SPA Chair gently put it at the October 2017 public board meeting:

I think there probably has to be some recognition of the liabilities that we’re taking on… Some of them could be quite large… I think there probably is a point at which we have to understand what the assets and liabilities are that we’re taking on (1.54)

Nor is it exactly clear where the SPA responsibilities and duties lie in relation to the merger. Flagging up a lack of clarity around governance, Deputy Chair Nicola Marchant stated:

What are the decisions that the Board are going to have to make and when are they, if any? And when is it that we say yes to any financial liability for the future? And what’s the assurance that we will be able to make an informed decision: because the information will be there. (1.38)

I simply don’t understand what decisions the Board are going to be asked to make in the context of this integration. Is it just going to happen? Or do we actually have any decisions to make and what are they? And when would we know? (1.52)

Marchant’s comments also tap into an underlying tension between the pull of Sottish Government policy and the role of the Authority as a scrutiny body. With the primary legislation now in place, the salient question is: how should the SPA proceed in what is clearly a high-risk project? While ex-SPA CEO John Foley expressed confidence in delivering the merger during the passage of the Bill, even a cursory look at the progress to date suggests this was at best, premature. As Board Member Bob Hayes observed less than a month ago:

We are still in the information-gathering stage on lots of this. There’s information that I understand BTPA [British Transport Police Authority] have been unable to get to pass over. There’s legislative question-marks. There are costs question-marks. There’s the expectation of the railway industry. Let alone the people issues that are underpinning this. (1.33)

What happens then, if the costs are deemed excessive, the decisions too risky or the period of uncertainty overly drawn out? What about the cumulative risk attached to decision-making? And what happens in the case of serious disquiet or disagreement with current direction of travel? Will the Authority call this out?

In the dark

A financial update presented at a closed SPA Finance Committee meeting earlier this month throws this predicament into sharp relief. Acknowledging that Police Scotland does not have the capacity or capability to deliver the merger, the paper states that work on costs (due diligence), as well as delivery will be undertaken by an external provider:

With reference to current commitments to business as usual activities, existing project activities and taking account of the specialist nature of due diligence, transition and integration process, the Force acknowledges that the capability and capacity to deliver the outcomes required will only be available via the introduction of external personnel via engagement with a professional services firm.

And that neither phase of work can be costed until a procurement exercise on due diligence is complete. A kind of due diligence on due diligence, as it were:

The cost of the support required from a professional services firm for Phase 1 and Phase 2 will not be known until a procurement exercise has been undertaken and until Phase 2 has been appropriately scoped.

Minutes from the meeting state:  ‘Members were reminded the work was complex and unprecedented with many significant financial implications’ and:  ‘the timelines to complete the work were very tight’. In response, members ‘sought assurances that work was being done to ensure that whatever solution was found to be the appropriate way forward, it involved no detriment to the current services provided by Police Scotland and that it involved no cost pressures to the SPA Budget’.

The problem, as the paper flags up, is that the costs are not expected until June 2018, only ten months ahead of the transition date, which more or less precludes meaningful assurance in the meantime (it is worth adding here that work on the merger itself began in 2016). While the project might involve no detriment, for the next eight months the SPA is effectively in the dark. How can or should an oversight body respond in what is an unprecedented and high-risk situation?

You say consultancy, I say contract, let’s sign the whole thing off

The recent announcement of an £400k award to Ernst and Young for work on integration also throws up questions about oversight on integration. The award was made under the Scottish Government Public Contracts Quick Quote scheme and lists the SPA as the buyer, although it is likely that the procurement was made by Police Scotland.

The award came to light at the October 2017 SPA Board meeting, at which board member Elaine Wilkinson asked whether sufficient resource and capacity was available, or whether additional resources would be bought in (1.41). In response, Police Scotland Deputy Chief Officer David Page referred to the appointment of Ernst and Young as Independent Programme Manager, a decision that was “put in train back in the summer”.

The exchange is striking principally because, to my reading, it suggests that at least some board members were unware of and therefore had not authorised the award, as might be expected. Wilkinson asks a straightforward question: will additional resource be bought in? To which Page replies, it already has been.

As it turns out, Police Scotland tenders and contracts below the value of £500K do not require SPA Board approval. In other words, the exchange appears to reflect the fact that the award was within Police Scotland’s delegated limits and as such, didn’t require SPA authorization.

Yet closer examination suggests that this is not clear-cut. The award notice states that the Ernst and Young contract relates to consultancy services – which require SPA Board/Scottish authorisation for expenditure over £100k.

The question then, is whether the Ernst and Young award is a consultancy, or a contract. At first glance, the award certainly looks and feels like a consultancy. Scottish Government guidance on consultancy procedures classify programme management as consultancy and the Ernst and Young award is described in exactly these terms:

The Scottish police Authority required the Provision of Programme Management Services to Deliver a Mobilisation, Transition and Transformation Programme to support the Operational Integration of British Transport Police in Scotland

The contract classification also clearly badges the award as consultancy services:

On the other hand, without more detailed information it’s difficult to make a definitive call: for instance, the contract may not meet more detailed Scottish Government criteria that define a consultancy.

Either way, there is a lack of clarity around the procurement process that resonates with Marchant’s unease around the role of the Authority on integration. If the award is for consultancy services, was the contract approved by the Board, and is there a public record of this? There appears to be no minute or note on the SPA website (although I should add that this isn’t easy to navigate and I may have missed it). If not the Board, who or which did organization authorised the award? The SPA Working Group set up to oversee the operational integration may have discussed the award, although this isn’t publicly documented. There are for instance, there are no published agendas, minutes, papers, terms of reference or membership details for the group.

Passing the baton

Looking back, a thread runs directly from the many concerns articulated during the Railway Bill to the issues now accumulating at the SPA. To take the example of transitional and project costs: on the one hand, the Scottish Government Financial Memorandum (FM) stated ‘such costs are expected to be small’; on the other hand, Police Scotland cautioned that ‘without properly scoping the extent and complexities involved in the Programme, the FM cannot accurately reflect the margins of uncertainty associated with the Bills estimated costs and timescales’, and that the ‘FM does not make full provision for set-up costs associated with the Bill and, as a consequence, cannot reasonably capture the areas where there is the potential for costs to be incurred’.

Having failed to resolve these differences prior to the Act, as well as a myriad of other problems, the realities of integration are now coming to the fore, while the baton has passed to the SPA. Charged with providing assurance and oversight, the Authority has some exceptionally hard decisions ahead on what is a fiendishly complex project, against a backdrop of rising demand on police services and increasing cost pressure.