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Fujitsu loses £500m Walsall Council deal

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Walsall Council pulled the plug on a £500m outsourcing deal with Fujitsu after proving that it can improve its shoddy services without help from the private sector.

The deal would have seen over 1,500 council staff sold off to Fujitsu and subcontractors Vertex under the direction of a strategy dubbed "Putting the Citizen First".

It came about after an Audit Commission survey of Walsall placed the council among the worst local authorities in the country.

The 2003 survey of Walsall identified it as a "weak" council, even after three years of steady improvement.

Business process outsourcing - paying private companies to take on council staff and services - was seen as the surest way for the council to improve its performance and gain some dignity.

Yet as negotiations with Fujitsu dragged on, Walsall did what it could to improve its services without a commercial imperative. In December 2004 it gained two stars and in the 2005 audit, its efforts paid off when the Audit Commission awarded Walsall a three-star rating, recognition that the council was "improving well".

The Local Government Chronicle has short-listed Walsall for a Most Improved Council Award, to be announced at its annual ceremony in March.

The reason for the improvement was attributed in part by Council leader Tom Ansell to the work of Fujitsu Services, from which his departments picked up ideas about how to do a better job. Neither he nor Fujitsu have yet revealed whether this came from paid consulting or the supplier's pre-sales efforts to clinch the now aborted deal. Some you win, some you lose.

Ansell summed up the nature of the authority's change of fortunes in a statement: "When we began to look at this project, the council was in a weak position...[now] Walsall is a very different authority."

Even so, we still have to wonder what is going to happen to those public services with which Walsall is still struggling. It appeared the council had assured the Audit Commission that its under-performing departments, such as social benefit, would be able to pull their socks up once they where managed by the private sector.

"The council has plans to address this through the partnership it is entering into with an outside organisation to provide many of its customer-facing and administrative services," says the Audit Commission report on Walsall, published only four weeks ago.

At least the council has the best part of a year before it has to dream up another alibi for its failing services.®

The smart choice: opportunity from uncertainty

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