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Auditor applauds Walsall

But what lessons learned?

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The Audit Commission has applauded Walsall council for jilting Fujitsu Services after three years in which the two haggled as the services that were counting most on the deal suffered.

Nevertheless, Walsall has improved most of its services without needing to use private companies at all. The auditor's support for Walsall's conduct in the negotiations, as well as its final decision to give Fujitsu the boot, is unequivocal.

The Audit Commissions's 04/05 Annual Audit and Inspection Letter for Walsall, due to be published at the end of March, ratifies the preliminary rating published by the Audit Commission in December, but includes additional commentary about January's collapse of talks with Fujitsu.

What the report lacks is a clear indication of what lessons other councils can learn from Walsall's experience. At £500m, it was going to be the biggest of its kind in the UK. Birmingham, Europe's largest council, Gateshead and Swindon are all working on similar deals.

Walsall's own Conservative-led Scrutiny Panel's report into the Conservative Cabinet's decision is similarly unenlightening, though it recognizes the "excellent work" of its compadres in minimising costs and making the right decision.

Yet the service that was counting most on the deal being struck, benefits, appears to be poorer for all the haggling. The time it takes to process new benefits claims has increased from almost seven weeks to almost ten weeks in the last four years.

Still, when talks started Walsall was recognised by the Auditor as a "weak" council. It has since won an overall three out of four stars and the moniker "improving well". Some improvements were done using tips picked up from Fujitsu, according to the council leader, although some services improved after being commandeered by central government.

It may arguably not be the role of either the Scrutiny panel or the auditor to look for lessons to share. But no-one else has the access or the authority to do it.

The council proper refuses to say what lessons can be drawn from its own mishap by other councils about to spend unprecedented chunks of £billions on novel outsourcing arrangements.

Such lessons might help other councils avoid wasting so much time and money on abortive deals. Advice on the contractual minutiae wouldn't go amiss: contractual liability blew the Fujitsu deal and is likely to put the frighteners on customers and suppliers around the country as they haggle over similar deals .

Even as Walsall embarks on fresh talks for something to replace the proposed "strategic partnership" with Fujitsu, the Audit Commission has had to draw Walsall up on its accounting, which was £8m out of kilter after the implementation of an Oracle Financials computer system.

The staff have since learned how to use their computers, but the council's coffers are £5m short of grants they had overlooked before.

Other deals with the private sector have faired better for Walsall. An arrangement with Serco has been credited with helping the council make a 64 per cent improvement in its education services. Perhaps there are one or two things Walsall can teach itself about outsourcing before it gives lessons to anyone else?®

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