Reports of a ‘major blow’ to G4S following the collapse of a ‘multi-million deal to outsource services’ for Bedfordshire, Cambridgeshire and Hertfordshire police forces paint a very gloomy outlook for software and IT services (SITS) providers targeting the police sector.
However, PAC believes that this announcement simply highlights the shift in emphasis for Police IT following the election of Police and Crime Commissioners (PCCs) in November 2012, and that some major opportunities remain for SITS suppliers.
Prior to the election, large broad-scope outsourcing engagements with private partners were becoming the favoured approach for forces to tackle the savings targets set after the Comprehensive Spending Review (CSR) of 2010. This led Lincolnshire Police, facing a budget cut of £19.7m following CSR 2010, to award a ten-year, £200m support services outsourcing contract to G4S in return for savings of £28m. Several forces, including Beds+Cambs+Herts, were ‘signatory forces’ for this process, prompting discussions with G4S as to how they could achieve similar savings.
However the election of PCCs, many of whom (such as Cambridgeshire’s Sir Graham Bright) stood on a platform of increasing police numbers, meant that outsourcing agreements involving large-scale personnel transfers became less politically acceptable. For example, the proposed agreement between G4S and Beds+Cambs+Herts involved the transfer of 1,191 staff.
While talks to replicate a service for Beds+Cambs+Herts alongside the G4S/Lincolnshire Police agreement have come to an end, it is indicative that Hertford Police Chief Constable Andy Bliss stated:
“My focus remains on continuing to fight crime and deliver a great policing service, yet dealing with the challenge of making significant savings. I shall be working very closely with David Lloyd, the Police and Crime Commissioner, as we now look at all possible options to ensure that we jointly maximise the efficient use of every pound spent on policing in Hertfordshire.”
Significantly, the scope of these ‘options’ includes ongoing discussions with G4S. Therefore, it is PAC’s view that SITS engagements will remain an important means for helping police forces to achieve their cost reduction targets. Instead of transferring personnel, the focus must fall elsewhere. This means that SITS providers that can offer solutions that make smarter and more efficient use of technology platforms are well placed to succeed.
PAC expects that ‘basic’ infrastructure management agreements are likely to be one focus area. With IT outsourcing a relatively immature market for all but the largest forces, such as the Metropolitan Police of London and the Northern Ireland Police Service, this could provide some low-hanging fruit for SITS providers. It would help free-up forces staff to take on more front-line roles while avoiding the politically sensitive issue of ‘privatising’ police jobs.
Another example of the kind of proposition that PAC envisages becoming more important in the post-PCC climate is Capgemini’s ‘T-Police’ offering. Built on Oracle eBusiness and Oracle Integrated Policing technology platforms, T-Police offers a ‘Police back-office in a box’, and is already used by forces such as Cheshire and Northamptonshire.
However, with much of the savings coming through the automation of back-office processes, forces will need to tread carefully. Greater savings can be made by cutting these jobs, but at the risk of losing political capital. There is also the potential to release these officers for front-line duty which will result in reduced savings, but can help meet PCC targets such as increasing the number of officers on the beat.
Although this shift in demand does not spell disaster for SITS opportunities in the UK emergency services sector, it will slightly dampen the level of growth. PAC now expects SITS spending in the emergency services space to increase at a CAGR of 1.6% to reach £398m by 2015. This means that it will still outstrip growth in the overall UK public sector.
Post by Dominic Trott