The arrival of the community charge to pay for local government expenditure in England and Wales next April is as much a source of contentment to ICL as it is to Mrs Thatcher’s political opponents. Mrs Thatcher’s political opponents see it as the Achilles Heel of her right wing policies, ICL sees it all in […]
The arrival of the community charge to pay for local government expenditure in England and Wales next April is as much a source of contentment to ICL as it is to Mrs Thatcher’s political opponents. Mrs Thatcher’s political opponents see it as the Achilles Heel of her right wing policies, ICL sees it all in terms of gold for which it is prospecting by setting up a new business operation, Local Government Managed Services (CI No 1,161). After all, local authorities have increasingly to operate like a large businesses and prove themselves to be competitive in the privatised environment as well as continuing to cope with the management of public resources such as housing and education as part of their overall capital control. On top of all this they must be seen to be accountable as the community charge is implemented. In the face of these changes local authorities can opt for a variety of information technology solutions. They can keep an in-house arrangement, they can form a consortium with other authorities by working together and sharing resources. There may be management buyouts of computer departments, or local authorities may seek external facilities management, or they may choose a cocktail arrangement which is a mixture of all these. However, if ICL has anything to do with the decision, local authorities will go for the consortium or the external facilities management approaches. The company feels it is well positioned to provide total managed service solutions, adding that it already has a lot of application software in the field, as well as 30 years experience in local government. Consequently, it is investing UKP1m in the new, discrete business operation Local Government Management Services which will work within ICL’s existing Local Government business unit. The first offering from the management services portfolio is a managed network service called Communications with Suppliers, and its launch explains ICL’s interest in local authorities taking up the consortium approach towards resource management. Electronic data interchange For following recommendations in the 1987 report on purchasing and supply by the Audit Commission, ICL hopes to sell local authorities an electronic data interchange solution to reduce their purchasing costs. The service is a development of the Tradanet network offered by International Network Services Ltd, the joint venture set up between ICL and GE Information Services which links businesses across Europe. Basically ICL claims that Communications with Suppliers will be able to link the facilities management of local authorities, be it carried out on-site or at a remote terminal, throughout the UK. It maintains that its open system local government network covers 85% of the UK and that it can link any authority no matter where it is situated or what type of machines it has. It argues that local authorities, despite all the hype to the contrary, are not the same as businesses in that they are not in competition with each other. Therefore, using a managed network service, local authorities can get together as a consortium and bargain for lower prices from suppliers. In this way ICL claims that a local authority’s annual supply costs can be reduced by UKP50m and its annual purchasing costs by UKP200m. The fatal flaw in all this good news for local authorities is that a group of them have to opt in to the service before it becomes viable. It also presumes that the initial group that opts in consists of a geographically-cohesive bunch. As yet ICL has no contracts for the service, but says that some are under negotiation and that it is negotiating with non-ICL users as well as with some of its regular clients. In reality ICL would seem to be gambling its relative inexperience in facilities management against its high profile in the local government sector to make a go of this new business unit.