Technology contracts and devolution – how local authorities can make the most of LGR

There will be many issues keeping local government decision makers awake at night in the present climate, particularly in relation to impending devolution and LGR. The list of related issues to prepare for gets longer and longer.

However, when it comes to technology and IT, devolution and LGR give local government a clear opportunity to modernise, reduce duplication and ultimately reduce costs. Further, consolidating datasets offers potential for more informed decision-making, better predictive analytics and overall, more efficient public services.

What do I need to be thinking about now to make the most of this opportunity?

Most authorities will likely have multiple technology contracts in place. As reorganisation begins to take shape, there will inevitably be some overlapping contracts for the same (or similar) services (likely with different suppliers), whereas the newly combined authority requires only one contract (and one supplier) for each element of its technology estate. Ambitious authorities will go even further by combining elements of its technology estate through unified and interoperable platforms (i.e. by combining legacy platforms relating to asset management, waste management, finance, HR, etc). 

Ahead of Vesting Day, due diligence is therefore the name of the game. Authorities will need to undertake an exercise of reviewing their contract portfolios and the services they receive. When doing so, there are consistent issues that need to be considered across all categories of services (technology or otherwise), whether the contract is to continue or terminate. 

These include:

• If continuing:
  • When does the contract expire? When will the services need to be re-procured, is there enough time and will the requirements of the new combined authority be sufficiently clear?
  • What are the contractual provisions around assignment and novation?
  • Can existing contracts be extended to cover the new combined authority’s requirements? Would the supplier be able/willing to provide that extended service? If so, are the contract change provisions clear regarding pricing implications?
  • Can any changes to the scope of services (either extending or reducing) be done compliantly under the applicable public procurement legislation?
  • Is the new authority comfortable with the allocation of risk, limits on liability and indemnity protections in place under the contract that it is taking on?
  • Have there been any issues with the services provided, are there any disputes ongoing?
  • What steps will be taken (e.g. polices adhered to, processes followed, user access permissions, contractual commitments, etc.) to ensure personal data is controlled and processed in a GDPR compliant manner?
• If intending to terminate:
  • What termination rights does the existing authority have and will terminating attract an early termination / compensation payment?
  • Is there a (TUPE) liability risk of transferring employees on a service provision change and what contractual protections are in place?
  • What is the supplier required to do on exit to support the transition to a new supplier (and is this sufficient, will it cost extra)?

What are the technology contract specific issues?

Depending on the type of service being delivered, further specific issues will need considering for technology contracts. Software licences, hosting services, SaaS agreements, IT outsourcing arrangements, etc often have their own quirks and market norms. The issues for consideration often go much wider than “contractual” and are more properly viewed as fundamental questions regarding how the new combined authority will function from Vesting Day. 

For these technology contracts, combined authorities will need to consider (for example):

• How will each authority’s datasets be migrated, combined and reconciled (i.e. de-duplicated / corrected / cleaned), whilst ensuring no data is lost and local services do not suffer?
• Which of the existing systems will be used going forwards by the new authority (e.g. CRMs, payroll, HR, training platforms, etc.) – will staff need training on new systems?
• How will technical integration of the existing systems be achieved (e.g. linking of databases, platform / software interoperability, etc.). How easily can technical interface issues between such different systems / software be resolved (at what expense and on what timeline)? Is it “just” a case of implementing APIs or are there more fundamental compatibility issues?
• What steps will be taken to ensure information security is maintained (as merging networks and systems can leave gaps / increase exposure to cyber threats)?
• What disaster recovery and business continuity arrangements will be in place for the new authority?
• Are there ‘on premise’ solutions that will need to be de-commissioned where there is a movement to cloud/SaaS?  Wil the mix of existing contracts mean the new authority (at least in the short term) has a mix of cloud and on-premise solutions?
• What opportunities are there for the new combined authority? Looking forward, the larger combined authority may wish to identify opportunities for new and more complex, unified and interoperable IT systems that may offer cost savings and enhanced service provision. 

The biggest question for the new authority will likely be one of convergence (fully integrated systems across the new authority) versus coexistence (letting existing systems run alongside one another), and, if the former, the speed at which this is achieved. Co-existence will, in the short term, be far less disruptive but misses out on the very real opportunity offered by convergence to effect change in local government by creating efficiency, reducing operational cost and enhancing cohesion.

Summary

Clearly, local authorities would be well advised to start a review of their technology contracts with suppliers sooner rather than later, even where future devolution or LGR plans are currently unknown. Knowing what you have “under the bonnet” and linking in with your IT/technology team is absolutely essential and, at the right time, will form the bedrock of conversations with those other local authorities sharing your devolution/LGR destination.  

Understanding your current IT estate and, where possible, future devolution / LGR plans for your authority will also help inform procurement decisions today and in the period pre-Vesting Day. Further, this will allow authorities to prioritise ‘business critical’ contracts and also develop a long-term strategy for how services will be provided to the successor combined authority. 

Most importantly though, LGR is an opportunity for the combining authorities to leverage their increased power to procure IT solutions that meaningfully enhance local government’s ability to provide public services, in particular, by reconciling currently fragmented systems so that they are unified and working together effectively. 

Our specialist central and local government technology team at Bevan Brittan work closely with our devolution and LGR experts, meaning we can offer unrivalled expertise in helping local authorities navigate these risks and opportunities.

If you would like to know more, please do reach out to one of our team.