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    Angela Rayner accuses Reform of ‘politics of hatred’ as she insists Labour can win bitter Holyrood by-election

    Angela Rayner accuses Reform of ‘politics of hatred’ as she insists Labour can win bitter Holyrood by-election

    SNP complain about Reform’s ‘race-baiting’ advert on Scottish Labour leader Anas Sarwar

    SNP complain about Reform’s ‘race-baiting’ advert on Scottish Labour leader Anas Sarwar

    Two Israeli embassy staff shot dead in Washington DC, sparking massive anti-terror response

    Two Israeli embassy staff shot dead in Washington DC, sparking massive anti-terror response

    Reform chief rules out IndyRef and claims party will be second biggest in Scotland

    Reform chief rules out IndyRef and claims party will be second biggest in Scotland

    Scotland being held back by chronic shortage of housing with calls for 25,000 new builds a year

    Scotland being held back by chronic shortage of housing with calls for 25,000 new builds a year

    Keeping Royal Family in Scotland ‘can no longer be justified’, claims Patrick Harvie

    Keeping Royal Family in Scotland ‘can no longer be justified’, claims Patrick Harvie

    Reform UK defeat Labour in crunch by-election by six votes after recount

    Reform UK defeat Labour in crunch by-election by six votes after recount

    Labour Government accused of ‘closing down’ Aberdeen over oil and gas jobs and ‘betrayal’ on GB Energy

    Labour Government accused of ‘closing down’ Aberdeen over oil and gas jobs and ‘betrayal’ on GB Energy

    Donald Trump dream of bringing Open Championship back to Turnberry is about more than golf

    Donald Trump dream of bringing Open Championship back to Turnberry is about more than golf

    Nigel Farage says Reform would prefer SNP to win next Holyrood election instead of Labour

    Nigel Farage says Reform would prefer SNP to win next Holyrood election instead of Labour

    SNP and Labour race for Hamilton ‘too close to call’ as parties set for crunch by-election

    SNP and Labour race for Hamilton ‘too close to call’ as parties set for crunch by-election

    Rapist Isla Bryson ‘is a woman’ says Green by-election candidate in Clydebank

    Rapist Isla Bryson ‘is a woman’ says Green by-election candidate in Clydebank

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      What is a virtual office and why you need one in Central London – Your Company Formations Ltd

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      Inflation rises again to new 40-year high

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      Bank of England hikes interest rates to 1.25%

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      Hiring activity in Scotland slows amid steep decline in staff availability

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      Scottish retail footfall growth ‘worst in UK compared to pre-pandemic’

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      Rangers placed on Vaclav Cerny red alert over Wolfsburg ‘fire sale’ as Cyriel Dessers makes transfer stance clear

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      Mathias Kvistgaarden waves Brondby farewell but Celtic hit with transfer blow as boss throws spanner in works

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      World A-listers go nuts for Ange as Roy Keane drops the mic, McCoist breaks down barriers and Salah keeps receipts

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      How a ferry and a forklift helped Celtic boss Brendan Rodgers reach the top as SFWA Manager of the Year relives his journey

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      How Celtic fans can still land Aberdeen Scottish Cup Final tickets as second chance emerges

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      Ante Palaversa tells Aberdeen pals how they can turn Rangers atmosphere early as Jimmy Thelin message revealed

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      Kieran Tierney hit by brutal takedown as Arsenal star ‘finds his level’ at Celtic

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      Scott McTominay picks out incredible favourite Napoli nickname as swooning team-mate stunned by the golden guy

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      Alan Brazil risks wrath of Celtic fans as he fears Tottenham or Leeds United await Brendan Rodgers

      Daizen Maeda and a forgotten transfer as Celtic top boy sold to best teams on planet like a superstar signing

      Daizen Maeda and a forgotten transfer as Celtic top boy sold to best teams on planet like a superstar signing

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      Neil Critchley admits new Hearts signing is injured as he reveals plan to get him up and running for Tynecastle arrival

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      Celtic squad revealed as Brendan Rodgers looks for edge factor sorely missing to force Rangers’ hand

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        One surprising food ‘you should eat 3 times a week’ to lower heart disease risk

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        Scots react to American called Scotland and whether name is ‘cool or just dumb’

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        People urged to apply for £200 grant with deadline in days

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        School leaders want to see more fines for parents to tackle major problem

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        Second private school in Wales faces closure as pupil numbers fall

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        Strike action at Cardiff University called off

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        Angela Rayner accuses Reform of ‘politics of hatred’ as she insists Labour can win bitter Holyrood by-election

        Angela Rayner accuses Reform of ‘politics of hatred’ as she insists Labour can win bitter Holyrood by-election

        SNP complain about Reform’s ‘race-baiting’ advert on Scottish Labour leader Anas Sarwar

        SNP complain about Reform’s ‘race-baiting’ advert on Scottish Labour leader Anas Sarwar

        Two Israeli embassy staff shot dead in Washington DC, sparking massive anti-terror response

        Two Israeli embassy staff shot dead in Washington DC, sparking massive anti-terror response

        Reform chief rules out IndyRef and claims party will be second biggest in Scotland

        Reform chief rules out IndyRef and claims party will be second biggest in Scotland

        Scotland being held back by chronic shortage of housing with calls for 25,000 new builds a year

        Scotland being held back by chronic shortage of housing with calls for 25,000 new builds a year

        Keeping Royal Family in Scotland ‘can no longer be justified’, claims Patrick Harvie

        Keeping Royal Family in Scotland ‘can no longer be justified’, claims Patrick Harvie

        Reform UK defeat Labour in crunch by-election by six votes after recount

        Reform UK defeat Labour in crunch by-election by six votes after recount

        Labour Government accused of ‘closing down’ Aberdeen over oil and gas jobs and ‘betrayal’ on GB Energy

        Labour Government accused of ‘closing down’ Aberdeen over oil and gas jobs and ‘betrayal’ on GB Energy

        Donald Trump dream of bringing Open Championship back to Turnberry is about more than golf

        Donald Trump dream of bringing Open Championship back to Turnberry is about more than golf

        Nigel Farage says Reform would prefer SNP to win next Holyrood election instead of Labour

        Nigel Farage says Reform would prefer SNP to win next Holyrood election instead of Labour

        SNP and Labour race for Hamilton ‘too close to call’ as parties set for crunch by-election

        SNP and Labour race for Hamilton ‘too close to call’ as parties set for crunch by-election

        Rapist Isla Bryson ‘is a woman’ says Green by-election candidate in Clydebank

        Rapist Isla Bryson ‘is a woman’ says Green by-election candidate in Clydebank

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          What is a virtual office and why you need one in Central London – Your Company Formations Ltd

          Inflation rises again to new 40-year high

          Inflation rises again to new 40-year high

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          Bank of England hikes interest rates to 1.25%

          Hiring activity in Scotland slows amid steep decline in staff availability

          Hiring activity in Scotland slows amid steep decline in staff availability

          Scottish retail footfall growth ‘worst in UK compared to pre-pandemic’

          Scottish retail footfall growth ‘worst in UK compared to pre-pandemic’

        • Sports
          Rangers placed on Vaclav Cerny red alert over Wolfsburg ‘fire sale’ as Cyriel Dessers makes transfer stance clear

          Rangers placed on Vaclav Cerny red alert over Wolfsburg ‘fire sale’ as Cyriel Dessers makes transfer stance clear

          Mathias Kvistgaarden waves Brondby farewell but Celtic hit with transfer blow as boss throws spanner in works

          Mathias Kvistgaarden waves Brondby farewell but Celtic hit with transfer blow as boss throws spanner in works

          World A-listers go nuts for Ange as Roy Keane drops the mic, McCoist breaks down barriers and Salah keeps receipts

          World A-listers go nuts for Ange as Roy Keane drops the mic, McCoist breaks down barriers and Salah keeps receipts

          How a ferry and a forklift helped Celtic boss Brendan Rodgers reach the top as SFWA Manager of the Year relives his journey

          How a ferry and a forklift helped Celtic boss Brendan Rodgers reach the top as SFWA Manager of the Year relives his journey

          How Celtic fans can still land Aberdeen Scottish Cup Final tickets as second chance emerges

          How Celtic fans can still land Aberdeen Scottish Cup Final tickets as second chance emerges

          Ante Palaversa tells Aberdeen pals how they can turn Rangers atmosphere early as Jimmy Thelin message revealed

          Ante Palaversa tells Aberdeen pals how they can turn Rangers atmosphere early as Jimmy Thelin message revealed

          Kieran Tierney hit by brutal takedown as Arsenal star ‘finds his level’ at Celtic

          Kieran Tierney hit by brutal takedown as Arsenal star ‘finds his level’ at Celtic

          Scott McTominay picks out incredible favourite Napoli nickname as swooning team-mate stunned by the golden guy

          Scott McTominay picks out incredible favourite Napoli nickname as swooning team-mate stunned by the golden guy

          Alan Brazil risks wrath of Celtic fans as he fears Tottenham or Leeds United await Brendan Rodgers

          Alan Brazil risks wrath of Celtic fans as he fears Tottenham or Leeds United await Brendan Rodgers

          Daizen Maeda and a forgotten transfer as Celtic top boy sold to best teams on planet like a superstar signing

          Daizen Maeda and a forgotten transfer as Celtic top boy sold to best teams on planet like a superstar signing

          Neil Critchley admits new Hearts signing is injured as he reveals plan to get him up and running for Tynecastle arrival

          Neil Critchley admits new Hearts signing is injured as he reveals plan to get him up and running for Tynecastle arrival

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          Celtic squad revealed as Brendan Rodgers looks for edge factor sorely missing to force Rangers’ hand

          Trending Tags

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            Apple AirPods Pro 2 hit lowest price since Black Friday at five different retailers

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            Experts issue warning to households that have certain type of toaster

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            Amazon slashes 52% off ‘brilliant’ Samsung Tablet now only £80 in limited time deal

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            Amazon Tech Week Sale sees £100 off Apple Watch, LG Smart TV down 45% and more

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            Sky flash sale cuts TV and Netflix pack with double broadband speed to record low price

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            ‘I lost 6stone with weight loss jabs but there’s one side-effect no one tells you about’

            ‘I lost 6stone with weight loss jabs but there’s one side-effect no one tells you about’

            One surprising food ‘you should eat 3 times a week’ to lower heart disease risk

            One surprising food ‘you should eat 3 times a week’ to lower heart disease risk

            Women thought she had a sore neck – then was diagnosed with cancer

            Women thought she had a sore neck – then was diagnosed with cancer

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            ‘I lost 3stone and 5 dress sizes with weight loss jabs but there’s a big drawback’

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            Test your brain health with 30-point cognitive exercise taken by Donald Trump

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            Scots react to American called Scotland and whether name is ‘cool or just dumb’

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          four reasons why the government’s model for outsourcing is broken

          by BP Author
          January 16, 2024
          in World
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          For over a decade, the Post Office and its supplier, Fujitsu, insisted that the Horizon system used in its branches was completely “robust”. When discrepancies appeared in hundreds of branch accounts across the country, the Post Office refused to believe the system was at fault and didn’t challenge the information it got from Fujitsu. Instead, it blamed the shortfalls on sub-postmasters, made them pay the losses, and prosecuted over 700 of them.

          The multimillion-pound contract between the Post Office and Fujitsu is at the heart of the scandal. The way the contract worked meant that Fujitsu was incentivised to fix bugs quickly rather than well. The Post Office didn’t have the expertise it needed to understand what was going wrong. The Post Office’s dependence on Fujitsu also meant that it protected its relationship with them at the expense of sub-postmasters and the public.

          The problems with the Horizon contract underpin one of the most widespread miscarriages of justice in UK history. But they are also replicated across thousands of other government contracts, including for many essential services, from hip replacements on the NHS to school PE lessons.

          These problems are in fact produced by fundamental features of the UK’s outsourcing model.

          1. The systems are too complex to understand

          The Horizon system was incredibly complex. It had to process all kinds of transactions, from selling travellers cheques to managing rent payments, across tens of thousands of disparate branches, using a complicated web of communications systems.

          The problem is, by outsourcing such a complex service, the Post Office ended up without the expertise to understand how it worked and what Fujitsu was (or wasn’t) doing. The contract also limited the amount of information they could get from the system. This all meant that the Post Office lacked the understanding and information about Horizon it would have needed to challenge the story it was getting from Fujitsu.

          In its most recent statement on the inquiry into what happened at the Post Office, Fujitsu said “the inquiry has reinforced the devastating impact on postmasters’ lives and that of their families, and Fujitsu has apologised for its role in their suffering … Fujitsu is fully committed to supporting the inquiry in order to understand what happened and to learn from it.”

          2. Contracts generate perverse incentives

          If a service is complex, like Horizon was, it is impossible to specify everything in a written contract. Any buyer has to miss things out. But then how do they get a supplier to do everything they need and not just the things in the contract?

          A woman standing at a Post Office counter.
          At the heart of the Post Office scandal was a broken software system.
          Alamy

          One of the reasons Horizon had major problems was that it was impossible to say in advance how each bug in the system should be fixed. Instead, the contract just stipulated how quickly Fujitsu needed to resolve problems. Bugs either weren’t fixed properly or the fixes introduced different bugs into the system. This kind of “service level agreement” is still standard in many government contracts.

          3. The buyer is locked in

          Complex services also require a supplier to invest in things like software, equipment and training that are specific to that service. There’s an idea in economics that if a supplier needs to make these “specialised investments”, it’s very difficult to get rid of that supplier. They have a huge advantage over their competitors, because anyone else would need to make these investments all over again.




          Read more:
          Post Office scandal: why thousands of victims are yet to see justice


          This is what happened with the Horizon contract. Once Fujitsu had built the system, it couldn’t be replaced by another supplier, even when things went wrong. In the original procurement, it scored bottom on eight of the ten quality criteria, but won the contract because it said it would pay for the up-front development costs. The contract has since changed, but Fujitsu carried on and has just had its contract renewed up to 2025.

          Getting locked into complex contracts is quite common for government. In 2014 HMRC announced that it would end its £8 billion contract with Capgemini for the UK’s tax collection system. It had to assign a budget of £700 million just to pay for the cost of transferring the contract to new suppliers. Now, ten years on, Capgemini is still the supplier. Apparently unable to find an alternative, HMRC ended up extending the contract to at least 2025.

          4. Suppliers are prioritised over workers and the public

          Because it couldn’t replace them, the Post Office depended on Fujitsu. This was compounded by the fact that Horizon was also essential to the Post Office’s business. Horizon was responsible for processing all branch transactions and keeping track of all money coming in and going out.

          Losing Fujitsu would cause huge cost and disruption to an essential system. The Post Office depended on keeping Fujitsu onside during contract negotiations and making sure they were financially healthy. Predictably, they protected that relationship over sub-postmasters, who were individually expendable. This also came at the public’s expense, who got a poor service and have had to foot the bill for the Post Office’s mistake.




          Read more:
          Post Office scandal: what the lack of action tells you about Britain’s polarised politics


          Essential public services across the UK rely on a few “strategic suppliers”. Government bodies are dependent on protecting their relationships with these suppliers and are invested in their financial stability. The collapse of Carillion in 2018, at a time when it was contracted to build NHS hospitals, brought home just how bad things could be if a major supplier went under.

          How far the government would go to protect other strategic relationships remains to be seen. But as long as UK government bodies outsource complex, essential services, it’s unlikely that the Horizon fiasco will be the last public scandal with a government contract at its heart.



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