On Twitter: @JamesFirth and @s_r_o_c (post feed)

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Wednesday, 31 October 2012

Britain's long term 4G future is not about max download speeds or huge data bundles

Last year I was pacing the corridors of power handing out copies of a paper I co-authored on the cost to UK businesses of slow mobile broadband (pdf) - essentially a paper outlining why the UK could not afford further delays to the roll-out of 4G data.

Watching the news last night on Everything Everywhere's (EE) 4G launch people who know me must have asked themselves why I even bothered.

A measly 500MB of data allowance on their standard tariff at £36 per month... I chew through 100MB on the average morning - that's why I use GiffGaff's unlimited data for £10 (rising to £12 next month).

Even if I did happen to live in a 4G area, EE doesn't really open up cost-effective remote working options.

Of course EE's 4G network is so patchy they can't really afford to offer more - 4G is only available in 11 cities and their 3G network (from personal experience) seems so clogged they must surely be wary that the bulk of any bundled 4G data might still end up routed via their 3G network.

But this is all very far from the point of 4G - the reason I published a paper last year and badgered any politician who'd listen as to the benefits.

The real 4G dividend comes when 4G is deployed outside the cities.

Tuesday, 30 October 2012

Google's extreme digital capitalism is just a different form of socialism

A news story has been rumbling on for a while.  France wants to find a way of taxing search engines; Germany proposed such a law back in March, Italy is reported to be considering such a law and even the US Federal Trade Commission embarked on such a project, in vain, two and half years ago.

This row is separate to the storm over multinationals not paying their fair share of taxes on local profits; although arguably the strength of feeling against Google may have been dampened if Google, as per many multinationals in general, weren't aggressively minimising local profits in an attempt to reduce their overall tax bill.

This row is about journalism and the poor, suffering, local newspapers coming to rely on Google for a large proportion of their readers.

For I doubt any publication worth their salt is worse off in terms of web traffic.

I'm no fan of Google, but the position of Google as an audience generator can't be overlooked.  I've been privy to web stats from companies who mysteriously find themselves de-indexed by Google and it's invariably catastrophic, with traffic falling to between 20 and 40 percent of previous volumes.  Those who do manage to get re-indexed recover pretty much all of their traffic.

And, for the record, I'm sympathetic to the news publishers' plight.  They pay for quality journalism, Google - I would say search engines in general but let's face it, this is an ideological battle against the Big G - reaps the profit.

So let's take this as a given, Firth's lemma, if you like.   Google brings news websites in general more traffic than they would otherwise get.  Additionally, I'll add for the sake of clarity: Google brings news websites more opportunity to present display advertising to its users.

So why the uproar when there's no evidence that the average news website is any worse off and plenty of empirical evidence to the contrary?

Friday, 26 October 2012

The scandal of the missing children: care home runaways are not tracked

When a 15-year-old schoolgirl ran away with her teacher it sparked a Europe-wide manhunt.  Yet an estimated 10,000 children go missing from care homes in the UK every year; and - this is the real scandal - no-one really knows what happens to these children.

Councils who run care homes don't collect statistics, nor does the government, so we don't actually know how bad the problem is.  These were the stark findings of a report by MPs last summer.

Bubbling under the surface in web forums often frequented by what many would dismiss as conspiracy theorists are some shocking but unsubstantiated allegations relating to systematic abuse of children in care.

Allegations bordering on surreal often focus on an elite paedophile network linked to the establishment, and a question by respected MP Tom Watson in Parliament on Wednesday about a "powerful paedophile network linked to Parliament and No 10" raised a small possibility that some of these theories may be based on fact.

Wednesday, 24 October 2012

Secrecy ultimately hurts more people when wild speculation fills the void

Yes, I'm a bit of a conspiracy nut - not that I believe the vast majority of the theories I read online (he says, trying to convince you there's an ounce of sanity between my ears).

But I'm fascinated at the point at which truth and speculation intersect.  How rumours spread outside of "trusted" channels such as official findings and reports from respected news sources.

So I find myself drawn in by pages and pages of conspiracy nonsense, perhaps kidding myself that I'm conducting informal research into online truth, rumour and influence.

As in previous furores, whenever there's a lack of official information, rumour and speculation fill the void.

And, with most people now able to connect via the internet, the massive void hanging under today's current child sex scandal is adequately filled to overflowing with rumour and speculation.

Tuesday, 23 October 2012

The Amazon Kindle "wipe" confusion: some questions for Amazon

There is much confusion over what happened in the strange case of a Norwegian woman who claims to have had her Amazon account suspended and therefore could no longer access upwards of 50 ebooks she'd paid for.

What now seems clear:

  • Amazon didn't "wipe" her kindle. Her kindle broke, her account was suspended and it was therefore not possible to recover her paid-for ebooks from Amazon's "cloud". 
  • Since the press got involved her access has been restored.
  • Amazon customer service and PR don't come out of this at all well and it leaves serious questions over the "ownership" of your "purchases".  In effect you don't own the ebook, despite in many cases paying more for an ebook than a regular book, and despite reports of Amazon using their near-monopoly on the supply of ebooks to screw publishers and authors into the ground.

Whatever the whys and wherefores of this specific case, Amazon have since issued a rather blunt statement:
"We would like to clarify our policy on this topic. Account status should not affect any customer's ability to access their library. If any customer has trouble accessing their content, he or she should contact customer service for help. Thank you for your interest in Kindle."
This leaves three questions for Amazon:

  1. Why was Linn not able to restore her access after contacting "customer service for help"?  It took the press to get involved before she saw any action.
  2. "Account status should not affect any customer's ability to access their library," but in this case it clearly did.  I note the use of the word "should not" rather that "does not".  Clearly this is a statement of intent rather than implementation.  What steps are being taken to ensure that no customers are ever affected in this way again, so they can always access their lawfully-acquired content?
  3. Given both of the above, isn't it also time to provide customers with the tools to back-up their kindle content to their computers so that purchases will always be accessible to users in any eventuality?  After all hackers seem already to have found ways to crack the content-protection mechanisms; the "bad guys" with the know-how can pirate ebooks yet the "good guys" can't back up their kindles?

@JamesFirth

Friday, 19 October 2012

Prejudice and bigotry in role models

I was talking to someone picking my brains about inspirational British scientists, engineers and inventors to help encourage children to follow in their footsteps.

We went through the usual suspects: from James Dyson back to James Watt, Stephenson and Brunel.

"How about modern tech entrepreneurs, is there a British Bill Gates?"

Well, the Economist asked this question last year.  Turns out we're just a nation of digital shopkeepers...

Of course, we're not... the Economist article missed out Britain's important contribution in developing computer games, the development of innovative platforms such as the low-cost ZX Spectrum perhaps responsible for today's generation of coders and in computer chip design such as gallant Cambridge-based RISC processor giant ARM.

But role models?  I admire Sir Clive Sinclair but he's more often derided for the C5 than he is remembered fondly for the ZX Spectrum, and Sir Alan Sugar to my mind deserves no credit for riding in Sir Clive's slipstream.

And who outside the tech world has heard of Herman Hauser and Chris Curry? Although many more will have heard of Acorn Computers having used a BBC Micro at school.

"And women?"  The conversation went.

"Well I haven't got binders of them," should have been my answer.

But then I started thinking, are British school kids so ridiculously prejudiced that they will only be inspired by stories of tech entrepreneurship by role models who are British themselves?

Why not just tell British kids about the actual Bill Gates, Steve Jobs and Larry Ellison?  Or are we so inherently prejudiced that we can't follow in the footsteps of overseas inventors?

And women in technology.  I'm sure it helps for a schoolgirl to see a successful tech entrepreneur and think, "yeah, I can do that."  But holding aloft Ada Lovelace, a pioneer in computable algorithms but dead for 160 years might actually be counter-productive.  Computers don't have cogs these days.

Might it not be better to get the message to Britain's schoolgirls that they can be inspired by any successful technologist, male or female; British, Russian, American, whatever.

The message should be that there is today no barrier to achieving; don't be put-off by the lack of stereotyped role models because there's nothing stopping you, Wendy Robinson, being inspired by Sergey Brin and Larry Page and making internet search relevant again.


@JamesFirth

Thursday, 18 October 2012

The slow march of sunlight: 240 years of Parliamentary transparency


1771: A man stands in a darkened corner of the gallery making notes by what light spilled in his direction from the few lanterns dotted around this the darker end of the chamber where the public were, in theory at least, allowed to observe debates.

The MPs below are debating Brass Crosby, the Lord Mayor of London.  The arguments are well rehearsed.   Parliament would cease to function should every word spoken appear under the microscope of public scrutiny. Members would refrain from honest debate for fear of what their constituents might conclude should a few rash words be quoted out of context, opting instead to act like showmen playing to the journals.  And how could the journalists be regulated to ensure their accounts remained unbiased?

Despite rowdy oppostion, Wilke's motion carried in the early hours.  The government was defeated not by tonight's debate but by the judiciary, who had previously refused to try Crosby for treason.  His crime? Refusing to punish another man, Miller, for publishing several accounts of proceedings in the House.

~s~r~o~c~

Nearly forty years later a pioneer in Parliamentary transparency did find himself in prison, but his crime was not related to the transcripts of debates he had published in his journal The Political Register over the previous eight years.

William Cobbett had used his journal to object to inhumane treatment of local militia by forces sworn to Hanover, and this threatened the union between the House of Hanover and Great Britain.  Convicted of treasonous libel, Cobbett spent the next two years in a notorious prison of the era.

Cobbett continued a campaign for Parliamentary reform until his death in 1835, being charged at least twice more with libel.  He stood against bribery and corruption in politics, for the removal of 'rotten' boroughs where the tiny electorate could easily be bought, and died in 1835 a Member of Parliament after finally winning an election in 1832.

~s~r~o~c~

One hundred and eighty years later many of the arguments surfacing in the decades leading up to the Great Reform Act of 1832 are still playing out today.

Of course television cameras now supplement Parliament's official written record Hansard, which still bears the name of Thomas Curson Hansard, a printer who first extended the circulation of Cobbett's debates before taking over publication entirely in 1812.

But Parliament is a body operating independently of Government and daylight has been slow to find its way into the many ministries and quangos of Whitehall and beyond.

Finland introduced transparency legislation in 1951. US citizens got Freedom of Information in 1966.  France formalised a constitutional right to access public documents in the seventies and Australia introduced legislation in the early eighties.

Citizens of the United Kingdom had to wait till the onset of the third millennium, and even then its powers didn't come into effect until 2005.

~s~r~o~c~

British citizens exercising their democratic right to request information face a myriad of problems.  Delays and outright refusals under one of many broad exceptions are common.

Public interest tests are highly subjective and make it relatively painless for officials to hide embarrassing detail with very few consequences.

Should a refusal be overturned on appeal the Government may well appeal to a higher authority, delaying publication of said embarrassing detail for a couple of years or longer, by which time the news agenda and perhaps the embarrassed official has moved on.

MPs and ministers are quick to brief, strictly off the record, of course, how damaging too much transparency can be.  How costly freedom of information is.  What little benefit comes from allowing the unwashed hordes to pore over every meeting minute and other minutiae of officialdom.


~s~r~o~c~


Many of the arguments against transparency are at least two hundred and fifty years old and, if not disproved, now widely disputed.

Yet local councils are preventing live video transcripts of official proceedings, lobbyists responding to formal consultations can request not to have their responses published, commercial confidence is a barrier to those wishing to investigate whether government departments get value for money when e.g. deploying 'superfast' broadband in rural areas, and revealing the names of MPs landlords is prejudicial to their safety.

(But, inconveniently, also prejudicial to anyone trying to investigate whether MPs might be letting the houses they own out to each other in order to inflate their expenses claims.)

Transparency is a balance between the public's right to know and the government's right not to have to justify the decisions it makes on our behalf.


@JamesFirth

Thursday, 11 October 2012

Assange: if there was a conspiracy, the conspirators have already achieved their aims

I haven't written much about Assange because, well there's already a few years' harvests worth of wheat and chaff out there...

I'll assume regular readers of this blog (yes, it still surprises me too!) are pretty clued up on the established facts and general arguments.

One thing continues to puzzle me.  Whatever you say about the strengths or weaknesses of the Swedish legal system, I've seen not one solid piece of evidence supporting the theory that Sweden would be a stepping stone of choice towards extradition to the US.

If there was a conspiracy then I find it hard to believe the Top Secret Plan started life with one of its aims as "get Assange to Sweden."

Swedish law lecturer Mark Klamberg outlines three reasons why not on his blog.

Of these, the third reason is most compelling.  Sweden does not extradite military personnel, spies or political prisoners.

UK legal commentators have, when referring to other cases, been quick to point out there are few legal obstacles preventing either British citizens or foreign nationals from being whisked west across the Atlantic to face trial in the US.

Surely Britain would have ranked higher up the conspirators' wish list.

It's worth noting that the conspirators (if any) could not have known Assange would have been 'caught' in the UK, so any direct comparison between Sweden-US and UK-US extradition is somewhat moot.  What is relevant is that Sweden is simply a bad place to try and extradite someone for alleged spying.

All this doesn't mean there isn't a conspiracy.

Let's say the US simply wanted to damage Assange and his organisation's reputation.  Well then they've succeed.

With legal commentators and campaign groups becoming entrenched in their position on Assange, lobbing increasingly tenuous blogs and accusations to and fro.

With Assange sat somewhat impotent in the Ecuadorian embassy.

With the public's suspicions alerted to questions over the way Wikileaks is run, with Julian Assange himself alleged to have exhibited some interesting behaviour - perhaps due to spending so much time on the back foot - in his dealings with journalists; and with journalists getting quite tired of the former darling of the transparency world Wikileaks.

If there was a conspiracy, the aim wouldn't be to get Assange to Sweden...  It would have been to discredit Assange.

Fifty years ago a sex scandal might have been the tarnish of choice; but not now, surely?

Well, yes.  Because it backed Assange into a corner, exposing his paranoia and willingness to sacrifice his principles in order to survive.

It wouldn't surprise me if the rumours of a sealed Grand Jury indictment and likely extradition weren't invented by the conspirators to add to the pressure on Assange.

And these conspirators must have laughed their heads off the moment Julian Assange entered the sanctuary of the Ecuadorian embassy.  A few discrete phone calls pointing out Ecuador's questionable record on press freedom to a few journalists.  More damage done.

"A dead man can't leak stuff"... well neither can a discredited alleged sex offender holed up in an embassy, driven to distraction avoiding US extradition proceedings that might never materialise.

@JamesFirth

Tuesday, 9 October 2012

What's the difference between a sick joke and a criminal offence?

When a pie factory exploded in Huddersfield my Twitter timeline, not normally awash with sick humour, caught one particular joke:
"Explosion in Pi Factory, 3.1415927 Dead"
The problem here is that someone was actually killed.  Not only that, but my brother used to work for the butcher who owned the factory, although he didn't know the dead man or the six injured.

Someone died, the joke was sick. So should those who repeated it on social media have been charged under Section 127 of the Communications Act for sending "a message or other matter" which is "grossly offensive or of an indecent, obscene or menacing character"?

Thankfully, to best of my knowledge, the law didn’t see fit to interfere – we can’t go locking up mathematicians with a penchant for paronomasia, clever little buggers!

But yesterday Matthew Woods was sentenced under this law to 3 months in a young offenders' institution for – let’s face it - far worse 'jokes' posted on Facebook in relation to April Jones.

It's not clear at this stage whether the jokes were posted on an appeal or memorial page dedicated to the missing girl, or on his own timeline.

What is clear from multiple reports is that the bulk - if not all - of these offensive 'jokes' were lifted from Sickipedia, a website dedicated to sick jokes.

If the jokes were simply posted on Woods' own timeline it raises the possibility that the people who uploaded the material to Sickipedia in the first place are also guilty of the same offence as, given this was a high profile UK story, it's highly likely that UK users uploaded the original jokes.

A post on Facebook is a limited public disclosure aimed at friends; a post on a public website is aimed at a wider audience - so there are clear grounds for equal treatment.

Just one case and we're already in a legal minefield.

Legal equality is of critical importance.  We can't just pick and choose who we want to prosecute based on whether the suspect "looks like a wrong 'un" or we risk giving the people who make such decisions power to act in a discriminatory manner or work towards political aims.

And to have equality we must have an objective test on whether material is or is not "grossly offensive".  Any joke about a death could be seen as "grossly offensive" to his or her family.  Does that therefore mean the Darwin Awards are now illegal in the UK?

I really do not intend to be flippant in this question on such a sensitive but important subject.

The death of a child is of course a circumstance bringing unimaginable heartbreak but that doesn't mean we should subvert the law so that it is applied differently in high profile cases and that doesn't mean we shouldn't question the wider implications of having such laws.

Looking at recent cases we know criminal charges are likely if you post highly distasteful comments about police murders, that a criminal conviction is possible for disrespectful comments about dead soldiers in a post critical of the role of the UK's armed forces overseas and sick 'jokes' about a child murderer can get you locked up.

To be absolutely clear I am not condoning such behaviour and there is no easy answer to such questions for law makers.

We can't ignore the fact that Matthew Woods' home was besieged by around 50 people after posting the material, indicating the public mood for action.  Similarly there is a report today that a court in Huddersfield is currently under siege by nationalists after it failed to deliver a custodial sentence to Azhar Ahmed for his Facebook comments about dead UK soldiers.
Read more on the difficulties:
1. The free speech thorn is there to stop us living in our cosy little bubbles
2. Freedom of speech: 'freedom from', 'freedom to' and protection of the individual
It's now nine years since Parliament enacted a law that gives some state control over what can and cannot be posted online; we have already embarked on a journey that results in jail time for significant transgressions.

And indeed UK public opinion is most likely in favour of "doing something" to prevent these "vile" abuses of free speech - since public opinion tends to form around black and white positions without considering the subtleties e.g. of enforcing such a law given the vast amount of grey separating black and white.

We're part way down a very slippery slope and in the absence of a change in the law the best we can hope for to prevent the UK's online speech laws affecting democracy is for:
  • prosecutors to establish a clear set of objective rules on how the existing law will be applied; and,
  • that the law is applied uniformly, regardless of the offender (a 19-year-old unemployed man or a high profile comedian) and regardless of the medium (ie a public comment on Facebook is analogous to one on a website such as Sickipedia)

@JamesFirth

Monday, 8 October 2012

Forget crowd funding, how about we go one stage further and invent a stock market?

Ask a technology start-up in London how they're thinking about raising investment cash.  Angel investors probably feature highly.  And at least half will probably mention crowd funding.

The problem with the former is that there's only a limited number of wealthy individuals prepared to risk hundreds of thousands if not millions in a start up.  And risk they do as, according to a recent Wall Street Journal article, three out of four start-ups fail.

And this leads to government pandering via tax policy to ensure the wealthy people needed to fund growth don't leave the country.

But we are the 99.9%! A thousand pounds' investment from a thousand people is as good as a million from a single high net worth individual.

And, for many businesses, crowd funding offers a solution.

Say you want to make a funky new bracelet-cum-intergalactic-communicator. You've already invented the technology, have a prototype and a business plan, but you need £1m to finalise the design and set up production.

If you can convince 12,500 people to effectively pre-order at a price of £80 you achieve three things simultaneously.

You create a tried and tested market for your product (your investors are also your early buyers, buyers who are prepared to stump up hard cash), your raise the cash needed to launch; plus, you distribute the risk of failure over many (ordinary) people at an amount they can afford to lose.

Crowd Funding has limited appeal

But crowd funding doesn't suit every venture.  Few tech start-ups have a tangible first product that's attractively priced to convince enough funders to pre-order at risk.  Funders still need to be convinced of the integrity of the business and the plausibility of the business plan.  What if development costs double in the first year, are we all left with nothing or all tapped-up for a further £80?

And who owns the company?  In many circumstances the crowd is left with very little more than one shiny thing and their name on a roll call of founding members; and as for the latter... Well you can get your name in the International Start Registry for far less.

As in a conventional funding arrangement, the funders take all the financial risk.  But when a crowd-funded company becomes successful, the founders not the funders end up owning the whole company.

Now wouldn't it be better if there was a way to offer shares to the crowd funders...

But there is a system to manage multiple investments from many people that does guarantee investors a share in any future success; but it just so happens that many crowd funding platforms specifically outlaw offering shares to funders, possibly to work around legislation designed to protect investors.

Why do companies float only after they've grown?

Only we don't today see stock markets used much for growth in the raw sense (i.e. seeing a company grow from 10 employees to 500).

The stock market has been corrupted into a place where wealthy investors make their mega-fortunes after companies have grown.  Google's floatation valued the company $23 billion.  Facebook's at $104 billion.

Pluck a few companies at random off the FTSE 100 - are these innovative companies that will help the UK grow out of recession?  British Telecom, Barclays, British American Tobacco, G4S, ITV, National Grid...

Around the time of the millennium I worked for Motorola during the so-called dot-com bubble burst.  Executives pressured departments to continue to hit unrealistic growth targets for the following five years.  Why? Because that's what the market wanted.

But Motorola was a large company - over a hundred thousand employees when I joined, if I recall correctly.    Yet it had investors wanting revenue growth; month on month, quarter-on-quarter, year-on-year.

Despite the tech bubble collapsing.

Any fool could see the growth market was tough.  South east Asian rivals like Samsung and LG, strategic mergers like Ericsson and Sony.  Plummeting revenue expectations from operators from cash cows like data and value added services (i.e. crappy WAP services to tell you e.g. the weather).

Shouldn't the company be focussing on consolidating, retaining customers and delivering on its customer commitments rather than fanciful growth?

I actually asked that question to the UK general manager.  I was given a pretty angry response about me being too young to understand what investors wanted and should stick to my job as a technologist - a job I would be increasingly lucky to keep if I continued to question the corporate wisdom flowing down from on high.

Over ten years later and I look back on what became of my old employer and can't help but believe I understood the market far better than the majority of the corporate execs.

But they can be forgiven, for they had the wrong kind of investor!

Investors want growth

So why is it we're re-inventing the wheel with crowd funding?  Why are we not instead reconfiguring the existing mechanisms - the stock markets - to make them attractive places for small growing companies to raise money to grow?

This seems to be such an obvious solution, but it would require a culture shift in regulation and investment banking.

Firstly everyone - investors, the regulators and the public need to accept that three in four companies will fail.  This isn't as bad as it sounds, as the one in four that are successful can and do make huge returns for investors - enough to cover the failures.

The stock market seems an ideal place to spread the risk over these companies.

Regulation needs to be geared around managing - not eliminating - risk.  And in many respects it is; well as far as entry criteria for "junior" markets such as London's Alternative Investment Market are concerned.

In fact the AIM has been criticised because of this 'casino' element.

But risk is inherent in all investment and it's so blindingly obvious I can't believe the hype around crowd funding has been allowed to grow for so long without anyone realising what these growing tech companies actually need is a stock market.

If crowd funding works as a concept, surely you can find some way of convincing the very same people - maybe offering similar incentives - to invest not in having their name on a meaningless list of founders but in having actual shares in the company.  Shares they can sell if the company makes it to the big time.

But the fact so few software and technology companies look to markets to raise capital is noteworthy.  Are the markets not well suited? Are the listing, transaction and nominated advisor fees disproportionately high?

Is public confidence so low and barriers for institutional investors so high that the stock markets don't offer technology start-ups a realistic prospect of success?  Is it still seen as too complex for the 99.9% to open a brokerage account and buy shares?

But surely it's worth fixing the markets rather than inventing replacement wheels that aren't quite round and don't quite fit the vehicle.


@JamesFirth

Wednesday, 3 October 2012

West Coast franchise fiasco exposes a flawed government infrastructure process: my personal experience

I'm still covered by commercial non-disclosure agreements preventing me being too specific in this post.

The government has caved in and said it will re-open the West Coast Main Line franchising process due to "significant technical flaws".

I've been involved as a consultant on two large government civil infrastructure contracts similar in nature to rail franchises and today's announcement doesn't surprise me in the least.

The touchpaper was lit back in August when Virgin announced it would ask for a Judicial Review of the decision.

Judicial Review is a process that can be applied to most decisions by public bodies, forcing the body to justify its decision to a court and thereby ensuring fairness and acting as a safeguard against corruption and abuse of power.

I was advising bid teams on aspects of IT used to track budgetary performance over the lifetime of such contracts.

My client pulled together an impressive team to produce each bid for the half-billion-pound-plus contracts to manage large chunks of civil infrastructure.

This itself is noteworthy, an average of twelve people including consultants far more expensive than me over months was a price worth paying for a chance to win this lucrative work; the cost of this and other failed bids would be amortised over the lifetime of each successful project - essentially we the taxpayers end up footing the full cost of bidding one way or another.

Is this cost a necessary part of ensuring good overall value, or is it a costly charade?

When I learned we lost the first bid I was surprised.  The bid was strong and the feedback we received seemed to mark us down in areas I felt we were strongest.  I floated the idea of a challenge to another member of the bid team.

Judicial Review was the elephant in the room

Over the following year I did more work for my client which included some direct liaison with the government agency.  Over that time it became quite clear that everyone on both sides knew the bid process was flawed.

I'm going to be very clear here: I do not believe the process was corrupt; or even that the process was leading to disastrous results.

But it wasn't - from what I learned - fair; and it wasn't necessarily leading to the best results for taxpayers or for users of this particular civil infrastructure.

The problem I saw was that the process was idealised.

The process attempted to assess in detail how good the contractor would be over the lifetime of the process whilst at the same time limiting the opportunity for the contractor to profit too much at taxpayer's expense.

Both of these sound sensible aims, right?

Except that the government wants the best of all worlds.  Delegation and good value with minimal risk and no bad headlines from private companies raking millions from taxpayers for shareholders.

And this lead to a highly subjective process that was very hard to judge, accurately; and easy to spin by companies experienced at winning this kind of work.

The end results:

1.) The government agency is left to conduct a series of highly subjective assessments. Everyone concerned seemed to accept the end outcome was effectively a simple divvying of projects between a small group of experienced bidders based roughly on whose turn it is next and who's stepped out of line much recently?

2.) New entrants find it hard if not impossible to get a toehold in this market.  If they put forward an honest price it might look like profiteering alongside the experienced players who know how to turn profit to overhead and hide overhead as cost.  This in addition to the natural barrier of having no track record and none of the smooth words used to appease the assessor as to the company's competence in microscopic detail on every aspect of the contract.

Many people involved in the process seemed aware that few, if any, of these contract awards would survive Judicial Review.

This was the elephant in the room, but since there was a closed pool of bidders competing for lucrative work on a 5-7 year life cycle it was clear to me that those involved in the bidding were under no illusions: they would find it very hard to win any further contracts should they dare to launch a legal challenge.

They believed this because they hired for their bid teams consultants with OBEs and CBEs, former civil servants who used to run the very process they were involved in, and these consultants set out the unofficial rules of bid club.

Ramifications

The BBC notes:
"... the implications of the decision to scrap the deal went much further than just the West Coast Main Line.
There were about 15 rail franchises due to be decided before the next general election and the whole franchising process could now be thrown into doubt"
I'd add that this goes way beyond the rail franchises (with their equally subjective tests of "will this company give good customer service, run enough carriages with enough seats - over many years; will they go bust during the contract, etc...)

If more failed bidders start to challenge the processes involved in awarding these contracts the government will have a pretty tough few years behind the scenes and potentially in the courts keeping the trains running, the water flowing and the traffic moving.

But what should emerge is hopefully a cleaner, more objective evidence-based system to award large contracts.

And by evidence I mean historical performance and widely used well established metrics, rather than hundreds of pages of guff and bluster created by teams of highly-paid consultants designed solely to convince assessors.

As mentioned earlier, one of the downsides of this process is that companies spend literally millions on failed bids, knowing they'll be able to claw-back the lost millions - and more - on each successful bid.  Typically the ratio was one win in every three or four lost.

The closed shop approach might not be corrupt in the traditional sense; and it might not be fatally flawed in that we don't have bridges collapsing, we have clean water and the trains run; but it isn't great - it keeps out new entrants and consequently the taxpayer, rail user, utility consumer, etc, ends up paying more for less.

@JamesFirth