Sunday 30 September 2012

G-Cloud, GDS, HMRC and Skyscape, the company with just one director, who owns all the shares – Whitehall SNAFU

The story so far ...

The Government Digital Service (GDS) have contracted with Skyscape Cloud Services Ltd to host the new unified central government website, GOV.UK, in the cloud.

Episode 1, Insanity – are they mad? Skyscape is a £1,000 company. Isn't that a bit small for this monumental responsibility?

Whitehall's G-Cloud team say this is an example of good practice, using small and medium-sized enterprises (SMEs) instead of the ponderous and expensive big boys.

Episode 2, Mendacity – are they lying? Skyscape claims to be in alliance with five other companies whose combined turnover is £43.3 billion and who have over 100,000 staff. Isn't that a bit big for an SME?

Now read on ...

[Skyscape has subsequently changed its name to UKCloud: "London – August 1, 2016 – Skyscape Cloud Services Limited, the easy to adopt, easy to use and easy to leave assured cloud services company, has today renamed and relaunched as UKCloud Ltd (, to reinforce the company’s exclusive focus on supporting the UK public sector in the digital transformation of services".]

Episode 3, Confusion – what's going on?

Now HMRC have signed up with Skyscape as well as GDS. Phil Pavitt, HMRC's CIO (Chief Information Officer) says that the shift to cloud ...
... will save over £1 million a year in running costs and will increase reliability and security of HMRC's internal IT services.

The Skyscape contract is a major step for HMRC in moving away from traditional ways of working with large service providers. And it's a great example of how we're exploring smarter, more innovative solutions that make life simpler for us and help us provide a better deal for our customers ...
  • Will Mr Pavitt's head roll if the Skyscape contract doesn't "save over £1 million a year in running costs"?
  • Suppose Skyscape put their prices up?
  • Suppose Skyscape go bust – it's only a £1,000 company after all?
  • Suppose Skyscape's servers fall over for a fortnight like the Royal Bank of Scotland's did earlier this summer?
  • Does HMRC have good enough book-keeping systems to know if £1 million has been saved and where and why?
  • HMRC is no SME – its ASPIRE contract with Capgemini and Fujitsu is worth £8 billion over ten years. Is it worth taking the risk of using Skyscape to save one eight-thousandth eight-hundredth of the value of just one contract among many?
  • ...
We know the answer to one of those questions. The National Audit Office have told us that when HMRC asked their suppliers to be a bit more explicit what they were charging for on their invoices, the suppliers refused. HMRC pay anyway, whatever it is they're paying for.

God, but Lin Homer's got a lot of work to do.

Never mind all those questions for the moment, the point at issue is that Mr Pavitt thinks that Skyscape is a small company.

How small?

We already know that it has only £1,000 of paid up share capital. And that the company is too young to have filed any accounts yet, so we have no idea about its P&L and balance sheet. The G-Cloud team have approved Skyscape to sell its wares on HMG's Cloudstore, GDS have bought from them and so have HMRC – how did they satisfy themselves as to Skyscape's commercial health?

They may not have filed any accounts but Skyscape have filed an annual return, as at 3 May 2012, according to which:
  • The registered address is Hartham Park, Hartham, Corsham, Wilts SN13 0RP
  • The company has one director – Mr Jeremy Robin Sanders
  • And one shareholder – Mr Jeremy Robin Sanders
GDS and HMRC haven't signed up with one company so much as with one man. One man owns all the shares and is the only director of the company which hosts the central government website and hosts some of HMRC's data. One man. What's going on?

GOV.UK depends on one man. Mr Sanders. Bits of HMRC depend on one man. Mr Sanders. The G-Cloud team have approved one man to sell his wares on the Cloudstore. Mr Sanders. The UK is a big, complicated, modern state with 1,000 years of democracy behind it and government contracts affecting the entire population are signed with just one man. Mr Sanders.

While that's sinking in, en passant, note that Mr Sanders didn't always own all the shares in Skyscape. Mr Jeffery (sic) Paul Thomas used to own one share. Then on 19 April 2012 he transferred it to Mr Sanders. You won't forget that name, will you – Jeffery (sic) Paul Thomas.

The Skyscape Cloud Alliance
The following note appears on the Skyscape website ...

The Skyscape Cloud Alliance partners; QinetiQ ,VMware, Cisco, EMC, and Ark Continuity bring together an end to end cloud solution which is Skyscape. This Alliance also provides a collaborative resource which drives innovation and our technical product development programme.
What does it mean?

If it means that Skyscape is a joint venture company set up by the allies, then Skyscape has the backing of £43.3 billion of annual revenue and 100,000 staff worldwide. Which means that it's not really an SME at all.

But it doesn't say that. The five companies are called "partners". But Skyscape isn't a partnership, it's a limited company.

Presumably Skyscape haven't just put these names on their website because it looks good. Because it's handy for marketing. If they used these names without the allies' permission, they'd be sued. There must be some sort of a commercial arrangement between Skyscape, QinetiQ and the others. But what sort of arrangement?

Skyscape are not mentioned in the accounts of QinetiQ or VMware or any of the allies. The nature of this commercial arrangement is a mystery. A gentlemen's agreement of some sort, perhaps? Surely that's not enough for G-Cloud, GDS and HMRC to rely on.

ARK Continuity
ARK Continuity is the odd one out among the Skyscape allies. It's relatively tiny. According to its annual return as at 16 December 2011:
  • The registered address is Hartham Park, Hartham, Corsham, Wilts SN13 0RP, the same as Skyscape's.
  • It has a company secretary and three directors – two bankers plus Mr Jeffrey (sic) Paul Thomas, possibly the ex-shareholder of Skyscape.
  • It has two classes of 1p ordinary shares, A and B, 800 of each issued, so it has £16 of share capital, not all paid up at the date of the return.
  • Revcap Properties 25 Ltd owns all 800 A ordinaries and Mr Jeffrey (sic) Paul Thomas owns 320 of the B ordinaries.
According to the 30 April 2011 Ark Continuity annual report and accounts, the two bankers are appointed as directors to represent the interests of Revcap Properties 25 Ltd, the 75% majority shareholder, the ultimate parent company of Revcap Properties 25 Ltd is Real Estate Venture Capital Partners LLP and:
The principal activity of the company and the group is the design, construction and operation of data centres
Nearly finally, on 9 August 2012, ARK Continuity appointed Baroness Elizabeth Lydia Manningham-Buller a director. The Rt Hon The Baroness Manningham-Buller was of course, formerly, the Director General of MI5.

On their website, ARK Continuity are naturally proud of their Spring Park data centre. They're a property company. Of course they're proud.

That's Spring Park at Hartham Park, Corsham, Wilts SN13 0RP, they provide a map of how to get there and they say that:
Spring Park affords occupiers the opportunity to embrace best practice and sustainable principles in the design, construction, engineering and operation of their data centres

Spring Park is one of Europe's premier data centre locations. Strategically positioned and built on a legacy of over 50 years investment in critical national infrastructure, Spring Park comprises 14.79ha of surface land, 9.29ha of underground, access to 114MVA diverse power supply and c93,000m² of consented data centre and office development

Located one mile from the A4 and 8 miles from J17 of the M4 between Swindon and Bristol, the site is adjacent to secure MoD facilities and benefits from significant connectivity infrastructure

To see the location map click here
To watch the History of Spring Park click here
The early footage of the Romans quarrying stone at Corsham to build the new town of Bath in the green belt is fascinating but someone should tell ARK about security. The Rt Hon The Baroness Manningham-Buller, perhaps?

The MoD might prefer it if ARK Continuity didn't tell people where their secure facilities are. GDS and HMRC, too.

And let's hope to God that that's not where GOV.UK is being hosted and where HMRC have stored their records. Because otherwise, now, thanks to ARK Continuity's website, everyone will know.

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