Last Night at the Mushroom Factory

Last night I attended the audit committee dealing with the MetPro report and the Annual Audit Opinion. Now most of the Council meetings I attend seem to cover up and dismiss criticism and try and obstruct questions from the public. Last night it seemed there was a shift in mood. The reports were, without a doubt, utterly shocking but for once officer and councillors seemed to be in agreement. Yes it is bloody awful (I paraphrase here). The scale of deficiencies in the council’s procurement and contract management are staggering and if this had been discovered in a private sector company heads would have rolled. A number of councillors seemed shocked at the scale of the problems. Recognition should go to Lord Palmer as chairman and Councillors Rayner, Schama, Cooke and Brodkin for their tough questioning along with the two independent committee members Richard Harbord and Debra Lewis. The chief executive and the chief financial officer seemed contrite, yes it’s bad and we must change. Yes, but why the hell did you let it happen in the first place. I don’t feel they really got to the heart of the issue and I’m not sure the problem will be resolved but at least they recognise the problem exists.

However during the meeting there was then movement from the back of the room and up pops Cllr Dan Thomas. Sadly I think he must be living in a parallel universe. It was as if the report had never been written. Yes we are going to plough on with One Barnet. This report is just what we need. Our consultants, Agilisys will sort it all out. Now this is where the difference exists. Most of the people on the audit committee have got life experience and a few (or a lot) of grey hairs. Some of them have run businesses. They get it. They understand that if your procurement and contract management systems are fundamentally failing, then the last thing you do is embark on a huge outsourcing project. But not Cllr Thomas. This is where political dogma takes over from common sense and frankly that it terrifying.

Last night I accused the Audit Committee of suffering from Mushroom Syndrome, kept in the dark and fed horse manure. I hope they get a bit tougher and stop accepting everything they are fed from the cabinet and the senior officers and start asserting their positions as the guardians of the council’s finances.

Set out below is the speech I gave to the audit committee last night.

“I have read this report several times now and I still find its contents shocking. Barnet Council is a billion pound business yet some of the most basic administrative procedures are missing and frankly that is a disgrace. Coupled with the findings in the Annual Audit opinion that provides only limited assurance on the Council’s overall internal control environment, this report into MetPro is indicative of a much more serious and deep-seated problem in the way this council is run.

I don’t want to go through the specific details of the report which I am sure you have all scrutinised in great detail. What I do want to address is what is not in this report, the underlying causes of this problem and how the council intends to move forward.

Starting with what is not in this report, I am disappointed that it has not addressed the very serious issues of data protection and safeguarding and why the council destroyed illegally recorded film taken by MetPro. Frankly I think it was short sighted of whoever drew up the terms of reference to exclude these issues from this audit. These issues will not go away and it will continue to be a running sore in the side of Barnet Council. I urge the committee to recommend that these very serious issues are investigated and addressed as quickly as possible.

Something else which is missing from this report is who is to blame. No one seems to have been held accountable and without that how can the problem be resolved. The Council employs an extensive and highly paid senior management team yet not one of them appears to have taken responsibility for this mess. The constitution states that “Substantial breaches of Financial Regulations shall be reported to the Deputy Chief Executive by the relevant Corporate Director and may be treated as disciplinary offences”. So come on then, who is going to be disciplined?

I also disappointed that this report does not acknowledge who brought about this investigation. It was the concerned residents and bloggers of Barnet who investigated this situation and who demanded this inquiry and it would have been nice to see that acknowledged in this report.

So moving on to how the council proposes to address this problem. I have read the recommendations of this report and they appear to be both ill-conceived and utterly ineffectual. Seven of the ten recommendations are basically saying do what it says in the Contract Procedure Rules. Well I hate to tell you this but that won’t stop it happening again.

When read together with the Annual Audit opinion it is clear to me that there is a flawed management culture within the council that is the root cause of the problem and a defective management structure that has allowed this to take place.

The culture of change seems to focus on unproven and high risk consultant led initiatives. The language of change is everywhere and in every department. The problem is that it has resulted in managers taking their eye off doing the day to day basics of running the council properly. We have a senior management team who include a number of highly paid consultants such as the section 151 officer who by the very nature of their contractual relationship have no long term commitment to the council. The man who is designated to be responsible for implementing so many of the recommendations, Assistant Director Commercial Assurance, is another consultant CCMPS, whose contract according to DPR 1249 ends no later than January 2012. So much for creating continuity to follow these recommendations through.

The culture of Barnet Council has to change. The focus of the management team needs to concentrate on getting the basics right. If you think MetPro is a problem just wait till the outsourcing kicks in. Those contracts are worth hundreds of millions of pounds and at the minute it is patently obvious that the management systems for monitoring and enforcing those contracts are simply not in place.

As an Audit Committee you have an opportunity, no a duty, to safeguard the financial interests of every rate payer in Barnet by demanding much tougher actions arising from this report and the Annual Audit Opinion. I also urge you to instigate a much broader review as to the way in which this council is being run and to challenge the culture and structure of the council that is exacerbating this problem. Failure to take this opportunity may well see this type of situation arise again in the future except next time the problems will be on a much greater scale. In the past I get the impression that this committee has been suffering from Mushroom Syndrome, kept in the dark and fed horse manure. I would urge you to take a much tougher line in order to avoid this happening all over again”.