Barnet Supplier Payments - is spending out of control?

The supplier payments for July are out this morning and yet again Barnet Council's Implementation Partner have been well rewarded. They have billed £276,454.77 this month and there seems no sign of the spending on this contract slowing down. For a contract that was originally budgeted to cost 'circa' £2 million and could end up costing close to £6 million, I am constantly surprised at the relaxed approach the council take to this contract.

Please read this blog on Monday as there will be some very interesting details about this contract.

I also note that the new parking contractor NSL has billed £588,195.32 this month. I hope that this represents a saving on what the previous in house team cost. Perhaps the Council would care to enlighten us?

My question is who is monitoring all this spending other than the Bloggers?

Who runs Barnet Council? A question for Barnet leader Richard Cornelius from the Barnet bloggers.

Dear Councillor Cornelius,

We wrote to you last week in regard to the announcement by Pam Wharfe, Barnet Council’s ‘interim’ Director of Environment, Planning and Regeneration, that a decision has been made to abandon the One Barnet Strategic Partnership proposals for the outsourcing of  £275 million worth of our local services in favour of a ‘Joint Venture’.

You have since contradicted her statement, saying:

“No decision has been made. No case for a jv has been made beyond the suggestion that there might be such as case. The decisions will be made by elected members in due course.”

In a subsequent message to staff Ms Wharfe has informed staff that:

“...the project Board recommended to Corporate Directors Group that this be formally advanced in discussion with bidders and indeed is currently our preferred option.”

Neither the DRS project board nor the Corporate Directors Group includes any elected members of the council. Membership of the DRS project board, we understand, is restricted to a small number of senior council officers and two consultants from Agilisys/iMPOWER, the company working as ‘implementation partner’ to One Barnet, at an average cost to local tax payers of £250,000 per month.

It would appear that Barnet Council is preparing to commit the financial security of this borough to a new model of outsourcing – one that its own consultants’ advice identified as more risky and costly than the one originally chosen, and that this decision has been made by senior officers before any consideration or approval by the elected members of the council.

Ms Wharfe’s own comments about the new Joint Venture seem to suggest that senior management are not at all concerned by the increased risk of failure that this new commitment will entail, or the increased responsibilities for the authority that this option would involve, as a result of guaranteeing more favourable terms for the successful bidder at the conclusion of the dialogue process. 

As residents, however, we are concerned: and we believe that you should be too.

We would ask you and your colleagues to consider the real possibility that in the event of the new Joint Venture failing, the council will still be left with the duty to provide the affected services, whilst the successful bidder may simply walk away with no obligation.

We believe that Councillors have clearly not been fully informed as to the details of the Joint Venture, and that the scale of risk that the One Barnet programme presents is simply not fully understood by members. It seems that the need for members to be fully informed of developments and involved in the formation of policy at all stages of the dialogue process has been deliberately overlooked.

Perhaps as well as a decision to pursue a new model of outsourcing, the council is committing itself to a new form of local government, in which the democratic process is set aside for a bureaucratic dictatorship, entirely controlled by the senior management team. 

If Barnet is indeed determined to bypass the democratic process, and to give the role of policy and decision making to senior officers, rather than to the political leadership of the Conservative group and the Cabinet, we would suggest this makes the role of the elected members completely redundant, although of course it may well offer a new opportunity for cost cutting exercises in the withdrawal of members’ allowances. 

Failing that, may we ask you to assert your authority as leader of the council, recognise that the outsourcing programme has been totally discredited, and instruct your own officers to follow a course of action which is the result of proper consultation and policy formation rather than one shaped by the motivations of their own agenda.

Yours sincerely

Derek Dishman

John Dix

Vicki Morris

Theresa Musgrove

Roger Tichborne

Community Spirit is alive and well in Friern Barnet

This afternoon has yet again shown me why Barnet is such a great place to live. A community that cares and stands together is a tremendous asset that should be treasured and supported. 

Outside Friern Barnet Library this afternoon, the community were out in force. They show that in spite of what Barnet Council has done to devalue the community by closing the library, they are continuing to provide a friendly environment for the community to come together. You would have to pay consultants hundreds of thousands of pound to come up with a community cohesion strategy that the Save Friern Barnet Library group are delivering free of charge. 

Barnet Council should embrace this group and identify how they can work together. Instead they are just rude to them.This group deserves the support of every member of the community and they definitely have mine! Keep it up.

One Barnet - Credibility Exhausted

This afternoon Barnet Council’s Interim Director, Pam Wharf, issued a statement which highlights the fact that councillors have absolutely no control over what happens at the Council. Ms Wharfe neatly states that the officers have made a decision to proceed with a Joint Venture and that at the end of the process they will present the Cabinet with a fait accompli. Accept the bidder and a joint venture or reject the lot. This means that councillors will have no option but accept the JV as it is inextricably linked to the final bid.

Ms Wharfe says that the option of a joint venture has been considered for the last two years. That is true but in every report for the last two year it has been ruled out as not the best option. 

 I wonder if the sustained pressure from One Barnet opponents has made them realise that they will lose control when they enter into a contract with the chosen bidder. Well this is not the solution.

As I have said repeatedly, whilst a JV will give Barnet a degree of control, if also shifts decision making back onto Barnet. So say for example, that the JV is underperforming, the bidder may say to Barnet, “Look we can’t deliver what you wanted, it’s unrealistic. We either need to cut the spec or put up charges to the public”. What do Barnet do? If it was a straight contract/client relationship Barnet could say, “Tough shit it’s in the contract just do it and any loss is down to you”. However, in a JV the relationship changes totally. Any loss incurred by the JV will be shared by Barnet in whatever proportion has been previously agreed. It will demand a much higher degree of management input than under a straight contract and that will inevitably lead to higher costs for Barnet.

Ms Wharfe talks about the possibility of the JV becoming insolvent and the back up of a parent company guarantee. My experience of parent company guarantees is that firms are reluctant to give them without very carefully written caveats and exclusions. All I can say is that if it ever reaches a situation where Barnet try to enforce a parent company guarantee, the lawyers will earn a fortune. In reality it is highly unlikely that the situation will arise because the partner will put immense pressure on the Council to change the basis of the contract so that it stays solvent, as insolvency would result in the cessation of services which are critical to residents.

What I want to know is what has the council’s implementation partner been doing for the last two years and why wasn’t this flagged much earlier. Nothing has changed over the last two years. It has always been known that a straight contract would reduce control but that a JV would increase risk.  

This whole process has cock-up written all over it. It lacks credibility and it smacks of desperation. Just pull the plug in this frightful mess and get the senior management refocused on running the day to day workings of the council properly.

Openness and transparency Mr Pickles? - Not in Barnet

 Today Eric Pickles announced legislation to open up Town  Halls to bloggers and armchair auditors. Well Eric let's hope it gives Barnet Council a kick up the a**e because frankly they need it.

Having asked for information which is available at the touch of a button and it not being supplied I complained and was told that they would need 20 day to conduct an internal review. This afternoon I have been told that 20 dfays is not enough and they need more time . Well Barnet I can tell you whose laptop the information is on and in 15 seconds it could be printed off. Why are you making me wait 2 months to hand it over? Because you hate people asking awkward questions, because you think bloggers don't deserve to be told anything or because if you can make people wait you will.

Fellow Barnet Blogger Vicki Morris had an article today on the Guardian's website about disengagement with communities. Barnet are experts at disengagement and stalling information which is readily available for months is just one of the many and well used tactics in their disengagement repertoire.

One Barnet Joint Venture - "There is a risk that the focus on commercial goals and development of new business can be at the cost of service delivery".

Someone kindly reminded me of a report published back in September 2010 when Barnet Council asked their expensive consultants to look at what would be the best structure for the One Barnet (FutureShape as it was still called then) project. You can read the report here. This is what they said about Joint Ventures which, on Friday, became the chosen option for Barnet:

Private Sector Joint Venture:

Price: Whilst capable of delivering a low price this would be a costly option to implement ‐ the joint
venture procurement being more complex than a straightforward partnering arrangement. Joint
ventures are best suited to situations where there is significant potential and appetite to develop
third party business.

Flexibility & risk: Where third party business is a more secondary goal it may be possible to build
many of the benefits that a JV can provide, such as gain sharing and a reasonable degree of flexibility,
into a more conventional partnership contract. It is likely to provide a good degree of flexibility due
to the control the Council could retain.

Performance: Whilst performance can be high in joint ventures there is a risk that the focus on
commercial goals and development of new business can be at the cost of service delivery.
Citizens & stakeholders: JVs have the potential to enshrine old operating assumptions, which can
limit the scope for transformation and therefore more radical change is less likely.

Pace: Due to the complexity in developing the arrangement this option is likely to take a relatively long time to implement.

Here is the Scoring Matrix they included in the report:

Note that Joint Venture scores lower than Strategic partnership or Incremental Partnership and only just ahead of a management buyout or consulting led solution.

It is also interesting to note that the outsourcing programme is now running 14 months behind schedule and has gone more than £1 million over budget on the consultancy costs.

The One Barnet programme is dead and the sooner Councillors accept it and start running the day to day services of the council cost effectively and efficiently the better for every single resident.

The New One Barnet Joint Venture: a Joint Statement by the Barnet Bloggers

Dear Councillor Cornelius,

At the end of last week, an email was sent by Pam Wharfe, Interim Director of Environment, Planning and Regeneration to employees of Barnet Council in which it was casually revealed that one of the two One Barnet outsourcing projects, the outsourcing of £275 million worth of council services, is now to be redesigned as a ‘joint venture’ in a new company comprising the bidder and the local authority.

This remarkable development raises several hugely important questions.

In the email, Ms Wharfe makes the rather disingenuous statement that the new organisation provides " ... an effective basis on which the Council can benefit from these opportunities and the same time it gives the Council greater rights of transparency and control ..."

The loss of democratic accountability to the community in the provision of services that would result from the outsourcing of the One Barnet programme is an issue we and other critics have raised repeatedly, yet is an accusation the council has continually rejected.

Whilst we are pleased to see that the authority has now accepted that our concerns are valid, we fail to understand how the creation of a new commercial venture will improve the ability of the council to retain proper controls and transparency in regard to the services outsourced in this way.

The new arrangement also raises the real risk of conflicts of interest regarding the management of the new venture and those who will be involved in the decision making processes of the organisation. Bearing in mind the failure of the council to mitigate the potential risks posed by any senior officers with links to private companies involved in the bidding process, what safeguards will be in place in relation to the membership of the new board?

Most significantly, perhaps, the new venture would appear to move the burden of significant risk from the private sector partner to the taxpayers who will be expected to fund the new company, whilst any profits that may ensue will not return to residents, but will be shared with the commercial partner. If the venture fails, residents will bear the cost of failure, and the need to re establish all in house services – if possible.

In short, the joint venture might fairly be described as nothing less than the outsourcing of profit, and a desperate, last minute agreement to carry the full risk of catastrophic failure in order to sustain, in the face of mounting disquiet from all quarters, the One Barnet outsourcing programme.

We ask why the Conservative administration has decided on this sudden course of action, at such a late stage in the dialogue process, and remind you, Mr Cornelius, that when the original case for outsourcing was made, your own consultants’ report stated:

“The costs and risks associated with a JV model are judged at this stage to be higher than for a Strategic Partnership.”

As we have so often pointed out, the undoubtedly high risks of entering into a Strategic Partnership have never been subjected to any independent assessment, or indeed any form of real scrutiny, yet here you are now, committing the financial security of our borough to what has been clearly identified as an even riskier and more costly strategy.

We might also speculate to what extent this radical departure, at this advanced stage in the dialogue, has exposed the council to risk from legal challenge by companies who have been excluded from the dialogue at an earlier point in the proceedings.

In respect of the need for democratic accountability, we would also question on what basis, and on whose authority the council has taken this decision: was the change in policy debated within the Tory group, or the Cabinet, or is this another development driven by the senior management team?

The mass privatisation of One Barnet will have a devastating impact on the daily lives of Barnet residents, as the need to make profit inevitably comes into conflict with the provision of public services, that is to say the support on which depend so many of the least advantaged and most vulnerable members of our community. All studies have demonstrated that the savings you imagine will transpire as a result of privatisation simply will not materialise, and indeed the whole enterprise is more likely to cause more cost to the local taxpayer, as well as a sharp decline in the standard of service.

By the time the full extent of the damage to the well being of this borough becomes evident, it will be too late to wrest back control of services without enormous difficulty and an intolerable burden of further cost. The senior officers who have driven the outsourcing agenda will no doubt be far away from Barnet and it is equally likely that you and your Tory colleagues will be voted out of office at the very first opportunity.

As residents of this borough we ask you to come to your senses and call an immediate halt to the One Barnet programme. Stop listening to the self serving advice of the private sector companies and the senior officers who are promoting this agenda, and take a look at the answer right in front of you – the in-house solution. With the support of the staff you employ you can work together to achieve the efficiencies you need and avoid the dangerous gamble of One Barnet: now is the time to act, before it is too late.

Yours sincerely,

Derek Dishman
John Dix
Vicki Morris
Theresa Musgrove
Roger Tichborne

One Barnet - Is it deliverable. Perhaps the bidders are starting to have doubts?

Today was a very significant milestone in the One Barnet programme  and one that may spell the end of the entire project. In an email to council staff, Pam Wharfe slipped into the note that Barnet now intend to enter into Joint Venture with the successful bidder of the massive outsourcing tender exercise.

You may say so what? Well, when the business case for outsourcing was made, the Council's consultants actually identified that "the costs and risks associated with a JV model are judged at this stage to be higher than for a Strategic Partnership". Yet today the council have committed us to higher risks and greater costs.

Experience suggests that one of the key reasons why the bidders are keen to enter into a Joint Venture is to shed risk they would experience in a standard  contractual relationship. In Ms Wharfe's email she suggests that the bidders are entering into a JV so they can share all the new commercial opportunities. Ha Ha Ha. who are you kidding! Further savings sufficient to justify their massive management fee looks increasingly difficult to achieve.

So what are the risks of the Council entering into a Joint Venture?

Barnet will have to pick up their share of losses should the outsourcing project be a disaster - and please don't say it can't go wrong. Just talk to the former Conservative leader of Somerset County Council and their problems with SouthWest One. At no stage anywhere during the outsourcing process has there been any indication that Barnet will pick up financial liabilities but suddenly that has been agreed. My question is by whom and with whose authority? I asked specific questions about financial liability to Councillor Thomas at Cabinet and I was told "all the risk is with the contractor". Well not anymore.

It is also much more complex, time consuming and expensive to set up a JV and also a lot more difficult to dissolve because the relationship is different to a straightforward contractor/client relationship. 

Suddenly Barnet Council are drawn into potential conflicts of interest for example on issues of health and  safety where traditionally the responsibility would have rested entirely with the contractor. Council directors/ Councillors who sit on the JV board may become personally liable for any financial shortcomings.

A JV will inevitably lead to compromises being made by Barnet because it is now their money at stake as well as the contractor’s.   I have seen it time and time again where the contractor says, fine if you insist on pursuing this policy you will have to fund half the losses. It changes the whole management relationship and will draw Barnet into day to day management decisions that they will no longer be able to resource. 

There may be tax or VAT issues and it will lead to concerns around the valuation of assets in the JV at the points of establishment and dissolution.

What really worries me is the glib way in which a massive financial risk has suddenly be increased for the council and with it the risk to every single council tax payer without any public debate, without any transparent financial advice and apparently in contradiction to the recommendations of the business case 18 months ago. 

Based on Pam Wharfe's statement today I think the credibility of Barnet is in tatters. Councillor Cornelius, I am not sure if you are clear what this has committed the council to but it is exceptionally risky. I cannot believe that you have made such a massive shift in position without taking independent professional advice but at the minute that's the way it looks. 

Is this the beginning of the end for One Barnet. I sincerely hope so!

  

Why Barnet Hides Behind FOI Act in the Battle for Transparency

Barnet Council have produced a chart, commonly known as the “Graph of Doom”, which purports to show how, over the next 20 years, children services and adult social care will eat up every single penny of Council Tax revenue. I don’t like the title of this chart as it is hugely pejorative and demeaning to those in receipt of care. However, this chart has been widely publicised and reproduced in the national press. It appears to underpin some of the key decisions Barnet are taking to change how the most vulnerable receive care in our borough so I thought it was only reasonable to ask a little more detail about the actual figures and assumptions used.

My first port of call was Person One at Barnet Council who prepared the chart. “Could I get a quick briefing on the figures in the chart and what assumptions were used?” Person One quickly sidestepped this request suggesting I contact Person Two at the Council. A polite email to Person Two; 

“I would like to understand the figures that were used to compile this graph. Please could you provide me with the raw data and the assumptions which underpin this graph. I am more than happy to come to NLBP if it is easier for you to explain the assumptions in person. Thanks for your assistance and I look forward to hearing from you.”

Person Two then sent a polite response saying I would have to submit my request as an FOI enquiry but that it should not take long as much of the information was ready to hand. Ok, so I submit an FOI request. Knowing how literally these requests are taken I was very clear to spell out exactly what I wanted which included the data for each year shown in the graph. I thought that it would be more accurate rather than trying to measure off the scale on the chart especially when the numbers involve hundreds of millions of pounds.

Ten days later Person Three at Barnet Council sends me a response with quite a few of the questions answered but only the data for the first year of the chart and not the other 19 years. I sent a polite response back to Person Three saying they may have simply overlooked the figures in error as they had only sent me one year of data. I helpfully pointed out that if the chart was created using Excel that simply right clicking ‘add data labels’ would give me all the information I needed.

A few days later I received an email from Person Four at Barnet Council noting that I had asked for an “Internal Review” and that this would take place in the next 20 working days. I swiftly replied to Person Four stating that all I wanted was the data I had originally asked for which I was told was at everyone’s fingertips.  One week later Person Four replied again stating that as I was not satisfied with the response it had to be treated as an internal review.

I am still waiting for the information I originally requested. Not difficult information, not time consuming to gather; data that is sat on someone’s laptop. This could have easily been resolved with a ten minute meeting at the Council offices but it has now involved four officers and a month later I still don’t have the data.

Barnet Council talks about efficiency and about saving money. It talks about transparency. However the reality is Barnet does its best to be obstructive and unhelpful.  Key policy decisions are being made on the basis of the conclusion from this chart yet we aren’t even allowed to know the figures. I will be writing further about this chart which I believe is both misleading and divisive but what I find most puzzling is why so many local and national politicians have accepted this chart without every asking to see the basis of the figures and assumptions. I am the only person who checks what they are told before making key decisions?

Leading Tory Cast Doubt on Strategy Adopted by Barnet

Sir Merrick Cockell who is both Chair of the  Local Government Association and Leader of Kensington & Chelsea Council has given a startling candid interview to the FT. "The days of assuming that private companies offer the best way of delivering public services are over", he told the Financial Times.

In the interview he says that "we have underestimated just how good some council services are that are done by local authorities, very professionally with the tightest budgets and rigorous management".

He also says that having a commission only model, like the One Barnet model, can be be very difficult because you tie yourself to a set of principles as being the right ones. He states that it is easier to adapt to change if the services are run in house - something the many opponents of One Barnet have been saying repeatedly.
In the interview he is also sceptical about experiments  like Suffolk's plans to outsource everything  - Just like Barnet.

And dear old Richard Cornelius says One Barnet Outsourcing is the only option. Potentially Barnet will be handing over more than £1 billion of services to just one company, Capita. Well Richard I suggest you go and have a chat to Sir Merrick. You might actually start to understand why so many people think One Barnet Outsourcing is just plain wrong and that actually there are very real and much more effective solutions out there if you would just listen to them. However, if instead you only listen to the consultants, who have a huge financial interest in pushing complex outsourcing solutions, you will never realise the best possible solution for Barnet.

One Barnet Outsourcing is an enormous financial gamble that will last for at least ten years and could cost every single council tax payer in Barnet a fortune if it goes wrong. Just look at SouthWestOne for an example of the problems that can arise with this type of mega-outsourcing contract.

Stop this madness now!

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