One Barnet DRS Contract - A huge over dependence on new business

Looking back at the original DRS business case as published in March 2011, the rationale for undertaking this outsourcing programme was to save costs. Two years on and we now have the bid from Capita. On the face of it it looks amazing. Capita will save the council £39.1 million over the 10 years of the contract but when you look in more detail it is clear that 86% of those savings are actually generated through increased revenues not cutting costs.

That means that Capita will have to go and sell services provided by council staff to other local authorities like Harrow, Brent and Enfield. Now this is something we have seen before especially in the SouthWest One contract. In that case the additional sales never materialised and the joint venture contract ended up in very expensive litigation. The additional workload is huge to generate this extra revenue yet the overall numbers of staff remain the same. We already know that there are not enough planning staff and that is why we have had to subcontract out the planning requirement for the Brent Cross development so how on earth are they going to deal with this huge increase in forecast workload. Staffing levels in Planning, Environmental Health, Building Control and Regeneration are all going to be cut.

It also means that Barnet residents will end  up paying more, especially for services like burials and cremations and a share of that increased charge will go back to Capita.  In the business case report that you can read here, they talk about generating additional income from "Pre-purchased graves, extended opening hours and additional cremation activities". Interestingly, the number of Cemetery and Crematorium staff are scheduled to increase by 80%. Given that it costs £8,447 for a non LBB resident to be buried in Barnet (almost double the cost of a Barnet resident), I am not sure how many additional burials they are going to generate. They may wish to generate a lot more out of borough cremations but that will mean that local residents will have to wait longer for their loved ones to be cremated unless they choose an early morning or late night slot which personally I find utterly disrespectful and unacceptable.

Set out below is a comparison of what was in the original business case and what we have been presented with now. What I want to know is how come the original business case was so wrong and just how risky is it to be dependent on so much additional growth in selling services to other local authorities. But we will never know because we are not allowed to know any of the real details and, as Lord Justice Underhill was so clear in saying, we were never consulted about this contract.

 

	DRS Business Case  28 March 2011	Capita Tender	Change since original Business Case
Cost Reductions	£19,703,105	£5,300,000	-£14.4 m
Revenue Growth	£10,303,005	£33,800,000	+£23.5m
Total  Savings	£30,006,110	£39,100,000	+£9.1m

 This looks incredibly risky but you can be guaranteed that our councillors will simply accept what they are told by council officers and the highly paid anonymous consultants from Agilisys/iMPOWER because that's all they ever do. If the Council are so confident in the figures then be open and transparent and let us have a detailed investigation, let us undertake a proper sensitivity analysis (not the feeble attempt shown in the business case report) to see what happens if these additional sales fail to materialise. Will that happen? Not in Barnet where democracy has been outsourced.