Dear Councillors
Throughout the history of the One Barnet outsourcing programme, statements by
the leader of Barnet council, Cabinet members, Conservative councillors and the
senior management team have all maintained that as a fundamental commitment to the
NSCSO contract Capita would make a large ‘upfront’ capital investment.
The necessity of this investment by a private sector partner was given
as the reason why the authority refused even to consider an in-house option as
an alternative to privatisation of council services.
If an in-house option had been adopted, not only would many local jobs
have been saved, all efficiencies made through better management of such
functions as procurement would have been retained by the authority, as opposed
to a limited amount capped in the contractual agreement with Capita. By
ignoring this option, it is arguable that the statutory duty of the authority
to make the best use of taxpayers' money may have been breached.
We have now learnt that not only has Capita failed to make the promised
capital funding but that in August, in a complete reversal of policy, the
Leader of the Council sanctioned the payment to Capita of £16.1 million of
taxpayers’ money held in the authority’s reserves, in order to cover the cost of
the capital investment.
We believe that not only have the leadership, Conservative members and
senior management team of Barnet Council promoted the need for privatisation,
and the contract with Capita, on a totally false premise, they have continued
to mislead residents by misrepresenting the facts, and maintaining that capital
investment is to be given by the company, rather than admitting that money has
been taken from the authority's reserves and paid to Capita for this purpose.
After the Cabinet meeting of 6th December 2012 which approved the
contract with Capita, Councillor Cornelius made this claim in a statement
published on the BBC London news website
Council leader Richard Cornelius said the combination of a saving to
the taxpayer of a million pounds a month and an £8m investment in technology by
Capita made it a "very, very good deal for the Barnet taxpayer".
This misrepresentation of the truth has continued even after the
payment £16.1 million was formally authorised by the Leader of the council.
The business model approved by Cabinet on 6th December 2012 stated
clearly that this investment was to come from Capita: how can it be lawful,
therefore, that having approved the contract on this basis, we now find the
reverse is true, and that taxpayers are paying for the investment?
If there is any financial argument for such a fundamental change, why
has the authority not been open and transparent about this new agreement, and
sought approval through the appropriate procedures?
The authorisation to add £16.1 million to the capital programme in
order to pay for the capital investment was made on 5th August this year by
Councillor Richard Cornelius, in an action defined as a 'non key' decision.
http://barnet.moderngov.co.uk/ieDecisionDetails.aspx?ID=4903
http://barnet.moderngov.co.uk/ieDecisionDetails.aspx?ID=4903
According to the council's own constitution, key decisions are those
that are 'significant in financial terms or in their effect on communities
comprising two or more wards'.
Clearly the decision to remove £16.1 million from reserve funds in this
way most certainly is a key decision, and departs in the most fundamental way
from the business model approved in December.
Quite incredibly, on 6th August, the day on which the contracts were
signed, and the very next day after the leader signed off the £16.1 million to
cover the capital investment, Barnet Council issued a press release:
in which it is stated:
"Capita will also make an £8 million pound investment in
technology to improve council back office services".
What is that statement, other than a deliberate misrepresentation of an
unpalatable truth?
We note that the explanation of the NSCSO contract on the council's own
website, updated after 5th August, continues to maintain falsely that an
upfront investment will come from Capita: see here -
http://www.barnet.gov.uk/info/930354/new_support_and_customer_services_organisation_nscso/990/new_support_and_customer_services_organisation_nscso
Capita will make an upfront investment which will provide improved Information Technology and telephone support to improve council back office services.
Capita will make an upfront investment which will provide improved Information Technology and telephone support to improve council back office services.
In regard to the approval of 5th August, the constitution says:
When key decisions are to be discussed or made, notification is
published at least 28 days before. If these decisions are to be discussed with
council officers at a meeting of the Executive, this will generally be open for
the public to attend, except where personal or confidential matters are being
discussed. The Executive has to make decisions that are in line with the
Council’s overall policies and budget. If it wishes to make a decision that is
outside the budget or policy framework, this must be referred to the full
Council to decide.
Unless the change of policy, and a radical change to the terms of the
business model represented by the decision to use reserve funds for a capital
investment payment to Capita has been formally agreed through the relevant
constitutional procedures, therefore, it is reasonable to conclude that the
payment may well be unlawful, and as residents, taxpayers and citizen
journalists in Barnet we object in the strongest terms to what would appear to
be a serious breach of the regulations that are supposed to protect our best
interests, and we ask you to instigate an immediate investigation into the
issues we have raised.
Derek Dishman
John Dix
Theresa Musgrove
Roger Tichborne
John Dix
Theresa Musgrove
Roger Tichborne
(Citizen Barnet has left the borough)
First rate questions! We are all due a full, accurate and (dare I mention the word?) transparent response.
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