Monday, 13 August 2018

Barnet Senior Salaries July 2018 - Who's Missing

Each month Barnet publish the salaries of senior staff. I screen the list down to those earning more than an MP (£77,379) as that provides a (crude) benchmark as to responsibility of the role.
In July Barnet staff received a 2% pay rise and the list of salaries is below. However what it doesn't identify are the consultants who are working as interim staff paid handsome day rates. How many there are we are not told. What it does do is make you realise that some of these staff are paid hugely compared to the private sector and one questions whether they are actually worth all this money?

Wednesday, 1 August 2018

Guest Post - Something is Brewing at Larches Community in Edgware

Larches Community are offering 12 people the opportunity to take part in Brazen Brewery!  A new beer brewing course from September 2018

London, 1st August 2018: Edgware based charity, Larches Community is launching Brazen Brewery! a craft beer brewing course for people with learning disabilities and autism. We are offering 12 people the opportunity to take part in the first course and gain valuable life skills - increased confidence, improved self-esteem, cooperation, initiative, memory retention, giving and receiving instruction, decision making, working as part of a team, having fun and learning how to make some wonderful craft beer!

“We are thrilled to offer three 12 week brewing courses in our first year, teaching people elements of the brewing process.  In years two and three we plan to offer our qualified brewers employment, working in our social enterprise brewery, based in our new building and selling craft beer within our local community.  At the heart of everything we do is Valuing People for Who They Are”
Linda Edwards MBE – CEO, Larches Community.

If you would like more information about Brazen Brewery! please call Charlie O’Sullivan on 020 8905 6333, email: or visit


Larches Community is a registered charity established in 1995 by a group of families to create opportunities for young people and adults with learning disabilities and/or autism and Asperger's syndrome.

Larches Community was created out of a deep concern for who would provide a supportive family home with a creative and stimulating life for our children beyond our lifetime. People with a learning disability represent a section of the community that enjoy few privileges, who experience social discrimination and are generally undervalued and underestimated by society. Most are socially excluded, with few opportunities to develop their individuality or to develop and contribute their skills to the community.

We offer a Learning for Life programme where learners gain independent living skills - cooking, budgeting, drama, musical theatre, craft and laughter club which help to develop the individual to tap into their undiscovered potential and soar to new heights.  

In our 23rd year, the Board has set the most ambitious and challenging strategic goals in our history. We have been granted planning permission by Barnet Council to build a three-story building with a basement on our current site. This development has afforded Larches Community the opportunity to review our offer to people with learning disabilities and autism, refocus our work and transform our services to encourage people with learning disabilities and autism to be the Best They Can Be!

Tuesday, 31 July 2018

Supplier Payments for June - Agency Costs Still Look High

The supplier payments for June have just been published. This month the big winners are Capita  who billed £10.7 million on the CSG and Re contracts. Comensura billed £1.45 million and looks like we will hit £19 million over the full financial year.

For some reason NSL who administer parking and litter enforcement billed £1.77 million in June which seems excessively high.

PA Consulting also billed another £134,917 this month, on top of the £685,804 they bill last month. One of the invoices this month was for "Supp People Recharge". I wonder what this is for but  as it was billed to adults and communities I wonder if has anything to do with the failed implementation by Capita of the Mosaic case management system that we heard about earlier this month. I shall be asking a few follow up questions I think.

I also wonder what we paid OCS Group £110,161 in June, bringing the first three months billings to £278,541 given that we already have a cleaning contractor, Churchill Contract Services.

The payments to John Graham is for the construction of the two new leisure centres and the Conway Aecom is for highways work.

The latest payments to Capita on the CSG and Re contracts bring the running total to £350.8 million. I still cannot see where the mystical savings are being generated. 

As for the Comensura contract, the current forecast for this financial year is £19.1 million, some £1.2 million higher than last year, at a time when there are supposed to be cuts to interim and agency costs so as to avoid another massive financial overspend.  We were due to have an update of the council's financial performance on 18 September (which was too late in my opinion)  but that meeting has now been postponed another three weeks till 9 October. My very real fear is that by the time we reach October everyone will be throwing their hands up in horror at the overspend but by then it will be too late to do anything about it.

As always I will continue to keep a close eye on Barnet's spending.

Thursday, 19 July 2018

A look back in time and a tribute to Barnet Bugle

Tonight Barnet are going to be making decisions on which services will be brought back in house and which will be retained by Capita. Casting my mind back to 5 years ago when decisions were being made on the Re Contract I remembered some of those meetings. Luckily for us the late, and very sadly missed, Dan Hope videoed most of the meetings. As the Barnet Bugle, he has provided us with an archive of evidence from those meetings which you can view here. Whilst Dan and I had very different political outlooks we shared one vital, common interest which was about openness and transparency in Barnet. Thanks to Dan we have a record of so many meetings. I thought I would dig out one clip when the Council was discussing the award of the Re contract and ask Richard Cornelius to consider whether ignoring the views of residents was such a good idea and to suggest that this time maybe he should listen a but harder.

One other thing to note was that 5 years ago we were given 5 minutes to speak. Thanks to austerity, democracy has also had to suffer cuts so we now only get 3 minutes. I will make sure my 3 minutes tonight count.

Wednesday, 18 July 2018

Why Capita's Contract is a rip off for Barnet - Day Four Extra Charges

Over the past few days I have been looking at the gainshare payments. Today I am looking at the extra charges Capita have billed on the Barnet contract.

The first example is a bill for £128,000 for additional electronic data storage. Barnet agreed to pay this amount, set by Capita, "because the electronic storage levels are above the amount agreed in the contract". Now I may be wrong but that sound a great deal given that it is on top of an agreed level in the contract. I would welcome input from any IT experts out there but my own bit of digging suggests that is quite a lot. While I am no fan of Amazon whatsoever I know that their Amazon Web Services (AWS) is a huge and profitable part of their business. I took a look at some of the data rates for storage, both simple data storage and a more flexible file management system and the rates are below.
Now the reason I looked at AWS rates is because that is who Capita are using to store some of Barnet's data on the OpenBarnet data portal. It may be that we are using a huge amount of data storage but remember this is in addition to the storage levels agreed in the contract. That says to me that somebody either horribly underestimated how much data we would be using in the contract or we are being ripped off. Either way we are paying through the nose for it.

The second example is a bill for £247,000 for additional call volumes above the baseline figure. Now when the contract was signed everybody talked about 'channel shift', getting people to use on-line means of contacting the council such as webforms rather than by phone as this would save money.
It may be that the council set over-ambitious targets for the decline in phone calls but then wasn't Capita responsible for implementing 'channel shift'? To help channel shift along  and to cut costs, Capita have introduced something called the 'Virtual Agent' which is the automated telephone service that I am sure many residents have experienced. Because it is automated it shouldn't cost more to run (in terms of additional call centre staff). However, my experience of the automated system is that because it is very difficult to get put through to the right department first time, you end up ringing in multiple times.  However, what I did was look at the performance stats published by Barnet comparing the most recent data with the year 2014/15. Barnet haven't published telephony data for Q4 of 2017/18 yet, so I used Q4 2016/17 to give a complete year of four consecutive quarters.

What that data tells me is that call volumes haven't risen over the last three years but the use of the Virtual Agent has as can be seen in the table below:

So how come Capita want an extra £247,000 for providing a service where call volumes are pretty static but they have reduced the calls answered by an operator by more than a third, saving a fortune in call centre staff . I simply don't see how this charge can be justified.

The third example relates to a bill for £692,759 for dilapidations to North London Business Park Building 4 (NLBP4). Originally the plan was to employ Capita who would use their offices in Coventry, Belfast, Blackburn, Darlington and so on, to house services and we could then trigger the break clause to vacate NLBP4 in late 2015. A good idea in theory but one that didn't happen. LBB staff were moved out and consolidated into Barnet House and NLBP2 but the Capita staff remain located in NLBP4. My thought was, no problem but Capita must be footing the bill. Well actually no they aren't, we are and hence we have been stung with a bill for dilapidations on NLBP4 for nearly £700k.

These three examples alone amount to more than £1 million being paid to Capita which could have been used to provide vital services such as 40+ care staff or refuse/street cleaning staff. I know where I would prefer that money to go.

The Conservatives keep saying how much outsourcing is saving but the evidence is clear that while we are making savings on the core contract, all the extras, all the gainshare, all those special projects at consultancy rates mean that by my reckoning we aren't saving anything especially when you include the millions of pounds making so many council staff redundant, the huge investment we funded in IT and the £11 million of consultants and lawyers fees to get us to a signed contract.

Tomorrow, Councillors will be looking at which services to bring back in house. Unless they have all the information about all these extras, how can they make a properly considered decision? Sadly I suspect the decision has already been made and any opposition will simply be out voted.

Monday, 16 July 2018

Why Capita's Gainshare is Such a Rip Off - Day Three - who made the saving?

For the last couple of days I have set out details of gainshare payments on the Capita contract in Barnet. There are numerous payments and I have just picked out a selection. Today I have included a couple of other examples where the issue relates to who generated the saving and was any value added to warrant a gainshare payment.

The first is an example of where it looks like all the benefit was generated by a Barnet Council officer yet Capita are still able to claim the gainshare. Up till 2012 (pre Capita) Barnet were full members of the not for profit London Housing Consortium (LHC) set up to provide "effective procurement solutions for local authorities, housing associations, schools and other public sector bodies".  In 2015 it was decided that Barnet should rejoin the LHC as an associate member; you don't get as big a share of any rebates but there is no liability for any losses nor is their a membership fee.  At the time Barnet were about to embark on two construction projects, Monkfrith School and the refurbishment of Barnet House with a value of £5.3 million. The report was submitted as a delegated powers report and signed off by the Council's Commercial Director, not a Capita employee. The rebates from LHC are small as a percentage but when you are dealing with large projects it all mounts up. As a result of our membership Barnet received a rebate from LHC of  £47,797.32. Not a fortune but that is enough to fund two care staff. Problem is Capita say they are entitled to a gainshare so we end up handing back 31% or £14,817.17.

The second is where Barnet's bank withdrew from the local authority market so there had to be a new contract. The new contract was less expensive so yes there is a saving. However the paperwork states clearly that "procurement support has been delivered from within the LBB Core Team". Now we pay for the core procurement service in the core contract payment. Nevertheless Capita say this is a gainshare so Barnet pay them £35,381.25 - enough for a social worker.

The third example is focused around the assumption that costs always rise. Barnet tendered their interpreter and translation service. Assumptions were made about volumes and by looking at historic prices. When the current bids came in lower than the historic prices, charged Capita claimed a gainshare of £22,155.91.  What I was also aware of was that there has been a lot of downward pressure on translator and interpreter pricing.  I have used translations services in the past and have been told that prices are at best static and in many cases falling, obviously depending on skill level and language. The problem with the Capita contract is that if market prices fall, Capita see the benefit in additional gainshare.

Tomorrow I will be looking at the "extras", additional charges made by Capita which in my opinion are excessive.

Sunday, 15 July 2018

Why Capita's Gainshare is Such a Rip Off - Day Two

Yesterday I blogged about three gainshare payments which you can read here. Today I have three more examples of why the idea of gainshare seems at odds with the principles of public money being used for public service.

(Just in case anyone isn't aware, "Gainshare" is a contractual mechanism by which Capita is entitled to a share in savings they make for Barnet).

Example 1 - the Double Bubble Trick
For the last four years I have been complaining about the gainshare Capita has claimed on the Interim and Agency contract with Comensura. I remain convinced that we have been ripped off to the tune of several million pounds and it formed the basis on my objection to the accounts both in 2014 and last year. Interim and agency costs have risen alarmingly since 2011/12 :

In 2016/17 we paid a gainshare on the Comensura contract of approximately £1.3 million. Last year there was a big push to reduce the number of interim and agency staff as can be seen in the chart above. So imagine my surprise when I saw a gainshare claim for £250,000 for "HR Agency Transfer". When I queried this payment I was told that "this relates to work undertaken by HR to convert agency workers onto permanent contracts thereby helping to reduce agency spend and stabilise workforce, which led to a cost reduction of circa £800k per annum".  So for the last four years Capita have claimed  millions in gainshare on agency costs as more and more agency staff are used and then they get another £250,000 gainshare for helping to convert those agency staff to back to full time employees. I have no confidence that the £800,000 saving figure is real, but as is the way with all gainshare payments, Capita put in a claim of forecast savings and then carry out a "true up" at the end of the year when the actual savings are reconciled against the initial claim. To me this just seems plain wrong, especially as part of the switch from agency to full time staff has been driven by HMRC's clampdown on IR35 tax avoidance which has forced a large number of interim staff across the public sector to change their employment status.

Example Two - Pile up the costs and still claim the saving
If you are a single person in a property you can apply for a single persons discount (SPD) of 25% on your council tax bill. Capita get a gainshare for reducing the number of people claiming this discount. What they can also claim is the costs of carrying out the work. In 2017/18 Capita submitted a gainshare bill for £174,117.77 for the SPD reduction. When I asked for the supporting evidence I was surprised.  The gainshare is calculated based on the "total payments collected above the baseline". This was £315,000. However, the cost of carrying out the work to achieve that saving was  £127,000  giving a net saving of  £188,000 on which we paid 25% gainshare, equivalent to £47,000. Now bear in mind that Capita can charge their staff out at consultancy rates as set out here to carry out this work and on which they also make a very sizeable mark up. So from an increased council tax income of £315,000, Barnet actually gets to keep just £138,000.

Examples Three/Four/Five - It's all about the budget
There are a number of gainshare claims which are all broadly similar. Capita ask what is the budget for a service.They then tender the service and where it come in below the budget, Capita take a gainshare on the difference.
One example is for Family Systemic Training. Capita asked for Barnet's budget which Barnet said was £30,000. Capita tendered the training and picked the lowest price bid at a price of £11,400. Capita said fantastic we have saved you £18,600 so with a gainshare of 31% they billed and were paid a gainshare of £5,766. So for a service that cost £11,400 we ended up paying £17,166. In my world that is plain wrong.
A similar situation arose when tendering a tree policy consultation. The council set a budget, there was a tender on the council's own etender portal, the bid came in much lower than the budget so Capita picked up 31% of the difference.
The third example of budget driven gainshare is on document storage. Previously archive boxes were stored at the archive section of the Mill Hill Depot which has now been flogged off for housing. Barnet House and NLBP are tight for space so Barnet needed to make use of an external storage provider. Capita, asked for Barnet's budget for storage and were told it was a round £500,000. Capita went to Stor-a-file who offered them a price forecast to be £359,296 over the next five years, including an initial free 6 month period. Capita said woohoo that's a saving of  £140k or £28,200 a year so we are entitled to £11,280 of that each year. In addition, they claimed (I believe incorrectly) an additional gainshare on the 6 month free period. In total the gainshare fees over the next five years is £68,370 just because an officer set the budget too high. So instead of paying £359,296 which is the actual cost the supplier charges, we are paying £427,666.
Maybe now you can understand why I compare this gainshare process to BBC Rogue Traders and why we must take back control of this money spinner from Capita.

Saturday, 14 July 2018

Why Capita's Gainshare is Such a Rip Off

I have just finished carrying out my inspection of Barnet's accounts. In particular, I have reviewed every single one of Capita and Re's 256 invoices. Some are clear in representing what we agreed in the contract but others, especially the gainshare invoices, frankly make me shudder at how anyone could have signed them off.

(Just in case anyone isn't aware, "Gainshare" is a contractual mechanism by which Capita is entitled to a share in savings they make for Barnet).

The way I described it to a friend is that it was a bit like an episode of BBC Rogue Traders - you know they haven't done anything illegal but you definitely feel your granny has been right royally ripped off. The reason why this is important right now is because next week Barnet are going to be deciding which services should be brought back in house and which should be left with Capita. Procurement and the gainshare payments arising are one of those services currently identified as being left with Capita.

Over the next few days I will give you some examples of Capita invoice with which I have concerns. The first is an initiative to move people with Learning Difficulties (LD) or  Mental Health (MH) issues from supported living or residential care homes to the private rented sector. Now clearly there is a drive to cut adult social care costs but these projects always give me some real concerns and I am aware that there have been some problems when this type of move has taken place.  Set out below is the "Project Overview and Savings Methodology" provided by Capita.

Four users were identified and moved into the private rented sector. I haven't seen any details as to how the individuals felt about this move and whether it met their needs but this is of course all about the money. Over 3 years the savings achieved are at £197,203. Some may say that is a positive move as costs have to be brought under control.

So now here comes the rub. Capita said we have saved you £197,203 we are entitled to a gainshare of £67,138 (34%) and that is what Barnet have paid. This makes me very uncomfortable because it turns vulnerable people into a commodity on which a profit can be earned. This isn't about effective procurement, it is about cutting a service to make money. It also worries me that making inroads into the adult social care budget will be difficult if Capita are going to keep taking a massive slug of the savings on every initiative.

A second example is a procurement exercise for the  Domestic Violence Unit covering:

  • Independent Domestic Violence Advisors;
  • Refuge Provision;
  • Support Service for Perpetrators and Victims of Domestic Violence;
  • Risk Assessors; and 
  • Multi Agency Risk Assessment Conference (MARAC). 

Capita carried out tender exercise and compared the new prices to what Barnet previously paid. Much of the detail is redacted but critically Capita claimed a gainshare of £47,102.80. Last year the payment was disputed because it was thought that Domestic Violence was funded from grant money and Capita can't claim gainshare on grant money. However, this year it was agreed that Barnet had funded the service and as such were stuck with the bill for £47k. Again, what seems to be missing from the process is the issue of quality and user satisfaction with vulnerable people being a source of profit for Capita.  What I also struggle with is whether this is the type of work we are already paying for from a procurement service included in the core contract; my view is that it is, but apparently not.

A third example today is on court costs. Capita receive a gainshare paid at 20% of court costs collected above a baseline.  The baseline was set at £871,000 and last year the total court costs collected was £1,242,495.  Capita therefore received a gainshare payment of (£1,242,495 less £871,000) x 20% = £74,299. The point I made is that by having a fixed sum as a baseline,  as court cost rise over time or if there is a year when there is more legal action, Barnet will end up paying a fortune in gainshare, not because Capita have recovered a higher proportion of court costs but simply because the overall bill was higher.

There will be more examples to come tomorrow.

Thursday, 12 July 2018

Capita Day Rates - Disclosure at Last

Capita have billed many millions in extra charges on the Barnet CSG contract. A significant chunk of those charges are for "Special Projects" charged at pre agreed day rates - in 2016-17 alone Special Projects cost £16.8 million as reported here

The contract stated quite clearly that these rates should be disclosed after three years but when I asked for them it came as no surprise that my request was refused. After going through the Information Commissioner's Office (ICO) and having to appeal their initial ruling they eventually upheld my appeal. Today was the deadline for Barnet to provide the information and last night it was sent to me. Set out below are the Day Rates as stated in the original contract signed in 2013 but rates may have risen since that time, especially as Capita have an indexation clause within the contract. I will leave you to judge whether you think these rates are reasonable and whether, for a number of roles, utilising a council employee might have been cheaper. It is interesting to note the day rates of the Legacy One Barnet Project Managers (Table 4) as they may be a reflection of the rates we were paying pre Capita and compare those to the day rates being charged by Capita.

Tuesday, 10 July 2018

Internal Audit Give Barnet Limited Assurance Rating - it goes from bad to worse

The forthcoming Audit Committee papers have been published and it doesn't make for pleasant reading. All the reports are all here  In particular the Internal Audit Opinion is damning with only a limited Assurance rating, something the Council has not received since 2010/11. It includes statements like:

  • There has been a weakening of the organisation’s control framework, with an increasing number of findings which demonstrate weaknesses and non-compliance in the framework of governance, risk management and control;
  • An increasing number of high risk and medium risk findings relate to the financial management practices in place at the Council, specifically those around income and expenditure monitoring;
  • Roles, responsibilities and reporting lines were not consistently defined or understood, leading to gaps in delivery and oversight;
  • Data quality and integrity issues were noted across some areas at the Council, particularly regarding Pensions, HR, Section 106 and CILs. In the absence of strong data management and analysis, governance is weakened because the ability of senior staff and Members to scrutinise performance is reduced.
  • Statutory and internal deadlines for activity were met, increasing the Council’s potential liability for additional fees and charges, and legal sanctions and reducing the extent to which its own enforcement activity can be carried out;
  • We noted issues with the performance of key employment checks including DBS and right to work checks, which could lead to fines, legal action and reputational damage;
  • Key health and safety checks relating to water safety were not carried out in line with required statutory timescales;
There are many more. I have already submitted my questions as set out below. We will, as always, 
have to wait and see if any of them actually get answered. I'm not hopeful but they are questions that must be asked.
  1. Who decided that Appendix 1 should be exempt and was it at the request of an officer, a member or Capita?
  2. You are stating Appendix 1 is exempt under paragraph 3, Part I, Schedule 12A Local Government Act 1972 which relates to financial or business affairs yet this report is about a failure of that financial or business performance. As such publishing the report may inform decisions being taken on the 19 July at the Policy and Resources committee. Please could you provide a copy of the public interest test that was undertaken before deciding that this report should be exempt?
  3. Given that all of these events outlined in the report happened on the CEO’s watch, that the CEO is a Board Director of Re and that the CEO was the S151 Officer when the Capita and Re contracts were being decided, how can the CEO ensure that he is perceived as the right person to lead the council going forward?
  4. Given that Grant Thornton were the Council’s external auditors when the CSG and Re contracts were let and that they may have reviewed the financial controls at that time or during the 2013/14 or 2014/15 audit, to what extent do you think this might be perceived as a conflict of interest and were any other accountancy companies considered to carry out this work?
  5. The report states “We also noted a decrease in the extent to which staff were willing to engage with audit requests and provide deliverables in a timely manner. This led to prolonged periods of engagement in the case of some audits and an increase in audit delivery costs.” Were there any particular departments or delivery units where this was more prevalent and what would you say was the cause of this unwillingness to engage with Internal Audit?
  6. It appears that a culture of ignoring the central guidance has developed with individual departments making their own decisions. What has caused this culture to develop and how do you think that culture can be changed?
  7. As all of the items listed in this report have been flagged before in quarterly reports, it cannot come as a great surprise to you that the council has been given a limited assurance rating. What reassurance can you provide to me that this will get better given the senior management team when these events occurred are still in place?
  8. The report states “There are significant weaknesses and noncompliance in the framework of governance, risk management and control which put the achievement of organisational objectives at risk” To what extent do you think this committee has to accept some of the blame for this situation and if so what do you think this committee could do better in the future?
  9. The governance statement appendix B mentions best practice. Best practice suggests that “the audit committee chair should not be, expressly, a member of the executive. A non-executive chair is important in order to promote the objectivity of the audit committee and to enhance its standing in the eyes of the public”. Given that Cllr Finn is, or was until recently, the Chief Whip of the Conservative Group, please provide evidence as to how you believe there is a genuine separation from the Executive, that is both clear and perceived to be clear by residents, opposition and independent members?
  10. Can you please clarify if monitoring CSG and Re for fraud is within the terms of reference of the CAFT team. What discussions have taken place with Capita’s own internal audit/investigation team about this situation, why did they not identify this fraud and to what extent should or could CAFT take responsibility for investigating CSG and Re going forward?

Saturday, 7 July 2018

Supplier payments for May - Interim & Agency staff costs rising again

Just a short post today about Barnet's supplier payments for May.

Not much in terms of payments for Capita and Re this month as they tend to be paid quarterly so just £802,823.71 for Capita and £1,094,439.69 for Re. Comensura spend is on the up, with a total of £1,925,781.97 for may alone. Although it is to early to be certain, based on the first two months of this year the forecast looks like it might get back to the 2016/17 level of £20 million.

A few of interesting invoices that I did note were as follows:

  • PA Consulting billed £685,804. The majority was for "IT & Comms". Given that I thought IT & Comms was the responsibility of  Capita, it is surprising we have such a large bill from another consultancy.
  • We paid £13,940 to Comer Business & Innovation Centre. It may not sound like much but it is for space at NLBP. This tell me there isn't enough space in Building 2 at NLBP which make me worry about what is going to happen when Barnet relocate to a much smaller building at Colindale. I would also point out that although we were supposed to have vacated Building 4 at NLBP we are still paying for Capita to rent some of that space. Surely we should have looked to see if there was any spare space in Building 4 which we are already paying for first?
  • We paid Saracens £28,398 for "rent". I am guessing this relates to the use of their stadium for the election count but it does seem rather a lot of money to pay for one night's usage.
  • Assurance spent £308.33 at Pinks florists; that's quite a lot of flowers.

Coming up in the next week will be details of the year end audit and my findings from the inspection of the accounts. Keep reading and I will keep blogging.

Tuesday, 3 July 2018

Barnet - An Organisation In Denial

This sums up my feelings after last night's Financial Performance and Contracts Committee.

I had asked 34 questions and fellow blogger Roger Tichborne had asked another three yet most of  the answers were crafted to tell us nothing about what we had asked. Mrs Angry and Mr Mustard were also there to document the goings on but I think all four bloggers found the meeting entirely unsatisfactory.

Residents need to be aware of what a financial mess Barnet Council are in but the use of words in the reports discussed last night would have created a different perspective. Overspends were "reduced" not by cutting the amount spent but by topping up from reserves. In total last year we used £21 million from reserves to balance the budget, something which clearly isn't sustainable.

One of the serious problems occurred in the Capita run joint venture Re. Last year the external auditor identified a problem with £4.6 million of guaranteed income from Re that had not been paid. At that Audit meeting the S151 Officer who is the head of finance reassured everyone that the money would be recoverable. I had my doubts when the Capita partnership manager called the amount "disputed". I asked again about this money and whether it was going to be recovered at the performance and contract management committee  on 27 February just 4 weeks before year end. The reply from the council then was “The benefit to the council of additional income under the RE contract is guaranteed and does not, therefore, impact on RE’s budget performance” Four weeks later at year end and following legal advice they decided that it wasn't recoverable and it was written off. I don't doubt that writing it off is the right thing to do but what makes me so cross is that for nine months the council was in denial that it was a problem. We were also told that another £2.6 million of contractual liability had to be paid to Re and that it been "omitted from the forecast in error" but corrected before year end. Well technically that may be true but it wasn't corrected 4 weeks before year end. This tells me two things. One: take everything Barnet says with a massive pinch of salt and Two: we have a contract with Re which seems unenforceable and is costing Barnet a fortune. Set out below shows the impact of these late amendments on the accounts.

On gainshare, the nice little earner for Capita, we were promised back in January that this would be dealt with by this committee. Six months on and it is now being passed around a number of committees like a toxic pass the parcel. In my previous blog I gave one example of the sleight of hand which is the gainshare process. However the argument from Barnet Tories has always been that we may pay Capita for gainshare but we are saving money. I have always disputed this and last night I asked a question as to whether the savings were real. The wording of the response tells you everything you need to know about this process which assesses "contractually compliant savings". What that means is that who ever wrote the contract made it very easy for Capita to claim gainshare whether or not they provided any added value to the procurement process. I have a very serious example of where Capita have claimed a gainshare which I suspect most people will find morally wrong but because the contract allowed it Capita have claimed it and Barnet have paid it.

On the rest of the CSG contract Capita are failing on a number of key performance indicators (KPIs) but it doesn't matter because it doesn't count as a contract fail. 
If I was Richard Cornelius I would be taking legal advice as to whether we had grounds to sue the lawyers who acted for Barnet when this contract was being drafted because it is so heavily weighted in Capita's favour. I did suggest back in 2013 that Barnet should get a third party lawyer to review the contracts but as always that was dismissed. It may be a decision Barnet are now regretting.

At the end of last night's meeting I felt that I had just wasted 2 hours of my life. A meeting of complacency, and casual indifference with few questions from Tory members. Mr Mustard's tweet summed it up:

Set out below is the speech I gave, sadly falling on deaf ears.

"Narrative too positive – needs to reflect true picture"
"Doesn’t highlight use of reserves. With this the £4 million overspend changes to an underlying variation of £8.5 million"
"CSG narrative not full picture  been told the true picture is much higher overspend"
"Family services net variance wrong"
"Satisfaction with website artificially inflated especially planning"
"Figures don’t match those published by NHS digital"
"Problems with payments Council owed £2 million"

Not my words but those of the Strategic Commission Board on 6 February discussing papers coming to this committee. I asked Richard Cornelius if he was aware of these issues before the year end – he said no he wasn’t but that they should have been reported.

You as a committee can only scrutinise what you are given and if you aren’t given a clear picture you can’t make the right decisions. I do not think you got a clear picture then and I am worried you aren’t getting a clear picture now. I’ve submitted 34 questions yet many of the answers show an organisation in denial, scared to be honest. We are in a financial mess and you all need to be honest as to how it is going to be addressed.

Back in February I asked you a specific question about the Re guaranteed income and you said “The benefit to the council of additional income under the RE contract is guaranteed and does not, therefore, impact on RE’s budget performance. Performance against the guarantee will be reconciled and published as part of the annual accounts process”. Yet now we find that was wrong.

In January former Audit Committee Chair Hugh Rayner said they were referring Gainshare to this committee. I asked about this in February and you said "Both referrals to PCM committee from Audit Committee (on benefits realisation and gainshare) will be formally noted at this PCM committee, and then scheduled into the forward plan. Now you are saying that it has been pushed to Policy and Resources and will be brought to the appropriate committee in due course". This smacks of pass the parcel.

I have not one ounce of confidence in this committee and will not do so until you start answering straight questions with straight answers. Get a grip, stop spinning and start sorting out this mess.

Sunday, 1 July 2018

Are we on the brink of victory or will it be a missed opportunity - The future of Capita in Barnet

On Friday, Barnet made an admission, a big admission; an admission that Capita is not delivering for Barnet. For me that comes as no surprise. I have been concerned about the scale and complexity of this contract since 2011 when the first clear contractual details emerged.
Sadly they are leaving a number of services with Capita that are either; under-performing; costing a fortune; or where Capita add little or no value. 

Set out below are a few examples of why they are mistaken in leaving these services with Capita.

In terms of procurement, Barnet will have to pay Capita £14.3 million over the next 5 years in “Gainshare” where they get a share of any savings, yet most of the “savings” could have been secured through standard framework contracts available to all local authorities. In addition, some savings are calculated against a budget. Imaging walking into a shop to buy a new vacuum cleaner. The shop keeper says "what's your budget" and you say "£200". The shopkeeper offers you a vacuum cleaner priced at £100. "There you go", says the shopkeeper "that will be £133".  But it only cost £100. "Ah yes", says the shopkeeper "but your budget was £200. I saved you £100 so I'm entitled to a third of the saving plus the cost of the cleaner". I know that sounds nonsensical but I have an almost identical example of this sharp practice from last year's Capita invoices but sadly the sums involved were significantly greater.

This department has had significant problems. In terms of "transactional services" I am not sure what they mean precisely but if you look at the last audit report accounts payable, run by Capita received only limited assurance (which is poor) with problems in
  • "Potential Duplicate payments (high risk) – Control design"
  • "BACs Reconciliation (high risk) – Control operating effectiveness"
  • "Policies, Procedures and Process notes (medium risk) – Control design"
Revs & Bens:
Barnet have been charged an additional £521,000  in the last two years for the “extra caseload” in Revenue & Benefits. That’s on top of the core fee we already pay. What you also need to recall was that back in 2012 the in-house Revs & Bens team were rated the second highest performing in London as rated by the DWP.

This area has had on going problems and it has been recognised that the Capita Integra system has significant problems. Prior to Capita, the council had invested in SAP a sophisticated system that integrates many different functions within one system and is used by some of the very largest organisations - expensive but good.

Last year we were charged an extra £189,823 for printing - that is on top of the core fee.

HR Payroll:
There have been lost of errors with the payroll. In 2016/17 Capita had to repay £187,630 in service credits (a sort of fine) specifically for failings in payroll accuracy.

Pensions Administration:
There have been repeated problems with Pensions administration which culminated last year in Barnet being fined by the Pensions Regulator for the failings in pension administration. The Pensions Board have raised serious concerns about Pensions Administration.

Customer Service:
On customer service Capita charged Barnet £416,000 last year for “excess customer service volume”.  Capita set a baseline figure in the contract and anything over that we get charged extra. There is currently a plan currently to try and get these volumes down by cutting Face to Face services and to create "savings opportunities from telephony service degradation". That is something I find shocking but it shows how the tightly drawn contract with Capita forces these bizarre actions to get the extra costs down.

Planning and Planning Enforcement:
This is an area where so many residents are unhappy especially as Re not only assess planning applications but also generate income from planning advice. Enforcement has been very poor although that is now receiving close attention. When I attended the Re four year review almost every representation from members of the public were complaints about Planning or Planning enforcement.

Licensing also creates potential conflicts of interest and I saw a case recently where licensing had earned a fee to advise a license applicant but Environmental Health, another part of Re were opposing the application. As for Environmental Health and Trading Standards my view is that these are well outside the core skills of Capita. Former Barnet employees brought the skills, they do a good job so why pay a fee to Capita for no real added value.

So given all that information I am at a loss why Barnet are content to leave all these services with Capita. 

Over the next few days I will set out why taking a much more strategic view as to how the services could be restructured  would not only save money but could also deliver a better service for residents.

Tuesday, 26 June 2018

Financial Performance in Barnet - Some very serious questions

Next Monday is the first meeting of the newly restructured Financial Performance and Contracts Committee. You can view the committee papers here but I warn you they are a long read. This committee last met on 27 February, 4 weeks before year end. At that point no significant mention was made of the poor financial performance. Four months is far too long to wait for a committee dealing with such important matters. Maybe it was because Barnet or Capita were too ashamed of the results.

CSG run by Capita had a dismal performance including failing 18 contract indicators. But not to worry. The footnote makes it clear that although they had all these failures, none of them count as a contract failure so that's Capita off the hook. I absolutely despair of Barnet's ability to enforce performance on these contracts.
Capita run Re also turned in an appalling financial performance. At the committee meeting on 27 February they showed a net overspend of £285,000. By financial year end, 4 weeks later that had increased to £6.7 million. Someone somewhere was not doing their job to have such a massive change in financial performance in the last 4 weeks of the financial year. I would also draw your attention as to how they change the format between reports to make comparison a bit more confusing.

Of critical importance at this meeting is the dire financial situation and what it means for Barnet residents. This financial year Barnet has to make an additional £9.5 million of savings. That is on top of the £9.9 million of savings they have already budgeted (but may fail to achieve). What is worse is that while the reports detail the failings there is no clear indication of how these problems will be resolved. The reports also uses positive narrative and spin to make the situation less serious than it really is, a worrying approach if councillors aren't super vigilant in interpreting what they are being told. Last year Barnet had to use £21 million from reserves and balances to fund the overspend, a situation which is entirely unsustainable but I see no prospect of how they are going to close the  budget gap this year.

Set out below are questions I have submitted to the committee. As always I have low expectations of whether they will be adequately answered. I will update you after the meeting.

  1. On 27 February 4 weeks before year end this committee was made aware of an overspend after adjustments from reserves of £4.232 million. In 4 weeks that overspend almost doubled to £7.885 million. Why was there such a serious under reporting of the financial position at the last meeting?
  2. Given that this committee was not alerted to the scale of the  financial overspends at the 27 February meeting, 4 weeks before year end, and only discovered in May when the year-end accounts were being closed, how confident are you that this report provides you with an accurate picture of current financial performance?
  3. Do you think that the net draw on reserves and balances for 2017/18 of £21.148m is either acceptable or sustainable and what steps are you going to take to ensure this huge draw on reserves and balances does not occur again this year.
  4. 1.2.3 implies that the Policy and Resources committee were aware and approved of all the drawdown on reserves and balances which they were not at their meeting on 13 February, 6 weeks before year end. Do you think the wording of this section should be changed to reflect the fact that such a large shortfall was only identified after year end accounts were closed.
  5. In the report it states that the overspend was reduced following drawdown from reserves. This is entirely misleading as the overspend was not reduced. Should the report be corrected to say the overspend was offset following drawdown from reserves as that is a more accurate description of the situation.
  6. At this meeting in February most of the budget overspends were identified with one significant exception which is the Re budget. In February the Re budget outturn was forecast at £611,000 with reserve movements of £241,000. On that basis paragraph 1.2.18 entirely misrepresents the situation by saying that the budget was overspent by £3.954 million. Can you confirm that the budget was overspent by £6.7 million of which only £290,000 was identified at 27 February.
  7. Of the two overspend items in the Re budget, is the £4.5 million guaranteed income the same element that was identified by the external auditor last year and on which the Audit committee were given solid reassurances by the Director of Resources that they would be recovered?
  8. Will you be asking the Director of Resources why they gave such a reassurance last year that has failed to materialise?
  9. Please can you explain why it took from July last year until after year end before this committee were made aware that this amount was not recoverable?
  10. Please can you clarify specifically what you mean by the sum being “accounted for within the HRA budget” given that this sum is not reflected in the HRA budget outturn at Table 3?
  11. Can you clarify specifically what the legal advice said as to why the “guaranteed income” should not be included in the General Fund revenue account?
  12. If the other major Re overspend of £2.647 million was a contractual liability, why was it not recognised in the performance figures sooner so that other budgets could be adjusted before year end to reflect the liability?
  13. At 1.2.23 the report states that “net pressure” is £9.5 million. Can you confirm that this is in addition to the planned savings already forecast of  £9.932 million meaning that total savings required this year are £19.432 million?
  14. Given that we are three months into this financial year what is the latest update on the realisation of this £19.432 million of savings?
  15. How confident are you that the narrative in this report is balanced and that it provides a true picture of performance?
  16. At 1.6 in the report it states that six performance indicators were not met yet at  1.7 the report states that Cambridge Education only failed to meet one contract indicator. Does that mean that the commissioning and corporate plan indicators are not the contractual responsibility of Cambridge Education?
  17. The report identifies indicators not met but no reassurance is provided as to how they will be met in the future. How can we be sure that these indicators will have been met when they are next reviewed?
  18. At 1.8 no mention is made of the massive financial fraud that took place last year and which it appears was able to take place as a result of failing in the internal financial controls which are the responsibility of CSG. Can you tell me why this was not included in the report?
  19. The report states that “a review of internal financial controls was undertaken and improvement implemented”. Is this the Grant Thornton Project Rose study, and if so when were these improvements implemented and will the report either be made public or circulated to members of this committee in private session/ “blue papers”.
  20. The report notes that a gainshare working group was set up to review the application and reporting of procurement gainshare. Please can you provide me with more details as follows: what are their terms of reference; who attends the working group; how many times have they met so far; do they publish minutes; what is the timescale for producing a defined output; do Capita attend these meetings; will you be taking public evidence; and will the findings be made public?
  21. How confident are you that the gainshare savings stated are real and specifically as a result of Capita expertise or could they have been achieved using standard framework contracts available to local authorities?
  22. When I checked on the 23 May 2018, the contracts register for 2018/19 was on line and showed  that 112 contracts had expired before the start of the 2018/19 financial year. On 23 June 2018 the data set had been removed from the Barnet Open data portal. What is going on, it the contract register being maintained up to date, how many contracts are currently being used that have expired?
  23. For 2017/18 I understood that the in-year Council Tax and NNDR collection rate were guaranteed at 98.0%. On that basis why is the in-year council tax collection rate shown as only 96.02%  and only 96.89%  for NNDR and will CSG be making up the shortfall?
  24. There are a large number of KPI’s not being met or performance is worsening yet the report does not appear to identify what steps are being taken to ensure they situation improves. How can we have any confidence that these matters are being adequately addressed and that this time next year the situation will have improved?
  25. Do you think it would be helpful to inform committee members that the caseload charges over and above the core fee for 2017/18 were £190,953 and that CSG customer service volume excess charges were £247,000?
  26. Given that the council has now introduced monthly financial reporting can you include in the terms of reference that the quarterly financial reports must reflect a rolling quarter’s data i.e. the three months figures immediately prior to the committee meeting as a way on ensuring you get the most timely and accurate information.
  27. When the report says the CFO’s report will give a “broad look” at financial performance it creates ambiguity and risks failing to provide you with important detailed information.  Given the content of the report are listed do you agree that the term “broad look” should be deleted and include the words “and any other information the committee deems important for the monitoring of financial performance”?
  28. Do you think it would be advisable to add in the following phase: “The report must be provided in a consistent format which not only allows immediate transparency but facilitates the easy identification of trends in performance over a period of time”?
  29. Will this report include details of the Budget Recovery Plan, progress on non-essential discretionary spend controls and any SPIRs that have been frozen?
  30. Will the report give details of the Capita contract negotiations – even if they are provided in private session/within confidential “blue” papers?
  31. Given that staffing and agency costs are a major source of budget overspends surely this committee should receive details of  staffing, incl. headcount, FTE, agency and sickness absence as these are financial performance issues not policy issues?
  32. For the avoidance of doubt, who is the Chief Finance Officer as there is no such post in the LBB senior management structure; are they a Capita employee, the Head of Finance or the Director of Resources/S151 Officer.
  33. Will the S151 Officer attend these meetings?
  34. Why are we waiting until September to get a report on agency spend when it represents such a major cost to the council given that we will be half way through the financial year at that stage and have less opportunity to act on the findings before year end?

Monday, 25 June 2018

Barnet Food Waste Collections – a dirty business - A joint blog by Mr Mustard & Mr Reasonable


"The London Environment Strategy and the policies and proposals on waste and recycling have been developed following an unprecedented process of evidence gathering, analysis, stakeholder consultation and dialogue. Barnet did not respond during the public consultation on the issue of food waste collection, which was included in the waste policies and proposals.  The waste policies represent a trajectory that is the best environmental and economic solution for the city and at the borough level. Londoners too expect and deserve a consistency of service provision across the city. The evidence points to the impacts that food waste collection has on driving higher rates of recycling across the board I am concerned about the impact on recycling performance from Barnet’s decision to stop separate household food collections. I do possess, through the GLA Act, the backstop power to direct authorities, where I consider it necessary for the purposes of implementing the municipal waste provisions of the London Environment Strategy.  Moreover, waste authorities have a duty under that Act to undertake their waste responsibilities in such a way as to be in general conformity with the strategy. However, the use of my power of direction is clearly an option of last resort, once all other avenues have been explored and exhausted.

On the 19th of June, I wrote to the Leader of Barnet Council expressing my deep concern at their decision and requesting that it is put on hold. This will enable my officers to now start the process required of us under the GLA Act.   See also answer to Mayor’s Question 2018/1583".

As is the way in Barnet, nothing is ever quite as it seems. On 5 June, just four weeks after the local elections, Barnet Conservatives voted to scrap the separate brown bin food waste collections on the basis that it would save £300,000 a year. A minor concession was suggested by Cllr Peter Zinkin that officers should identify how those residents who wish to continue to recycle their food waste could do so but with the rider that it should be at no extra cost to the council.

Both Mr M & Mr R thought this was a poor and illogical decision and decided to investigate further.
With follow up questions to the Director of Street Scene, the basis of the £300,000 saving was identified as follows:

“There are 12 front line blue bin and food collection rounds. Each of these round has one loader dedicated to collecting food waste, and two loaders to collect recycling. Stopping food collections will mean that 12 loaders will not be need for this purpose. The mid point cost of a loader including on costs for 2018/19 is £26,906. As such the savings on 12 loaders was calculated to be £322,870. The increase in disposal costs for food waste being transfer into the brown bin was £22,300.  We are not going to make staff  redundant those loaders who are no longer collecting food waste will instead be used as a pool of staff to fill in for staff on leave etc. rather than them being replaced by agency staff. This will reduce the recycling and waste agency spend”.

The key figure here is the increased disposal cost of food waste incineration which is quoted as £22,300. Now one thing Barnet Council fail to grasp is that Barnet Bloggers double check everything.

We had discussions with: 
  • the company that currently carries out the anaerobic digestion of Barnet’s food waste;
  • three other anaerobic digestion companies in North and East London;
  • London Energy (the company that runs the waste incinerator); and
  • the North London Waste Authority (NLWA) who manage all waste disposal for seven North London Boroughs including Barnet;

and a different  picture emerged.

According to many sources, food sent to anaerobic digestion has a much lower cost compared to being sent for incineration. NWLA confirmed what is termed “gate fees”, the charge for disposing of waste as follows: Waste sent for incineration £89.47 per tonne, food waste sent for anaerobic digestion £31.39 per tonne, a difference of £58.08 per tonne.

Barnet currently sends 5,000 tonnes of food waste annually to anaerobic digestion, so the increased cost of sending food waste for incineration is not £22,300 but in fact £290,400. On that basis removing brown bin collections will not save £300,000 per annum, it will instead save £32,470. What is worse is that as the borough grows and more food waste is incinerated, that modest saving could be eroded to a point where there is no saving at all.

So coming back to Cllr Zinkin’s offer, it is possible to recycle everyone’s food waste at a very modest cost compared to what officers are proposing, just £32,470 or around 23p per household per year. We think it’s worth it.

Mr Mustard & Mr Reasonable

Saturday, 16 June 2018

ICO Judgement - Barnet Must Release Capita Day Rates

Since the start of the Capita contract I have been concerned about the cost of "special projects" which are billed as an extra on top of the contract price agreed with Capita. In particular, these projects are charged at an agreed consultancy day rate, listed in the contract but redacted from public view. This has concerned me given the enormous size of the special projects bill. In 2016/17 special projects cost Barnet residents £16.8 million - that's on top of the core contract fee of £29.48 million they already receive.

The contract stated that the day rates would be commercially sensitive for three years so last year I duly asked for a copy so that I could see exactly how much we are being charged for each project and to assess whether we are getting value for money. While some of these projects need very specialist expertise, some could be done by salaried staff at a much lower cost as a council officer confirmed to me at a council meeting.

With Barnet having refused to provide these day rates and refusing an internal review, I took my complaint to the Information Commissioner's Office (ICO). After some prolonged deliberation they initially came back saying that Capita had stated that disclosure would undermine their ability to compete in the market place. Barnet Council also objected saying that disclosure would undermine their ability to secure other consultancy at competitive rates. I argued that if the day rates were higher than the marketplace then we should know and it might encourage Barnet to renegotiate them with Capita. If they were low it would help to drive down rates from other consultancy contracts. I made it clear to the ICO that Barnet was under severe financial pressures and keeping the details of such a large cost secret was not appropriate especially as both Capita and Barnet had signed a contract saying the day rates would be released after three years,  a contract to which residents may not be a signatory but are definitely a stakeholder.

After another prolonged period I heard last Friday that the ICO had ruled in my favour and required Barnet to publish the day rates. They have now published the full judgement on the ICO website. You can read it in full here. I wait to see if Barnet appeal the decision or publish the information.

Thursday, 14 June 2018

Financial failure - It looks like Capita run Re was a major problem

Reading the Barnet Council draft accounts I was curious to understand where the overspend in 2017/18 occurred. There was a lot of talk about the growing demands for family services and adult social care and sure enough some of the overspend was down to that. But what jumped off the page was the biggest single overspend of £3.95 million. Guess where? The Capita run Re (Regional Enterprise) contract. What I can't understand is that on a contract that is supposed to guarantee financial performance it ended up costing us nearly £4 million extra.

I have consistently said at Council meetings that there is no financial transparency on the Re contract and I keep being told not to worry.  Indeed on 27 February 2018, I raised the issued of transparency and Re's performance at the Performance & Contract Management Committee.

At that meeting the report showed that Re was overspent by £285,000 and that with a top up from reserves that brought it down to £44,000 overspend. This was apparently down to legal costs which are contractual liabilities payable by Barnet as you can see in the note below the table. Just to be clear, this was 4 weeks before year end.

So four weeks later the overspend has jumped from £44,000 to £3,954,000. I will be asking why this overspend has occurred but my concern is that it may be linked to the disputed invoice of £4.599 million identified at last year's audit.
This was due to a shortfall in guaranteed income promised by Re. At the Audit committee meeting last year I was reassured by the Director of Resources that this sum would be recoverable but I also noted that the Capita Partnership Director described it as a "disputed" amount. I blogged about it here and expressed my concern that little or none of it would be recoverable. That looks to have come true and the debt has been written off. I may be wrong but given the size of the sum and the fact that it occurred after quarter 3 results, this appears to be the most logical conclusion.

We are now at a tipping point. The CSG contract is under-performing with the Council considering bringing part of the finance function back in house; the Re contract predicated on guaranteed income appears to unenforceable. There are other matters which will come to light by the next audit meeting, which I cannot disclose at this time but which will have serious repercussion for the entire Capita contract.

Barnet must recognise the reputational and financial damage that these Capita contracts are inflicting and do the right thing. End the contracts with Capita.

Tuesday, 12 June 2018

Incompetence, Naivety or Worse - Financial Disaster Looms in Barnet

I have spent the last eight years trying to get Barnet Council to act in a more financially responsible manner. Last night we saw just what a policy of constant Council Tax freezes and poor management has done for Barnet finances. I blogged about this last week which set out my concerns and the questions I had submitted to the Policy & Resources Committee. Last night I got answers, although not to the questions I had asked. That is the Barnet way and something I have come to expect.
You can read the answers here but to be honest they tell you very little.  In summary:
  • They didn't find out about the budget shortfall until May, after the election when they were closing the final accounts - although Cllr Cornelius' throw away line that "Purdah was unusually strict" seems to undermine that answer.
  • Even though Barnet forecast these problems 6 years ago in the graph of doom they do not accept that constant council tax freezes have turned it into a reality.
  • They will now hold another meeting in July to decide what they are going to do to try and sort out this mess and to consider an option to bring strategic finance back in house.
  • They are thinking about potentially introducing a freeze on recruitment - something they should be doing today.
  • Actively monitoring payroll on a monthly basis is "challenging"
  • They will be reviewing all capital projects but they can't say which ones.
  • They will have to think about different strategies to address the increasing demand for adult social care.
  • They are going to start public consultation in July on the radical changes to the council needed to balance the budget.
  • Barnet will seek to recover the costs of up to £500,000 from Capita for the the investigation into financial reporting being undertaken by Grant Thornton.
  • And even though they have already paid Grant Thornton £138,600 on this review of financial reporting they haven't yet agreed the workplan or the objectives of the study - something I simply do not believe.
One of the biggest problems is the failure to put up council tax since 2010.  I have been suggesting modest rises since 2010 but I also came across a video of a Budget Overview & Scrutiny meeting back in September 2012. It illustrates how back in 2012 Cllr Dan Thomas was already considering an increase but was somehow persuaded to introduce a freeze instead. If Cllr Thomas had stuck to his guns then we wouldn't be in such a mess now. (Credit must go to the late great Barnet Bugle, Dan Hope, who recorded so many council meetings and who we all miss very much.)

 I have set out below the speech I gave to the committee, Labour councillors listened and I was pleased that they proposed an additional recommendation to consider bringing strategic finance back in house, something which will be considered at the new July meeting.

This is a financial mess and nothing in this report shows me how you are going to get out of it. We need to make massive savings quickly but all I see is inertia. From where I am sitting Barnet looks to be on the same trajectory as Northamptonshire County Council. Decimated services and mass redundancies. Rather than spend my 3 minutes going through the reason as to how you have got us in this mess I thought it would be more constructive to give you my views on how you can try to address the problem.

Put a ban on all new recruitment without CEO or 151 officer approval.  It mentions it in the report as a possible option but it needs to happen straightaway. Force HR to come up with a clear plan of how they are going to cut agency costs to 2010/11 levels (£9m). Review the flash figures for payroll within three days of month end and challenge any unbudgeted spending immediately.

Take a leaf out of Northamptonshire’s restructuring playbook for financial control and implement an independent procurement panel to review all expenditure over an agreed limit of say £10,000 including all Capita special projects. You also need to get a much stronger grip on capital spending . If you can cut capital projects to balance the books then maybe they shouldn’t have been approved in the first place.

Renegotiate the Capita and Re contracts with the first target being the gainshare arrangement which appears to be a licence to print money, £23 million on procurement alone. The financial function isn’t delivering and right now you need a clear joined up financial perspective with timely and accurate reporting. The logical solution to get that control is to bring it back in house as quickly as possible.

The Barnet Group has a large duplicate management structure including CEO, Finance Director right down to a duplicate FOI department. Five separate boards 20 different board directors. Barnet homes management costs are £21.1 million yet operational costs are half that. Re-integrating Barnet Group within the council structure could rationalise the management and duplicated admin function taking out a significant chunk of those costs as well as providing a more integrated and efficient service for users.

You duplicate many roles by having commissioning officers on 6 figure salaries and then pay Capita, Re, Cambridge Education etc for senior management to implement services. This needs a radical overhaul which I suspect will mean bringing more services back in house.

This isn’t about political dogma it’s about plain speaking  common sense, something which has been absent for a long time in Barnet.

Notes:  Council tax freeze impact
Blog in 2012 
Blog in 2013
Blog in 2014
Blog in 2017 and chart from that blog below

Pledgebank promise to review monthly spending from 2011.

"I will pledge to give up 4 hours of my time every month to scrutinise and challenge all invoices over £10,000 to help the Council reduce unnecessary spending so long as five other people will make a similar time commitment to sit on the panel and that Barnet Council will genuinely participate in the process and listen to the advice and opinions given." 
 Read about it here