Friday, 20 April 2018

Enough is Enough - Time to Sack Capita

Between the two contracts, CSG and Re, we have paid Capita £327 million. Let that sink in for a minute; £327 million to a private company from just one London Borough. Ever since the contract was proposed I have challenged how such a pervasive outsourcing programme can work in the best interests of Barnet residents.

I have always made it clear that, ideologically, I have no problem with outsourcing so long as it is being done for the right reasons. Typically this is where it involves very specialist, non core activities where technical expertise may be difficult to secure and retain in house. In Barnet's case this outsourcing programme covered so many services which were core to the running of the council and which in 2010 were rated as 4 star (good). Barnet has been an experiment in mass outsourcing and almost five years in, it appears to be a failure.

Last night's audit committee was a litany of service problems, system failures, lack of controls, under performance, a major fraud. Internal audit saying issues were a problem, Capita saying they weren't.

Councillor Khatri, the now independent councillor for Mill Hill, deselected by the Conservative group, gave a quiet and persuasive evisceration of the Capita contract. He has long been a sceptic of the Capita contract believing that it does not offer value money for residents. Cllr Khatri is no fool, with an MSc and 34 years government experience in Export Credits Guarantee Department he is a shrewd and analytical person with great experience of business.

Some people have said that this contract is too large to fail, too large to bring back in house, so we are stuck with it no matter how poorly it performs. Unsurprisingly, I have a different view.  I believe that with a properly planned programme, the service can be brought back in house efficiently and cost effectively. We have an opportunity to redesign the council to ensure that departments deliver excellent service. This will allow a large number of senior commissioning posts to be removed saving millions.

The first phase will require Finance, Pensions Administration, IT, HR and Procurement to be brought back in house. These are the key levers by which you can control the business. It provides you with the information you need to understand which parts of the business are performing well or badly. The next phase is to set up a call centre in Barnet to deal with customer enquiries and the revenue and benefits service. Staff 100 or 200 miles away working for a number of councils simply don't have the local knowledge required to quickly deal with problems.

In terms of the Re contract that is a joint venture between Barnet and Capita. It just doesn't seem to work  as was exemplified last night at the audit committee. The CEO of Barnet who is a board director of Re has failed to get Capita to agree to new KPI's to more effectively manage the Highways contract. This has been dragging on for a year and there is still no clear outcome. There is what I described as a contractual gordian knot with exceptionally complex contractual relationships between Barnet and the companies that actually deliver services. This means that contracts aren't being effectively monitored and managed. I have yet to see any real financial benefits of the Re relationship - they have failed to sell services to other councils. This is a contract that can be brought back in house very rapidly simply by dissolving the JV and transferring staff back into the council. It cuts out the middleman of Capita and the profit they extract from the arrangement.

It can be done and it should be done. It is time to part company with Capita and take control of how Barnet operates.

Wednesday, 18 April 2018

Something Very Wrong in Barnet

Back in January I wrote a series of blogs about the very serious concerns regarding the gainshare arrangements in Barnet. In particular, I wrote about an energy contract on which Capita had claimed a gainshare of £313,215 which appears to be entirely unjustified. You can read about it here but in simple terms we paid an energy supplier a premium to, in theory, save money on overcharges by having a fully managed service. As I understand the contract, we pay a premium of approximately 1.5% on our energy charges for this service. Now here is the rub. Capita say they helped to secure this contract - even though it seems to have come via the London Electricity Project, a London Councils' initiative. As a result they are claiming they made the savings on the potential overcharges and want a third of them over a three year period, all in a single upfront payment.

To me and, I think, any rational human being this seems like a false claim. As a result I lodged an objection to the accounts on the basis that this money should not have been paid to Capita. That was on the 14 July 2017. Nine months later BDO, the external auditor, has still not resolved this matter.  I get the impression that no one actually believes that Capita deserves this money but because the correct boxes have been ticked they have been paid.

Frankly this disgusts me. Services are being cut, money is incredibly tight but because Barnet signed up to a contract which no councillors read in detail, we are being stuffed. This is nothing short of a scandal.

Last week I was at last given the details of the guaranteed procurement savings that Capita have to make for the rest of the contract. These savings are net of a further payment to Capita of something called the Agreed Procurement Price Recovery which is still redacted. Between now and the end of the contract they have to make over £43.7 million of procurement savings of which they keep around £13.5 million. The problem will be whether they can make real tangible savings or whether we will get further repeats of "contract savings" like this energy deal.

Barnet Supplier Payments for February

I had prepared the supplier payments for April and passed them on to a fellow blogger but forgot to publish them here, so the full detail is set out below.

While payments to Capita and Re look relatively modest that is because of the large advance payments paid last year which you can see more clearly in the chart below:

Comensura is still receiving large sums of money and while this month that was "only" £1.15 million, to date we have paid Comensura £16 million with one month of the financial year remaining as you can see in the chart below:

I will update at the end of the month when we will have the final year end spend by supplier.

Monday, 16 April 2018

Questions to the Audit Committee

I have submitted the following questions to the forthcoming audit committee this Thursday. I hold out little hope of getting appropriate answers.

Agenda Item 7
  • At 1.3.1 the numbers do not seem to add up. Should it read 49 high priority actions (not 45)?
  • On accounts payable the report states that “Because these controls rely on data being entered correctly, they have historically not been very successful at automatically detecting duplicates”. Is the report implying that data is not being entered correctly?
  • The reports states that “CAFT have found that the high number of false duplicates identified make it uneconomical to investigate these transactions”. When did CAFT first identify the high number of false duplicates, why has this not been raised with the audit committee before this meeting given the Integra system has been in place for 4½ years, and who made the judgement that it was “uneconomic to investigate the transactions”?
  • Given that there are no detective controls, outside of the annual National Fraud Initiative (NFI) data matching exercise, to identify potential duplicate payments made and, more seriously, that the  Accounts Payable team have not been able to perform their own review of data to identify duplicate invoices submitted for payment, what is the risk that over the last 4½ years duplicate payments have been made but not investigated.
  • Why didn’t the Accounts Payable team disclose before this internal audit that they were unable to perform their own review of duplicate payments and why didn’t the Commissioning Group Finance identify this problem before now.
  • Please can you clarify the issue relating to the BACS payment run – is it that confirmation was received for the total amount being paid but not individual payments, or that there was no audit trail to evidence the preparation of the BACS report i.e. were the BACS payments correct in the first place?
  • Will ensuring all policies and procedures are uploaded to an appropriate shared drive so employees have remote access to all relevant documents ensure that staff in Sussex and Darlington actually read or familiarise themselves with the policies and procedures. What measure are in place to ensure this is more than just a box ticking exercise?
  • In the separate 19 page Internal Audit Report it highlights a high risk problem with the Cashbook Team. The sample of 25 unallocated receipts amounted to £559,000. What is the current total of all unallocated receipts?
  • Who is responsible for the Cashbook team, Capita or LBB.
  • If 19 of the 25 unallocated receipts were not investigated at all and 6 of the 25 were partially investigated but not followed up or resolved how many residents has been hassled unnecessarily or worse, have had the matter referred to a debt collection agency when the debt had been paid?
  • In the Outstanding actions section the highways actions have been deferred yet again. On point 1 why are Re taking so long to agree additional performance indicators proposed by the Council given that Re is supposed to be a JV between the Council and Capita?
  • On point 2 if the KPIs in question will only include the elements that Re can influence yet Re are the council’s agent for monitoring the LoHAC contract with Conway, how can we have any confidence that the LoHAC work will be delivered satisfactorily and that there is a rigid monitoring system in place?
  • Given that Capita have claimed and received a large gainshare payment for the “savings” on the LoHAC contract and that Re received a large payment from Barnet for advice on the LoHAC contract, surely they should accept responsibility for the delivery of that contract and the consequent KPIs.
  • On point 3, is requesting supporting information from the contractor the most appropriate way to validate performance if you already have concerns about the performance data provided by the contractor. Surely there should be a separate third party or Council validation process?
  • At Point 21 of the completed actions I note that “arrangements to streamline and make capturing and collation of DBS data more efficient will be implemented”. However, in light of the revelations identified in the recent Private Eye article where a Capita Director allegedly stated that “in the vast majority of cases the level of check could not be evidenced and in many cases was not correct”  and that such failures “will result in the DBS considering suspension or cancellation of our registration to use the DBS service”, please can you provide some reassurance that streamlining the capturing and collation of DBS data does not render the checks invalid?
Agenda item 8
  • The CAFT report highlights an on-going financial fraud investigation case. While I understand that you do not wish to discuss the specifics of this case, I am sufficiently alarmed by shortcomings under agenda item 7  that I believe it is important that any investigation into how the system failures permitted this fraud to take place must be addressed immediately to ensure that no further fraud can take place. Please can you confirm that the systemic faults that allowed this fraud have been identified and addressed already, that you will investigate how the systemic failure were allowed to exist in the first place and why Capita, the Commissioning Finance Team or internal audit did not identify the systemic risk sooner?
Agenda item 9
  • In light of the financial fraud investigation, do you think the additional allocation of 455 days for  blue badge investigations is appropriate and that instead the additional time should be allocated to identifying and stopping staff and financial fraud?
Agenda item 11
  • I note the audit plan recognises the additional powers and duties of the external auditor and, in particular, the point that these powers allow electors to raise questions about the accounts and consider objections. What it fails to address is the time taken to address these questions and objections. As such do you think it is acceptable that it has taken the Council 9 months to provide information to the external auditor in relation to an objection to the accounts and that the objection has still not been resolved.
  • I note that the external audit will bring in specialist support to review Use of Resources. Can you provide details of the particular areas they will be examining?

Thursday, 1 March 2018

Barnet Supplier Payments - Interim & Agency Spend Escalates

The supplier payments for January have been published. For the first month in a long time Capita are not in the top ten of payments. However, the interim and agency supplier Comensura billed more than £1.9 million.

In terms of Capita, they received a more modest £708,603 on both the CSG and Re contracts. However, we are still using up the advance payments balance as can be seen from the chart below.

In terms of the interim and agency bill there have been repeated  statements that they are getting these costs under control. Barnet spends a huge amount on agency staff and in addition Capita claims a very large amount under the gainshare clause. Last year we spend just under £20 million . This year, with two months still to run in the financial year, Barnet have already spent £14.8 million and it looks like they will hit just under £18 million by year end. That is still a vast amount of money to be spending on temporary staff and on which we pay 4 separate amounts of commission.

As always, I will  continue to monitor spending at Barnet.

Thursday, 22 February 2018

Is Barnet Capable of Managing its Outsourced Contracts?

Next Tuesday is the Performance and Contract Management Committee meeting. Reading the 119 page Performance Monitoring Report it makes my heart sink at how poorly some of the contracts are being monitored and managed and how performance management seems to be a box ticking exercise. You can read the report here at agenda item 7.

I have submitted a series of questions on a number of agenda items set out below. It will be interesting to see the responses.

  1. Can you explain why the Commissioning Group budget has risen from £20.2 m in 2016/17 to £35 million in 2017/18?
  2. On page 42 risk AC028 identifies the lack of a fully functioning case management system. Who is responsible for managing and maintaining this system and how confident are you that the draft plan to implement remedial works is actually working?
  3. On page 44 reference is made to Barnet’s Children’s Commissioner and her report of January 2018. At 4.23.3 of her report she made specific reference to the role of the PCM Committee, raising a question over whether that Committee has the capacity or capability to scrutinise and monitor complex children’s services effectively. Why was this not highlighted in the papers for this meeting and how are you going to actually address this serious concern?
  4. The Children’s Commissioner also noted that there is a culture in Barnet of over optimistic and over reassuring reporting to members. How confident are you that the reports you are receiving in these papers are not over optimistic and over reassuring and what steps are you taking to ensure that culture is changed?
  5. At page 94 there is a report regarding the performance of Cambridge Education. As part of this contract, school meals were subcontracted to ISS. School meals was a profit centre generating £240,000 of profit before it was outsourced and the business case identified it as a major source of additional income generated outside the borough to support the business case. Why is there no information on the financial performance of the ISS subcontract and will you provide an update of ISS’s current financial and operational performance?
  6. At page 97 it notes that there will be an additional charge for Revs & Bens work from DWP. In 2016/17 Capita charged £330,000 for additional Revs & Bens work plus £98,000 for face to face support. How much is Capita likely to charge in 2017/18?
  7. At page 99 the reports states that there is a rebate from Comensura and administration charges to other services, totalling £1.986m. Please can you clarify how this rebate from Comensura is calculated, and what proportion of the £1.986m it represents?
  8. One of the CSG contract variations identified in Table 12 is for £1,004,038 for dilapidations to NLBP Building 4 “to increase the funds to cover cost until October 2018”. Given that Barnet should have existed NLBP 4 in October 2015 why are we still paying into a dilapidations fund and why are we paying it to Capita, not the building freeholder?
  9. At Page 103 the report states we are paying £78,908.65 to Capita to assist with Family Services recruitment. Given that we paid Capita £248,000 for the same task last financial year are you sure this further payment represents value for money?
  10. At page 106 the report provides details on Re’s financial performance yet there is no mention of how much additional revenue they generated, a key component of the overall financial performance. Please can you tell me how Re are performing against revenue generation targets?
  11. To what extent has the contingency plan recognised that Capita provide services through a range of different service companies (for example pensions administration is operated through Capita Employee Benefits Limited) and that with such a complex operating structure some companies  might continue to trade while others are placed into some form of insolvency measure?
  12. To what extent has the contingency plan recognised issues such as retention of title, where for example if a Barnet contractor has purchased but not fully paid for essential equipment (such as IT hardware) the original supplier may uplift that equipment?
  13. To what extent has the contingency plan recognised that before a  company goes into some form of insolvency measure, it may experience a prolonged period where cashflow is highly restricted, preventing investment in key equipment and failing to replace staff that leave which would have a highly detrimental impact on service standards?
  14. Have you taken specific professional advice from an insolvency practitioner, for example from the external auditor BDO, to ensure the contingency plans are robust?
  15. At the Audit Committee of 31st January 2018 the Chair, Cllr Rayner, said that he was referring the issue of gainshare on the CSG contract back to this committee for a review. There is no mention of this in the forward work programme. When is it scheduled to take place?

Friday, 9 February 2018

You get what you pay for - should Barnet residents pay more?

Next Tuesday the all powerful Policy & Resources Committee will assess whether to increase Council Tax or not. There is a recommendation that they should add a 3% social care precept. Social care is in crisis, not just in Barnet, but throughout the UK so this makes sense. However, this money is ring fenced and the council are obliged to prove it has not been used for other purposes.

The Council are also allowed to increase Council tax by a further 2.99% without having to hold a local referendum but the recommendation is that this should be frozen. This follows a pattern with Barnet having frozen or cut Council tax every year since 2010. In 2016/17 they did include a 1.7% social care precept but this mirrored a 1.7% reduction due to the Olympic levy coming to an end - so no overall net increase.

The problem we have is that Barnet have been using reserves to make up some of the shortfall and they are getting to a point where they will reach the minimum threshold a local authority is required to hold. Barnet are proud that they have made real term cuts to council tax of 20% but that has a very significant cost in terms of the reduction of services. Most departments are being required to cut their budgets, including services like Children's and Adults. For details of all of the budget cuts you can read them here with a summary below.

Currently Barnet is being propped up by a central government grant called New Homes Bonus which is linked to the number of new homes are built. This year it is roughly £10 million so you can see why Barnet is so keen to push through every new housing development. However, this grant is being cut and there is no certainty as to how much longer it will continue.

So now we come to the tough bit; should residents be prepared to pay a little bit more? From my perspective the answer is, unfortunately, yes. Failure to do so is just building problems for the future. I was talking to someone about this the other day and it is a bit like only paying off the minimum balance on your credit card each month  - you know it's not enough but you don't have to worry about it this month.

Even if Barnet had taken a very modest 1% increase in council tax each year, it would mean we would have around £14 million more to spend this year, negating the need for this year's cuts and borrowing from the reserves. The argument for not taking a council tax rise is that many families are hard pressed financially. That is also true but this whole problem has been brought about by central government cuts to local authority financing and all three constituencies returned Conservative MP's who have voted through these cuts.

I would also say that there are some savings still to be made at Barnet Council. We know about the very expensive PR & Communications team which you can read about here and the huge salary rises for some of the most senior staff but ultimately people have to be realistic and pay for key services like Children's and Adult Social Care.

I have raised a number of questions regarding the budget which I have set out below and I will update you when I get some answers.

  1. At the Policy & Resources Committee last year the detailed revenue budget showed an “original estimate” for 2017/18 of £270,333,880. This included £ 6,863,000 for Additional Income from Council Tax. In this year’s detailed revenue budget it states the “original estimate” for 2017/18 was £277,196,880 with the Additional Income from Council Tax left blank. How can the “original estimate” have changed and what has happened to the missing £6.8 million?
  2. Given that the external auditor said in the audit completion report “there is little margin available in reserves and balances to support any further revenue budget overspends or slippage on savings plans and management will need to revisit how these reserves are being utilised in the event of continued pressures on budgets”, do you think it is wise to recommend a budget that recognises pressures yet freezes Council tax and depends on reserves to make up some of the deficit?
  3. Given that the Council will be unable to levy a social care precept in 2019/20, and that you are forecasting a budget gap after savings and reserves of £5.965 million, even with a 2.99% council tax increase, do you think it is fiscally responsible to freeze council tax yet again this year?
  4. The report states that “it may become necessary to go to alternate weekly collection if recycling rates continue to plateau and/or the savings identified are not realised” does this two weekly collection refer just to residual waste or would it include two weekly collection of recycling and food waste as well?
  5. How confident are you that the savings forecast on the Your Choice Barnet contract aren’t simply adding to the deficit in The Barnet Group and what safeguards are in place to stop that happening?
  6. Can you clarify how the £300,000 decrease in concessionary fares will be achieved?
  7. Under Central Expenses can you clarify why, in the expenditure breakdown, the current estimate of capital financing for 2017/18 is approximately £11 million less than the original estimate for 2017/18 but that the original estimate for 2018/19 increases by £12.6 million over this year’s current estimate?
  8. Are the efficiency savings on third party contracts identified in the Children’s & Family services budget net or gross of any gainshare payments to Capita?
  9. Given the inadequate OFSTED report rating of Children’s Services and the fact that the original budget was overspent by £6 million to try and help resolve some of the issues identified, is it wise to forecast savings for 2018/19 of £2.1 million on Children’s Family Services for 2018/19?
  10. Why are no financial savings shown against the HB Law service – have they achieved the pinnacle of efficiency?

Friday, 2 February 2018

Barnet Supplier Payments - yet another reason why we need to start planning for change

This has been an eventful week in Barnet. Capita's share price has crashed, with Barnet having to draw up contingency plans in the event of its failure. The same day as the crash, the Audit Committee heard a catalogue of Capita failures.

Today I have published the supplier payments for December 2017. As you can see from the chart below, we are still paying Capita/Re a fortune even though we have made huge advance payments to them on both contracts.

The monthly bill for agency and interim staff is declining slightly but it is still forecast to hit £17.2 million by the year end. With a commissioning council and so many services outsourced it is beyond belief that we are spending more on agency staff now than we were when no services were outsourced. Below are the charts showing the payments to Capita and Re as well as for Interim and Agency staff.

I have had a number of discussions today with people asking whether the contract with Capita can be terminated. I have referred them to the contract (page 167) on the Barnet Council website which seemingly makes it clear that, yes, we can terminate the contract. We would have to pay a fee (which Capita do not want me to see as explained in an earlier blog) but given the massive cost of the current contract that may well be a price worth paying.

What is important now is to start discussing what a redesigned Council could look like and how it could be structured. I had a great discussion with someone who has great experience of the council. They identified what services should be working much more closely together to make them more effective at delivering services (and which would save a significant number of managers). That made me even more convinced than we need to start the process of creating a masterplan for the council and then start bringing service back in house to fit within the new structure.

The message to Barnet residents should be one of hope and the genuine belief that without Capita we can have a better, more efficient council that can deliver the best possible services, cost effectively.

Thursday, 1 February 2018

Capita's problems or a one off opportunity for Barnet

Last night I attended Barnet's Audit committee. It was a catalogue of  Capita failures. Failures to meet the promises made 5 years ago when Barnet decided to appoint this company who promised to deliver services better and cheaper. Last night I said that the council needed to do something now and that doing nothing was not an option. I mused on this further and chatted with people who understand Barnet Council and why the Capita contract has delivered so poorly. The more I talked with them the more I saw Capita's failures in Barnet and their disastrous performance on the stock market as representing a one off window of opportunity for Barnet.

Yesterday I asked for Barnet councillors to start bringing key services such as finance and pensions back in house. Today I am asking for something more radical. We have a window of opportunity to think about how we design a local authority from scratch, a blank sheet of paper. Yes, the council clearly has to deliver a range of specific services but how they are delivered is up for grabs and what other services they provide is up for debate.

Prior to Capita taking over Barnet, there were established customs and practices, physical and organisational structures that restricted how change was implemented. Some aspects of the service were great; remember Barnet was rated a four star council. Other aspects were poor, often restricted by a lack of investment in good technology. We were told that Barnet could not afford to invest in technology and that is what Capita would deliver. Ironically, as soon as Capita were appointed Barnet found the money for investment and gave it to Capita. The services were outsourced but instead of coming up with a radical and bespoke organisational solution we simply transitioned to Capita's established customs and practices, Capita's physical and organisational structures. Is it any better? Well the evidence suggest it is no better at all and in many ways it is much worse. The recent Children's Commissioner's report criticised Barnet for its "Silo Structures" made worse by outsourcing. The report also said that Barnet was process heavy which slowed down decision making. In the review of the Capita joint venture, Re, the report noted, "Capita’s internal organisational structure (known as “the towers”) has been identified as a layer of complexity that potentially impacts on day to day service delivery".

My attention was drawn recently to how the cost of the commissioning function in the council has grown since the contracts with Capita were signed. Barnet are having to throw more and more resources in to managing the contract with highly paid "strategy staff". The commissioning budget has risen from £8 million to over £20 million in three years yet we still don't seem to have enough staff monitoring the contracts.

So can we start again from scratch; design an organisational structure that reflects Barnet's needs now but with the flexibility to adapt as the role of local authorities change and develop? We can develop a efficient structure that gives councillors and the public a clear joined up view of the council and how it is performing. That might mean some services are outsourced, typically those that are highly specialised and non-core to the running of the council. But they would be outsourced to market leading specialists rather than "we can do it all" suppliers like Capita.

I know some people will say we can't afford it but it is important to distinguish between capital and revenue. Borrowing to invest in services that will save money makes plenty of sense. Indeed Barnet are making many capital investments to save or generate revenue such as the new leisure centres.

It is clear to me that the Capita contract is not performing anyway near to the level we were promised. There are lots of extras we are being charged for. But most importantly Capita and the council do not share common goals. With the problems Capita are experiencing now, that goal divergence is likely to get worse, not better, as pressure increases to improve profitability of its remaining contracts.

The die hard defenders of outsourcing will trot out all the old phrases but my view is they are living with an outdated and broken model. We need fresh thinking and innovative ideas.

If I was leading a party into the forthcoming local elections I would be selling the opportunity to change the way the council is run, to get the best advice for a new and efficient model. A model that suits us, not a remote, corporate organisation going through its own massive restructuring exercise.

That means preparing a masterplan for the council with a phased withdrawal from the Capita contract. Indeed, as one of my fellow bloggers mentioned, Capita might be pleased to seek an exit from the JV contract, especially as it is struggling to deliver the promised returns. Bringing finance back as quickly as possible is essential because without control of finance any other plan will struggle. There will be lots of specific questions like, do we need to bring a call centre back to Barnet? There are plenty of organisations that could help set up a call centre quickly in Barnet staffed by people who are connected with the area, who know what services Barnet provide and have a connection with the area. There are lots of specific questions, but what is essential is to have a vision of what a great council looks like.

We have a window of opportunity. I just hope we have some councillors who have the courage to innovate and deliver something new, efficient, a new council that meets our needs not those of the suppliers.

Monday, 29 January 2018

Six Blogs and a Damning Report - Why we need a change at Barnet Council

Over the last week I have published a series of blogs about the costs of Barnet's contract with Capita.  I am a regular attendee at the Performance & Contract Management Committee meetings where I have consistently raised concerns about the performance of Capita and the costs we are paying. There is an equally consistent approach by Conservative Councillors who always say everything is fine and dandy, which I find both frustrating and worrying given that there is no rigorous challenge.

On Friday we saw the publication of a damning report by the Children's Commissioner for Barnet which you can read here. The background is as follows:

Barnet’s services for children were inspected by Ofsted in April and May 2017. They were found to be inadequate across all reported categories. The inspection raised serious questions surrounding the quality of practice and leadership, including the Borough’s focus on children, its quality assurance systems and the quality of management oversight. The Barnet Safeguarding Children Board (BSCB) was also found to be inadequate. As a result, an independent Children's Commissioner was appointed by the Secretary of State and is required to report to the Minister of State for Children & Families - so pretty serious stuff.

The report looks into the underlying problems that brought about the failure and what barriers are preventing the service from improving quickly. Problems had been identified in 2016 and experts from Essex County Council brought in to advise Barnet but a year later when OFSTED inspected many of the problems still existed.

Identifying why change hadn't been implemented, even though the problems were known, is a key element of this report. It is pretty damning with some of the key headlines as follows:

  • The lack of ‘turn-around’ leadership experience and expertise presents the clearest barrier to improvement in Barnet. It has led to a lack of clarity, inconsistency and poor engagement in terms of setting expectations around practice standards and protocols across children's social care services.
  • A robust, inclusive Improvement Board was needed, supported by a structure which ensures actions are taken and monitored. The Improvement Board in operation was an internal Board, chaired by the Chief Executive which met too infrequently to impact on practice and received over-optimistic and unspecific reports on progress.
  • Silo working was pervasive throughout the Council. While lack of ‘join up’ is often seen in large organisations, the silos found in Barnet at the corporate level mitigated against the potential of SCB to make a strong contribution to support the improvement for children. Equally, silos across children’s services and partners more generally, including between safeguarding and education services, did not maximise improvement capacity.
  • There are some cultural issues to be addressed at the corporate level which may relate to the legacy of the commissioning/delivery split. Because the focus of SCB had become higher level transformational and strategic change issues, day to day ‘business as usual’ matters began to be seen as less important and were not normally discussed at top level.
  • The Council is a process-heavy organisation with multiple approval requirements for even fairly straightforward matters. This leads to frustrations and delays which mitigate against establishing a nimble and creative improvement culture.
  • While many within the service were acutely aware of the failings described by Ofsted, both before and after the inspection, there was a general lack of in-depth understanding elsewhere. Prior to the inspection, this was exacerbated by over-optimistic reporting of progress, including to the Improvement Board, and by inaccurate information arising from audits and quality assurance processes.
  • While there is a clear understanding about the importance of using performance and management information to drive improvement and monitor impact for children, systems and approaches are poor. This represents a distinct barrier to further improvement and is also a contributory factor as to why the impact of improvement activity since 2016 has not been sufficient.
  • There are significant amounts of data and information about performance within the borough but analysis and use of that data and information are under-developed.
  • Monitoring has tended to focus on quantitative indicators without significant reference to the quality of practice and the impact on children.
  • There is a serious disconnect between senior managers in children's social care and the front line. This is a significant barrier to improvement and also a core reason for the lack of impact of improvement efforts so far.
  • The lack of purposeful and systematic engagement with staff in Barnet leads to a lack of clarity and understanding about what is required of them. Equally, staff do not feel that they have the opportunity to contribute their expertise to developments – they are ‘receivers’ of change rather than agents of change. Many staff report frustration about the lack of follow-up when suggestions or requests are made.
  • It became clear that governance in Barnet has not been sufficiently focused on safeguarding children. Most members did not have a good understanding of safeguarding issues; of safeguarding work in the borough; of the needs of vulnerable children in the borough; and, significantly, of the problems growing in the service and the implications for children of the findings highlighted in the recent Ofsted inspection.
  • Following the serious issues raised in the Essex report in March 2016, bilateral discussions were had between the DCS and individual members. The Leader and Lead member (Chair of CELS) were well briefed by the DCS on concerns raised, and the restructuring took place to give the DCS full responsibility and accountability for the service, as outlined in paragraph 2.6. However, the CELS Committee did not receive any reports relating to concerns highlighted in the Essex work.
  • There are a variety of issues and questions arising from this unsatisfactory history. They include:
  1. whether the remit of the CELS Committee is too broad. There is no doubt that the Committee had full agendas during the period concerned, taking controversial items including on libraries, school funding and school places;
  2. whether the split is appropriate between CELS as a ‘theme’ Committee tasked with looking at strategy, ‘transformation’ and policy but not performance, and PCM as the Committee that looks at performance across the Council. Given that PCM’s prime focus has generally been Barnet’s large outsourced contracts, there is a question over whether that Committee has the capacity or capability to scrutinise and monitor complex children’s services effectively;
  3. why the culture in Barnet leads to over-optimistic and over-reassuring reporting to members. This may be due to factors such as the marginal nature of the borough’s politics; the concern to maintain Barnet’s reputation; custom and practice; and/or a misplaced concern to make serious safeguarding issues public prior to an Ofsted inspection.

The Director for Social Care and Education at Essex County Council, will remain the Chair of the London Borough of Barnet’s Improvement Board, and report progress on a regular basis to the DfE. Barnet cannot be trusted to fulfil this key role.

The last three points are indicative of wider problems at Barnet; is the committee structure appropriate to adequately scrutinise the performance of the Council? The split between the theme committees and the performance committee is an issue I have highlighted repeatedly. It is akin to two people driving a car, one holding the steering wheel and someone else operating the accelerator and brakes. Critically, the issue of over optimistic reporting to save face is something I experience regularly in Barnet. This all has to end if we are not to see similar problems arising in other parts of the council.

We need a change of administration and a complete rethink on the way the council is run.

Thursday, 25 January 2018

Is Gainshare Costing Barnet a Fortune - Part Four The Comensura Contract

Agency and interim staff cost Barnet Council a great deal of money. By my calculation it amounted to just under £20 million in 2016/17. Traditionally a council's relationship with an agency staff member would be as follows:

This would involve Barnet dealing with lots of staffing agencies separately and paying bills from each agency. Barnet would also need to negotiate commission rates with each agency separately, which is a time consuming and complex task. To overcome this problem many public sector organisations use what is called a neutral vendor. In Barnet that neutral vendor is a company called Comensura. They do not supply any agency or interim staff themselves, they simply act as a consolidator, collating and managing the relationship between staff agencies and the Council. Comensura negotiate rates and charges with agencies. 

The original contract with Comensura was agreed at Cabinet Resources Committee on 20 June 2012 and started on 1 October 2012 for a period of three years with the option to extend for a further year. It was sourced through the Eastern Shires Purchasing Organisation on a framework contract (one that has already been agreed) and ESPO take a small commission on every hour of agency staff used.

In September 2015 approval was given to extend the contract for one year to enable preparation for, and procurement of, new contract arrangements for temporary workforce provision. A year later, in September 2016, approval was given for a further two year extension due to the failure to secure a new contract in collaboration with a number of London Councils. 

Gainshare Savings Real or Illusory:
In the original tender process, a tender price was submitted by Comensura but the following statement was made at point 9.10 in the tender evaluation report.

“Each of the bidders has identified but is not able to quantify additional cash savings that could be achieved during the implementation phase of the contract when further pay rate benchmarking will be carried out and the baseline value of the contract has been set by Comensura.

In 2015 in the contract extension report it noted:
Comensura and the procurement team have identified short term additional savings benefits in year by reviewing long tenure agency employees; those engaged for longer than 3 months a year on short term contracts and are working towards a reduction of these”. This was also driven by a change in HMRC rules to stop agency staff avoiding tax and national insurance.

Hopefully all is clear up to now. Now we get to the main issue. As soon as Capita took over the CSG contract they claimed a gainshare on this Comensura contract. Since 2013 Capita have claimed several millions (I estimate c.£3 million) in gainshare payments on this contract.

Fundamental to Capita’s gainshare claim that they “negotiated” further savings is whether these were in addition to the savings identified but not quantified or  simply a quantification of the savings that Comensura had already identified or that Comensura subsequently generated. This is a critical point as the majority of gainshare payments made to Capita relate to this one contract. 

I have asked for the evidence that Capita did generate these savings but this has not been provided. I have received a redacted copy of the original LBB Procurement Board Project Submission (attached below) but this merely serves to question whether the savings have been realised given that the cost of contract has risen from £12.53 million in 2012/13 to £19.88 million in 2016/17.

Latest Contract Extension:
Under the terms of the original Comensura contract it was let for a three year term with the option to extend for one year only.  As I see it, the latest contract extension in September 2016 cannot be an extension, it must be a new contract. As such, even if the gainshare payments on the original contract were valid, which I do not believe they were, I do not see how they can be extended to the new contract commencing in September 2016. However, Capita are claiming gainshare for the entire financial year to March 2017.

Overall, we are paying commission to four different organisations between the wages and on costs of the staff member and what Barnet Council finally pays.

Now I don't know how much negotiation took place, whether the savings are real or not but this gainshare has been a massive money spinner for Capita. The gainshare they have claimed could, for example, have been enough to offset all of the library cuts. As with the other contract gainshare examples I have raised in the last three days, by claiming large savings, it triggers the ability for Capita to claim the Agreed Procurement Price Recovery Payment (APPR) which this year was £970,000. I have been prevented from seeing what the APPR was in the three previous years of the contract but is likely to be as much or more than this year's payment.

Again, I raised this with the external auditor back in July last year but six months later have still not received a response. 

I raise this because, at a time when the council are consulting on further budget cuts, Barnet are writing out very large cheques to Capita under this catch-all gainshare clause. It shocks me that the council are happy to cut vital services but aren't prepared to challenge Capita on this matter, but that is the Barnet way. 

Wednesday, 24 January 2018

Is Gainshare Costing Barnet a Fortune - Part Three The Energy Rip Off

Back in 2015 a report was presented to the Policy & Resources Committee regarding potential savings on energy costs. The report was authored by the Council's Commercial and Customer Services Director, a Council employee (not Capita) and who has subsequently left the Council.

The report highlighted an energy review which had been undertaken to inform options for procuring energy for the Council. The energy review was undertaken following receipt of London Energy Project’s (LEP) benchmarking update on energy provision which compared energy arrangements delivery by LASER and Crown Commercial Services. Just to be clear LEP is a  London Councils initiative of which Barnet is a member.

The review informed the options for procuring energy going forward and these are presented both within this report and in the supporting Energy Review Business Case. The report was considered some way in advance of the new contract commencing, as advance commitment had to be given to "enable the opportunity of forward purchase of energy during optimal market conditions."

So just to be clear, this was a report presented by a Council employee, based on a benchmarking update from the London Energy Project for energy delivered by LASER Energy which is a wholly owned subsidiary of Kent County Council and an organisation from which Barnet has been buying energy since 1993.

The report also notes that alternative options were considered but were not recommended as "these would represent an approach which does not conform to the Pan Government Energy Project recommendation that all Public Sector organisations adopt aggregated, flexible and risk managed energy procurement." So this was pretty much the only option.

The report identified that the new contract would save around £110,000 a year on energy costs. In addition, by opting for a fully managed contract,  the report said that the service would avoid certain costs, the largest of which is correcting overcharges. Personally, I find this implausible because if the procurement department were doing their job there should not be £202,000 of overcharges and ultimately they get corrected. I also do not believe that you can forecast those cost avoidances going forward as surely mistakes would not continue to be repeated year in year out? Nevertheless it can be an indicator a fully managed service might be a better option. I have subsequently identified that this fully managed service comes at a cost and is reflected in the price LASER charge for energy, typically 1.5% of energy usage.
The report was signed off and the new contract commenced in October 2016. So far so good.

As part of my review of all Capita invoices, I was therefore surprised to come across this invoice claiming a gainshare of  £357,701.51 of which £313,215 is for making savings on the energy contract of £942,000.

So what Capita are claiming under gainshare is not only the energy saving for three years but also costs avoided for three years, a service provided by LASER and for which Barnet pay LASER a fee of approximately 1.5%.  In total they are claiming a saving of £942,000, yet from what I can see Capita had no input to the generation of this saving and have used theoretical potential cost avoidance, which we pay another provider for, to arrive at an inflated figure of which they want 33.25%. That is, to my mind, is not acceptable, does not represent a fair and reasonable interpretation of the gainshare clause and should not have been signed off by the person who authorised this payment.

What I also find interesting is that Harrow Council, who provide legal services for Barnet, also went through a similar process in 2015. They came to a similar conclusion (with a couple of variations for renewal energy and low energy use sites). You can read their report here. Could we have had a chat with Harrow and made the same savings without any charge from Capita?

What I also want to know is whether any of the councillors who attended that meeting were made aware that by signing off this procurement they were creating a financial liability to the council of  £313,215.  For reference sake, these are committee members:

Be aware that by claiming an overall saving of £942,000, it means that Capita can claim to have met their guaranteed procurement saving and  bill Barnet the £970,000 Agree Procurement Price Recovery. Yet again this has a very bad odour about it and makes me question the whole gainshare arrangement.

I raised this matter with the external auditor, BDO, as an objection to the accounts back in July 2017 but six months on BDO have still to provide a response. I remain concerned that no one has a grip on what we are paying Capita through this money spinner gainshare clause, that Barnet are being right royally ripped off, and that councillors are blissfully unaware.

Tuesday, 23 January 2018

Is Gainshare Costing Barnet a Fortune? - Part Two Double Bubble

In Barnet we have two contracts with Capita: one for the CSG contract and a joint venture for regulatory services known as Re.  Under the CSG contract Capita can claim a gainshare payment for  savings they make on procurement contracts or from existing contractors.  The Re contract is structured in a completely different way, being a joint venture between Barnet Council and Capita and as such there is no gainshare clause within that contract.

As part of the inspection of the accounts I have gone through all 224 Capita and Re invoices and all the supporting information, a thick arch lever file's worth, and have discovered a number of issues. One in particular is set out below.

As part of the Re contract Capita are responsible for highways. This is also one of the areas where Barnet collaborates with other London Councils on something known as the London Highways Alliance Contract (LOHAC). You can read more about it here.

On 9 May 2016 Re submitted an invoice to Barnet for the sum of £365,088.67 +VAT for LOHAC Procurement Support.

I'm not sure specifically what they did for that very large amount of money, but it should have bought a great deal of support on what is a framework contract. Barnet duly paid the invoice.

Five months later, on 7 October 2016 Capita CSG, the other arm of Capita in Barnet, submitted an invoice for a gainshare payment of £484,375 for saving made on the, wait for it, LOHAC procurement contract.

So one side of Capita appears to be getting paid for providing procurement support and then the other side of Capita claims the gainshare savings on the same contract. That, I believe, is known as "double bubble".

Because the claimed savings on the LOHAC contract are so large it means that Capita have met the guaranteed savings level and can claim their £970,000 Agreed Procurement Price Recovery (APPR) fee. If this turns out to be a mistaken claim then not only would the £484,385 have to be refunded but also some or all of the £970,000 APPR fee. In total we are talking just shy of £1.5 million so not chicken feed.

Now it may be that there is an innocent and entirely plausible reason for both Capita contracts being paid for the procurement savings on the same contract but having raised it with the Chief Executive,  the Council Leader, and the external auditor no one have so far responded.

What worries me is that I seem to be the only person looking at all of the Capita invoices in any great detail. It also worries me that the finance function of the council is run by Capita who not only raise the bills but pay the bills. That just seems inappropriate to me.

I have lost all confidence in the Capita run finance function, especially after the year end audit debacle where the year end accounts were delayed and Capita were fined £55,000 which you can read about here.

At the time I suggested that the finance function of the council be brought back in house. Given all the concerns I have seen as part of my inspection of the accounts, my view hasn't changed.

Monday, 22 January 2018

Is Gainshare Costing Barnet a Fortune? - Part One

When Barnet signed up for the outsourcing contract with Capita it was claimed that there would be lots of savings. As anyone with an ounce of sense knows, something that sounds too good to be true usually is. At the time the contract was signed most people, including many councillors, were in the dark as to the details of the contract because it was "commercially sensitive".

What many may not have realised is that Capita are guaranteed a minimum share of any procurement saving before the remaining savings are shared with Barnet. This is known as the 'Agreed Procurement Price Recovery' (APPR) which was explained to me as follows: 

"The CSG contract includes within it investment into the procurement service by means of subject matter experts that aid in delivering the guaranteed procurement saving. This investment is self financed through savings generated over and above the guaranteed position to the council". 

However, if Capita don't achieve enough saving to cover the minimum guarantee to Barnet and the Agreed Procurement Price Recovery, they can roll over their APPR share and claim it back the following year. 

The procurement savings claimed are large, although some may  be surprised just what they claim savings on. Below is a list of the procurement gainshare paid to Capita last financial year.
I would note that the claimed savings as reported in the accounts do not appear to coincide with the invoices provided by Capita for the claimed savings and, as such, gainshare payments. What is noticeable is that Capita are claiming gainshare on vital services such as Domestic Violence, Children's and Adolescent Mental Health Services (CAMHS), Stroke Services and Return Home Interviews to name just a few. What is also interesting is that a number of these payments were subsequently credited back to Barnet as they were not substantiated. What worries me is that Capita are trying to make money from vital services which must be considered in terms of the QUALITY of the service not just the COST of the service.

It would also be interesting to understand to what extent this process is tying up council staff trying to assess whether these savings have actually been delivered given a number have been rejected.

 Just to be clear, these are just the procurement gainshare savings. In addition, Capita also claim gainshare on reducing single person discounts, increasing collection rates on council tax, generating additional rental income on council properties and generating additional capital receipts on property sales. Barnet summarise these savings and below is the summary of how much has been paid to Capita on the various gainshare clauses since the start of the contract:

Be under no illusion, gainshare is very profitable for Capita and, as I understand it, is included in a number of their other contracts. However, should we, in Barnet, be hanging on to more of those savings, if they actually exist at all. I have asked this of Conservative councillors on a number of occasions where their view is "it is better to have two thirds of something than 100% of nothing".

While there is a logic to that statement, it is of course not comparing like for like. This year alone we paid Capita a guaranteed payment of £970,000 for their procurement "subject matter experts". This is on top of the standard contract fee we pay them for managing the day to day procurement function that is part of the CSG contract. Based on many year's experience in business there are always some "low hanging fruit" or easy wins to be gained whether that is sales, savings, or service changes. If you are the client, what you want the contractor to do is actually look at the tougher areas where savings, sales or service changes are harder to realise. As such you would typically incentivise the contract so that on the first slug of changes generate minimal benefits for the contractor but once they have over come that threshold they then start to benefit.

My view is that if Barnet were serious about procurement savings they could employ a red hot Head of Procurement on £100,000, which seems a pretty competitive salary if you look at current vacancies on Indeed. Give them an assistant manager and an admin person and that comes to  no more than  £200k per annum including on costs. Capita only addressed 21 procurement items during the year  2016/17 and a number of those, such as building maintenance and agency staff, had been agreed in previous years, so the workload isn't huge. That way we spend £200k but save £770k on the Agreed Procurement Price Recovery payment and keep 100% of the other procurement savings rather than handing over a third to Capita. It makes sense to me but why don't Councillors see it the same way?

I will be looking into the gainshare deal in more detail in a series of blogs in the coming days so please keep following.

Sunday, 21 January 2018

Special Projects - Capita's nice little earner at Barnet

See update below in Red
Before the CSG contract with Capita was signed, Councillor Hugh Rayner made a very insightful observation which, thanks to the sadly missed, Dan Hope, we can still see below. Cllr Rayner made the observation that in many contracts the profit is made in the "extras".

As part of my inspection of  Barnet's accounts, I have analysed all of the invoices and the supporting data to compile a list of all the extras, contract variations and special projects which Barnet have paid Capita to carry out on their behalf.

In terms of contract variations  and extras there have been a number including routing library calls through the Capita call centre. Apparently this was omitted from the original contract so as a result we were charged £453,580 for that service in the first two years of the contract. I did some analysis of call volumes and by my reckoning it worked out at a charge of just over £8 per call.

In the most recent contract variations schedule Barnet agreed to move the Single Fraud Investigation Service (SFIS) from the council's own staff in the Corporate Anti Fraud Team (CAFT) to Capita's CSG Revenues and Benefits team. That means an additional charge by Capita of £112,291. Whether we will save £112k of salaries by reducing the CAFT is a moot point. Also Capita have been given the task of administering the Barnet Crisis Fund. Again this will be undertaken by the CSG Revenues and Benefits (Revs & Bens) team as a cost of £449,166.67. (You can read them both here at page 85).
I have received an email today to say that the SFIS was moved from CAFT to the DWP some time ago. In which case why are we paying Capita to carry out this service? Unfortunately the Performance and Contract Management Committee where this was documented was cancelled in January but I will make sure it is raised at the next meeting in February.

One might suspect that the Revs & Bens team have got plenty of spare time on their hands  to be able to take on this extra work. Yet trawling through the Capita invoices for 2016-17 I see that Capita charged Barnet an extra £330,228 for the extra workload above the agreed contract thresholds plus an extra £98,039 for "face to face" support.

We also had to pay an extra £14,400 for 12 executive coaching sessions provided by a subsidiary of Capita to senior council officers. One invoice mentions the name of the recipient of 6 of those coaching sessions but I will spare their blushes here. However, paying Capita £1,200 per coaching session seems quite lucrative to me.

So now we move on to special projects. These are items that weren't included in the original contract and for which we pay Capita at pre agreed consultancy day rates. We don't know what those day rates are because this is one of the items Barnet/Capita want to remain secret even though both parties agreed in the contract they would be disclosed after three years (see my previous blog).

To be clear, these charges are just for Capita's input at pre-agreed consultancy rates. While some of the projects may have always required external support, there are some which in the past may have been able to be carried out by council officers within their normal duties. This was confirmed by an officer when I asked the question a a committee meeting.

The list is long so apologies if it looks a bit boring. The key issue here is that there are so many projects and in total they add up to over £16.8 million. Have we had value for money? Certain Conservative councillors will says yes, we have had value for money because the day rates charged are similar to other consultants. Grant Thornton were commissioned to carry out a review of the Re special projects of which they said,

"In addition to the core contract, there is substantial expenditure on projects and the Review brief anticipated that the Review would pay some attention to this aspect. However, timelines have not permitted detailed reviews of individual projects, so the focus has been on value for money. Despite the use of external support, it has proved difficult to obtain sufficient information to conclude whether or not overall project costs represent good value for money and it is proposed that officers should explore this further". 

Grant Thornton also commented, "Our benchmarking identified that a clearer understanding would be achieved if margins and costs were considered in relation to prices charged for service delivery".  So the answer is we don't know.

A few highlights from special projects list below include: £248,000 for Family Services Recruitment, £1.4 million for work on the libraries downsizing, £1.52 million on project managers, £895,000 for Greenspaces support. Some, many or all may be perfectly legitimate but without a doubt this is a significant money earner for Capita.

So my question is are we being ripped off on any of these projects and are they really saving us money? I think Cllr Rayner was right on this one. 

Saturday, 20 January 2018

What Barnet Don't Want You to Know About Capita

Secrecy can be a nasty practice with people often keeping secrets for all the wrong reasons. Secrets breed mistrust. In Barnet, the Capita CSG contract has many secrets. The polite, business-like term is "Commercial Sensitivity" but we all know it is secrecy. Barnet say they want to create a sense of transparency and trust but as the saying goes "never give out all the information".

When Barnet entered into their contracts with Capita back in 2013, I, the other bloggers and local residents spent much time asking for the contracts to be made available so we could see what Barnet had signed up to. Richard Cornelius trumpeted about all of the thousands of pages of contract that were available but unsurprisingly there were some elements, the really important elements of the contract, that remained secret.

When the contract was first signed we weren't even allowed to know what was being kept secret. Chunks of text were completely redacted, with an explanation that we didn't need to know because it was commercially sensitive. There was also a patronising undertone of "why bother our silly heads with all this complicated contract stuff. The Councillors know best, just accept it".

I have read the contract, the many contract clauses, contract schedules, method statements and contract commitments, but the really important stuff, like money, has always remained secret. I regularly revisit the contract and came across a schedule that had been originally redacted in full, Schedule 23 Commercial Sensitivity. In this schedule, it sets out the duration of the confidentiality; for some items it is the term of the contract, i.e. 10 years, but for a number of items the duration is only three years.

Given that this contract was signed in August 2013 and commenced in September 2013 that means these items are no longer confidential. A copy of it is set out below:
Most years I take up every residents' legal right to inspect the accounts and, as in previous years,  this year I asked to review all of the Capita invoices paid by Barnet. I will publish further blogs over the next week on some of the other matters I came across, but suffice it to say, there was one particular issue relating to the gainshare clause in the contract that I wanted more detail on.

For those not in the know, "gainshare" is a mechanism by which Capita can claim a proportion of savings they make on behalf of the council. The percentage varies but it is typically 33%. What is also important to understand is that the savings Capita claim are not retrospective but future savings paid up by Barnet in advance. At the year end they have what they call a "true-up" process where they look back to see if they really have made those savings. If the savings are greater then Barnet pays more, if the savings are less Capita make a refund. Not an ideal situation, but that what was agreed in the contract.

This year Barnet made a one off payment to Capita of £970,000 on top of the usual gainshare payments. Having challenged this payment I was told that it is something called the Agreed Procurement Price Recovery  and yes it was in the contract  (Schedule 4) but that clause is redacted. I wanted to check to make sure Capita hadn't been paid excessively and to understand what we have automatically paid in the past and what the payments will be in the future. £970,000 is a very substantial sum, not small change, so I think it is important that should be aware.

Set out below is the clause in its fully redacted state.

Having read in Schedule 23 that the gainshare and profit share arrangements are only confidential for the first three years of the contract, I obviously asked for an unredacted version. I also asked for a number of other clauses identified in Schedule 23 that are time expired to also be disclosed. Now just for clarification this is something written into a contract which both Barnet and Capita have signed.

After waiting almost 2 months, it came as somewhat of a surprise that Barnet again stated that the information remained commercially sensitive even though the contract says otherwise. I made it clear to the FOI officer that Barnet have a signed contract where Capita have agreed to release this information so why aren't  Barnet simply enforcing the contract? The official response I received is as follows:

(I make no comment on the numerous spelling mistakes in the response.)

So there you have it, Capita did agree to make this information available when they signed the contract but what I have asked for is now so dangerous that it could lead to financial problems for the £2.3 billion market cap Capita PLC and lead to job losses. Bear in  mind this was before the Carillion collapse. Even so, I don't know who they are trying to fool but I think disclosing a single set of figures to me is the least of their problems.

What is also important to note is that they want to make all of the information in Schedule 23 exempt including Schedule 23 itself, which has already been disclosed. This has a Stalinist feel to it - we must forget the information we already know as it will be an offence to remember it in the future.

This is what we have come to in Barnet. A Council that kowtows to its supplier Capita, a Council that talks about transparency but does its utmost to prevent it. A Council that puts the commercial interests of a private company above the interests of its own residents.

The matter is now with the Information Commissioners Office. We will have to see what they say, but if ever there was a time to be transparent about what a Council has signed up to, it is now. It is vital that we can understand what this private company is being paid and to make an assessment of whether it is value for money.

Watch out for more blogs over the next week on the lamentable state of Barnet's contract with Capita.