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.

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