Tuesday, 11 June 2019

Capita Contracts Review - My open letter to the Policy & Resources Committee



Response to Review of Capita Contracts
Introduction:
The review set out at Agenda Item 7 falls short of the standards that should be expected when considering such an important decision. As such, any decision taken at this meeting will have no credibility and may expose the Council to the risk of a legal challenge. Worse still, it may fail to address the unsatisfactory performance of Capita and provide poor value for money at a time when budgets are under extreme pressure.
The Council has chosen to withhold Appendix C which contains the business case that support the decisions. Without that Appendix there is no way to validate or support any of the assertions made in the report. I have asked both the Leader and the Chief Executive to release Appendix C but have so far not even had the courtesy of a reply.
There were numerous misstatements and inaccuracies at the time these contracts were originally let. Many of the concerns raised then have come true. Contracts reviews were carried out in years 3 and 4 which found that everything was fine, yet we have been hit with a series of recurring problems which suggest the reviews failed to discover or address the underlying problems.
Starting Point:
In July 2018 this committee resolved the following:
1.   Agrees to review the council’s partnership with Capita, and authorises the Chief Executive to develop a Full Business Case.
 2.  Agrees that the proposed strategic aims underpinning the Full Business Case should be to:
a)    Deliver high quality services; b)   Secure best value for money for Barnet’s residents; and
c)    Strengthen the council’s strategic control of services.
 3.  Notes the three options identified and considered in more detail in paragraphs 2.4 to 2.7 and Tables 1 to 4.
 4. Agrees that option 2 – realigning the CSG and DRS contracts to bring back in house those services listed in Table 5 – is the proposed preferred option to be tested in the Full Business Case.
 5.  Agrees that option 3 is fully tested and considered in the Full Business Case.
 6.  Agrees that the Full Business Case should review the joint venture arrangement for the delivery of Development and Regulatory Services.
 7.  Agrees that the Full Business Case should be considered by Policy & Resources Committee, for referral to Council for final decision.
Eleven months later and this has not been delivered, even though there was both a clear rationale for doing so and unanimous approval by this committee. In the interim, a meeting was held between the Council and Mr John Lewis, the Chief Executive of Capita, but there are no minutes or details of what was discussed or agreed at that meeting nor the extent to which that meeting has influenced the remit and structure of this review. As such, it raises serious concerns about governance and authority of this committee.
 Failing Performance:
Capita’s performance has been lamentable. The fraud and subsequent Grant Thornton review exposed the fundamental failings of Capita’s systems, the inadequacy of management and failure of the Council to adequately monitor Capita’s performance. It was also noticeable that Grant Thornton identified that “the Business Director for Regeneration, with overall responsibility for regeneration projects, had only nine months experience of regeneration and was not directly involved in reviewing the financial management activity of his managers. The role was geared more towards commercial account management, focusing on the contractual relationship with the Council and not with detailed functional and technical oversight of the projects themselves”. The high turnover of senior management is a recurring theme across a number of the failing services provided by Capita.
The Pensions Regulator has fined Barnet and issued improvement notices because of Capita’s failure to provide a basic service. Again, the churn of senior management has exacerbated the resolution of the failings. Schools Payroll has been given a no assurance rating by Internal Audit and 170 members of staff had pension payments incorrectly deducted from their pay packets.
Highways performance is poor in spite of spending £50 million on the Network Recovery Plan. The complex contractual framework, the inability to agree and enforce common KPIs between Barnet and Capita and between Capita and the Highways contractor has made contract monitoring and enforcement much more difficult. Yet again, there have been difficulties in recruiting and retaining a Senior Highways Manager. It is also important to note that Capita were paid an additional £1 million in gainshare on the Highways Contract even though London Councils initiated the contract.
Customer service has failed to meet targets with calls to Housing Benefit and Council Tax, having failed to meet the agreed KPI in any single quarter since the contract started, even though the 20 seconds service level target for answering calls was raised to 60 seconds.

What makes this situation even worse is that Capita claimed an additional charge on top of their core fee because the number of calls answered exceeded the contracted volume.
IT has been a consistent failing service. The implementation of the Mosaic casework system was commissioned from Capita as a special project for which they were paid extra, on top of the contract fee. However, they still failed to deliver the system and new external consultants were commissioned to implement the system incurring additional costs. It has also caused significant operational difficulties and is sufficiently serious to be identified as a red risk on the Corporate Risk Register (AC028).
Procurement has been poor, with Capita being paid £5.9 million in gainshare on procurement contracts even though it appears to be generally realised that the savings were nothing more than smoke and mirrors. This became even more apparent at the Urgency Committee on 30 November 2018 when a settlement was agreed with Capita to cease claiming any further procurement gainshare payments.
Capita’s performance has, by any measure, been poor. A constant churn of managers with posts vacant for prolonged periods, has prevented problem resolution and contributed to the continuing poor performance. The failing performance is not just my opinion, it is also the opinion of Council Users and Commissioning Officers who gave 9 out of 10 indicators a Red rating with 7 of the 10 ratings worse than last year.

Methodology:
There is no transparency about the methodology used to carry out the review, who carried it out and who peer reviewed or sense checked the findings. In particular, I would note the following issues:
·         It appears that the review has looked at individual, silo based services and carried out a like for like comparison of costs. That is an artificial basis and ignores the synergy and savings that could be generated if the service was restructured. I have repeatedly asked that the review should take the opportunity to consider a restructuring of service which could generate significant savings that would not be realised on a simple like for like in-sourcing exercise.
·         There is no transparency on the cost base used for comparison. For example, the cost of the service as set out in the contract is not the price paid by the council. Each year the council is invoiced separately for Indexation to reflect the cost of inflation. In 2017-18 Barnet were charged an extra £1,668,464.23 for indexation, split £937,502.23 on the CSG contract and £730,962 on the Re contract. It is not clear if a proportion of the indexation charge was allocated to each service when the comparison against in-sourcing was made. If it was not included, then it will artificially inflate the savings of the Capita service.
·         Any comparison between the cost of the Capita service and an in house service must take account of the inferior and unsatisfactory service provided by Capita. Failure to consider this will mean that the comparison will be between a non compliant/unsatisfactory service with a fully compliant in house service. This will always place the fully compliant service at a financial disadvantage.
·         Mention is made of the cost of pension liabilities of bringing staff back in house. However, it is important to note that in 2017/18 Barnet paid Capita an additional charge, on top of the contract fee, of £3.849 million in Pension Strain, Recharges and Costs.  In 2016/17 the figure was £5.211 million. It is not clear if these additional charges were included in the cost calculations but if they were not, it may artificially inflate the savings of the Capita service.
·         Revenues and Benefits have defined workloads that Capita will provide within the contract fee. In 2016/17 Capita were paid an additional £428,267 for workload that exceeded the contractual limit. In 2017/18 Capita were paid an extra £190,953 for additional workload. It is essential to understand how these excess workload payments were factored into the calculations. If they were not included, then it will artificially inflate the savings of the Capita service.
·         Customer Service has defined volumes included with the contract. In 2017/18 Capita charged an extra £415,876 because the contracted volumes were exceeded. It is not clear if these additional charges were include in the cost comparisons but if they were not, it may artificially inflate the savings of the Capita service.
·         A huge amount of Council senior management time has been taken up dealing with the problems generated by Capita. It is not clear whether the cost of resolving Capita failings has been included in the calculation but if not it will artificially inflate the savings of the Capita service.
It may be that all of these additional costs were factored into the business case calculations but as the public do not have sight of Appendix C it is not possible to make that assessment.
The Cost So Far:
To date, the cost of the two contracts has amounted to £398.5 million, £145.9 million above the contracted value. While some of  the additional cost is for projects that Barnet may have had to procure separately, it is clear that overall, the costs have been much higher than expected.

There is very little transparency of costs on the Re contract. However, based on the most recent benefits realisation table published last year, an analysis of the CSG contract suggests that in the first 5 years of the contract, no actual savings have been realised as demonstrated in the chart below. 


Conclusions:
In July last year there was a clear view that a range of services would benefit from being brought back in house. So far just two services have been in-sourced: Finance and Strategic HR. The Council has an opportunity to rethink how it is structured and how it can create a sustainable financial model in an environment of continuing central government funding cuts. This report ignores those opportunities and opts for the status quo of a commissioning council, with Capita providing services in silos from geographically dispersed offices around the UK. This model has been shown as failing in the direct services provided by Capita. However, the silo structure that forms the basis of the Capita contract has also had a negative impact on other services provided by the Council. This was highlighted by the Children’s Commissioner in her report into Children’s Social Care Services in the London Borough of Barnet of January 2018, where she said, “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”. Capita’s contract structure reinforces the silo structure of the Council while delivering unsatisfactory services. Maintaining the status quo with Capita will maintain silo working limiting the Council’s ability to deliver real change.
When there is a problem, decisive action is necessary. The fraud and the subsequent report from Grant Thornton was a wake-up call that Capita were failing in so many aspects of the service. This was the opportunity and impetus for change. The report to the committee appears superficial and without rigour. It shows a reluctance and timidity to change and resolve the problems that are clear for all to see. It suggests your acceptance of failure by Capita and that there are no better solutions. Please do not accept the officer recommendations and ask for a more thorough and rigorous examination of the options.

Thursday, 9 May 2019

Joint Post from the Barnet Bloggers


Capita - “Not Minded”

At the Barnet Council Audit Committee on 1 May the external auditor from BDO made some very worrying and serious statements about the controls systems in place. This follows a £2 million fraud last year, and pervasive problems with the pensions and payroll administration.

“You don’t have a particularly strong control environment”, the auditor reported, and then stated that Capita were “not minded” to provide assurance over systems running processes on Barnet Council’s behalf.

This is an astonishing response from Capita.

Responsibility for assurance of these systems, run from Capita’s offices around the United Kingdom, falls to Barnet Council’s Internal Audit Team.

As the External Auditor made clear, the Internal Audit team is doing good work “but it doesn’t give you that level of assurance that you would expect with so much of the service outsourced”.

Given that Capita provide so many of Barnet’s back office systems this is a very serious situation, especially as the external auditor raised this problem two years ago, before the £2 million fraud was discovered.

As bloggers who have closely followed and reported the story of Barnet’s partnership with Capita, we are deeply concerned about this situation and alarmed that neither the auditor nor committee members were aware that assurance of Capita’s systems is a contractual requirement, and not something that could be provided at their discretion.

We ask the following questions of the Council:

·             Why were the audit committee not made aware of the auditor’s concerns when they were raised two years ago?
·             Why are Capita “not minded” to provide assurance over their systems when the contract appears to indicate that they must provide that assurance?
·             Why did Grant Thornton not pick this matter up when they were the Council’s External Auditors or as part of their contract review following the fraud?
·             Why have the Council’s contract monitoring officers not identified this problem before now?
·             If BDO are saying the Council does not have a strong control environment, what are the risks of another fraud or systems failure happening?

And finally,

·             How can Capita continue to retain the confidence of the Council without such assurances?

We ask that the Council arranges for a forensic review/audit of both Capita contracts to address the contractual failures raised by the External Auditor as a matter of the utmost urgency, to be paid for by Capita, before any further decisions are made on what services Capita will continue to provide. Failure to do so can only have the most serious consequences for the financial security of this borough, and the well being of all residents.

Signed:

Derek Dishman
John Dix
Theresa Musgrove
Roger Tichborne


Sunday, 5 May 2019

Yet Another Audit Meeting Fiasco - Capita Fails Again

Last Wednesday I attended what I think must rank as one of the most chaotic, depressing and shocking Audit meetings. I would normally recommend people to listen to the podcast of the meeting but for some reason the first 64 minutes of the meeting, including the section on public comment and questions, does not appear to have been recorded. Convenient, most definitely, because it was during this first hour that the appalling quality of service provided by Capita was discussed.

One of the reasons I was attending and asking questions was because the Schools Payroll Service, provided by Capita, had been given a No Assurance rating by internal audit, the worst rating it can receive. The issues around control, reconciliation of payments and many people authorised to access the system, were very similar to those identified by Grant Thornton in their investigation of how the £2 million fraud by a Capita employee was able to take place.

What became apparent during the questioning was that the written answers given don't always give an accurate picture of the situation. For example, I asked:

"Given you keep discovering these similar problems, is there a fundamental flaw in the way these systems were set up in the first place, what are the risks that similar issues exist in other parts of the council, and to what extent does the geographical dispersal of departments exacerbate the problems?"

The response was: "The Council does not believe there is a fundamental flaw in the setup of the systems", so my supplementary question was "Who in the Council does not believe there is a fundamental flaw, Internal Audit, Finance, who?"

At this point there were a number of embarrassing looks at one another and a deafening silence. No one was prepared to say they agreed with the response to my question. This is what worries me. The people who are qualified to answer that question are either Internal Audit or Finance - no one else. This is PR management at its extreme and it is a dangerous route to take.

What came out a little later, raised by Cllr Alison Moore, is that there does seem to be a broader systems problem which manifested itself last week in 170 members of staff being auto enrolled in the pension scheme and payments deducted when they had already opted out of the scheme. This has hit some of the lowest paid staff in the council and affected their pay for April, a significant and unexpected financial deduction. Ironically, it transpires it also affected a number of councillors who had pension contributions incorrectly deducted from their councillors' allowance. The man from Capita, who was also taking the flak at the recent pensions fiasco meeting, said that he was new, that he was sorry that it happened and that he would get it sorted. The problem is this is a stock answer with the never ending stream of new people from Capita, but nearly six years into the contract these problems keep happening. I also got the impression that two of the new Conservative councillors who sit on the Audit Committee were deeply uncomfortable with the situation and with Capita's dismal performance.

I also asked about the budget allocation for Internal Audit. From my perspective they do a good job with limited resources but could and should be doing more. Having questioned the allocation of time, it transpired that in 2018-19 the council fraud department allocated 880 days for blue badge misuse. This compared to the entire budget for Internal Audit of 1,238 days. Don't get me wrong. I am not in any way condoning blue badge misuse but it does seem like a lot of days allocated especially when there is so much more work to do on internal audit. Apparently the blue badge misuse investigation budget is funded from the special parking account and couldn't be transferred, for example, to internal audit. It seems a crazy system but there you have it. I did get one small victory in that I asked for Internal Audit to undertake a review of the failed bin collection changes. While the problems seemed to have settled down, they have done so at a huge cost, with the latest figures showing this service is £2 million overspent. At the recent Environment Committee a detailed report was produced but with a massive omission in that there was no indication of the costs. Surprisingly, Cllr Zinkin said he agreed and that Internal Audit will be asked to review the bin collection reorganisation.

As the meeting progressed we came to the slot for the external auditor from BDO. Luckily this part of the meeting was recorded which is a good thing because what he said was shocking. The auditor from BDO said that, it was important to keep a strong control environment but they have found some challenges in this area. Unlike other organisations that provide outsource services to organisations such as the NHS, Capita “were not minded” to provide any audit assurance of the services they provide to Barnet so all the pressure fell on Barnet’s own internal audit team to check what was going on in all the remote Capita offices and that was something he had raised for the past two years. I did shout out  from the public gallery that it was a contractual obligation at which a number of councillors started asking if it was. It is, and it is included not only at numerous points within the main contract but also within the method statements for service provision which form an annex to the contract. Here are just a few examples:



In addition I specifically asked a question about this back in December 2012 when the contract decision was being made and the response I received is set out below confirming it is Capita's responsibility to undertake their own internal audit of the services they provide.

Capita is responsible for its own internal control and internal audit arrangements with regard to all the services being transferred. It is obliged to share all audit planning and activity with the Council. The Council would only undertake an audit programme itself if any of Capita’s arrangements failed to satisfy our requirements as set out in detail in the contract, and any such programme would be funded by Capita. The Council does however have the right to audit Capita’s contract delivery at any time, whether it has concerns or not.

I do sometimes wonder if I am the only person who has read the contract in detail. I was re-watching some of the fantastic recordings of Council meetings captured by the late and sadly missed Daniel Hope (Barnet Bugle). What shocked me most is how few of the councillors and officers who imposed this lousy Capita contract on us are still in post. However, three key people are still there, Mr John Hooton, now the Chief Executive of the Council, and Cllrs Richard Cornelius and Dan Thomas. So many inaccuracies were given at the time and so many concerns raised. Luckily, many of the people who challenged the One Barnet Contract at the time are still around, not least the other Barnet Bloggers and members of BAPS. The Council may have a restricted corporate memory but the residents do not. The contracts with Capita have been an expensive failure. The latest figures show that we have paid Capita £145.9 million more than the contracted sum. 
Yes, there is a limited saving on the core contract but that cannot be separated out while ignoring all the other charges and costs. I prepared a chart based on Barnet's own figures in 2018 which illustrates the point that overall the contract is costing us more money.
Once you add in the expensive special projects, including disasters such as the Mosaic IT system, which has been an operational and financial failure and which will cost us £4.6 million to sort out, the costs become massive.

It is time to say goodbye to Capita; the sooner the better.

Sunday, 7 April 2019

Colindale - Are local residents getting a fair deal in meeting Barnet's growth targets?

The population of Colindale is forecast to hit 43,050 by 2030 and will be the most densely populated area in Barnet. I use that as a starting point to allow people to understand a bit more about why some residents feel concerned about the level of development and whether all the pressure for growth is falling on just a couple of wards.

Back in 2001 the population in Colindale was 13,860 with a mix of different property types. It has been highlighted as a growth area by Barnet Council and over time there has been massive redevelopment including on the former Hendon Aerodrome, Hendon Police College (the Peel Centre), the British Newspaper Library and Colindale Hospital. I have been through Colindale a number of times recently and what struck me is how cold and clinical an area it has become with so many blocks of flats. Some are social housing but a great deal are private flats.
Many roads are now private land, with Automatic Number Plate Recognition (ANPR) cameras to watch your movements and there seems to be nowhere to park unless you pay.




There are various different sets of figures but according to those published by Barnet in their Ward Atlas data set, by 2018, the population of  Colindale has risen to 26,500. However, there is a lot more development on the cards, including a major development at local underground station. This will cause significant disruption to some of the long term residents.
What you have at this location is a some traditional low rise properties overshadowed by towering blocks. The proposed development would include a series of tower blocks. In the original scheme one of the towers was identified as being no more than 16 storeys high but after a review of the scheme the maximum height has been extended to 28 storeys. These houses in the picture look like they will be consumed in the new development and this is set out in the Supplementary Planning Document (SPD) where it states:
"Potential replacement of properties at Nos. 167 to 173 Colindale Avenue and Agar House, Colindale Avenue, with new mixed-use development with commercial at ground floor and residential above, set back from the current boundary-line to allow for pavement widening".
You can read about the proposals here. The new scheme  will comprise the following:

• Site A – Replacement of existing tube station with commercial use at ground floor and residential above. The building could be between 20 and 28 storeys in height.
• Site B – New station to be positioned over the rail-tracks with integrated station plaza with potential for over-station development.
• Site C – New widened public realm set-back to allow for commercial properties at ground floor with residential above. The new structure could be between 16 and 20 storeys in height.
• Site D – New widened public realm set-back to allow for commercial properties at ground floor with residential above. The new structure to be no more than 8 storeys in height.

The rationale for these high towers is so they can provide "wayfinding" to the tube station.
As it says in the SPD:
"Figure 6 presents an option of maximum height which also incorporates smaller footprints and breaks between structures to incorporate open space. This option clearly marks the station site as the heart of Colindale and could provide wayfinding guidance to pedestrians and commuters. It is evident in Figure 7 that the Townscape is expressed in height through the pinnacle of the station site. The slender tall elements are working better in providing legibility in long views, marking the station and providing a true epicentre for Colindale expressed through height".

The visualisation of these towers shows the bulk of all the properties being built immediately around the tube station but also how much these towers will overshadow other properties. No mention of how this will affect the lives of local people; no mention of the disruption. Perhaps if the people writing this waffle lived in the local area they might have a different perspective.

At some point someone has to say, "Is this fair to local residents?" and I think that point has been reached.

It is important to understand a bit more about the local area.
There is a large source of data about Colindale which highlights some interesting factors as follows:
  • In 2015 only 2.2% of the properties were in the F,G or H Council tax bands compared to 27% as the average for the borough of Barnet;
  • 60% of properties at the 2011 Census were flats. That is likely to have increased significantly as most of the new development is flats. This compares to 42.9% as the average for Barnet;
  • Median Household Income (2012/13) was £30,170 compared to £54,530 as the average for Barnet;
  • Second highest ward for dependent children in out of work households (2014) at 18.9% compared to 10.6% for the borough as a whole with only Burnt Oak having a slightly higher level at 19.1%;
  • It has the lowest level of owner occupied properties at 36.3% (2011) compared to 57.6% for the borough.
Indeed, Barnet's own analysis of Colindale's population suggests it is over represented by young people renting in high density social housing. You can read the ward profile here.
The big risk is that many of these new developments will be sold to buy to let landlords creating a transitory community with no long term commitment to the area. At the 2018 election Colindale had the lowest turnout of any ward in Barnet at only 31.4%. Compare that with the turnout in High Barnet Ward at 55% and 48.1% in Hampstead Garden Suburb and there is a real concern that a lack of electoral engagement means Colindale is an easy target for these large developments.

I wonder if residents of Totteridge or Mill Hill or High Barnet would settle for this type of development on their doorstep, including pulling down their homes "to allow pavement widening". 
So the big challenge facing Colindale now is the additional housing growth and how it impacts on the existing residents.  I am not saying that we don't need more properties in the borough, especially affordable property, but the issue is do we put them all in a couple of wards, namely Colindale and  Golders Green, which incorporates the new Brent Cross development. I looked at the the forecast housing densities across the borough and what becomes apparent is that wards like Colindale will have much more pressure placed on them while wards like Totteridge, Mill Hill and High Barnet will be preserved at the current low densities. Set out below is an analysis of the change in housing densities by ward between 2001 and 2028. (Source: Barnet Ward Atlas)


Ultimately this is about whether the residents of Colindale are getting a fair deal from Barnet Council. I am sure we need a wider conversation about where new homes are built to ensure that Colindale does not become the default option when yet more new flats are proposed.

Thursday, 4 April 2019

Disappearing Evidence - Refuse Collection Reorganisation Update

Update 11.29 am 5 April.

I have just had a response from Barnet that the information is now available again.  You can see it here. Having checked the data, the overspend on waste collection service remains the same at £2.029 million.

On 14 March  I asked a series of questions relating to the round reorganisation of Barnet's waste collection service. I expressed serious concern that not only had the rounds reorganisation not saved any money but in fact it had actually cost a great deal more. The reason for me making this assertion was based on information issued at the Financial Performance  & Contracts Committee a few days earlier on 11 March. At that meeting it was disclosed that the waste collection service was significantly over budget and that the year end forecast showed the service would be £1.75 million over spent and that this overspend had jumped £1.189 million since the previous month. I raised this at the Environment Meeting but received no clear response as to when we would get a clear understanding of what the reorganisation has actually cost.

On 1 April Barnet published the Period 11 financial figures which also set out how the latest forecast on the waste collection service had worsened. Luckily I took a snapshot of this report. On the 2 April I tweeted about the significant increase in costs but as of 12 noon today the information has been removed from the website - it looks like it was removed on 2 April, possibly as a result of my tweet.

The figures show that between the figures published on 11 March and those published on 1 April the revised year end forecast had increased by another £283,000. That is a huge increase in short a short period of time. Much worse is that they were forecasting for the last three months of the year in the period 9 figures. To have to make such a large adjustment in period 11 suggests that cost have rocketed at a time when I was told repeatedly at the Environment Committee that the problems with waste collection were reducing. It is now apparent that the reason the problem are reducing is because so much more money is being thrown at them. I have set out below a comparison between the two sets of figures including the one that has now been removed from the Council's (not very) Open Data website.

I have asked Barnet why they have removed these figures and I will update this post once I have a response. What is clear to me is that the round reorganisation of the waste service has been a financial disaster and the risk is that other cuts to services will now be made to offset this massive overspend.

Friday, 15 March 2019

Two Meetings, Some Shocking Discoveries.

Set out below are a few things I learnt at the two Barnet Committee meetings I attended this week. You may find them surprising/shocking.

  • Barnet are moving to brand new offices in Colindale in June but they haven't agreed an exit to the lease at Barnet House which will cost £63,000 a month for the next 156 months,  so we risk leaving the building empty for the next 13 years at a cost of £9.8 million, and that was always in the business case.
  • Barnet are in dispute with the builder of the new Colindale offices and the sum involved is large enough to impact the capital budget - we aren't allowed to know what the exact sum is but my guest would be somewhere around an extra £5+m.
  • Where housing benefit was accidentally overpaid, Capita are allowed to keep an extra £340,000 of the money recovered.
  • Barnet agree with me that they had provided some incorrect figures to Policy & Resources Committee on the FTE headcount of agency staff  - Barnet showed it declining whereas it had actually risen significantly in the last three months. 
  • It is okay to say there is an upward trend in user satisfaction even though the figures have got significantly worse in the last 12 months.
  • If Capita have a large number of vacant posts for services they provide to Barnet we still get charged the same price  - because we only measure outputs and Capita will get penalised (but not as much as they save in salary costs?).
  • We still haven't got a clear picture of all the agency staff costs.
  • East Barnet Library will be turned into a Families Hub for the east of the borough when the library is relocated to the new leisure centre in Victoria Recreation Ground.
  • Barnet surveyed 1.5% of households to understand how many bins they had to collect and subsequently found the small sample wasn't a reflection of the true numbers of bins.
  • Even though for years drivers have been unable to get the large refuse vehicles into restricted access routes they thought they would give it another go - and it failed.
  • Drivers weren't members of the project team that planned the round changes.
  • The new area based collection service means that a significant amount of time is spent getting from the Harrow depot to the point where they actually start collection refuse.

  • They couldn't procure a critical IT system to help with the rounds reorganisation because they left it too late before commencing the procurement process to comply with EU procedure - even though the issue had been known about for 3 years.
  • A significant amount of management time was diverted from services like street cleansing to deal with the new refuse collection rounds.
  • Even though the number of rounds reduced from 41 to 38  Barnet had to hire an additional nine (9) refuse trucks at a cost of £1000/week each and purchased 4 new trucks at a cost of £741,700 +VAT.
  • The new green waste collection round mean staff have to collect an average of 1917 bins per shift.
  • As recently as last week only 28% of rounds on a Monday were completed within an 8 hour shift and over the week 30 rounds took more than 10 hours to complete


  • 17 estates had their twice weekly collections cut to once a week. Discussions have now taken place with managing agents and areas are being identified to store additional bins on the estates.
  • There is no clear definitive comparison between what the refuse service cost before the changes and since the changes so we don't know if they have saved any money.
  • The refuse service is currently forecast to be £1.75 million over budget.
  • Recycling rates are down.


The two meetings left me with no confidence in the operation of the Council and the ability to achieve cost savings. Next financial year - starting in 2 week's time - Barnet has to make £20 million of savings and we will still need to draw down £5.3 million from reserves. I remain concerned that without an accurate picture of how much we are spending on things like agency staff and the refuse reorganisation there is a very real chance the savings won't be achieved.

Tuesday, 12 March 2019

Barnet Bingate - My questions on what happened

On Thursday Barnet's Environment Committee will discuss the review of the Bin Round Changes that took place in November. Click here to read the full report. Set below are the questions I have submitted which I hope will probe a little deeper into what led to the problems and why the service is now £1.75 million over budget.

Questions:

Preparation Stage:
  • Why wasn’t a survey of the number of bins collected from households carried out before the rounds were finalised and has it now been completed?
  • The report acknowledges there was over confidence in drivers abilities to access challenging roads. Was a representative of the drivers invited to test drive the new larger vehicles before they were purchased?
  • Was the purchase of wider longer vehicles included in the risk assessment and if so, what was the finding and how was the risk mitigated?
  • I understand from industry experts from outside Barnet that one of the downsides of route planning software is that it does not always pick up road anomalies and as such should always be validated by staff with a detailed route knowledge to “sense check” them. How many of the routes were “sense checked”  by experienced staff before they were introduced and how many were amended following that sense checking?
  • Does the route planning software easily accommodate manual amendments to the proposed routes?
  • Given that some roads may have 6 or more sections, as highlighted at 4.3 in the report, on how many occasions does the route planning software schedule two or more different refuse vehicles, two or more recycling vehicles and two or more green waste vehicles in the same road on the same day, what is the maximum number of different vehicles that have been scheduled for collections in the same road in a single day?
  • Can you confirm that the area based collection strategy means that, for example, on a Monday, refuse vehicles based in Harrow would have to travel to the East of the borough before they start work and return to Harrow at the end of their shift and that on a Friday, for example, vehicles based at Oakleigh Road would have to travel to the West of the borough before they start collecting and return to Oakleigh Road at the end of their shift and how much of their shift is spent travelling from one side of the borough not collecting rubbish?
  • Did anyone calculate the mileage, travel time and fuel costs associated with the area based collection strategy and if so what is the additional mileage, travel time and fuel cost compared to the old collections rounds?
  • Can you clarify  if, prior to the route change, drivers only had to have a knowledge of roads in the half of the borough where they were based whereas now they have to have a knowledge of roads all across the borough?
  • Can you clarify if any members of the frontline staff, such as drivers, were members of the project team?
  • The report notes that from 27 August frontline staff were invited to take part in structured review sessions. How many staff were invited, how many sessions were held and how many frontline staff attended?
  • On page 36 the report states that Street Scene is in the process of procuring a fully integrated IT system. What is the cost of this and why wasn’t it procured before the round changes were made?
Staffing:
  • The calculation of total staff numbers in figure 13 do not add up. Please can you clarify what are the correct figures?
  • It appears that the number of core staff have reduced by approximately 15 since October (core LBB staffing has reduced by approximately 600 hours per week). Was the reduction due to increased sickness, staff made redundant or did they leave and if they did leave what did their exit interviews identify as the reason for leaving?
  • Of the 7,117 of agency staff hours worked in January, what was the split between drivers and loaders?
  • The cost of LBB staff per hour appears to peak in January. Is that linked to bonus payments to incentivise staff to work over the Christmas/New Year period and how much was paid in incentive bonuses to LBB staff?
  • In October, before the changes, LBB staff additional hours were approximately 17% of core hours but by December that had risen to approximately 27% of core hours. What impact did such a high level of overtime in November and December have on staff  and did it result in the increased level of sickness/unauthorised absence?
  • What check were made at the time to ensure drivers did not exceed maximum driving hours and has a review taken place of all tachograph charts/written records to audit those checks?
  • How many hours of other street scene staff were diverted from, for example, street cleaning duties, to refuse collection and has this had a detrimental effect on the standard of street cleanliness?
  • Is the plan to keep the high proportion of agency staff or is it the intension to recruit permanent staff to phase out the majority of agency staff?
  • Given that in the UK over the last 5 years 39 waste workers have been killed mostly by being hit by moving vehicles or machinery, and that as recently as December a refuse worker in Northholt was killed, what safety training is provided to agency staff and permanent staff and has a risk assessment been carried out on the model of using such a high proportion of agency staff?
 Operational:
  • How many rounds were in operation before the changes and how many rounds are there now split between general waste, recycling and garden waste?
  • What is the average number of collections for each of the garden waste rounds?
  • How many of the new rounds are completed within a standard 8 hour shift and how many rounds need additional overtime or agency staff assistance to complete?
  • Can you clarify if situations arise where the vehicle driver is based in one depot but the loaders for that vehicle are based in the other depot?
  • Can you clarify who is now collecting waste from residential properties above shops, household waste teams or trade waste teams, and what have been the operational implications of the changes?
  • Of the 10 additional refuse vehicles on hire each week how many are to replace broken down vehicles and how many are to provide additional capacity on rounds?
  • In addition to the vehicles on hire, how many refuse vehicles have been purchased and what was the cost?
  • How often are general waste vehicles left full overnight and what impact does that have on start time of rounds the next morning?
  • Is green waste held at the Oakleigh Road depot overnight and how often is it sent to Edmonton?
  • How often is recycling waste held in the bulking areas at the Oakleigh Road Depot overnight, and is this a fire risk?
  • How many LBB shunt vehicles are used to transfer waste from Oakleigh Road to Edmonton and has this been reduced/outsourced since the new round changes?
  • In January you were operating an afternoon crew working between 2pm – 9pm at the Oakleigh Road Depot. Is that shift still operating and is it a permanent component of the collection service?
  • How many accident/damages claims have been made since the new larger vehicles were introduced and how does that compared to the number of claims made before the new vehicles were introduced?
  • On how many estates have you cut the number of collections from twice weekly to once a week and how much has that saved?
  • If you are now rebalancing Monday and potentially Tuesday and collection rounds are moved to new days, how will this affect area based working?
  • The report identifies that there were only 225 formal complaints in the three months November, December and January yet during that time there were over 16,000 reported missed bin collections. Many residents reported that they simply couldn’t get through the switchboard. Why did the publicity material not contain a designated hotline number and why was the customer service response so poor?
  • Has the on-going problem with subsidence at the Oakleigh Road Depot impacted on the efficiency of the operation such as restricting vehicle movements or parking within the depot and when will the subsistence problems be resolved?
  • Given that space at the Oakleigh Rd depot is very restricted, how have the additional purchased and hired vehicles been managed in terms of parking, does it reduce the efficiency of the depot and was an appropriate risk assessment completed to ensure the movement of so many vehicles in such a tight space was carried out safely?
 Financial:
  • Please provide a clear summary of the weekly cost of general, recycling and garden waste collections before the changes and the costs after the changes including the additional vehicle hire, additional fuel costs so that we can understand how much the new changes have saved/cost?
  • Period 10 to end of year forecast for the Waste and Recycling Front Line budget indicates it will be £1.75 million overspent. Given that any changes of this scale are recognised within the waste management industry as taking between three and six months for full business as usual, why wasn’t this period of disruption and associated costs not built into the budget?
  • Have you re-forecast the budget for 2019/20 to reflect the problems of implementing the new changes and what is the impact on the MTFS?

Sunday, 10 March 2019

Questions for the Financial Performance & Contracts Committee

How would feel knowing that the outsourced company responsible for managing Highways repairs and maintenance has 25% of posts vacant and are struggling to recruit? Is that why the highways in Barnet are so poor?  We still don't have clarity on agency staff costs and appears to have some very expensive interim staff on six figure salaries. The Council's relocation to the brand new office block in Colindale is late and they are in dispute with the contractor over costs. How much will this new building cost and how easy will it be to get to the new offices if you live in the East of the borough? Just some of the topics on which I have asked questions. As ever, I will have to wait and see if I get straight and direct answers to my questions.

  1. 1.2 says that a £3.685m contribution to reserves from the Capita contract settlement. What happened to the other £0.435 million that formed part of the settlement, when was it paid and where is the record of the payment given that it is not shown as a credit in the monthly expenditure figures?  
  2. What was the reason for the underspend of the forecast NLWA levy?
  3. At 1.9 the report states that the average interest rate for the £304.08m of long term debt is 3.86%. How much of the long term debt is in Lender Option Borrower Option (LOBO) loans, what is the interest rate on those LOBO’s and what steps have been taken to follow in Birmingham and other authorities’ footsteps to extricate themselves from LOBO’s and replace them with lower cost PWLB funding at a lower cost?
  4. Re para 2.1.10, please can you explain in more detail why there is presently a backlog in raising invoices for income due to the service and why CSG is a significant debtor which could result in debt write offs being written back to the service?
  5. How much of the £293,000 overspend in HR is due to the high cost of interim agency staff in senior positions and please can you clarify how many agency/interim staff in HR are costing the council more than £100,000 per annum?
  6. Re para 2.1.20 please can you clarify on which specific retained income lines the £1.346m shortfall has occurred?
  7. Can you clarify specifically how the housing benefit overpayments occurred in the first place, are the repayments anticipated or actual, and will the gainshare be paid before or after the repayments have been recouped?
  8. When you say that the misclassification of income between the General Fund and the HRA has been resolved in 2019/20 and going forward, does this mean that the authority will receive this income going forward or that the income has been reclassified so that we definitely know we won’t receive the income?
  9. Can you clarify how you can reconcile Table 2 which shows an overspend on Streetscene of £1.147 million with Table 6 that shows Environment are still on budget to save £1.915 million and does this mean that additional cuts will have to be made from elsewhere in Environment to make up for the overspend on Streetscene?
  10. Given that a significant debtor is Hammerson PLC owing over £1 million, that all of the invoices required more information and that two of these invoices are more  than a year overdue, has all the requested information been provided and what steps will be taken to seek immediate payment?
  11. Given that Barratt have failed to respond on 8 out of 10 invoices with a value of £600,000 what steps are you taking to recover this money immediately?
  12. Why do the agency staff cost figures not tie into the actual staff cost invoices even taking into account when the invoices were paid?
  13. Why does the average cost of employing agency staff vary by so much from month to month especially in Commissioning Group given there is so very little difference in the number of FTE staff employed?
  14. Given that the agency costs do not include interim and agency staff employed outside Matrix contract, can you quantify what the additional spend is through agencies such as Hampton’s Resourcing and Gatenby Sanderson, and what is the headcount for those agencies?
  15. At point 1.11 it lists 8 areas where benefits were built into the new contract. Can you clarify why those benefits were not build into the Comensura contract either from the start or when a new contract was awarded to Comensura in 2016?
  16. How much do you believe these 8 benefits built into the new contract will save Barnet per annum?
  17. The report fails to identify why recruitment and retention is a problem. What has Re done to understand the causes of the problem, for example have Re undertaken Barnet staff satisfaction surveys, how many exit interviews have been carried out and what were the findings, is it a morale problem, is it a pay and benefits problem? Without knowing what is the cause of the problem how can any mitigation proposals have any chance of success?
  18. Will the lower salary and pension costs arising from so many vacancies be reflected in lower charges made by Re to Barnet?
  19. At 1.35 the report states “Capita has not hit the targets for satisfaction, but there have been incremental improvements in most areas”. However, the report identifies that in 7 out of 10 satisfaction criteria the performance/direction of travel has actually worsened since last year. As such how can the statement “incremental improvements in most areas” be true?
  20. Given that none of the satisfaction KPIs have been met since contract commencement 5 years ago can you please explain what is the point of having KPI’s and what signal does this send to Capita about prolonged non compliance?
  21. Seven different bus routes stop in close proximity to Barnet House and the Northern Line stop at Totteridge & Whetstone 5 minute’s walk from Barnet House make it very accessible to residents. How accessible will the new offices at Colindale be to residents in the East of the borough who have housing queries or want to inspect a planning application in person?
  22. After June 2020 where will the family services in the be located in the East of the Borough and what reassurances can you give that funding for a permanent East Hub will be allocated?
  23. Given that last week I was told that an exit from the Barnet House lease had not yet been agreed, why wasn’t this identified as a risk in the report at section 1.16.7 and what is the scale of the financial risk – i.e. how many months will we have to keep paying rent for Barnet House once it has been vacated?
  24. What is the scale of the financial risk of not being able to vacate NLBP4 by June 2019?
  25. Have you carried out any staff surveys to understand how many staff feel about the move to Colindale, how many staff will find the move difficult in terms of travelling/commuting and what estimates have been made on change in staff retention as a result of the move?
  26. Please can you clarify when (i.e. June 2019) you will have certainty on the scale of the financial risk of the contractual dispute with the building contractor so that it can be incorporated into the budget?


Wednesday, 27 February 2019

Supplier payments for January - have we got a clear picture of agency costs?

The biggest issue in the latest set of supplier payment figures is the inconsistency in the interim and agency staff costs. I have been concerned that since the change over in contracts from Comensura to SCM Matrix we aren't getting reliable cost figures. In December the bills from Matrix were £824,900, much lower than I would have expected. However in January the bill was £1,413,389, almost £600,000 more. We have yet to see the breakdown of the costs and which departments increased their use of agency staff but such large fluctuations seem indicative of wider issues. In fact the January figures are the highest since last August.

I would also point out that there are also significant payments to two other staff agencies for what appears to be two members of staff. In January Barnet paid Gatenby Sanderson £18,731.31 and Hampton's Resourcing £11,363.64 and the total payment to the two agencies since January 2018 is £425,536. As far as I am aware this payment is for just two members of staff and if anyone from Barnet Council would care to correct me, please let me know how many staff are involved. What I would also say is that at these sort of salaries, these staff members should be listed in the senior staff salaries list which Barnet are obliged to publish by law and which you can read here.

In total, the agency costs excluding the two above are so far at £13.49 million with two months to run before the financial year end. I am still not convinced the cost includes all the agency staff recruited to sort out the mess on the refuse service but we have to wait another couple of weeks before we get a scale of the problems there.


The Capita and Re payments this month were just under £2 million this month once credits of £147,063 were included. However I haven't seen any details of the £4.12 million Capita are supposed to be refunding and which should have gone through in January.
The running total for payments to Capita & Re are set out below:

The top ten suppliers chart show that yet again the biggest slug of money is going to the Barnet Group; Conway Aecom have the highways contract and John Graham Construction are building the two new leisure centres at Copthall and Victoria Recreation Ground.
 As always, I will continue to monitor Barnet's spending.