Capita - they may be going but costs continue to grow

 I have been tied up for the last couple of months with the planning inquiry on the proposed redevelopment of the former gasworks in New Barnet. I will be producing a detailed blog once we have a decision from the planning inspector but in the meantime I though I had better refocus back on to Capita.

I was delighted that Barnet's new councillors have decided the Capita contract will end before the next election. The Re contract will end when the contract expires this time next year with a few of the remaining services such as IT and customer services being delayed while alternative arrangements can be put in place. However, that doesn't mean that I will stop monitoring the costs and in June there were some large bills, especially on the Re contract. set out below is the latest update 

Later on this month I will be inspecting all the Capita contract invoices as part of the Inspection of Accounts process for the year 2021/22. I want to check what the £49.95 million was actually spent on, especially the £13.95 million that was in excess of the contracted value. So far we have paid Capita £604 million and that deserves scrutiny.

One other area where spending seems to be running high is the agency cost budget. Agency costs peaked in 2016/17 at £19.87 million. After many challenges from me, especially to the Comensura contract who managed all of the agency spend, we saw the agency bill decline significantly until Covid struck when, not surprisingly, the agency spend increased. I was expecting the agency spend to drop back down to where it was in 2019/20 but the first three months of this financial year suggests that on the current burn rate, it may hit the 2016/17 peak of £20 million.

A couple of other large bills this month include the on-going cost of Brent Cross Thameslink station where this month we paid £3.6 million to Network Rail Infrastructure and £2.15m to Volker Fitzpatrick which were part of the total £6.4 million spent on Brent Cross.

We also paid £515,383 to PA Consulting in June with the cost allocated to the Adults & Health department. I suspect this relates to the on-going issue of the Mosaic casework system which was originally planned to be implemented by Capita but was taken away from them when the project failed to deliver. If I am wrong I am always happy for someone at Barnet Council to tell me what it was spent on.

As always, I will keep monitoring the spending.

Are agency staff costs out of control in Barnet?

For years I have been raising concerns about Barnet Council spending on agency staff. From a peak of just under £20 million a year in 2016/17 it has been declining and at the current rate should hit around £14.5 million by the year end.

However, I also review the monthly agency spend by department and what I have seen it a rising trend for agency spend in the Streetscene department which includes the refuse collection department. I have yet to see any evidence that the massive round reorganisation that took place in November 2018 has generated a single penny of savings and at the same time I have seen the agency spend continue to rise. Back in June I raised concerns that Streetscene was spending on average £50,000 a week on agency staff but in October that had risen much further and in November we saw two weeks where the agency spend was over £80,000 per week. So what this suggests is that while spend in some departments is falling, any savings are being offset by increases in the Streetscene department and I suspect this is to bolster the disastrous refuse collection changes. The agency spend did decline at the end of the month but that is a reflection of the fact that the green bin collections were paused early (10 November) because of the subsidence problems at the new Oakleigh Road waste depot. Public scrutiny has been gagged in Barnet and as such these trends are simply ignore at committee meetings and I get the impression that most councillors never actually drill down onto the figures.

Capita spend was comparatively low in November because there were no quarterly payments made this month but the running total for the contract to date is still £166.5 million more than was contracted.

2020 should see the 6/7 year review of the two Capita contracts but I have no confidence that they will examine what has been going on and whether Barnet residents are actually getting a good value service. I will keep watching how Barnet are spending our money.

Give £4m with one hand take £17m with the other

Supplier payments have been published and in December there were two massive payments to Capita. On the CSG contract Capita received £13 million and on the Re contract £4.3 million. These are massive payments which seem to make the £4.1 million Capita have agreed to refund seem somewhat paltry. It also concerns me that there is no transparency whatsoever on how the £4.1 million settlement figure was calculated. Set out below is the running tab on the two Capita contracts which makes you realise just how much this contract is costing us. And don't forget, you can still comment on the Council's proposal to bring some  or all of Capita services back in house. The consultation ends on 15th February so make sure you submit your comments to Barnet Council here.

I didn't report the supplier payment figures last month as I had significant concerns about the agency costs. These concerns remain. Set out below is an analysis of the agency costs as declared in supplier payments for this financial year.

Since the contract changed over on 1 October the payments have plummeted. This suggests that either:
a) there has been a massive change in recruitment policy since October; or
b) not all the figures have been declared since the new contract started in October.
We will have to wait and see what is the right answer. Given that there was a significant use of agency staff on the refuse service following the changes made to the collection rounds I wonder if they are included in these figures or if they are using another agency which so far hasn't shown up.

In addition there were some large and unusual payments as follows:

• £538,745.70 to JLT Speciality, an insurance broker. Given the council insurer is Zurich Municipal (to whom we paid £504,237.21 in December) it makes me wonder why we paid so much to JLT.
• £828,155.00 to S&B Commercials who sell large commercial vehicles. I wonder if this is where Barnet bought their new bin lorries and who authorised such a large payment.
• £99,424.50 to Capacitygrid. That may not seem like a huge amount but the services they seem to offer appear to be the same as those we pay Capita to provide. My question would be, are we paying twice for some services?

Set out below is a summary of the top ten supplier payments. I will as always continue to monitor the Council's spending.

Barnet Council Agency Staff Spend - reducing but still very high

Earlier this week I attended the Performance & Contract Management meeting at which I asked a number of questions about the procurement failure of the Enablement Homecare Contract. As is often the case, no criticism of Capita was allowed and even when Cllr Finn agreed with one of my points, he was stopped in his tracks by Cllr Zinkin who is the Praetorian Guard of the Capita contract. The debate then moved to the topic of Interim and Agency spend which has seen a decline from the high point of last finance year. It is nevertheless still very significant and, as Cllr Edwards pointed out, how is that agency spend going to be affected once Brexit happens?
To set this in context the chart below illustrates the huge growth in Interim and Agency staff spend over the last 5 years.

It was always envisaged that the Interim and Agency staff spend would decrease after the two large outsourcing contracts were signed whereas in reality it has continued to grow year on year to the point where it has become a massive embarrassment for the council. Steps have been taken to try and reduce this spend and my latest forecast for the year end spend look like the outturn will be around £16.5 million down on the £19.88 million of last year but still double what it was in 2011/12 and we still have 8 months of the financial year to run.

I would also note that the Interim and Agency spend has a nasty sting attached. At the year end 2016/17 the council stated that the agency spend was in fact £21.194 million a difference of £1.3  million over the spend shown in monthly payments. This did puzzle me until I carried out my inspection of the accounts when it became clear that Capita were paid £1.3 million in Gainshare payments for "savings" made on the interim and agency contract with Comensura. I have still not been shown the evidence to support the claims of these savings but Barnet is quite happy to pay Capita £1.3m on top of the £19.88 million paid to the agencies and that, I believe, is why the Council's figure is higher. I have raised this with the external auditor and I await his findings.

The last point to make is that Capita are the council's HR provider and one would have hoped they would have come up with some clever recruitment strategies to bring in more permanent staff and reduce the use of agency staff. Perhaps this is the re-run of their recruitment role for the Army  which has turned out to be a disaster. Or maybe they quite like the gainshare payments which are directly linked to the spend on agency staff - the more agency staff the more gainshare payment.

Barnet Council - Agency and interim staff commission could have saved library staff

I have written a number of blogs about the amount Barnet Council spend on Agency and Interim staff as published in their monthly supplier payments. "Does it matter?" you may say. Well from my perspective yes it does.

The commission payments on the agency costs are significant and numerous.We pay a commission to the originating employment agency, a commission to Comensura, one to Eastern Shires Purchasing Organisation through which the Comensura contract was let,  and a gainshare payment to Capita.

This year it looks like spend on agency costs will exceed £20 million. I reckon that we are paying at least 10% and probably closer to 15% (or higher), so between £2 million and £3 million in commission. That is money that generates no benefit - simply profit for all the intermediaries between the member of staff and Barnet Council.

In addition, there are a significant number of interim and agency staff who are paid at consultancy day rates significantly above the typical salary for that post. Lastly, there is the cost of having to go through a series of different people each time the interim moves on, something which I raised at the Performance and Contract management evidence session and something which even Conservative councillors agreed was a problem.

So why raise this again now? Well this week 46% of Barnet's librarians have been told they are being made redundant to save around £2.5 million, a sum very similar to the commission being paid on agency staff. This demonstrates to me that Barnet Council have completely lost the plot when it comes to setting spending priorities.

In the past I have been told that the reason for the increasing agency spend is because of the inability to recruit social workers. While that may be part of the problem, scrutiny of the evidence suggests that use of agency staff is endemic across several departments. In the latest detailed analysis of the Comensura spend in July 2016 £419,000 was spent on agency and interim staff in the Commissioning department and £227,000 was in Streetscene.

The graph on the right illustrates just how much agency and interim spend has grown since the concept of One Barnet was dreamed up. The spend doubled between 2010/11 and 2015/16 and is set to grow further this financial year at a time when more and more staff are being made redundant and that just doesn't make economic sense.

Christmas cheer for Capita as they bill Barnet £16.69 million in December

Barnet's supplier payments for December reveal £16.69 million paid to Capita even after two credit notes for a total of £1.5 million. Barnet keep saying these payments are in line with the payments schedule but I am at a loss to see how they can have billed so much in just one month.

It also brings the running total of payments to Capita of £102.9 million a staggering sum and one which I do not believe can be reconciled against the contract that we were all told would save money.

In addition, Comensura, the company that provides agency and interim staff to Barnet billed £2.66 million in December, a vast amount and more than double the average month spend. It includes a single invoice for precisely £1.25 million billed to the Customer Support Group run by Capita. Such a large round figure looks to me like a separate payment not the reconciliation of agency and interim staff invoices. Cllr Mark Shooter raised the issue of Comensura cost back in July and was told they were going down. Well Cllr Shooter they aren't - they are rocketing and something stinks.

I remain concerned that having handed over the running of the council to Capita  no one is actually keeping an eye on just how much money is being spent. Where is the scrutiny, where are the checks and balances who is actually checking Capita and Comensura?

Barnet supplier payments - another £675k for Capita

This month the overall supplier payments were £35.5 million. Aside from the usual suspects such as TFL, Barnet Group and Barnet Lighting there were a few payments which deserve a little more examination

Capita  billed £675,137.58 the majority of which related to the CSG contract. Discovering specifically what it is for shall have to wait until the inspection of accounts next year and even then I don't hold out much hope of getting any real detail on the figures.

Councillor Shooter asked at a council meeting back in July about agency staff cost with  the response that the costs are falling. This month the bill from Comensura, the council's agency and interim staff provider was   £1,268, 836.97, down slightly on June but still higher than May. Given the council has spent many millions on redundancy costs it seems ridiculous to be spending an average of £1.3 million per month temporary staff. A few others were as follows:

Paul Winter & Co billed £112,469 for what I suspect is legal advice on Brent Cross
NSL  billed £561,943.35 which looks like two payments instead of one.
Hags Play Ltd  billed £387,858.28 they are suppliers of playground equipment
Facultatieve Technologies Ltd who have been installing new Cremators at Hendon billed £185,288.

Apologies to readers for my prolonged absence from blogging but I will pull my finger out and get back into the swing of things now the summer holidays are over.