Politicising the Environment - A step too far in Barmet

Why save £900,000 a year when you could save £300,000. Ah well that's the politics of Barnet.
On Thursday night Barnet agreed to 'suspend' food waste collections for an indefinite period while they look at how they can meet the 2020 recycling targets. Of course this was just a wheeze so that they can say they haven't scrapped the food waste collection service, but it fools no one.

I have blogged about this back in June and last week when I submitted questions to the committee.  In the supporting papers they said that stopping the food waste collection would save £543,448. This was then revised down in the summary because I have consistently challenged the assumptions they used in calculating the cost of disposing via anaerobic digestion versus incineration. So they are now saying it will save £300,000 a year. Quite a lot, but I looked at the costs and found that £130,000 is spent on collecting food waste from properties with restricted access. If they have to make a saving then focus on the exceptional costs rather than removing the service from everyone. I also had discussions with the anaerobic digestion company. Together we identified a further £68,000 of costs that could be stripped out almost immediately. So that brings the cost down from £300,000 a year to £102,000. If Barnet could boost food recycling rates there would be a very real chance of the service breaking even. I put forward all these arguments but a political decision has been made and logic and common sense is ignored.

Cllr Zinkn got quite angry with me at one stage and suggested that I hadn't read the papers when I suggested their supporting evidence for the environmental benefits of incinerating food waste was poor. One of the reports was a metadata study or one that collates the evidence from a number of  research studies. To me, saying I don't read the papers is the worse insult of all because the one thing I always do is read the evidence. In my questions I had drawn attention to the fact that, yes, it was a metadata study but it was carried out in 2004 and published in 2005. As a result all of the evidence would have come from studies carried out before 2005 and possibly some from the last millennium. As I pointed out in one of my questions, in 2005 the anaerobic digestion industry in the UK was almost entire dominated by digestion of sewage sludge. There were just 2 digesters operating that were for non sewage sludge. In 2018 there are 449 non sewage sludge Anaerobic Digesters in the UK and 106 commercial/ municipal ADs. It is a completely different industry today with technology that has moved on dramatically since 2005. Sewage sludge also has very different properties to household food waste.


It is a bit like using a metadata study on the smartphone industry in 2005, before the iphone was invented, on which to base decisions on smartphone usage in 2018. (The Motorola Razr V3 was apparently the bee's knees in 2005).

There are a number of studies which show the environmental benefit of  AD and it is generally recognised as being preferential to incineration. I have set out just one below but it is also important to understand that DEFRA (page 10) also  ranks AD above composting and incineration.

 The senior officer also made some statements about the gate fees (the costs charged for waste disposal) and the sustainability of the anaerobic digestion charges. I had checked with WRAP  who carry out an annual gate fee survey and they seem to bear no similarity to the figures quoted by the officer. I spoke with the AD operator who said they make their money from electricity generation. Wholesale electricity prices are rising and with the uncertain future of the nuclear power industry and the growth in demand for electric cars, the future for wholesale electricity prices looks positive form their perspective. It is also important to bear in mind that the digestate (residue left over at the end of the digestion process) is nutrient rich and is a very attractive alternative to artificial fertilisers typically produced using fossil fuels. All this digestate is sold on long term contracts to farmers.

To cap everything Barnet have refused to participate in a review fully funded by the GLA to look at ways that Barnet could retain this service. It suggests to me, and I suspect many others, that Barnet do not want to expose their figures to scrutiny because it will become apparent that they are not robust.

Barnet have also conflated the withdrawal of the food waste collection with the reorganisation of the refuse collection rounds. Based on the methodology for making the savings, which is to remove the dedicated food waste collector on each vehicle, the food waste decision would make no difference at this time. Cllr Dean Cohen said that the waste collection routes weren't just inefficient because of the move from one depot in Mill Hill to two depots one on Harrow and one at Oakleigh Road but that the routes had been inefficient for years. My question would be if that is true why on earth hasn't this inefficiency been addressed sooner. I am not an expert so I also sought out advice from an expert who understand the rounds in detail and who concurred that the waste round reorganisation could go ahead irrespective of the food waste collection decision.

And then we come to my final point which is why the council ignored a potential £900,000 saving which could be delivered by moving to fortnightly waste collections. 76% of councils in England who have responsibility for waste collection have moved to fortnightly general waste collections. This helps to encourage higher levels of recycling especially when tied in with weekly food and recycling collections and cuts costs. Environmentally and financially it makes most sense. I asked Barnet why they had rejected this option and their response was "The retention of a weekly residual waste collection service was a Conservative manifesto pledge as voted on by the residents of Barnet".  So residents voted  not to save £900,000 even though we are facing a massive financial crisis where Barnet has to make £67 million of cuts in the next three years and this year alone the forecast is for a £9.5 million overspend.

When decisions like this are made it makes me despair of where Barnet is going.

Incompetence, Naivety or Worse - Financial Disaster Looms in Barnet

I have spent the last eight years trying to get Barnet Council to act in a more financially responsible manner. Last night we saw just what a policy of constant Council Tax freezes and poor management has done for Barnet finances. I blogged about this last week which set out my concerns and the questions I had submitted to the Policy & Resources Committee. Last night I got answers, although not to the questions I had asked. That is the Barnet way and something I have come to expect.
You can read the answers here but to be honest they tell you very little.  In summary:

• They didn't find out about the budget shortfall until May, after the election when they were closing the final accounts - although Cllr Cornelius' throw away line that "Purdah was unusually strict" seems to undermine that answer.
• Even though Barnet forecast these problems 6 years ago in the graph of doom they do not accept that constant council tax freezes have turned it into a reality.
• They will now hold another meeting in July to decide what they are going to do to try and sort out this mess and to consider an option to bring strategic finance back in house.
• They are thinking about potentially introducing a freeze on recruitment - something they should be doing today.
• Actively monitoring payroll on a monthly basis is "challenging"
• They will be reviewing all capital projects but they can't say which ones.
• They will have to think about different strategies to address the increasing demand for adult social care.
• They are going to start public consultation in July on the radical changes to the council needed to balance the budget.
• Barnet will seek to recover the costs of up to £500,000 from Capita for the the investigation into financial reporting being undertaken by Grant Thornton.
• And even though they have already paid Grant Thornton £138,600 on this review of financial reporting they haven't yet agreed the workplan or the objectives of the study - something I simply do not believe.

One of the biggest problems is the failure to put up council tax since 2010.  I have been suggesting modest rises since 2010 but I also came across a video of a Budget Overview & Scrutiny meeting back in September 2012. It illustrates how back in 2012 Cllr Dan Thomas was already considering an increase but was somehow persuaded to introduce a freeze instead. If Cllr Thomas had stuck to his guns then we wouldn't be in such a mess now. (Credit must go to the late great Barnet Bugle, Dan Hope, who recorded so many council meetings and who we all miss very much.)


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

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

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

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

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

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

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

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

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

Pledgebank promise to review monthly spending from 2011.

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

The latest outsourcing - a case study in political dogma

"Barnet’s Catering Service provides approximately 3.23 million primary schools meals each year and approximately 1.14million secondary meals. The service provides freshly prepared meals cooked mainly on site from fresh ingredients in accordance with Government Food Standards. The service also holds the Soil Association Food for Life Silver Catering Mark which means farm assured meat, free range eggs and some organic foods". It also makes an annual operating profit of £190,470.

Barnet plan to outsource the school meals service as part of a larger package of council educational services including Ed Psych Team, Educational Welfare Services, and the SEN Placements and Performance Team to name just a few. One of the drivers for the council's outsourcing strategy is "the changing educational landscape" in other words the introduction of free school and schools becoming academies.

The business case, unsurprisingly, says that the in-house team should not be allowed to bid because only a private sector organisation has the skills and freedom to make money. Now what I found most alarming is the casual attitude the people who write these business cases take to hard evidence. The business case that justifies outsourcing all these critical services can be read here. As is so often the case in these manufactured documents, they slant the findings to justify their decision. In particular this business case says that the private sector -  a "joint" venture will generate significant new revenues. Currently the schools meals service generates 79% of all the revenues from the proposed services at a profit margin of 2.7% an entirely reasonable margin on a school meals service.

I asked some questions about this at the committee meeting last week and the answers I received were alarming to say the least. The business case suggests that a joint venture would generate £1,847,000 in new income - but this is profit, not gross revenue. The business case suggests that the margin on this business will be 20% so that means they will need to generate £9 million of additional turnover  - a doubling of the current turnover. By generating this additional £1.8  million of profit the business case shows how a joint venture will mean that cuts to the service will not be necessary.

However, the key issue is whether the margin of 20% is a realistic one. For school catering it clearly isn't. So what happens if the margin is 10% - well that means the joint venture will have to generate £18 million of new revenues and if the margin is 5% - still better than just about any other school meal service, they will need to generate an additional £36 million of gross revenues. Now it may be that they can generate the additional from other services but they will have to work incredibly hard if they are to generate £9 million of non schools meal revenues - the equivalent of carrying out the services for four other boroughs the size of Barnet in the first year. The lack of business sense and the unflinching belief in outsourcing everything is terrifying especially when driven by zealots who accept everything they are told without question.

Your Choice Barnet was, in effect, outsourced to Barnet Homes - an arms length management organisation - with a business plan predicated on growing revenues, something it completely failed to do. This has resulted in staff  pay cuts of 9.5% along with with to services. It looks like the educational services are set to repeat exactly the same mistakes.

Barnet is a top performing Council - So why are they making 397 staff redundant?

In questions and answers for Barnet's Council meeting on Tuesday we see the following:


Question 14    Councillor Reuben Thompstone
 How does Barnet Council compare with other London boroughs on measures of efficiency?

Answer by Councillor Daniel Thomas
Barnet compares favourably to other London authorities when comparing the Value for Money of all council services. We benchmark our performance and financial information each quarter, in arrears. In Quarter 2 2012/13, Barnet was ranked in second place in London for the total number of ‘high performing and low cost’ services. This indicator measures the total number of council services rated as high performance and low cost. Only the London Borough of Bexley had a higher proportion of services rated as high performing and low cost (70%), with Barnet in second place (54%).

Question 46 Councillor Hugh Rayner
Has there been any movement on the average time it takes to process a new housing benefit claim? 

 Answer by Councillor Daniel Thomas
In September 2012 the average time taken to process a new housing benefit claim was 19 days. Through the introduction of the new face-to-face process in Burnt Oak Library and Barnet House, this figure was reduced to 10 days by the end of February 2013 (the latest month for which figures are available). This performance is one of the best in London and is in the top 10 of all local authorities in Great Britain. 

Question 60 Councillor Joan Scannell
Could the Cabinet Member inform us of the current collection rates for council tax and business rates?

Answer by Councillor Daniel Thomas
The final in-year collection rates for 2012/13 were 96.6% for Council Tax and 95.8% for business rates. The equivalent figures for 2011/12 were 96.0% and 94.9%. 

 So there you have it from the pen of Cllr Dan Thomas. Out of the 32 London Boroughs, Barnet is second in place for efficiency, delivery of housing benefit claims is the best in London and Council Tax collection continues to improve. This is BEFORE One Barnet Outsourcing. Yet the Council want to make 397 staff redundant and ship the jobs off to the the rest of the UK. The Council should be thanking the hard working council staff - who scored so highly in the residents perception survey - not making them redundant. Only in Barnet.

Capita Week - Day Two - Revenue & Benefits

Last week someone kindly sent me an email regarding the blog I posted about Revenue and Benefits (Revs/Bens) and  Corporate Anti Fraud Team (CAFT). Set out below is what they said.

At the moment Revs/Bens is 2nd in the league table in London for performance indicators - this is the means by which the Department of Work & Pensions  (DWP) record our performance i.e how quickly we assess new claims and change of circumstances. 

Now bear with me here. Our new claim Performance Indicator (P.I.) is currently about 12 days which is outstanding, despite being massively understaffed. This has been helped by the face to face process introduced where by appointments are made and claims assessed directly at the point of submission.  Giving a low P.I. 
 

Now our friends at Crapita have promised, and I believe this is in the contract, to deliver 10 day P.I's for new claims made. Now the point here is they cannot use face to face facilities based in Blackburn. The only way to achieve such a P.I is to totally disregard the verification process. We expect claims to be processed via the phone. i.e you phone up state your circumstances - the claim is assessed and you write for the verification afterwards.

Open to fraud?! 
 
I know the Corporate Anti Fraud Team (CAFT) are very concerned about a potential lack of verification and no signature on a declaration. It is impossible to achieve a 10 day P.I any other way from outside the borough unless Crapita simply don't care and have no intention of making good that promise of course! 
 
Loads of fraud is flagged up through local knowledge. We know the tenants / landlords who are repeat offenders and addresses in the borough with history. 
 
I thought this needed a bit more digging so I had look at other Councils where Capita operate revenues and benefits. I came across a number of issues in Sheffield with people complaining about how long it took for Capita to deal with housing benefit claims.

There were some very sad cases of delays and unhelpful call centre staff here. More worryingly and linked to the issue of fraud, I came across some statements (which may be false) that last year Capita moved staff dealing with fraud over to dealing with new claims. My view always has been that KPIs can be a blunt tool that unduly focus attention on specific outcomes at the expense of other equally as important deliverables. If the contractor is rewarded for meeting a new claims KPI but not measured on fraud there is inevitably a risk that priorities will be changed.

While I was having a look at Sheffield I also came across their annual complaints report which can be downloaded here.

Table 1a: Complaints recorded on Council’s complaints management system

Complaints Received	2010/11	2011/12
Children, Young People and Families (CYPF)	230	122
Communities	322	251
Deputy Chief Executive’s	20	12
Place (exc. Street Force)	322	207
Resources (exc. Capita Revenues and Benefits)	156	100
Capita Revenues and Benefits	311	310
Total	1361	1002

While complaints generally fell by 20% between 2010/11 and 2011/12, complaints about Capita Revenue and Benefits remained high and made up 30% of all the complaints received by the Council.

Yet again I wonder if our Councillors actually bothered to do their own research, did they go and speak with Councillors in Sheffield about Capita's performance, did they look into the issues of whether KPIs artificially skew resource priorities. Given the importance of this contract, that the decisions they take could have a massive impact on the most vulnerable in our community and that cabinet members are rewarded handsomely for their role they should have done their due diligence. 

Do I think they have done it. NO!

BTW if Capita would care to comment on any of the points raised I would be more than happy to publish their response.

One Barnet - The Unanswered Questions

Update: YES IT IS CAPITA

Following the disclosure of two internal audit reports on the risks in the One Barnet Outsourcing project, I thought it would be useful to publish the address I made to Audit Committee in April this year. I am not surprised they didn't disclose their hidden reports at this meeting because it might have reinforced some of the comments I made. The committee failed to address my concerns at the time and today those concerns look even more serious.

"Having reviewed the CAFT (Corporate Anti Fraud Team) and Internal Audit plan for 2012-13 it strikes me that there is an enormous gap in the plans which represents a very significant risk to the Council. The Council is in the process of radical change and by 1 January 2013 the delivery of a large number of key support services will have moved to a private sector supplier. This involves hundreds of millions of pounds worth of spend and involves some of the key financial service such as revenues and benefits, procurement and the entire operation of the finance department.

Internal audit’s plan makes only passing reference to One Barnet and then only in the context of the initial commissioning process. Indeed Internal Audit have allocated less than 4% of the time to reviewing One Barnet. CAFT appear silent on One Barnet and have not allocated any time to it.

I would have expected to see a detailed report which sets out how One Barnet Outsourcing and the complete restructure of the Council to a commissioning council would impact on the operation of internal audit, CAFT, external audit and the audit committee.

For example:

Have the audit committee identified what audit rights and responsibilities they have under the new contract?

If Revs & Bens are administered by a private provider, will the CAFT team still have a role in identifying benefit fraud or will that responsibility pass to the external provider?

What audit rights will the council have over the new procurement function?

Will audit look at the contract procedures of the new provider or will audits remit be limited to examining the payment made to the new provider?

Will internal audit be expected to travel to the provider’s data centres to review procedures? Having reviewed Capita’s business centres map, it is perfectly possible that by 1 January 2013 we could see the council’s financial administration being undertaken in Mumbai, back office administration in Shepton Mallet, customer contact in Blackburn and pensions administration in Pune (in India).

How much thought has been given to the logistics and practicalities of how the internal audit function for these services will take place – if at all?

In terms of the new council structure, have the audit committee examined how they will interact with the new assurance group and with the outsource providers?

To what extent have the committee been involved in ensuring that the new assurance group will continue to provide the information and reports that the audit committee requires?

Will the audit committee be able to ask the outsourcing provider to appear before them to answer specific questions on the financial information they produce?

How will Grant Thornton’s on going external audit services be affected?
Have they provided advice on the issues arising from a commissioning council based on their experience of other local authorities?

What is their experience of dealing with a remote outsourced finance function?

It may be that all of these activities have been carried out, but if that is the case why hasn’t a report been published setting out all of these issues. What I am particularly concerned about is the audit committee are sitting in isolation whilst change is happening all around you. Failure to plan for these radical changes now will mean that you may be unable to provide the level of scrutiny you require in the future because of operational, logistical or contractual restrictions. I would like to get some reassurance from you, as a committee, that resident’s interests in the new world of “commissioning council” will be protected."

We are a week away from Councillors voting on this massive financial gamble yet all the matters I raised remain unanswered. In the commercial sector I cannot imagine any company signing up to such a radical organisational change without having addressed these issues in full, yet because politicians are in charge, they vote with what their party tells them irrespective of what makes sense. And please don't accept the myth peddled that there is not alternative. There is. I have identified savings of £9.5 million a year that could have been introduced several years ago but have been ignored because the culture of change and the influence of external consultants has prevailed. The in-house team have been prevented from submitting their proposals simply for political reasons.

If your councillor is a Conservative then ask them if any of the matters I raised have been addressed and if they can't answer the question ask them why they would vote to introduce such a radical financial gamble with so many unanswered questions.

Party Dogma 1 - Common Sense 0 - Barnet Heads for Disaster After One Barnet Vote

Last night demonstrated to me why local government needs radical reform. A motion of no confidence in the leader was all about the Barnet Council's obsession with handing over the running of council services to a private company.

Sadly there was very little factual discussion very little analysis of the key facts, very little evidence. There was, however, a great deal of offensive, unpleasant party politics. Cllr Dan Thomas had the bare faced cheek to say that the One Barnet scrutiny process has been open and transparent. Having asked numerous questions over the last two years I have never had a straight answer and any tangible evidence had always been hidden behind the cloak of "commercial sensitivity". Cllr Cornelius blamed the EU; Cllr Marshall blamed the last labour government; the unions got blamed for protecting their member's jobs.

I just wish they would stop blaming other people and look at themselves for a minute. How many members have read all of the papers, how many members have been to speak to councillors in Somerset or Essex or Liverpool or Edinburgh where they might have actually informed themselves and drawn their own conclusions. I tried to ask a question recently as to whether councillors had spoken to councillors in Somerset to talk about SouthWest One  where Somerset County Council is being sued by their private sector outsourcing partner but my question was banned. Councillors seem happy to be spoon fed what officers and external consultants tell them. Their naivety is sometimes breathtaking. Last night Cllr Marshall said that we are safe because we have a contract! What planet is he living on. Luckily he was immediately followed by Lord Palmer who speaks with authority and common sense are who showed Cllr Marshall what utter rubbish he was talking.

The constant mantra last night was there is no alternative. Not true and later today I will publish the Mr Reasonable One Barnet alternative.