Contract Variations - The One Barnet moneyspinner predicted by by so many including a Tory Councillor

Back in 2012 I remember attending a critical meeting in the run up to the decision to award the CSG contract to Capita. What was so memorable was how Cllr Hugh Rayner actually vocalised what everyone was thinking - when you have a contract how do you avoid being ripped off by the supplier with contract variations.

"I let out contracts myself to various customers and what I learnt in the contract is the word change or variance, because I know they are tied into me for the contract and this where I make all my profit and make up for the low price at the beginning"

A response was given saying we have to be robust.... blah blah blah, yet everyone at the time knew that this is exactly what was going to happen.

Thanks to the Barnet Bugle who recorded the meeting and this particular statement from Cllr Rayner


Since the start of the contract there have been a number of variations but buried in the papers of the latest Performance and Contract Monitoring committee there is a schedule of the contract variations to date. The report notes that nine contract variations were approved during the quarter. Six have a financial impact accounting for an increased cost of £1,933,025. 

But look a bit closer in a separate appendix  (p69) and that is a net figure offset by some savings. One of the largest contract variations  was as follows:

Contractual third party contracts true up in line with clause 7 of the contract and update Schedule 24 with final list of suppliers and the charges paid Financial impact of the life of the contract £9.7 million

Well that's fine you may say they are making savings as well but actually some of these are savings linked to fewer staff having to be made redundant at the time of handover because so many had already left the council and from reduced pension contributions. Indeed the largest offset was an amendment to schedule 1 and 4 to reflect the return of the Repairs and Maintenance budget for the Civic Estate to the Council in line with all other managed budgets which amounted to £6.5 million.

You may recall but back in 2014 I drew attention to one such contract variation to do with calls for libraries being directed to the Coventry call centre instead of direct to the libraries at a cost of £453,000 for the first two years of the contract. I estimated that this worked out at just over £8 per call which seems pretty expensive to me especially as so many of the calls were unresolved.

The rights and wrong of the various contract amendments is almost irrelevant. The key issue is that this contract is proving more expensive than originally envisaged because of contract variations and that extra money we now have to pay could have funded other services such as the meals on wheels or reduced the cuts to the library service. As I keep saying "Show me the savings"

Guest Blog - Barnet's Sham Consultation on Parks and Open Spaces

Mr Reasonable was sent this information from a concerned resident in Barnet who feels that the Parks and Open Spaces consultation is a sham. Having heard about their experience I can only agree.

Guest Blog
I attended the Finchley & Golders Green residents' forum and picked up a leaflet "Your environment, your views" which is about the Consultation on our parks and open spaces. At the bottom of this leaflet it has "For a paper copy of the questionnaire, please call 020 8359 4642". 

I phoned the above number. The person who answered said they were Regeneration. I checked that I had phoned the above number (it is displayed on my phone and I had) and also told him what number I had phoned. My understanding is that this number has been automatically redirected. He said it was nothing to do with them and I was put back to the switchboard who then put me through to Street Scene. The woman who answered knew nothing about the consultation and kept asking me if it was a survey, to which I replied it was not, but a consultation. She said it was all dealt with by the "back office" and when I kept asking where the "back office" was she said at NLBP. I asked if there was somewhere in Barnet or Finchley I could pick up a copy. I was put on hold and when she returned she said I could send an email to parks@barnet.gov.uk. I said that would require a computer - what about the people who do not have access to a computer to which there was no acceptable reply. She then asked if there was anything else she could help me with! She said I would be automatically directed to a satisfaction survey (I think that was what it was) but the phone just continued going 'beep, beep, beep,....(was that because I was obviously not satisfied?) All this took 19 min 34 sec with no chance of my getting a paper copy of the consultation.

I find the on-line questionnaire procedure very negative. Before I begin to fill in a questionnaire I like to know what all the questions are but with the on-line questionnaire this is not possible as you cannot move to the next screen until information is put into the required fields. Additionally, in many cases the information put into each individual field cannot be displayed on the screen at the same time because only about 2 1/2 lines are and you have to use the scroll bar to see other lines but again only about 2 1/2 lines at a time . Also I would like my own copy of my responses. Additionally, I would like to be able to review the completed questionnaire with my responses so I can amend them before I submit it but Barnet Council questionnaires do not have this facility.

Is it too much to expect that the phone number I rang from the flyer would have someone who could have taken my address and posted a paper copy of the questionnaire to me - taking about 2 minutes of mine and their time? 

Why is there not an option to download a copy of the paper questionnaire so people could then either write in their replies and post it back or be able to draft their replies and then input them into the on-line questionnaire. I believe this should be available for all consultations and would require little effort by the "back office". (There could be two options - one environmentally friendly / screen user friendly option listing all the questions with no spaces for replies and another with blank spaces for replies) Even this option would make this questionnaire available to more residents. There might be some in a household who are okay to use a computer and do the on-line survey and others who are not and having someone else print a paper copy for them would allow them to complete the consultation too. If they do not have their own computer, it should be possible to go to their local library, if they continue to exist, and have a librarian print one off for them.

I like to have time to think about my responses and perhaps amend them later. This is not the same as saving part of the on-line questionnaire for later as you cannot even use 'Print Screen' to get a printout because of only 2 1/2 lines displayed in many instances - the easiest way is to copy and paste each reply into a word file, print it out with blank spaces so you can write the questions in later or if there is lots of info to copy and paste these too. Hence my much greater preference for a paper copy than the present on-line survey.

Is it possible to reply to a consultation by writing a letter or an email? I have wondered if this is okay or not but cannot find any information one way or the other. Sometimes there are other things that you want to add that do not come under any of the questions but would be under the umbrella of the consultation. Or you just want to write prose and not be restricted by questions requiring certain responses. If this is also an option it should be clearly stated on the consultation web page - if it is not, it should clearly state that only on-line questionnaire responses will be accepted.. 

On the council website under the agenda for the Finchley & Golders Green Residents Forum there is Appendix 1 - Draft Parks and Open Spaces Consultation (link below). Any councillors who have read this will be under the impression that the consultation is more readily available than it actually is.

At the bottom of this page is this statement:

I note that this is also an appendix to the Hendon Residents' Forum but not the Chipping Barnet forum in January.

On 22nd Jan I went to North Finchley Library and asked for a copy but they knew nothing about it. I was able to direct them to the engage Barnet website so they could see what I was asking about but there was nothing on there about copies being available from the library. 

This consultation is about parks and open spaces. Many people who use parks and open spaces would have no idea that this consultation is running. A couple of months ago the laminated notices "Your Park - Keep It Green" with a photo of volunteers working in a park settling was placed at most of the entrances to my local park, Victoria Park. Why has something similar not been placed at the park's entrances regarding this consultation? 

We all know that these consultations are just window dressing - Barnet Council will sell them or use them for other uses than a park or open space. But if more people know about and have greater access to the consultation there will be a greater response.

Kind regards,

Concerned Resident 

Dinner at the Haven

As I mentioned in my previous blog there was a payment of £1,552.11 in the December supplier payments which was for "Equipment and Material Purchases" by the Assurance Department. Yesterday I received the  response  to my FOI request to understand what this payment was for. It turns out this was for  a Town Twinning Dinner at Haven Bar & Bistro, Whetstone with a delegation from the Council’s Twin Town of Morphou, Cyprus. Expenditure was from the Town Twinning Budget and payment was authorised by the Mayor’s Secretary. This dinner formed part of a schedule of events with the Morphou Delegation.

My main concern is that it was labelled as ''Equipment and Material Purchases" as I think that is misleading to say the least but the question does arise should we have spent this money at all. Some may say it is a relatively trifling amount and is something we should do to maintain friendships with Morphou. Others might say that at a time when we are cutting meals on wheels adult social care and children's services this is a rather inappropriate payment and maybe it should be sponsored by a local company or supplier to the council. 

Whatever your view at least we all know what it cost and it looks like they all had a jolly time - the bill is below:

Kerching! £18 million for Capita

Updated 4 February 2016 see below in red

December supplier payments are out and Christmas clearly was a season to be merry. Capita billed £18,264,588.36 in December on both the Re and CSG contracts. That brings their running total for the financial year to £61.26 million, £10 million more than the whole of 2014/15 and a total of £168.3 million since the start of the contract two and a half years ago. While certain Councillors keep repeating the mantra "Capita are saving money" I keep asking them to show me the evidence because the amount of money we are paying seems immense compared to the core contract value.

Our friends Comensura were also paid £1.58 million in December bringing the total this financial year to date to £13.8 million for agency and interim staff. This remains a contract out of control although I note that they have not asked for an advance payment this year to cover the Christmas period.

There are a couple of other anomalies in the payments. The first is for a large amount of money £640,640 which was paid to the Accountant General of the Senior Court. I wonder what this is for?

I am grateful to the FOI department at Barnet Council for a very speedy and complete response. This sum is for the Compulsory Purchase of a derelict property in NW4, so whilst it is a large payment out it is now an asset of the council. Zoopla suggests that the value of the properties either side are valued at just over £1 million so let's hope this property generates a return on investment for the council.

The second payment was a much more modest amount of £1,552.11 on 15 December and was for "Equipment and Material Purchases" by the Assurance Department. Nothing strange about that you may say other than the supplier name - Haven Bistro & Bar, the very pleasant restaurant in Whetstone. You will not be surprised that I have already submitted an FOI request for the invoice. I hope this isn't a repeat of the erroneous invoice for "training" which was carried out at the Claddagh Ring pub which I blogged about here .

As always I will keep a watch on spending in Barnet.

Trust, Evidence and Scrutiny all in short supply

At last week's Performance and Contract Monitoring Committee the main topic was the performance and review of the Capita Customer Service Group contract. Mrs Angry has written, as usual, an exceptionally readable, far superior and incisive review of the meeting which you can read  here.

I had a number of questions for the Chairman. A link to the questions and responses are here but the nub of my concern was most usefully raised by Cllr John Marshall when he asked if I would agree that the Capita contract has saved Barnet money.

My response was No.

The core contract does save money, although I'm not sure if it as much as was originally envisaged simply because a number of items were overlooked when the contract was being drafted and services were omitted. Most recently we were told that we would have to pay an extra £565,000 per annum for a contract for IT systems for Revenue & Benefits "because the contract was transferred with no budget". I would also note that if Barnet had put as much investment into the in-house team, they too might have delivered comparable savings. So whether Capita has really outperformed what the in house team might have delivered will never be known because, of course, the in house team were expressly precluded from the tender process.

However, the area where we seem to be paying a fortune to Capita is in all the extras including all the special projects and share of savings. At this meeting an officer did concede, when I put one of my supplementary questions, that some of the work charged for as special projects would previously have been carried out by salaried council staff. Capita charge for all these projects at consultancy rates and they are costing millions.

Councillor Hugh Rayner actually had the measure of this before the contract was signed. Thanks to Barnet Bugle who filmed the meeting back in October 2012 - but where were you last week? Cllr  Rayner hits the nail on the head when talking about how to make more money out of contracts.




If you look at Barnet Council accounts, how much they spent in 2014/15 compared to 2013/14 they seem to have spent more even though there have been massive cuts to services. So my question to Cllr Marshall and to every other Cllr is show me the evidence - have you actually realised these mythical savings. Just repeating the phrase "we have made savings" doesn't make them happen. Someone needs to get a grip of all the money being spent on extras, on costs like the Comensura contract for interim staff which is massively overspent (Capita are responsible for HR so why haven't they come up with a strategy to reduce agency staff - but they benefit from the overspend through their gainshare payment) and start actively managing this contract.

The three year review process of the Capita contract is about to start and it already looks like a stitch up. Officers will carry out the dialogue with Capita reporting back to Cllrs and meetings will be held in private. Cllr Geof Cooke did ask  for the meetings to be held in public but Cllr Finn as Chairman of the committee refused. He said maybe one or two but we all know what that means. Put to the vote all of the Conservative Cllrs voted against Cllr Cooke's amendment and yet again some of the most important discussions about a contract costing hundred's of million of pounds will be held behind closed doors. Personally I don't think Cllrs stand a cat's chance in hell of ever getting to grips with the contract without a great deal of professional support and as such it will be a missed opportunity - yet again.

I suggested to Cllrs that they should appoint someone to help them with their review, someone with detailed contractual and accounting experience who can guide and advise them. No, came back the response we have officer for that. Yes and are those the same officer that wrote a glowing review of Capita's staff and data centre, "OUR data centre" as Cllr Cooke pointed out which of course in Capita's data centre made officer's look rather silly and  cast serious doubt over who authored the report.

Trust, Evidence, Scrutiny; all in short supply in Barnet.

Supplier Payments for October - Comensura still a problem in Barnet

October supplier payments are out and this month there a number of large unusual payments. For some reason Barnet have paid Harrow Council £7,167,500 under the heading of public health - not sure what that is for? In addition Bevan Brittan LLP was paid £2.45 million for IT services. Given that they are a legal practice I suspect that someone in Barnet has mislabeled what this payment is for.

Capita had a relatively light month receiving only £1.57 million but one old favorite, Comensura, received a whopping £1,815,572.53. That brings Comensura's running total for this financial year to £10,812,965.97 and, as I have mentioned before, there is no chance of Barnet hitting its target of £15.5 million for the entire year. It is also important to remember that Capita get a percentage of that spend under their gainshare clause so the more Barnet pay Comensura, the more Barnet have to pay Capita.

Another old favorite, Impower, was paid £82,912.40 for "other, professional and various services" but not consultancy fees so that's ok then - not.

CBRE Indirect Investment  Services Ltd were paid £120,000 and Network Rail Infrastructure were paid £416,808.66 both for "consultancy services".  In addition, Affinity Water received a single payment for £831,952.67 in addition to a number of much more modest payments. I suspect some of these large payments may relate to the Brent Cross Development and may or may not be reclaimed from the developer. It would be really helpful if we could have a clear designation of what is recoverable and what isn't so we can see exactly what this Brent Cross development is costing Barnet residents.

As always I will keep monitoring payments.

Two Nights, Two Committees, Two Fingers to Scrutiny - Part 2

If you wanted to witness mindless political dogma at work you should have attended the Children's Education & Library (CEL's) committee last Wednesday.

This committee is chaired by Cllr Thompstone and on this occasion was supported by a phalanx of consultants and officers.

Of particular interest to me is the plan to outsource the Educational Services, including the in house school meals service. To set it in some context Barnet’s Catering Service provides approximately 3.23 million primary schools meals each year and approximately 1.14 million 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 £241,770.

I have blogged about this previously here and here and in summary the situation is as follows:

• Barnet have tendered a contract for which there is only one bidder;
• Barnet didn't know what margin they would achieve on the largest component of the business and are dependent on the sole bidder telling them;
• The company Barnet are in dialogue with don't actually provide the largest component of the service being tendered;
• Capita, who run the two large outsourcing contracts and have the best opportunity for economies of scale, have walked away, which may indicate that the contract isn't viable.

When the CSG and DRS contracts were tendered there was a business case which summarised what Capita had offered, including how much investment they were going to make (which never actually happened) and the net revenue they would generate by service line. This time we are not allowed to know. In fact we aren't even allowed to know what the potential savings or costs are in the last 3 years of the contract. All we are allowed to know is whether or not the contract meets the medium term financial saving target of £5.4 million between now and 2020. We absolutely aren't allowed to know how that will be achieved.

Cllr Thompstone announced that there were two people who had requested to speak. Up pop two head teachers extolling the virtues of Cambridge Education and how they had been consulted during the tender process. One was head of an Academy and used a contract caterer that was part of the academy package. Cllr Thompstone then announced that that was the end of public speakers. No, not again! This is not the first time that someone has accidentally forgotten to register my request to speak. Cllr Thompstone in an act of "kindness" said that I could ask my questions and maybe I could cover my point then. Luckily I am not a shrinking violet and told Cllr Thompstone that I had requested to speak and ask questions and that I intended to do both. Nervous huffing and puffing and then surprise surprise an officer discovers that, yes, I had requested to speak. It's not that I'm paranoid but these antics to try and stop me speaking are wearing a bit thin.

I gave my speech which I have set out at the end of this post. It made it clear that while I have no objection to outsourcing the majority of education services (although I think it is a somewhat pointless exercise as schools are free to purchase services from Cambridge Education already). Any questions from committee members? No not one.

I then had the opportunity to ask supplementary questions to the ones submitted and largely unanswered by officers. You can see the questions and the answers provided here . Critically the responses tell us that:

• There was no catering expert on the evaluation panel, even though the school meals service makes up 77% of the current revenue.
• Details of the last 3 years of the contract are secret and the public have no right to know the details.
• We have no right to know what upfront investment is being made, how much revenue the company will generate, or where savings will be made.
• We know that there is a gainshare clause on the contract but we are not allowed to know the upside of the contract and therefore how much gainshare is up for grabs.
• The council will have no contractual relationship with the company supplying the catering service.

The topic was then opened up to councillors. A few questions from conservative councillors. One that particularly alarmed me was from Cllr Alison Cornelius asking whether there have been any problems with the proposed catering subcontractor. Well Cllr Cornelius why didn't you Google that before the meeting; did you ask anyone if the caterer serviced any schools in Barnet and why, for example, they lost the contract for school meals at a school in North Finchley in July this year? 

Don't get me wrong, I have no specific problem with ISS. I am sure they are a perfectly good caterer. My issue is that this £7.2 million a year contract has simply been handed to a company without any real competitive process - the decision to use ISS rests entirely with Cambridge Education and not Barnet Council. 

All of the important financial details, I was told are in a separate secret report for Cllrs' eyes only so I was expecting that at some point during the meeting the committee would move into private session and interrogate the details. However, Cllr Hutton asked if the contract could be amended to take school meals out of the contract package. No absolutely not said the lady from Capita. Cllr Thompstone said that if Cllr Hutton wanted to propose an amendment if would have to be to the recommendation of acceptance of the report. A form of words was agreed and then it was put straight to the vote. Defeated on party lines 5 votes to 4 and that was the end of it. No questioning of figures in the secret report, no challenge, no questioning. Frankly every single Cllr should be utterly ashamed of their performance. Why bother having a committee when nobody challenges or questions what officers are doing in their name. But this is Barnet and that is the norm.

My speech to the CELS committee:

Tonight you’re being asked to approve a tender which is fundamentally flawed. I want to make it clear from the outset that I am not opposed to the outsourcing of the Education services but I am concerned about the subcontracting of the school meals service. Barnet has a school meals service providing 4.3 million meals a year, which is successful, has won external work and is profitable. It was originally included in this business case to sweeten the deal for the other services as it currently contributes 78% of the total revenue.

You started with six companies and you’ve ended up with just one bid from a company that does not operate a catering service. Catering will be subcontracted to ISS with whom Barnet council will have no contractual relationship. I’ve asked how much additional revenue ISS are promising to  generate but I am not allowed to know that. Bear in mind that the key driver for including catering in this contract was forecast £963,000 of net profit it would generate.

If this project was about efficiency and cost effectiveness, the logical option would have been to market test the catering service separately where there is a very healthy competitive market.

However I am sure you are also aware that in the Department of Education Survey from January 2015  it noted that school meal prices charged by private catering companies are on average 6.5% higher than in house or local authority catering services.

You had no catering expert on the tender evaluation panel for a contract that may last up to 10 years so I hope you have read appendix B thoroughly. Unlike the CSG and Re contracts where there was a reasonable amount of disclosure this will receive no public scrutiny and the assumption will be that you have read and understood the implications of Appendix B. For example  are you clear on the VAT status of this contract bearing in mind it became a significant issue in the Your Choice contract.

I’m concerned that actually the biggest saving here is the removal of Barnet’s central overhead charges and it’s debatable whether that is a true cashable saving.

I ask you to reject the contract as proposed and to withdraw the school meals service from the contract unless you are entirely satisfied it will deliver savings identified without affecting the quality of the service or cost schools more money. And if you really feel it will benefit the service carry out a separate school meals market testing exercise. In that way you will get a much greater level on transparency on what this service is costing and how realistic the savings really are.