A bit of context for Barnet's current financial mess - the £41million shortfall

 It's been a while, but the current financial crisis in Barnet deserves some context as this mess has been 15 years in the making. I have been following Barnet's finances since 2010 and I have made regular comments on the financial strategy. 

One thing I have commented on repeatedly is council tax freezes. Some may say it was a great thing as it kept council tax costs down for residents but in reality it is just kicking the problem down the road. The council tax element was frozen between 2010/11 and 2018/19 - they did include a social care precept between 2016/17 and 2018/19 but the council tax element remained frozen and in 2014, just before the election, they actually cut council tax by 1%

Well, in 2025 we have reached the end of that road and it looks like a disaster of epic proportions. Often council tax freeze are driven by political decisions not rational logical decisions. A great example of this was in 2012 when the plan was to increase council tax by 2.5% but the plan was scrapped and a demand by senior politicians for savings to be made instead - you can see the blog a a video of the meeting here. 

I have always said that freezing council tax for one year has long term implications as you are, in effect, reducing the council tax base by that amount every year going forward because each future year's calculation starts from that lower base.

I blogged about it again in 2013, 2014, 2017 and again in 2018 making the same point that this was storing up massive problems for the future.

I decided to go back and update all the figure with a more detailed analysis of the impact of the freezes. Set out below is a graph which shows the impact of these freezes.

Getting into more detail I have set out in the table below, the basis of the figures. I tried to be as accurate as possible using not just the revenue figures but also the number of properties in paying council tax - the council provide the number of Band D equivalent properties as part of their calculations in the Council's Annual Budget Book/ Financial Forward Plan and Capital Programme

What the figures show is that if Barnet had taken modest rises of 1.99% every year instead of freezing or cutting council tax, by 2022 there would have been £41m a year more revenue coming from Council Tax. National government must also bear some of the blame as for a number of years the government subsidised council tax freezes for that specific year. But the problem is that a subsidy is only for one year but the freeze represents a recurring loss.

Labour are not entirely blameless as the year after they came in they reversed the 1% increase in council tax made the previous year by the Tories. The big problem is councils are around for the long term but politician come and go and the decision they make are often very short term and politically motivated. The residents of Barnet now face the consequences of those actions.

It is also interesting to not that the cumulative lost revenues over the period 2010/11 to 2021/22 is £273million which maybe could have been spent on improving the infrastructure and services in Barnet. The old saying, "you get what you pay for" is truism but it has consequences and we are seeing them realised now.

How covid victims' families are being ignored by Baroness Hallett and how people with disabilities were failed during the pandemic

I haven't blogged for a while as I have been a bit unwell but I received an email yesterday from someone in Barnet who I admire immensely and I feel compelled to pass on his story. 

John  & Ida Sullivan had a daughter, Susan, who I met on a number of occasions at various campaigns and marches about the Barnet Council under the previous Conservative regime. Susan, who had Downs syndrome, was a very lively and cheerful person. I didn't know until I listened to the podcasts, just what a talent Susan had as a swimmer, winning numerous medals at the Special Olympics. Sadly she caught covid at the very start of lockdown in March 2020 and died shortly after. What is shocking are the details John reveals in two podcasts:

https://goingviralthepod.libsyn.com/the-dancing-queen

https://goingviralthepod.libsyn.com/who-do-we-not-save

What I learned from these podcasts is how people with disabilities were treated differently and inhumanely during covid, how hospitals ignored the knowledge, experience and wishes of carers. According to research 6 out of 10 people who died from covid were disabled. John and his family discovered that because Susan had Downs syndrome and a pacemaker she was denied access to the ITU at Barnet General and deemed "not for resuscitation" even though her family had asked for her to be resuscitated and until covid she had been in excellent health.

John wants to give his evidence of how Susan was unjustly treated to the Covid Inquiry chaired by Baroness Hallett but sadly he will not be able to do so but instead a large amount of personal evidence will be 'amalgamated' by a research company into 'Every Story Matters' where "stories will be collated, analysed and turned into themed reports, which will be submitted into each relevant investigation as evidence. The reports will be anonymised". John doesn't want Susan's story amalgamated and anonymised. All Baroness Hallett was asked to do by the legal team for the bereaved families, was to hear the witness statement of just 20 families, and she refused. Making time for those 20 families seems entirely reasonable and fair in an inquiry where public hearings are scheduled to concluded Summer 2026. Surely there must be room to hear those 20 families in such a lengthy timetable.

At one point in the podcast John says "The only voice my daughter has got is me. I will, to my dying breath, fight to give Susan that voice, and all the other Susans, at the Inquiry."

I hope that Baroness Hallett thinks again and allows the victims' families to give their experience to the Covid Inquiry in person so that the real story of how so many disable people died during covid can be heard and lessons learned.

Latest spending figures from Barnet and a 'blast from the past'

 Latest supplier payments are out and as the Capita Re contract draws to an end we see how much we are still paying Capita. In February we paid them £2.77 million on the CSG contracts and £503k on the Re contract. That brings the total to date to £641 million and we still have some payments to go. The Re contract has just ended so hopefully we will see the final payments at the end of the month when they are published. Barnet have extended the contract for a number of elements for the CSG contract so we will have a further three years of payments on that contract.

The spend on agency staff remains high and with one more month to go before year end it looks like we have already exceeded last year's spend at more than £17.3 million and are on course to hit the highest level since the peak in 2016/17. I hope someone is keeping a very close eye on this spend.

I was also interested to see a name I recognised from some while ago. Impower Consulting are, I believe, the same company that, alongside Agilisys, previously provided advice to Barnet on the mass outsourcing of services back in 2012 for the Capita contracts. They are definitely the same company who, in 2015, helped outsource the education services including school meals. Sadly the school meals ended up being sub-contracted out to another company so that the Council had no direct contractual relationship with the school meals provider and the education services contract was handed back to Barnet as soon as Covid hit in 2020, three years ahead of the planned contract expiry date. You can read about it here. This year to date we have paid Impower £133,692.96, a not inconsiderable sum. I hope it represents genuine value for money.

We have also spent £110,528 with a company called Peoplescout, a 'talent solutions' company which I think means recruitment. With all of the Re contract being brought back in house I suspect the cost of recruitment companies will be higher than normal but is something I will keep an eye on.

Finally is Brent Cross, where so far this financial year Barnet have spent £50.6 million. This follows on from £77.1 million spent in 2021/22, £70.8 million in 2020/21 and £45.5 million in 2019/20. I hope that all this expenditure is going to be worth it in the end.

I continue to keep an eye on Barnet's spending.

Latest Capita Spending

 Latest spending figures are out and the Capita contract continues to cost us a fortune. In January Capita billed an additional £3.2m on the CSG contract and £620k on the Re contract. The latest running total is £638 million.

The spend on agency staff continues at a worryingly high level and looks like it will hit £18.7 million by the financial year end (31 March).

Capita continuing to disappoint in the death throes of the Re Contract

 Apologies for not having posted a blog for a couple of months but I am still monitoring Barnet and the Capita contracts.

The latest spending figures show that Barnet have now paid Capita £634 million which is £273 million more than the contracted value even though some services included in the contract value have already been brought back in house such as Finance.

I watched the Audit committee in January where Capita were requested to attend to talk about their performance. You can watch the Audit Committee meeting here and the part where the director from Capita participates starts at 27 minutes 20 seconds into the meeting. What is most disturbing is that now the contract for Re is coming back in house at the end of March Capita seemed to have given up on rectifying problems that already existed. Performance failure and the inability to meet deadlines was repeatedly raised. At 41mins 14secs, one of the independent members of the Audit Committee does some plain speaking about Capita's performance which has been poor and is definitely worth watching.

While the Capita Re contract will come back in house on 1st April there are still significant elements of the Capita CSG contract will continue to be operated by Capita for another three years and that fills me with serious concerns. Barnet is a case study in how not to outsource services, with overly complex contracts and weak monitoring. I will keep watching Capita's performance.

Looking back almost twelve years - the pledge I made that was never accepted

 I was going through Barnet's supplier payments for October 2022 (£71.7 million) and I cast my mind back to January 2011. At that time the council implemented something called Pledgebank where residents could pledge to carry out some activity on behalf of the council/community. My pledge was as follows:

“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.”

Strangely, the council never took me up on my pledge although, rather than decline it, they left it hanging, "undecided" as they put it. You can read about it here.

Why I raise it now is that when costs are so tight and we potentially face serious cuts to services due to the impact of the crazy mini budget of 23 September, every penny spent must be carefully watched and if necessary challenged.

This month, excluding redacted payment, we paid 1,021 suppliers £69.27 million. The top 20 suppliers were paid £48.83 million or 70.5% of the total spent. Looking at individual payments there were a total of 14,811 of which 521 were for £10,000 or more, around 3.5% of the total invoices. Excluding payments to statutory authorities, that number falls further. Maybe now is the time to revisit that pledge?

Barnet also spent just over £2 million on agency staff in October which brings the year end forecast to £18.2 million, up on last year and set to be close to the peak year of 2016/17.

And just to update you on Capita, the running total is now £622.74 million. Scrutiny is more important than ever.

Capita still costing us a fortune

 I was a bit worried that the supplier payments still had not been published for September 2022 so I dropped a quick email to Barnet yesterday. Almost by return, they came back saying thanks for pointing it out but they had been published the figures somewhere else on the website by error and that had now been corrected. Since the finance function has come back in house they have always been helpful and very responsive.

What the figures do reveal is the bill for Capita continues to mount even though the end of the contract is in sight. In September we were billed £5.13 million on the Capita Re contract and £3.39 million on the Capita CSG contract, both chunky numbers.

The running total since the start of the contract is now £618.61 million, £257.73 million more than the contracted value.

It is also important to remember that the contracted value includes the cost for services that have already been brought back in house such as finance so the true cost is even higher.

Other noticeable costs include the running total for agency staff at £8.5 million with a forecast year end cost of £17.1 million.

It is also worth noting that, in the first six months of this year, Barnet have paid out £28.57 million on the Brent Cross project. I remain concerned at the level of risk Barnet is exposed to on this massive redevelopment project.

Listening to what is happening at other local authorities, I think we are in for a serious financial squeeze with the impact of inflation on pay rises, increased energy and construction costs, and contracts which include indexation clauses (such as the Capita contract). Now more than ever it is essential that there is a high level of scrutiny on every pound spent within Barnet. 

As always, I will keep monitoring the spending at Barnet.