Tuesday, 8 January 2019

Failing Performance - Hanging on the Telephone

Back in 2016 Barnet undertook a review of the Capita CSG contract. This three year review was supposed to identify shortcomings and look how the service could be improved. I dutifully carried out a detailed analysis which I submitted (which you can read here). Unsurprisingly my evidence was ignored, as it always is, and CSG were deemed to be doing a spiffing job. I was particularly critical of the telephone answering from the Barnet call centre based in Coventry. Barnet publish performance statistics which I had carefully analysed and which suggested that calls to Council Tax and Housing benefit during the 2015/16 period were consistently failing to meet this service level agreement (SLA) target of 80% of call answered within 20 seconds. It also highlighted the number of calls abandoned, those are calls where the caller gives up waiting and hangs up. The charts I submitted on that performance are set out below:

 Move forward three years and Barnet are now considering whether to bring certain services back in house following the massive fraud and the damning Grant Thornton report on Capita's performance.

Performance data hasn't been published for nine month but just before Christmas a series of performance files appeared on the council website detailing the performance from January to September 2018. I have charted the data below but there is a subtle difference in that the SLA target for answering calls has been raised from 20 seconds to 60 seconds so that should help Capita to meet their target. However the evidence doesn't back that up.

There seems to have been a huge problem in August and September with 3,273 callers hanging up having waited so long to get through. Capita only met the SLA target in two months out of nine (May and June). Given that in 2015/16 Capita only met the SLA twice when the target was much harder at only 20 seconds, it doesn't demonstrate to me that Capita are improving
Housing benefit calls didn't fare much better with the SLA only being met in two months (July & August) and with a total of 4,719 calls abandoned over the period. Now I can imaging that if you are calling about housing benefits, it is a really important matter to you. Making people wait so long is simply unacceptable in these circumstances. The data also identifies the maximum call wait times of over 37 minutes in two months.

It would be good to hope that this data would be considered when the Council is deciding which services to bring back in house but I know from experience that this will be a purely political decision irrespective of the evidence. Capita seem able to consistently under perform but get away with it as long as they promise to do better. They have been in place for five years now and it isn't getting better. How much longer do we have to wait until we get a decent service?

Sunday, 16 December 2018

It's not just Barnet that's broken - it's Broken Britain

This week is one that will go down in history as a series of dreadful mistakes and missed opportunities both nationally and locally. It started with the national TV debate which in the end didn't happen (although the Channel 4 debate did shine a light on Caroline Lucas). Next came the Brexit vote that was cancelled mid-way through the parliamentary debate.  I watched the madness in parliament with a feeling of despair and hopelessness. National politicians grandstanding for the sake of ego sickens me and when this was followed by the vote of no confidence in Theresa May's leadership it was yet another example of selfish individuals screwing millions of ordinary people who are just trying to get through life.

I watched Prime Minister's questions and was given the impression that I was living in a parallel universe. Employment at an all time high - well, given that you only have to work one hour per fortnight to qualify as being in employment and there is immense pressure to take any work with the threat of benefit sanctions, that is hardly surprising. The problem is that it forces people into the wrong jobs. Many years ago I learned about frictional unemployment: that period of unemployment while people search for the right job that matches their skills. To my mind it is an acceptable form of unemployment because it helps to optimise the skills of individuals where they can maximise their productivity. In Britain we have high levels of employment but falling productivity. Forcing people to take the very first job offer irrespective of their skills just seems like a waste of talent and an inefficient use of resources. There is a classic example of this in today's Guardian which typifies the plight of many graduates who have been convinced to make a massive investment in their education, piling up huge student debts, but betrayed by government who have failed to come up with a coherent industrial strategy to boost high value, high paid jobs.

The government also talk about wage rises. That's not the feedback I get from friends and relatives who are stuck on minimum wages. The minimum wage is going up next year by 4.9% - sounds great doesn't it. But when you look at what that actually means in cash money it is just 38p an hour. When you look how much energy, food and rent are rising by then you realise that 4.9% of f*** all is still F*** ALL.

This week also saw Capita come in for even more criticism of their failings in the National Health Service and Army recruitment yet they still keep their contracts, propped up a government who seem to accept poor performance in return for keeping privatisation of the public sector.

What I see is a cruel, self-serving, remote and out of touch Government that seems to demonize the poorest in society and reward the privileged and wealthy.

This translates from a national level to local politics in leafy Barnet. This week we saw approval given to £68 million of cuts to frontline services, including Children's, Adults', Environment and Housing services.
To save money, Barnet Conservatives agreed to changes in council tax support that will see thousands of people worse off, without allowing any public comment and questions. The contempt was magnified when the Council's Monitoring Officer appeared to say that public comment and questions have no value.  Dr Julia Hines recorded this contempt at the meeting.
At the same meeting Conservatives decided that it was okay for officers to ignore the unanimous request of Cllrs to prepare full business cases for the in-sourcing of Capita services. This means that we will have to put up with paying for failing services like pensions, payroll, customer services and IT for even longer.

Then, to round off the week, Barnet published the unredacted version of the Grant Thornton Report into the £2m fraud. It set out in detail the evidence of the fraud, one missed by both the Council's internal auditor and the Capita-run Finance Department. What was most shocking was the statement Capita released which seemed to shirk responsibility, undermining the credibility of the report even though we know it happened and the offender is in prison.
Barnet is a reflection of Conservative Britain; contemptuous, selfish and happy to make the wrong decisions for a few short term savings. We need to start again with a fresh agenda, a clear vision of what we want Britain to deliver to its citizens, of how society should treat its most needy and the role of big business in that plan. We have a nation of good, talented, hard working people who deserve so much more from their government than what we have been served up this week. We need and deserve change. Let's hope we get it in the New Year.

Monday, 3 December 2018

Suppliers Payments for October - A very large bill this month

Updated 5 December see below in Red
The supplier payments for October are out and there are a few anomalies. First off is the size of the overall bill which is much higher than normal at £74.85 million. The lion's share of that is represented in a payment of £25.86 million to the Barnet Group and their Open Door subsidiary. I am not clear why they are receiving such large sums; it may be the continuing purchase of properties for temporary accommodation; it maybe something else but it is a lot of cash especially at a time when the budget is overspent and massive cuts are planned for next year.

Capita CSG received £1.45 million after a deduction of a credit of £420,000 (I wonder what that was for) and Capita Re received £2.39 million, not insignificant. Just for reference, Capita CSG did receive more than £8 million last month.

Comensura only received £0.8 million this month, much lower than normal and would given a year end forecast of £17.2 million.  However, I was surprised there were any Comensura bills given the contract ended on 30 September and a new contract with Matrix SCM was supposed to have started in October - so far there are no signs of any invoices from them.

Updated 5 December
Barnet's Open Data website has now published the Matrix SCM data (although they confusingly call it MCM). The data includes 4 Day's of November data but I have separated that out to get a clearer image of total costs for October. This adds another £975,002 giving a total cost for interim & agency staff for October of £1,778,816.83 and a year end forecast of £18.9 million, £1 million more than last year.

There are a few unusual payments which include PA Consulting who were paid £232,267 for IT services - I wonder if this is linked to the Mosaic problems; £48,000 for Grant Thornton, I suspect tied up with the Fraud report; £12,726 to Enterprise  for vehicle hire. Next month will be interesting when we get a clearer picture on the interim and agency staff costs especially as the new bin service started at the beginning of November and may have significant  Set out below are the usual charts. I will continue to watch spending in Barnet.

Sunday, 2 December 2018

War on the Poor & Vulnerable

The last week in Barnet must seem to some like a war on the poor and vulnerable. On Monday the Adults and Safeguarding Committee looked at cuts to their budget. These included:
  • Cuts to adult social care staffing which, as the report identifies, "has the potential to impact on service delivery where capacity is reduced, such as longer waiting times".
  • Putting clients into residential care rather than offering community-based placements when cheaper to do so. The report acknowledges that "some clients and their carers / families, may consider this change unfavourable if they have a preference for a community placement". But who cares as long as it is cheaper.
  • "Maintaining affordable levels of inflation on care and support packages while continuing to meet statutory duties" for which read cuts to care provider costs. The report acknowledges that, "As this could impact providers' ability to provide services, there could be an impact on customer satisfaction". The reality is that to deliver this objective it will need squeeze the pay of frontline care staff , some of the lowest paid staff in Barnet who are already struggling to live on poverty wages.
  • "Increased use of universal services, enablement, telecare, adaptations, equipment and direct payments which cost less than traditional home care and residential care....This might include support from volunteers and local clubs, for example".  The report acknowledges that "some users/relatives may still prefer traditional care and find creative options less palatable" So get volunteers or charities to pick up yet more of the services.
At the Housing Committee they discussed moving 950 council homes to their Open Homes Organisation which is more akin to a housing association. The Council acknowledges that rents will go up but they will take a premium from Open Homes which will generate £650k a year. Personally it looks social cleansing to me.  A number of years ago Barnet scrapped open waiting lists and now only help those people with the highest house needs - you can read it here. This proposal will wait until a Council property becomes empty, either the tenancy comes to an end or the tenant moves out. The council will then transfer these properties into Open Homes. The rents in these properties will be significantly higher than council house rent and up to 80% of the market rent. According to the latest GLA figures published on 18 October 2018, the median borough wide market rent for a 3 bed property is £1,798 so 80% of that is £1,438. Even if you are in a working household that is a great deal of money especially if you are in low paid employment. This looks like a plan to run down genuinely affordable rents to a point where the only council accommodation will be temporary to meet statutory needs and that may be outside the borough. This meets the aspirations of certain councillors who would like to see only rich residents in Barnet.

At the schools forum on Tuesday they discussed three options facing Barnet schools

  1. A proposal to fund some services, previously funded from the Education Services Grant, from the budget shares of maintained primary and secondary schools.  the impact of this cut would be approximately £32/pupil
  2. A proposal to increase De-delegation from maintained school budgets in order to continue the school improvement (LNI) service in its current form.  The impact of this would be a cut of £11.28 per primary school pupil and £5.83 per secondary school pupil.
  3. A proposal to transfer 0.5% of the Schools Block to the High Needs Block. The impact of this this varies by school  but for my local primary school is would cut their budget by £25,490

We know that wealthier parents can employ tutors for their children. I recall just how many kids had tutors when my children were in primary school and how we had to use tutors again in secondary school because of prolonged periods without a permanent teacher in certain subjects meant our children were falling behind. Cuts to budgets will impact the least advantaged children  who simply can't  afford tutors. Barnet make great credit of the performance of pupil in our schools but just look at little harder and you will see that the children who are not performing well are in the poorest groups . Examples include the percentage of disadvantaged pupils achieving the ‘expected standard’ in Reading Writing & Maths (RWM) or the percentage of pupils with an Education, Health and Care Plan37 or statement of special educational needs achieving the ‘expected standard’ in RWM. Cuts to school budgets will just hurt these disadvantage children even more.

On Thursday a consultation on changes to the Council tax support system closed. This looked at the amount of discount people who are on benefits receive on their Council Tax bill. There may be an assumption that people on benefits get all their council tax paid but that has not been the case for a while. Barnet have used the introduction of Universal Credit to change the discount and rather than make the new scheme cost neutral, they have taken the opportunity to cut £3.2 million from the support budget. This means that if you earn just £10/month on top of your benefits you will have to pay 48% of your council tax. The full schedule is below.  This is just going to push even more of the poorest 20,000 people in Barnet further into poverty.
Add all these elements up and it looks like a war on the poor and vulnerable. They seem to be shouldering a disproportionate burden of the budget cuts which seems unjust and inequitable. More worryingly it does look like a concerted strategy to purge the borough of the most disadvantaged making Barnet a borough for the fit, healthy and wealthy only. It also seems to mirror the national government's plan to demonise and punish the poor. These are very bad times.

Tuesday, 27 November 2018

Will the £4m cheque buy Capita another 5 years?

Updated below in Red
Urgency Committee meetings are designed to pick up urgent matters that can't wait to be dealt with at other scheduled meeting. This meeting popped up in the calender last week and will be held this Friday morning at 8.30 am with the single issue of whether the Leader should authorise the acceptance of a £4.12 million cheque.  In most cases people would be cheering at getting a welcome cash injection just before year end. In this case it is what the payment is for that is most troubling.
The report is titled 'Commercial Settlement of Historic Issues' a rather startling title and I think not as intended. I think the intention was to discuss previous (historical) issues but they may have been historic as well in so far as they will be remembered for many years as one of the most disastrous deals ever done in Barnet.

This report provides an overview of the £4.12m cash settlement payment to the Council negotiated between Capita and the Council to resolve historical commercial issues related to the CSG (NSCSO) and Re (DRS) contracts.
The key items that form this proposed commercial settlement are:
  • Mosaic (the Adults Social care system) – new IT system implementation that experienced issues with timeliness and quality of delivery;
  • Development pipeline – delays in delivering housing on council land;
  • Increased monitoring associated with financial controls – to cover cost of Grant Thornton and additional council resources (in addition to first payment made in September 2018);
  • Procurement gainshare – settling of respective claims; and
  • Miscellaneous items – estates compliance (related to 2013 to 2016); and KPI failures related to the Re contract.
In theory this may look attractive  but a further analysis of the problems suggest that Capita are getting off lightly. The Mosaic Case management systems has been an unmitigated failure and in July the council identified that it would cost £4.2 million and a new supplier to sort it out. The fraud and consequent Grant Thornton Report has not only cost a fortune but taken up huge amounts of senior officer time to try and sort of the mess and to implement control procedures that Capita should have put in place 5 years ago. The gainshare rip off is nothing short of a scandal and deserves much greater scrutiny and the KPI failures are numerous and serious.

So the payment is welcome if somewhat low compared to the actual costs Barnet has been subject to. However the sting in the tail is that paying this £4.12m allows Capita to sidestep their procurement savings guarantees of £30.17 million over the next 5 years. The argument is that we will now receive 100% of the savings. Given that most of the savings have already been squeezed out of the procurement budget, the risk now is that we receive 100% of not very much instead of a guaranteed £30 million.

My really big concern is that this has been pushed through as an urgency item to forestall any decision about Capita's future services to be discussed at the Policy & Resources Committee on 11 December. We have already seen that we are not going to get the agreed full business cases on which services to bring back in house. This cheque has the potential to render the meeting on 11 December entirely redundant other than as a talking shop.

I will blog more about this after the meeting  on Friday but below are the questions I have submitted.
  1. Please can you provide the notional allocation of the £4.12 million attributed to each of the 5 items set out at 1.1 (a)-(e)
  2. Given that at the July Policy & Resources Committee the report noted that the costs of resolving the problems with the Mosaic system were £4.2 million and that there “are differences in views on who should pay for the £4.2m costs” can you clarify whose views have prevailed in this settlement and how much of the £4.2 million Capita are paying?
  3. The report notes that the payment of £4.12 million removes the liability for Capita to deliver net guaranteed procurement savings which amount to £30.17 million over the last 5 years of the contract. What impact does this have on the overall guaranteed savings of £126 million over the lifetime of the CSG contract and what are the risks of these savings not being delivered?
  4. In the financial  year 2019/20 will Capita receive £356,000 under the Agreed Procurement Price Recovery (APPR) mechanism as set out at 41.27 of Schedule 4 Price Payment Mechanism?
  5. Given that Capita will no longer receive any gainshare on this contract and APPR would have ceased after 2019/20 anyway, what incentives are there for Capita to fully resource the procurement function?
  6. Given that Capita have commenced formal redundancy consultations to cut 72% of their Corporate Programmes Team working on the Barnet contract, what reassurances have been provided by Capita that they will not cut the number of staff in their procurement team down to the bare minimum and /or move out the most talented staff to other contracts where they do receive a gainshare?
  7. Can you clarify if, by signing this agreement, it precludes the procurement team from being TUPE’d across to Barnet before the end of the contract?
  8. The report notes that no gainshare has been paid in 2018. However, advance claims were made and paid in 2016/17 for the entire three years of a contract which include 2018/19. Will those advance payments be recovered and if so what proportion of the £4.12 million do they represent?
  9. Can you clarify how much of the net guaranteed procurements savings were actually delivered in 2017/18 and, before this settlement is agreed, can you provide evidence that any shortfall in historical guaranteed procurement savings have been met?
  10. The report notes that procurement gainshare payments to Capita in 2017/18 were approximately £2 million. Can you clarify how that sum is broken down given that the Capita invoices suggest that the sum was  £1,665,543.26 and that of that sum, £534,000 was paid at the rate of 100% to Capita under the APPR mechanism (i.e. Capita received 100% of the savings and none was shared with LBB).
  11. Can you clarify if, by accepting this payment, this automatically guarantees that Capita will continue to provide the procurement function until the end of the contract irrespective of what the Business Case being presented to P&R in December finds?
  12. Does the payment of this sum guarantee that Capita will continue to provide any other services for the remaining 5 years of the contract irrespective of what the Business Case being presented to P&R in December finds and if so what are they?
  13. Does the offer of £4.12 million from Capita crystallizes an acknowledgement of financial loss exceeding £500,000 and  by accepting this payment does this preclude Barnet from invoking Step In Rights as set out at 21.1.1 in the contract?
UPDATE: 1 December 2018
I attended and spoke at the committee meeting yesterday. You can listen to what was discussed here and clicking on the sound bar. My appeal to the Councillors was not to refuse the payment but, at this stage, to defer the decision until the Policy & Resources Committee on the 11 December when more councillors would be able to scrutinise this decision and for more information to be provided to inform that decision.  Given that the payment from Capita will not go through until January anyway, deferring this decision by 11 days would have had no impact of the timing of the payment. It would have also allowed this to be discussed alongside the review of the Capita contract so the two items, which are inextricably linked, could be dealt with together. As is the way in Barnet, two councillors, Richard Cornelius and Dan Thomas, made the decision to press ahead, out-voting Barry Rawlings who was in favour of deferring the decision.

One thing that did come out during the course of the meeting is whether these savings are real or not. Because of the way the contract is written with a baseline for costs being set in 2012, it appears that any savings that are made at any time during the 10 years of the contract trigger a gainshare payment for the remaining duration of the contract, even if Capita had little or no involvement in the process. This is what I have always suspected but this seemed to be clarified in the responses and discussion to my supplementary questions. I have blogged about the one sided and anomalous gainshare process many time especially where contracts are let by council consortia. One such contract is the highways contract - LOHAC which is a London Highways Alliance and TfL joint initiative - you can read about it here. In the last two years Capita have claimed £1 million in gainshare on this contract. Part of the deal offered means that they can no longer claim gainshare on any procurement - which is a good thing. What it does do is make a complete nonsense of the often repeated statement that Capita is saving us £1 million a month. Over the period of the contract Capita claimed to save Barnet a net £47 million on procurement.  This meeting highlights that these savings are nothing more than smoke and mirrors and would have been saved anyway with or without Capita as part of the normal council procurement process. 

As such I can start to see why this might be a better deal for Barnet than sticking with the original contract - BUT it fundamentally undermines the rationale for outsourcing in the first place. In which case the best option would be to take the money and sack Capita. The problem is that by taking the money I suspect it makes it much harder to sack them. Cllr Thomas also made the bizarre comment that it was good that we had outsourced because when the contractor fails we can claim compensation unlike in house teams. The issue is if you outsource contracts you don't expect them to go wrong and getting Capita to constantly pay up for failure just means we have a failing service.  

Time will tell what happens but given the tactics employed yesterday I have no confidence that we will see a fair and balanced business case appraisal on 11 December. 

My speech to the committee is below:

"The question is “does this deal represent good value for money. The council’s legal advisors say it represents “good value” but there’s not a single piece of evidence to support that statement. This 5 page report contains no detail, no risk assessment, no analysis of how the sum has been calculated, yet you are being asked to make a decision which could have major financial consequences over the next 5 years. This sum doesn’t cover the cost of fixing the Mosaic system. We still don’t know what the final bill will be for all the additional management time and control systems to address the fraud let alone the total cost of the Grant Thornton report. We’ve paid just shy of £8 million in gainshare on alleged savings which may not have been cashable.
By accepting this offer you remove Capita’s liability to pay £30.17 million of net procurement savings. The contract was back end loaded with two thirds of the savings falling due in the last five years which they will now avoid. You may argue that by taking away the gainshare guarantee we get to keep 100% of the savings. The problem is that the level of savings look entirely unrealistic. The two largest alleged savings were on the Comensura and LOHAC contracts. Comensura has been replaced and LOHAC savings are currently subject to challenge with the external auditor. Some gainshares were only derived because officers had set an indicative budget too high. The risk is  Barnet receives 100% of not very much maybe  £1 -2 million a year at the most. This would leave us with a £20-25m shortfall against the guarantees. There’s no risk analysis, no forward procurement projections, no advice from external procurement experts. Approving this deal without those documents or advice would be nothing short of criminally reckless.

I urge you to defer this decision and deal with it at the Policy & Resources Committee on 11 December alongside the Capita business case review by which time officers can provide the level of detail a decision such as this deserves and allow greater scrutiny by more councillors. The payment is not scheduled till January so deferring the decision for two weeks will have no impact on when you receive the money. Making the decision now could cost the council at least £20 million. Think carefully, you will be held accountable".

Sunday, 25 November 2018

Anger, Chaos & Conflict - Just Another Barnet Audit Committee

On Thursday evening we witnessed fracture lines opening between the old and new guard of Barnet Tories, a meeting that satisfied no one and yet again highlighted the terminal failings delivered to us by Capita.

With seven speakers and 68 public questions this was always going to be a lively meeting but I am not sure anyone had quite anticipated the frustration and annoyance that was expressed by members of the public. Each of the seven speakers gave their three minutes with little or no questioning. Even with so little feedback there was still only time for 3 of the 68 supplementary questions.

There were two main items on the agenda; the first was the review of the Grant Thornton (GT) report and second was a run through of the internal audit reports. Most of the audience were familiar with many of the issues in the GT report because it was discussed in October at the Financial Performance & Contracts Committee. However, the biggest revelation that emerged was that a number of the committee members had not been provided with an unredacted copy of the report. The public are used to being treated with contempt by the council, but for councillors and the two independent co-opted committee members who are being asked to review a serious financial investigation not to be given a full copy of the report is inexcusable. Cllr Alison Moore asked for unredacted copies of the report to be given to members immediately. Lots of rumblings and patronising comments but it went to a vote.  Imagine the shock when new Tory Cllr Alex Prager voted with Labour and Cllr Laithe Jajeh abstained and the motion was carried. These two young councillors will need to be taken more seriously. Cllr Prager is an accountant and Cllr Jajeh is, I believe, a lawyer. They have the potential to bring a different perspective to the committee. Time will tell if the whip is brought to bear on them or if we will see a bit more independent thought from the Tories.

There were reports from the S151 officer, the assurance director and the GT staff. The one group unrepresented on the night were Capita, the company who were in charge of both the regeneration team where the fraud occurred and finance team whose lack of suitable controls allowed 62 separate fraudulent transactions to go unnoticed. The Internal audit function failed to identify this problem and agreed that they would have to put more resources into this area. Yet just a couple of years ago I challenged both Internal Audit and the Corporate Anti Fraud Team about the number of days allocated to reviewing the CSG and Re contracts but as always my concerns were ignored.

The reports were noted and the S151 Officer and his team went through all the systems they have now implemented to ensure this doesn't happen again. At one point Cllr Kathy Levine made the comment that if we (the council) are doing all this work for them (Capita), why don't we just do the job ourselves. She makes a perfectly valid point. We are paying Capita ,who do a lousy job and then sort out the mess that ensues. Cut out Capita and just bring the service back in house.

A vote on the report was deferred till the end of the meeting when Cllrs went into private session to read and discuss the freshly printed, unredacted, GT report. We don't know what was said or what they agreed so no transparency there then.

They then moved onto internal audit findings. Now I suspect that many of the committee members had not read the full report as it was buried away; a hyperlink in the summary report leads to other hyperlinks which eventually take you to the report. I have mapped out the click trail below:

The report gave no assurance, the lowest possible rating to the Temporary & Interim workforce service, a contract which is managed by Capita and for which they have claimed several million pounds in gainshare. It is a shocking report which you can read here.  Examples include:

On DBS Checks:
"Four individuals (2 x Passenger Transport Escort - Level 2 and 2 x Passenger Transport Driver) indicated that they would normally be required to have DBS clearance due to the nature of their roles and contact with vulnerable residents. We looked at the compliance tab within the agency staff system for each of these individuals but none had details of DBS clearance in place,"  and
"The supplier is supposed to audit suppliers regularly (six monthly for all agencies, three monthly for social care agencies) to assess compliance with statutory requirements in areas including immigration status, DBS checks and IR35. The six-monthly audits are supposed to be reported on to Barnet, but the three-monthly ones are only reported if requested. Only one audit report has been produced since the inception of the current contract, which was sent by the supplier to the Council in February 2017."
The risk identified was as follows: "If agency staff are not subject to the relevant vetting for their post, there is a risk that inappropriate appointments will be made, leading to financial loss, increased safeguarding risks and/or reputational damage for the council."

On Monitoring:
"18 (individuals) had their assignments extended beyond the initial assignment length. We looked at the records of approvals within the workflow inbox and requested supporting evidence from the supplier for the most recent assignment extensions for these individuals (all dating from after September 2017) and were not able to verify that the required permissions had been obtained for these extensions in line with the agreed workflow for extension approvals for 17 of the 18 extensions (94%)."
The risk identified was as follows: "If the Council does not have an overview of the length of service of agency staff, there is a risk of financial loss to the Council where a permanent post would be more appropriate, or where agency staff gain additional employment rights through length of service".

On Value for Money:
"The historic savings percentage quoted in the contract is used to estimate savings to arrive at the quarterly amount to be paid to CSG. It is not clear why the historic savings percentage is being used as the basis for the CSG gain share calculation, when the contract says that actual savings should be calculated and costs rebaselined annually. The text within the contract where the savings percentage has been drawn from is explicitly flagged as an illustration of past savings performance, rather than as a rate setting exercise. As such, it is likely that the CSG gain share calculations to date for this contract have not been accurate if the historic savings percentage has been used as the assumed savings amount"
The risk identified was as follows: "If cost savings and agency staff numbers are not accurately reported, the Council may not be able to understand whether or not the contract with the supplier offers value for money."

Personally, I find all these matters shocking especially as some of them were flagged up in 2014 and again in 2015. The response from the council is "we are changing the agency contract". What they failed to acknowledge is poor contract management, that is carried out by Capita and I see no prospect of their service improving. Worse, I see the Audit committee who have a responsibility for risk management failing to take any actions which would see the situation improve.

On 11 December we are scheduled to have a Policy & Resources Committee which will discuss the business case of which Capita services will be brought back in house. We know that this includes the Finance function excluding transaction services which will remain in Darlington and Strategic HR. I think that will be the totality of services. I also have a very worrying suspicion that the deal done by Capita to pay Barnet £4.12 million to resolve "historic (sic) commercial issues" is aimed at heading off any other services being brought back in house.

Monday, 19 November 2018

Will a Confluence of Events Lead to a Crisis in Barnet

In the last couple of weeks a number of separate and different policy decisions have emerged. Each one on its own is bad but not overwhelming. However, as all these different problems come together in the next four weeks, this confluence of events risks leading to a political crisis in Barnet,the likes of which we have not seen in some years.  Set out below are just six of those issues.

The Grant Thornton Report
The Grant Thornton report into the £2 million fraud was published back in September but with a large part of one annex heavily redacted. This annex dealt with contractual breaches by Capita.
Next week is the Audit Committee at which this report is due to be discussed. I and other bloggers in Barnet have already highlighted the massive failure of systems that allowed this to happen. I blogged about it here, Broken Barnet blogged about it here and the Barnet Eye blogged about it here. Grant Thornton have pulled no punches about the causes of the problems and all roads lead back to Capita. There was an expectation that the report elements that were previously redacted would be made public so we could have a full and frank review, especially around the contract breaches. The report lists a summary of the contract breaches and these are set out below.
Crucially, the evidence and observations is the part that is redacted. A well informed source suggested to me that the redactions weren't just to spare the blushes of Capita but to conceal criticism of the Conservative group and the way the contract has been managed. At this stage that is just speculation and will only be proven one way or the other when the report is published in full. The big issue here is that by concealing the evidence and observations, democracy is being stifled at a time when key decisions about these contracts are being decided. There are many calls for this to be made available and ultimately this may end up with the Information Commissioner's Office, one of a list of complaints they are dealing with in regard to Barnet, but this is no way to run a 21st century council.

Capita Contract 'Realignment'
Back in July officers set out a series of services where they felt there was scope to improve service performance, value for money and strategic control as set out below.
A business case report was commissioned unanimously by the Policy and Resources Committee in July and it was scheduled to come to the next Committee meeting on 11 December. Last week we also found out via a letter from the Council Chief Executive that the Capita Contract 'realignment' has now been shelved. Officers have had nearly 5 months to prepare this business case but it simply hasn't happened. As a result, all but two of the various services that even the Conservative group had agreed should be considered for insourcing will be left with Capita for the foreseeable future. I suspect that this committee will call into question the authority of the Chief Executive to ignore a unanimous committee decision. If it is claimed there have been insufficient resources to complete the study, then I will point out that they allocated a budget of £300,000 for this work so what has that been spent on?  I made the suggestion at the July committee that council officers were already busy and that in these circumstances they should bring in external consultants to help prepare the business case. Residents and, I'm sure, many councillors who were expecting this report will feel betrayed and let down by the council and I suspect this will end up in legal action.

Internal Audit Report
At the Audit Committee next week councillors will also be considering an internal audit report which is shockingly bad with a NO ASSURANCE rating. This documents the failure and mismanagement of the interim and agency staff contract, a contract managed by Capita and on which they have received millions of pounds in gainshare payments. This detailed report is buried away and not listed in the agenda papers. As is increasingly the case, the report can only be accessed via a hyperlink in the officer's summary report which then requires three further click throughs before you can actually read the report. If you want to read it, here is the direct link to the report.  Some of the problems identified in 2014 and again in 2015 are still happening in 2018 yet nothing changes. There is always the promise of an action plan to solve the problem but why after five years of failure is this never followed through. I will be blogging more about this in the coming days but it is a catalogue of indifference, complacency and refusal to take decisive action.

School Budget Cuts
I was contacted by several people last week about the consultation taking place in schools to cut their budget further.  Barnet's approach is that their own budget has been cut by Central Government so the Council will have to cut the schools' budget. You can read about the consultation here. It offers three options all of which are bad as follows:
  1. A proposal to fund some services, previously funded from the Education Services Grant, from the budget shares of maintained primary and secondary schools. The impact would amount to a cut of £32.37 per pupil
  2. A proposal to increase De-delegation from maintained school budgets in order to continue the school improvement (LNI) service in its current form. The impact would amount to a cut of £11.28 per Primary pupil, £5.83 per Secondary pupil
  3. A proposal to transfer 0.5% of the Schools Block to the High Needs Block. The impact varies by school but for example my local primary school Danegrove would see their budget cut by £25,490, the cost of a teaching assistant.
In response 30 Chairs/Vice Chairs of Governors at Barnet schools have written to Barnet Council showing their  concern at the situation they have been placed in, the lack of true consultation and the impact it will have on future budget cuts.You can read the response here.

Council Tax Support Cuts
We have also seen a consultation on the cuts to council tax support. This is the amount of discount people who are on benefits receive on their Council Tax bill. There may be an assumption that people on benefits get all their council tax paid but that has not been the case for a while. Barnet have used the introduction of Universal Credit to change the discount and rather than make the new scheme cost neutral, they have taken the opportunity to cut £3.2 million from the support budget. This means that if you earn just £10/month on top of your benefits you will have to pay 48% of your council tax. The full schedule is below. You can give your views on the consultation here. This is just going to push even more of the poorest 20,000 people in Barnet further into poverty.

Bin Collection Chaos
The final issue that has arisen is the change to the bin collection service. This seems to have been rushed through with very little consultation with the frontline staff who do the job. There have been changes to collections of refuse from flats above shops and as we know the food waste collections have been indefinitely suspended. The net result has been chaos, with many bins left uncollected. I understand that senior managers were warned that some of the rounds were simply too long to cover in a day and that the number of bins that had to be collected on each route was not known. This is unforgivable. You only have to look on Twitter to see numerous pictures of unemptied bins around the borough.

Political Crisis
So all this is coming together in the next four weeks and I get a sense that more and more ordinary, Barnet residents, those who are not engaged with social media, those who have no more than a passive interest in politics are starting to question the actions of the Conservative councillors. Brexit may be providing an immediate distraction but on a day to day basis all of these problems are now affecting many more residents. Coupled with the budget shortfall of £66.8 million over the next three years things are only going to get much worse.

I also get a sense that not all members of the Conservative party are happy, let alone thousands of residents who are feeling the impact. I get the impression that a gulf is starting to open up between the old guard politicians  and some of the new young Tory councillors.  The net result for Barnet residents is a badly run council, a weak leadership and poor management. That is good for no one especially the poor, school children, and anyone who believes in democracy. This council is falling apart and I doubt that is going to change any time soon.