Thursday 16 February 2012

When Contracts Go Wrong - Will Barnet Learn From Their Mistakes

Buried away at page 304 of the business planning document being discussed at next week’s cabinet meeting is a very interesting set of charts. They represent the corporate risk register and make pretty scary reading.

The first risk relates to the Street Lighting contract as it states:

“Street Lighting PFI Contract. Contractor has struggled to deliver the required standards and as a consequence has suffered large financial adjustments. Contractor has indicated this is not sustainable and has threatened to withdraw from contract. The financial implications could be up to 50% increase annually potentially equating to £2.25m annually”.

The impact is rated as catastrophic and the likelihood as high giving an overall risk score of 20. The council are taking actions to reduce the risk including “proposed amendments to contract to improve sustainability” but the target risk is still a high 15.

Now just imagine if the same thing happens when the two mega outsourcing contracts that are currently being tendered start going wrong. We will all be in the proverbial dog doo because they will be too big to fail. Now where have we heard that phrase before?

It is also interesting to note just how many other risks are included on the corporate risk register

“Development and infrastructure – Development within the Borough through the medium-term is planned to deliver 8,800 new homes and an increase in population of 20,000 by 2015. There is a risk that funding and delivery mechanisms will not be in place to deliver the necessary physical, green and social infrastructure to accommodate the requirements of an increased population”. This is something I and many other people have been banging on about for years. It is all very well planning all this expansion in Barnet but forever playing catch up with all the essential infrastructure that makes life bearable. They are planning remedial actions but the target outcome is still medium high meaning that there is still a good chance that this essential infrastructure will not be in place.
There also remain very significant risks on waste management, something which has been identified in the past and for which the target risks remain high.

I was considering asking questions about this at the Cabinet meeting but given the derisory way my questions have been treated in the past there doesn’t seem much point in asking.


  1. Even more terrfying is the solution to the street lighting problem which is to stop changing street lights ( which were only being changed because the govt was handing out PFI money ) claw that amount back from the contractor and then give them even more money to install energy saving nodes to save on the electricity bill. That is to reward them for failure. All this without going back out to tender.

    If, once installed, enough people complain that Barnet is too dark at night, if muggings, car crashes, burglaries etc all increase then the lights will all bu turned back up to full and £5m will have gone down the drain.

  2. At the last Council meeting Labour challenged Coleman on this. My memory was that he referred to the lighting contract as a "failed PFI" and then claimed it was Tony Blair's fault for starting us down the PFI route. He got quite heated & shrill about it as I recall, but sadly did not seem to feel in the slightest bit responsible.