Thursday 30 July 2020

It's been a while - but I'm still here

I have been continuing to keep an eye on Barnet's finances during this very difficult time but as lockdown eases I thought to was a good time to start digging a bit deeper into Barnet's finances again, especially as the annual inspection of the accounts is coming up in August.

In terms of the monthly supplier payments it looks like Capita continue to benefit from their contract with Barnet. In June they were paid £12.5 million and this brings the total paid to Capita on the Barnet contract to a whisker under £500 million. When I mention this figure to some people they laugh as they simply don't believe that one council could pay so much money to one company but that is the reality of Capita in Barnet. The table below gives you the detail.

The long overdue review of the two Capita contracts has been postponed because of the Covid crisis but from my perspective it now looks inevitable that the contracts will be extended for a further 5 years taking us up to 2028. Capita may lose certain components of the contracts along the way but that may well suit Capita especially those elements which make them little or no money for them.

Interim and agency staff are still in great demand with another £1.26m spent in June. In some ways there is a plausible reason for having so many agency staff when many staff may have been absent due to Covid but it still seems like a lot of people employed on a temporary basis.

A couple of other things have jumped out of the latest supplier payments. The first is a payment of £375,823 to PA Consulting. Now I may be wrong but I believe they have been commissioned to sort out the mess of the Mosaic casework IT system which Capita tried and failed to implement. Barnet did receive a settlement from Capita on this project but increasingly this looks like is was way too small.

The other payment is to a company called Wirecard. Since the start of the financial year in April, Barnet have paid £239,340 onto these cards which is used for pre-payments. The problem is that Wirecard ran into financial difficulties in June with a €1.9 billion blackhole in their accounts. The background can be read in the Financial Times here and then in the Barnet Times here where Barnet Council played down the seriousness of the matter. However, a number of people had their payment cards suspended until the insolvency administrators took over. It demonstrates quite well why we have to be vigilant at all times and that just because a company is large and well known it does not mean it cannot go bust.

I will keep watching Barnet's spending.