Monday 28 November 2022

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.

Wednesday 9 November 2022

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.

Thursday 22 September 2022

What we are paying Capita

 Even though large parts of the Capita contract will finish next year, they continue to bill Barnet for their charges. The running total is now £607.7 million, £246.8 million more than the contracted sum.

As readers will know, I also review every single invoice Capita have submitted during the Inspection of Accounts period which give residents the right to inspect bills, invoices and payments. This year it was 381 invoices for a total sum of just under £50 million.

Within that figure there are some interesting numbers. £4.49 million was for 'indexation' of their fees. I have raised this with the council on numerous occasions saying that no other council service is guaranteed to get RPI increases every year so why do Capita? This will be a major issue over this financial year when RPI in August was 14.2% (significantly higher than the more accepted CPI rate).

£805,261 was paid to Capita for 'E Test & Trace' work. I just hope we are able to recover that from central government. We were billed £979,727 for the 'Network Recovery Programme' for which read road repairs. Now my understanding is that this figure is not for things like tarmac and pneumatic drills but simply staff to manage the programme.

Brent Cross is a major project to which Barnet has already made a massive investment including £77 million last year alone. The project management of the new Brent Cross Thameslink station was taken away from Capita and given to Mace but Capita still managed to bill £815,880 in fees.

There remains the infamous gainshare clause whereby Capita get to keep a proportion of any savings they make. It was phased out on procurement after many years of me complaining that it was a flawed system (you can read some of the old examples here) but it is still in operation of some other areas. This year we paid £300,015 gainshare on Council Tax and Housing benefit overpayment recovery. Given that Capita administer both these services one would have hoped they got it right first time. A further £221,160 gainshare was paid for reducing council tax single person discounts.

Capita also set thresholds for the number of council tax and benefits enquires they deal with. If the number is exceeded, we get billed an additional charge known as a volumetric charge. This year that amounted to £122,075, less than in previous years but still a lot of money.

In special projects, £2,749,758.83 was paid to Capita on various elements of the Hendon Hub project, one which has drawn very significant opposition and legal challenges. They also billed £1.66m for various IT projects.

In today's Barnet Times (22 September 2022) we see yet another example of poor performance in the Capita contract and that the representative from Capita refused to attend the Audit Committee to answer any questions. While a decision has been made to end the Capita contract, some elements will be continuing for another 42 months. The need to monitor and challenge the performance and cost of the Capita contract continues until the very last day. 

Tuesday 2 August 2022

Capita - they may be going but costs continue to grow

 I have been tied up for the last couple of months with the planning inquiry on the proposed redevelopment of the former gasworks in New Barnet. I will be producing a detailed blog once we have a decision from the planning inspector but in the meantime I though I had better refocus back on to Capita.

I was delighted that Barnet's new councillors have decided the Capita contract will end before the next election. The Re contract will end when the contract expires this time next year with a few of the remaining services such as IT and customer services being delayed while alternative arrangements can be put in place. However, that doesn't mean that I will stop monitoring the costs and in June there were some large bills, especially on the Re contract. set out below is the latest update 

Later on this month I will be inspecting all the Capita contract invoices as part of the Inspection of Accounts process for the year 2021/22. I want to check what the £49.95 million was actually spent on, especially the £13.95 million that was in excess of the contracted value. So far we have paid Capita £604 million and that deserves scrutiny.

One other area where spending seems to be running high is the agency cost budget. Agency costs peaked in 2016/17 at £19.87 million. After many challenges from me, especially to the Comensura contract who managed all of the agency spend, we saw the agency bill decline significantly until Covid struck when, not surprisingly, the agency spend increased. I was expecting the agency spend to drop back down to where it was in 2019/20 but the first three months of this financial year suggests that on the current burn rate, it may hit the 2016/17 peak of £20 million.

A couple of other large bills this month include the on-going cost of Brent Cross Thameslink station where this month we paid £3.6 million to Network Rail Infrastructure and £2.15m to Volker Fitzpatrick which were part of the total £6.4 million spent on Brent Cross.

We also paid £515,383 to PA Consulting in June with the cost allocated to the Adults & Health department. I suspect this relates to the on-going issue of the Mosaic casework system which was originally planned to be implemented by Capita but was taken away from them when the project failed to deliver. If I am wrong I am always happy for someone at Barnet Council to tell me what it was spent on.

As always, I will keep monitoring the spending.

Friday 17 June 2022

Capita and Fly Tipping - a short update

 As I have been tied up preparing for the Victoria Quarter Planning Inquiry this will be a short blog.

The first point to mention is Capita. Labour may have won control of the Council but we are still stuck with  Capita until September 2023 at the earliest. The latest figures show the bill continues to climb at just a whisker shy of £590 million.

Let's hope that between now and next year, the contract is brought to a close and we can regain control over these costly services.

The other thing I picked this week was the success or otherwise of penalising people who litter. This is a service that was also outsourced to Kingdom Services Group Limited. In the period February 2019 to November 2021, the contractor issued 8,760 fines for various forms of littering. The two largest categories are for dropping cigarette butts and fly tipping which together amount to 80% of all the fines issued. However, this is where things start to differ. Of the fines issued for cigarette littering, 65% are paid whereas for fly tipping only 16% of the fines are paid.

If people know they don't have to pay a fine, it stops acting as a deterrent. I asked about this problem three years ago and I was told then, "it takes longer to recover the fines for fly tipping". Sorry but that doesn't wash. For fines between January 2017 and December 2018, 25% of general littering fines remain unpaid but 57% of fly tipping fines in the same period are unpaid. I suspect it falls into the "too hard" category but if fly tippers know they have a better then 50% chance on not paying their fine, even if they are caught, then it is no surprise they keep fly tipping. 

Saturday 14 May 2022

Ending the Capita contracts - time is running out

Labour won control of Barnet last week with a large majority. They will be under serious pressure to make lots of changes to the way the council is run but I would plead that the two Capita contracts should be a top priority.

As I have said for the last 9 years, the two Capita contracts do no favours for Barnet residents. The catalogue of failure has been well documented on this blog, and as part of the review that has been dragged out over the last two years, it is evident that bringing services back in house can either directly save money or provide a better, more competent, service. 

The looming problem Barnet Labour Cllrs face is that, because the previous regime delayed the decision on whether or not to extend the contracts until after the election, it has left just 3 months to take that decision or face having to extend the contracts for at least another year simply because the transition arrangements haven't been put in place.

Both contracts expire on 5th August 2023 but there are specific clauses which relate to what has to take place to meet that expiry date. 

In the CSG contract it states at 47.3.7 that: 

On or before a date falling no later than twelve (12) months prior to the Expiry Date (where this Agreement expires by effluxion of time) or during the period from service of any Termination Notice until the Termination Date of this Agreement, the Authority shall notify the Service Provider in writing whether it wishes to retender the provision of the Services.

It then goes on to clarify at 47.3.9 that:

If the Authority does not wish to retender the Services then the Authority will indicate which Service Provider Exclusive Assets and Service Provider Traded Service Assets (or part of the Assets) shall transfer to the Authority on the Expiry Date or Termination Date in accordance with clause 5 (Assets and Equipment) and the Service Provider shall promptly undertake all necessary actions by the Expiry Date or Termination Date (as the case may be) including any further actions required pursuant to clause 5 (Assets and Equipment).

Probably the most critical element is the transfer of data and the transitioning of the IT system. When Southampton Council took the Capita contract back in house it took them 12 months to set up their own systems and transfer all of the data.

In the CSG contract it notes at 47.3.2 that 

The Service Provider shall (subject to any condition imposed on the Service Provider or any Sub-Contractor by Legislation):

(d) no later than six (6) months and no earlier than twelve (12) months before the Expiry Date, supply to the Authority within twenty (20) Business Days of the relevant date or request all information reasonably required by the Authority to carry out the Services (including but not limited to information (subject to the DPA) referred to in Schedule 33 (TUPE Information for Retendering) in relation to employment of all employees of the Service Provider or any sub-contractor (including the Sub- Contractors) employed in the provision of the Services and information relating to the Assets and Authority Assets) and the Service Provider warrants that at the point when given and, to the best of its knowledge and belief, such information is accurate in all material respects.

At 47.4.7 Surveys on Expiry or Termination - Final Survey, it states:

twelve (12) months prior to the Expiry Date or during any period leading up to the Termination Date, the Authority shall be entitled to procure the carrying out by a suitably qualified independent surveyor (not being an employee of the Authority) of a final survey of the Assets and Authority Assets to assess whether they have been and are being maintained by the Service Provider in accordance with its obligations under clause 6.1 (Maintenance).

At 47.4.5 Retention Fund it states that:

If the Service Provider has been notified under clause 47.4.3 (Results of Survey) that rectification and/or maintenance work is required, twelve (12) months prior to the Expiry Date or in the period prior to the Termination Date the Authority shall (to the extent that the Outstanding Work has not been carried out in the interim) deduct the costs of that work as quantified by that survey referred to in clause 47.4.1 (Final Survey) from the next following instalment (or, if the amount of such instalment is insufficient, the next instalments as necessary) of the Periodic Service Payment and pay such amount into an interest bearing account (the Retention Fund Account) until this Agreement has expired or terminated (subject to clause 47.4.6 (Costs).

At 7.3.2 it notes that: 

Six (6) months (or such other period agreed to by the parties acting reasonably) prior to the Termination Date or Expiry Date (as applicable) the parties shall agree:

(a) which of the contracts used in the provision of the Services shall transfer (either by novation or other mechanism) to the Authority or Future Service Provider (the Transferring Contracts);

(b) the costs and a reconciliation of any payments made in advance or arrears in respect of the Transferring Contracts on the basis that the Service Provider shall be responsible for all costs and charges which arise prior to the Termination Date and/or Expiry Date (as applicable) and the Authority shall be responsible for all costs and charges which arise after the Termination Date and/or Expiry Date (as applicable).

(c) the process and timetable for transfer and handover of management responsibilities in respect of the Transferring Contracts together with the provision of relevant documentation and information in respect of issues such as performance and payments to date.

This will require a lot of pre-planning and that needs to start very soon so that by 6 months before expiry you know exactly which contracts you want to retain.

The Re Contract is a joint venture and as such the unwinding process is more complex. In that contract it states at clause 2.3 that if Barnet wish to extend the contract by 5 years then that notice has to be provide 18 months before the expiry of the contract. This is repeated at clause 55.3.6. I just hope that the previous regime did not provided that notice.  

At 27.1.1 it states that:

Subject to clause 29.2.4 and 29.2.5 in the event of termination or expiry of this Agreement the Authority shall have the option exercisable within six (6) months of the Termination Date or Expiry Date to:

 a) purchase from the Service Provider at their Net Book Value any or all of the Exclusive Asset(s), unless:

 i. the cost of any such Exclusive Asset(s) has been fully paid for through the Periodic Service Payment or otherwise amortised at the time of expiry or termination of this Agreement; or

 ii. any such Exclusive Asset(s) were transferred and delivered to the Service · Provider as Initial Transferring Assets in accordance  with clause 29.2, and in which case such Exclusive Asset(s) shall be transferred to the Authority at nil cost; and

 iii. the cost of any such Exclusive Asset(s) has been partly paid for through the Periodic Service Payment or otherwise partly amortised at  the  Expiry Date or Termination Date then a proportional part payment shall be deducted from the Net Book Value;

 (b) receive (or a nominated party receives) a non-exclusive licence on reasonable commercial terms and at a reasonable commercial rental for the non-exclusive use of the Shared Assets (or a part thereof as nominated by the Authority);

At clause 30.8.1 the final survey (similar to the CSG contract) can be carried out 18 months prior to the expiry date and at 30.8.5, the Retention Fund, as with the CSG contract should be identified 12 months prior to the expiry date. 

In each contract there is an entire schedule  (Schedule 17 in the Re Contract and Schedule 18 in the CSG Contract) specifically relating to the exit arrangement and includes, for example, the requirement for Barnet to appoint an 'Exit Manager'. Capita have to have an exit plan already prepared which they have to update annually. It will be critical to see if that plan is up to date and the extent to which they have assumed the contract will be extended.

My biggest fear at the minute is that the new Labour regime will be told by officers that this fall into the "too difficult" category and that the proposals identified by the previous regime should be enacted. That would be a disaster, would limit what changes could be made to the way the council is structured and critically, would signal that Officers make the key policy decision, not the elected members. Time is short to take decisions, because the last scheduled full council meeting before 5 August is on 26 July, just 10 weeks from now. Please don't waste that time otherwise we will be stuck with Capita for years to come.

Sunday 1 May 2022

Please read this before you vote

 It is the local election on Thursday, the one and only time in the four year cycle when the council actually have to pay attention to the views of residents through the ballot box. 

There is a lot of spin at this time but I just want to look back over the last four years since the last election and see what has changed for the better or worse. 

Council Tax has risen significantly over the last 5 years and no matter what Conservative councillors may say, the council tax has risen every year, including this year - so no, not a freeze. Set out below is a chart showing the increase year on year. (This excludes the amount paid to the GLA)

In addition, if you have a green bin, you now have to pay an extra £70 a year to have that collected, a clever way to avoid showing the real increase in council tax. Now don't get me wrong, Barnet had no option but to increase council tax because previously they had frozen council tax and in 2014 actually cut council tax by 1% just before the 2014 election. What irks me is the way council taxes went up by 3.99% and 4.99% in the last two years so that, in an election year, the increase can be limited to 1% while saying it is frozen.

Bin Collection is also a matter the local Conservatives are keen to focus on. They promised they would keep weekly bin collections in 2018 only to withdraw the brown bin food waste collection weeks after the election and two years later introduced the £70 green bin charge. Barnet is the only London borough not to have a dedicated food waste collection. Instead of sending the waste for anaerobic digestion which is environmentally friendly, generates electricity from the gas produced and provides a valuable fertiliser as a by-product, we send it to the Edmonton to be burned in the incinerator. Interestingly, there was a business case developed in 2018 by council officers to move to fortnightly general waste collections which, with a retained weekly food waste  and recycling collection, could not only have saved more than £900,000 a year, but would have helped to push up recycling rates by forcing people to separate out their waste more effectively. Political ideology won the day at the cost to Barnet residents and the environment.

Transparency is another thing which has deteriorated over the last four years. In 2019 Barnet Conservatives introduced new rules which stopped Barnet residents from addressing committees in person and dramatically limited the number of questions that could be asked. It was claimed that this would save £42,000 a year of officer time answering questions posed by residents at committee meetings. In reality it was simply to stop residents asking serious questions about the way the council was being run. There was always a time limit of 30 minutes in any committee meeting for residents' questions and speeches, speeches were limited to 3 minutes and questions were taken turn and turn about so no one person could take up all of the time with their questions. Occasionally, not all of the questions were addressed in the 30 minute slot, but at least there was a written record of the council's response. Now, you are not allowed to address the committee in person or be questioned by committee members, you get one question per agenda item and no more than two people can ask a question about each agenda item. When you are dealing with the annual budget, one question simply isn't enough. For example, at the Policy & Resources Committee in February this year, the papers for the budget agenda item comprised 386 pages including, changes to charges levied on residents, debt management policy, capital strategy, risk register, housing revenue account, medium term financial strategy, to name but a few, yet residents are allowed to ask just one question. I suspect that the real reason for gagging residents was not to save an alleged £42,000 from a council budget of  £344 million, but to stop a well informed and curious resident base from asking difficult and inconvenient questions.

We have also seen other changes on transparency such as the removal of senior officer salary data. We used to get a detailed breakdown of how much all officer paid over £55,000 a year were paid. Below is a graph I used to produce showing how much each officer was paid - I limited the range to those officers paid more than an MP and I never published the officers' names even though the data was available.

The data available then changed so this is all that was published.

Not only was the number of posts listed dramatically reduced but all the historical data was removed from the council's website. I suspect this was because there was a level of transparency which allowed residents to see the increases received by some council officers when their posts were regraded or when they received above inflation increases. No data has been published on the Council's website since September 2019.

Performance of the Capita contract has also suffered from a lack of transparency. Historically, a table known as "Benefits Realisation" was provided for the Capita CSG contract which showed how much (or little) the Capita contract had actually saved. When it became clear it wasn't saving anywhere near what we had been originally been told, they stopped publishing it. Data on Capita's performance at answering the phone to Barnet residents also stopped being published until just recently, and after much pestering from me, as it showed how poor the performance actually was. Having changed the targets twice to make them easier to meet, the latest data shows Capita still aren't answering the phone within the target time of 2 minutes and the data set remains incomplete.

Minutes of the Strategic Commission Board (Council Management Team) used to be published. They were not normally that informative although from time to time they included real insight into the way the council operates. In one set one minutes from February 2018 but published after the election, it highlights a practice known as 'telephony service degradation'. I suspect it was linked to an issue I  raised as part of the inspection of accounts which highlighted that if calls to Barnet exceeded a certain threshold, Capita were able to charge extra and in the financial year 2017/18 that amounted to an extra charge of £247,000. As a way to generate savings, the proposal was to introduce  'telephony service degradation' i.e. make the service worse so as to reduce the number of calls being answered and thereby cut the extra charges being made by Capita. Barnet stopped publishing these meeting minutes before the start of the pandemic and have yet to restart their publication.

Development is another contentious issue in Barnet. Conservatives are saying that they are opposed to over development but if you look at the huge amount of development along the A5 that clearly does not apply there. I know some of the people impacted by the Sainsburys development at the Hyde where Barnet pushed through a development of 1,309 flats in blocks up to 28 storeys even though it sits outside the agreed development area and is not in a town centre. All of their views were ignored including the home owners which will be very badly hit by loss of light. We now have a series of developments which will create 2,500 new flats on a 400 metre stretch of the A5 but without the infrastructure to support anywhere between 5,000 and 7,000 new residents.  The massive development at Homebase in Cricklewood was another example where Conservative councillors were saying what an awful scheme it was yet voted for its approval. Yes, we need new homes especially for families, but what we are getting is a mass of small 1 and 2 bed flats which remain out of reach for most of the people who actually need them.

Barnet became addicted to a central government grant, New Homes Bonus, and in 2019 were forecasting an average of £10.8 million per annum. The more homes you built above a threshold, the more New Homes Bonus you received. It was a crude measure to boost housing builds but Barnet saw it as a useful revenue stream and so were incentivised to build more and more homes, typically 1 and 2 bed flats even though the top priority is for three bed homes for families. However, each year since 2019, that has been adjusted down so that next year we are now forecasting only £4.8million compared to an original estimate of £10.9 million. I raised this issue in 2019 of how reliable New Homes Bonus payments would be, but that was dismissed as pessimistic. It is exactly for these reason that residents need to be questioning the council and why gagging residents is so short-sighted.

The most recent example of Barnet's planning committee not listening to local residents is the Hendon Hub, a massive development at The Burroughs in Hendon which will destroy the beautiful, albeit downsized, Hendon library and a scheme which Historic England did not support. Local residents have launched a Judicial Review. You can read more about the Hendon Hub here.

This leads into our Library service and the way it has been decimated over the last five years. We were told that this was all about saving money and that people didn't really need libraries in an age of kindles, but now more than ever, when people are choosing whether to eat or heat, monthly broadband charges look like a nicety, not a necessity. Libraries were great places for people who didn't have internet access to work, study, apply for jobs, search out information and carry out other day to day functions, not just about somewhere to read and borrow books. In New Barnet, when the writing was on the wall for the old East Barnet Library (2017) I asked if it could be relocated in the proposed new leisure centre which would allow it to stay open all the hours the leisure centre was open. It was still too small but at least if it was open 90 hours a week it would allow people to access books, study space and the library computers. The reality is that we have a library located within a leisure centre open 90 hours a week, with a manned reception right next to the library area, yet the library is only open for just 17 hours per week. With the prospect of  thousand of people moving into New Barnet in the assortment of new developments, a tiny room open just 17 hours a week does not seem like a library we should expect. If you live in New Barnet you will get a chance to visit it on polling day as it is the local polling station - however you will not be able to use the Library - voting only.

Care Homes is another area which Barnet outsourced and which has proved to be a disaster. Apthorp Care Home was outsourced to Catalyst and run by another company Fremantle. You can read all the details here but the net result is the care home was run into the ground, the care offered was appalling and rated inadequate by the CQC. There was a massive backlog of repairs which meant living conditions were unacceptable. Fremantle handed back the running of the home to Barnet in 2019 and in 2021 Barnet decided that the backlog of maintenance was so bad that they would close the home. Now this isn't an old home, it was only opened in the early 2000's. I asked about monitoring in the period before the damning CQC report and it was clear that Barnet did not keep a log of all the monitoring visits nor was there a sanctions or penalty regime in place to make the provider improve. They outsourced the care of our elderly family and friends and did not do enough to ensure their care was safe and secure, something which is unforgivable.

Capita contract is the other issue that remains a running sore in Barnet. In 2018, after the election we told about a massive fraud carried out by a member of Capita's staff, stealing over £2 million in 62 separate transactions over a period of 17 months in 2016 and 2017. The fraud went undiscovered and only came to light after the fraudster's bank alerted Barnet Council to the potential problem. Grant Thornton were brought in to see how on earth such a massive fraud could take place and their findings showed fundamental weakness in the Capita systems and, that " there has also been insufficiently close scrutiny and client side management on the part of the Council and the Chief Officers coupled with an over reliance on the limited scope and frequency of work carried out by the Internal Audit service, to highlight issues. This is likely to have contributed to the lack of focus on effective controls". 

This was followed in 2019 by another fraud in the Capita run Pensions admin department, this time  seven different payments for a total of just over £70,000. Yet again Capita systems were found to be wanting. 

Set out below is the current cost of the Capita contract and shows that so far we have paid Capita £586 million, £225 million more than the contracted sum. It is also important to understand that Barnet have already taken back a number of services including Finance and HR which were in the original contracted sum so, in reality, we are paying even more than is shown.

Following the major fraud, the finance function along with HR was brought back in house and Barnet has been discussing what elements will be returned to the council ever since. We still do not have a definitive list of which council services that will be retained by Capita and we won't get a decision until after the election even though this should have been decided more than two years ago. In 2021 the review of Capita services was accompanied by a “Market Insights” report prepared by Grant Thornton in which the Executive Summary opens with the statement:

“Historically procurement has been ideologically driven and highly political”

 It also goes on to say:

“The gap between cost and efficiency for delivery between the public and private sector has been significantly squeezed over the last decade as a result of market pressures. This means that outsourcing is not always the most cost effective option by default”

I think this first statement sums up so much about the way Barnet Council has been run, ideologically driven and highly political. 

So when you are thinking about which way to vote on Thursday, ask yourself if you want another four years of the same or whether you think there is a better way to run Barnet. Whatever way you vote just please make sure you use your vote, as it will be the only way to show your views and to get politicians to listen for the next four years.

Wednesday 6 April 2022

Latest Costs of the Capita Contract

 The latest supplier payment figures are out and the Capita figures tell a familiar story with the total paid to date running at around £225 million more than the contracted value.

The contract comes up for renewal in 16 months but Barnet still have not "finalised" their decision on what services will be retained by Capita and what will be brought back in house or given to another provider as in the case of Pensions Admin. When asked for a date when they would clarify which services will go where, we were told a decision would be available "after the election".

Thursday 3 March 2022

Has Brighton Marina Cost Barnet Residents a Fortune?

 As part of the justification for renewing the contract with Capita, a report setting out the achievements of our outsourced planners included a very curious statement. 

I was somewhat surprised that Capita should be boasting about working for Brighton Marina for 2 years when maybe their attention should be focused on Barnet, so I asked a specific question about it.

"The report suggests that a principal officer spending two years on the Brighton Marina is a good thing; many would say it is the opposite. Major developers seem to have their own VIP lane. Has this decision on planning been made purely on a financial basis and have you lost sight of the service quality imperative?"

The response I got from Barnet was brief to say the least:

"The Brighton Marina project was cited as one example of a project that enables planning officers to broaden their range of experience and knowledge and it was carried out at no cost to the council." 

That was on 23 November last year. Skip forward to last week and Barnet was hit with not one, but two appeals on major planning projects for "non determination". This is where the planning authority fails to decide on a planning application within a defined timescale, which for major projects is 13 weeks. One project was Barnet House at Whetstone and the other was the Victoria Quarter in New Barnet. The council will have to defend these appeals to the Planning Inspectorate, which could cost serious money, and if the Inspector finds that Barnet were at fault, we could be liable for the developer's appeal and legal costs as well. 

Maybe if the Capita planning officers spent a bit more time dealing with Barnet's applications and less time trying to earn money in Brighton, we might avoid incurring significant costs having to defend these planning appeals. I also raised some very serious concerns about the way the planning department is run and its failure to comply with Local Government Association guidelines on pre application advice. Barnet's response was suitably robust 

"We strongly believe that the planning service is in compliance with all legal, transparency and probity requirements. However, if you have specific evidence to the contrary, we will of course arrange for it to be examined".

Last week I submitted that evidence to Barnet's Internal Audit department and will await how they investigate this further. 

Barnet's insistence that Capita are doing a great job in planning and that is why they should retain the contract for another 5 years looks to me somewhat misguided and the sooner it is brought back in house the better.

Monday 31 January 2022

Capita Savings - The Myths Exposed

It's 2022 and this year there are local elections in Barnet. I have eased back on blogs since Covid but now is the time to start communicating again, so let's start with the latest state of play on the Capita contract. I listened to the council meeting last week where Cllr Dan Thomas reiterated the myth that the Capita contract has saved £125 million. To be clear, there is not a single piece of evidence to support that figure and a great deal of evidence to suggest that the contract has not saved anything at all other than the face of those councillors who voted for this overly complex, badly structured contract. The latest figures for the month ending 31st December 2021 indicate that we have now paid Capita £577 million, £225 million more than the contract value. 

Tomorrow the Financial Performance and Contracts Committee meet to discuss the the latest details  on which Capita services will be brought back in house and which will stay with Capita, either for a couple of years while Barnet decide what to do or for a 5 year extension until 2028. It was agreed last week at Full Council that the following services will all be brought back in-house: Procurement; Trading Standards; Environmental Health; Licensing; Regeneration and Highways. This comes as no great surprise as none of these services generate an income for Capita. Procurement used to be a money spinner for Capita, with its gainshare clause, but this was negotiated out of the contract following the £2m fraud and the monumental mess Capita made on the failed Mosaic casework system implementation, which has cost millions to sort out. I had hoped that there would have been more  progress on providing certainty on whether the other services would be retained by Capita since the last meeting in November but it is apparent that this is a very politically sensitive matter so any further decisions have been kicked into the long grass until after the elections in May. I have asked for the financial details of the services being brought back in house to be disclosed but yet again I have been told the public cannot see these figures even though councillors have seen them in the secret "Blue Papers" and formed the basis of the decision they took last week.  We will not see them before the election, as I suspect they will show that bringing this group of services back in house will actually save money on what we are being charged by Capita and that would be far too embarrassing in the run up to the elections.  So much for Cllr Dan Thomas' statements that Capita are saving money when we could have been running them cheaper in house for years.

The entire Capita contract has a stench about it. As I blogged about in May last year, Grant Thornton wrote  in a summary of the outsourcing process in their Market Insights Report "procurement has been ideologically driven and highly political". Not me saying that, but external advisors, Grant Thornton - extract from their report below:

The level of secrecy surrounding this contract remains high. I have had discussions with the chair of the Committee and the senior officer carrying out the report and managed to get the concerns I raised included in the engagement report, albeit they were then largely dismissed. Critically, we are not allowed to know the real operating costs of this contract and what revenue Barnet is missing out on by having Capita in place.

The lucrative elements of the contract remain for Capita. Revs & Bens, where they can charge extra for exceeding volume targets and where gainshare still exists on council tax collection, housing benefit recovery, withdrawing single person discounts etc. Planning, which generates significant fees, stays with Capita where they get to keep a chunk of the profit. Capita are hanging on to IT, even though their IT system, Integra, has been criticised on numerous occasions for failing to provide the information and flexibility we need. I raised the point that Capita provide both the IT system and the advice on which IT system to use. Surprise, surprise, they recommend using their own bespoke system, Integra. Pre-Capita, Barnet spent over £20 million implementing and integrating SAP, a world class ERP (Enterprise Resource Planning) System. Indeed the S151 Officer has asked for a new ERP but the advice provided comes from Capita so we will be stuck with Integra. I flagged this as a massive conflict of interest and suggested that for the council to respond to the rapidly changing demands for technology and systems, they should consider employing their own chief information/technology officer but yet again this was dismissed.

Capita are having the contract extended for Accounts Payable,  yet this service has received more critical reports from internal audit over the last 8 years than any other service with 4 Limited Assurance reports

Customer Services, mainly the telephone answering system, stays with Capita and we are told they are doing a fabulous job. I wonder how many people have tried to get through the automated answering system at Barnet? Until 2018 Barnet used to publish data on call answering and it demonstrated that calls to Council Tax and Revs & Bens were consistently failing to meet the minimum response time targets, with thousands of calls being abandoned as people gave up trying to get through to Barnet. Unfortunately, Barnet's response was simply to stop publishing the figures. 

Capita was a massive, complex contract, implemented without the resources to adequately manage and monitor it.  Even worse, the people who devised the complex systems all cleared off once the contract was signed. Councillors were warned about the consequences of this ill conceived contract back in 2013 yet Barnet pressed on, as Grant Thornton says, for ideological and highly political reasons, a situation that continues to persist. Unless there is full transparency on this process there will be no confidence that this is anything other than a stitch up.

So when candidate comes knocking at your door telling you that the Capita contract is saving a fortune, ask to see the evidence because there isn't any!