One Barnet and Why Capita's £75 million Doesn't Add Up

We have been told repeatedly that the Capita One Barnet Contract will save residents millions of pounds. The two main contracts and the forecast savings are as follows:

NSCSO (now called CSG)
Baseline (at December 2012) costs £38.8 million
Forecast costs savings £7.01 million
Procurement savings £4.69 million
Improved council tax collection £0.84 million
Total guaranteed saving £12.54 million
By my reckoning this means that Barnet should pay £26.26 million per annum
(Source: NSCSO Business Case Cabinet Meeting 6 December 2012)

DSG (now called Re)
Baseline (at June 2013) costs £14.2 million
Forecast cost savings £0.53 million
Increased income £3.38million
Total guaranteed savings £3.9 million
By my reckoning this means that Barnet should pay £10.3 million per annum
(Source: DSG Business case Cabinet Meeting 24 June 2013)

So if we look at the figures above this means that we should be paying Capita £36.56 million assuming they deliver all of the guaranteed savings. It may therefore surprise you that in the year 1 July 2013 to 30 June 2014 Barnet paid Capita £75,008,840.49. Yes £75 MILLION,  £38.44 million more than we should be paying.

Even setting aside the £16 million of up front investment Barnet have paid to Capita (which should be factored back into the annual cost savings)  that still means we paid £59 million when the cost of providing the service before outsourcing was only £53 million. Also bear in mind that Barnet have shelled out millions in redundancy payment, £8 million on Agilisys/iMpower, millions for agency staff as well as causing distress and heartbreak to hundreds of families that have suffered redundancy to push through these contracts.

At tomorrow night's Council meeting, Richard Cornelius will once again be selling the myth that Capita are saving Barnet residents a fortune in his response to a question from Alison Moore. I hope some of the Councillors present start asking whether these figures are real or just smoke and mirrors. The number don't add up Cllr Cornelius.

Barnet and the Icelandic bank disaster - an interesting development

Buried away on the Council's website is notice of a decision "Sale of Claim in LBI". What this is in fact is Barnet's attempt to bring the long running Icelandic bank (Landsbanki) debacle to an end, albeit at a further cost to local council tax payers. Barnet note that whilst part of the claim has been settled we are still waiting for around £7.9 million to be returned which may take several years at least to settle.

The Local Government Association have been advised by lawyers Bevan Brittan and have appointed Deutsche Bank to sell our outstanding claim at auction which is possible under Icelandic law. The Council have set a reserve price for our debt but that is not stated for obvious reasons. How much on the pound we will get for our outstanding debt who knows, but one thing is sure, it will not be for the full amount of the debt and we will have lost years of interest.

I marvel at the irony when I think that it was the financial institutions who brought about this global banking disaster and they are now seeking to make money from their mistakes by buying up that bad debt at a discount and I'm sure Deutsche Bank aren't running this auction out of the kindness of their hearts.

I look forward to Richard Cornelius telling us exactly how much we have had to forgo in order to get at least some of our Icelandic money back.

Mr Cornelius, where is your moral compass?

Set out below is an open letter to Richard Cornelius. Why is it that, yet again in Barnet, it is members of the public who have to set the moral compass for those in leadership positions. Failing to act swiftly tells us a great deal about the people who are supposed to run Barnet on our behalf.

Dear Mr Cornelius

On Friday 3 May Councillor Brian Coleman pleaded guilty to the charge of common assault by beating of Helen Michael, in the High Road in North Finchley. Evidence from CCTV was shown in court and proved incontrovertibly that this incident was nothing less than an utterly indefensible act of aggression. It resulted from Councillor Coleman being caught parking in a loading bay, trying to evade the hugely controversial parking payment scheme he had imposed on residents in this borough.

Despite the fact that he has now been convicted of a criminal act of assault, Barnet Council has refused to comment, absurdly claiming that this is unnecessary as the attack did not take place while the Councillor was on council business.

Indeed local Tory members, including leader Richard Cornelius, openly continued to support their fellow member after he was charged, and were privately informing others that the story of the assault was false. Councillor Coleman was suspended from the party only after intervention from Conservative Central Office. Since the conviction, local Conservatives have issued no statement.

By his own actions Councillor Coleman has shown himself to be unfit for public office: such bullying behaviour, dishonesty and hypocrisy are not acceptable in an elected representative of the community. We demand therefore that he stand down from his seat in Totteridge, and that the Conservative Party expel him from membership.

We call on Richard Cornelius, as leader of Barnet Council, and on behalf of the Conservative Party in this borough, to apologise to Ms Michael, and to dissociate himself and his colleagues from this appalling incident. To remain silent is not an option: to remain silent is to condone an act of violence against a woman, and this was and must always be absolutely unacceptable.

Signed:

Derek Dishman

John Dix

Vicki Morris

Theresa Musgrove

Roger Tichborne

Council Tax Freeze - Cost and Impact

Last night Richard Cornelius talked about a Council Tax freeze and that this was something everyone wanted. I made it clear during the meeting that a Council tax freeze would cost £40 million over the next ten years (which is almost 2/3 of the outsourcing savings) and asked what other services he was going to cut. Unsurprisingly I did not get a clear response. After the meeting I asked Richard again about the cut and his response was, what else could we do?

Well it may come as a surprise to many people but eight weeks ago there was no plan to introduce a Council tax freeze and indeed Cllr Dan Thomas seemed to be dead against it. The tax freeze came at the prompting of Cllr Brian Coleman when he was chairing the Budget & Performance Overview & Scrutiny Committee on 19th September. Thanks to the wonderful work of the Barnet Bugle this exchange was recorded and is on the film below (the key bit starts at 1 minutes 35 seconds in).


Credit: Barnet Bugle

You will notice that Cllr Thomas states that the budget for next year had been set for a 2.5% increase and that a council tax freeze will cost £4 million next year. He says "If you and your committee can recommended where we cut the £4 million from then we can consider that".

So 8 weeks ago we had a strategy to introduce a 2.5% council tax increase next year and now we have a council tax freeze and no other choice and we have to find an extra £4 million of cuts from the budget next year and every year going forward.

This is what is so fundamentally wrong with Barnet politician. They make it up as they go  along, driven by political dogma not common sense. Personally it makes me despair. Playing political point scoring will mean that more services are cut, the most vulnerable in our community are hit hardest, investment in our children's future decimated.

Richard you should hang your head in shame.

Wow! Brian Coleman calls for One Barnet to be Scrapped

Today's Barnet Press has an article by Brian Coleman which calls for the One Barnet to be scrapped which I have reproduced below:

"Something has happened in the last few months in Barnet. Residents have been taking an interest in the way Barnet Council is proposing to operate in future , the so-called One Barnet scheme.

One Barnet, if it goes ahead, would fundamentally change the way the council is run. It is a New Labour idea - however, the concept of council, police, fire brigade, NHS and the voluntary sector delivering services jointly fell apart as the cuts agenda focused minds and turned opinion against grandiose reorganisation.
However Barnet Council ploughed on regardless of the changing political environment.

The opinions of sceptical Conservative councillors were brushed aside by promises from officers (and the revolving door of endless consultants) of massive savings.

The fact that most Conservative councillors had their doubts was lost as the trade unions bombarded councillors with emails attempting to protect their members terms and conditions. This campaign just drove Conservative councillors into the arms of the officers on the basis that if the unions were against it the scheme must be good news.

Council leader Richard Cornelius, a One Barnet sceptic, met with officers in January and the promise of savings seduced him. The rest of the Conservatives, including me, fell into line.

Then in August came the bombshell of a possible of a joint venture, something never mentioned before, and the leader of the council's anger could be heard all the way from his holiday home in France.

Then followed the unexplained sudden departure of Barnet's chief executive Nick Walkley. Why leave if One Barnet is going to be a stunning success?

Many Conservative councillors feel they are powerless to stop this officer-driven juggernaut or as one senior Conservative put it - we are lemmings heading for the cliff.

The council needs to dump this flawed scheme and introduce a proper strategy which assesses where services belong, whether that is the private sector, shared services with other boroughs, the voluntary sector or indeed occasionally in-house - a mixed economy is what is needed. For example, I don't know any councillors who agree we should privatise the planning department.

Conservatives are pragmatic and anyway the concept of One Barnet is fundamentally un-Conservative and ignores localism. It is totally New Labour, in fact.

The time has come to dump One Barnet and return to core local government values and make sure this particular turkey does not see Christmas!" 

 For such a critical article to be published just days before a vote of no confidence in Richard Cornelius is to be held shows what a mess the whole One Barnet outsourcing programme has become. It also indicates that Brian is not on his own in being concerned about One Barnet when he quotes his fellow conservative councillors as being sceptical. I noted with interest his reference to the views of councillors being "brushed aside by promises from officers and the revolving door of endless consultants of massive savings."

What surprises me most is why it has taken them so long to come to the realisation that this scheme is bonkers and that it risk the financial future of the borough.

Richard, do the right thing and pull the plug on One Barnet now.

Barnet bloggers' open letter to council leader Cornelius: Sack Brian Coleman!

Dear Councillor Cornelius,

The people of Barnet have spoken. The London Assembly result on 3 May was a resounding rejection of the policies of your administration and of a prominent member of your leadership team.

As you were not leader at the time of the 2010 election, and most of your unpopular polices were not part of the manifesto, we ask you to consider the following proposals, with a view to changing the course of your administration.

1. Dismiss Brian Coleman from your Cabinet. Mr Coleman was decisively rejected by Barnet voters in the London Assembly election and to allow him to continue in post is an insult.

2. Reopen Friern Barnet Library immediately. This well-supported community asset cannot be replaced successfully at the Artsdepot.

3. With local traders, campaigns and stakeholders, create a parking regime that will enhance the environment and restore the fortunes of Barnet’s high streets. Parking charges should manage traffic, not rake in cash. No more hikes in parking charges; reduce charges as necessary, including in CPZs.

4. Cut the rate paid to all freelance consultants employed by Barnet by 25%. Large city firms including JP Morgan and Lloyds TSB have instituted such a policy in response to the harsh economic times. Any consultant not prepared to take a cut would be terminated as per contract terms.

5. Cut the pay of all Barnet Council staff earning more than £150,000 p.a. by 20% and staff on £100,000 - £150,000 p.a. by 10%. The savings in 4. and 5. would generate far more than the sum lost through the parking changes above.

6. Immediately halt the One Barnet outsourcing programme. Dismiss all consultants engaged on the programme.

7. Invite the council trade unions to identify savings and efficiencies within Barnet Council, at the same time protecting services, jobs, and pay and conditions. This exercise should also be opened up to Councillors and members of the public.

8. Invite members of the public to form an oversight panel, to scrutinise contracts and accounts with suppliers. Give the panel access to all council contract information, subject to signing of confidentiality agreements. The panel would report directly to the chair of the audit committee.

9. Cut all councillor allowances by 10%, to show that we really are “all in this together”, and review the excessive allowances paid to Cabinet members and Committee chairs. Learn the lessons of the upset caused to voters by the "Allowancegate" scandal.

10. Stop harassing members of the public involved in protests against discredited council policies. Work with residents, not against them, to improve Barnet. Embrace democracy!

In the year of the 100th anniversary of the Titanic, we ask: do you want to be the political equivalent of the captain who hit the iceberg?

Barnet Council has had two years of unremitting bad press as a result of policies that were not declared to the public during the 2010 election. Now the people have spoken, and we the undersigned believe that you have no choice but to listen and to change course.

Signed:
Derek Dishman
John Dix
Vicki Morris
Theresa Musgrove
Roger Tichborne

Barnet Council - 25 day to change and counting

I have just read a report by Barnet Unison which terrifies me and which illustrates how the current regime at Barnet Council are out of control.

The summary is set out below:

Barnet Council have used a consultant to come up with a scheme which restructures the Revenues and Benefits department. The consultant’s proposal fails to provide a detailed risk analysis to justify saving of £650k per annum when only 1% drop in income collection could expose the council to a loss of over £2.2 million in council tax collection just over £1.1 million in business rates. Our analysis shows that 0.2% drop in income collection will wipe out the proposed saving £650k.

The consultant’s proposal neglects to address the risk to the Housing Benefit subsidy, currently at £260 million per annum reclaimed from the DWP. This is significant to the council as for example a loss of 1% in subsidy would equate to £2.6million. Currently Barnet performs in the top six in London at maximising the reclaim from the DWP.

As their structure dramatically reduces expert resources the consultant report needs to include a specific risk analysis mitigating actions for realising set income targets.

The consultant’s proposal will not enable the council to optimise its income and as a result could potentially result in unplanned future increases in council tax as result of non collection.

Inadequate Management Capacity

The consultant’s proposal seeks to reduce the managers by 36% in the new structure for Revenues. This places undue burden on management’s capacity to deal with future planned legislative changes and therefore there is a risk to operational performance and meet set income targets. Additionally it leaves the council at risk to further change control charges by the contractor thus increasing the costs to Barnet and its residents.

Failure to maximise the council tax base due to updates not being done in an accurate or timely fashion, discount and exemption entitlements not being effectively policed

Financial and reputational risks to council from loss of specialist capacity, e.g. Court officer, NNDR, etc. It will no longer be possible to carry out all essential work, which will have a serious and far-reaching impact.

Private Sector does not Perform

The consultant’s have made the following statement in response to a question from staff:

“Southwark, Westminster, Hammersmith and Fulham and Bexley are London Boroughs that have successfully outsourced their Revenues and Benefits services and most of them have higher in-year council tax collection rates than Barnet’s best performance in the last 5 years.”

The nationally published statistics provided by The Department for Communities and Local Government (DCLG) confirms that the consultants’ above statement is factually inaccurate. We have provided the official data from DCLG on page 3 of this report and a further breakdown in Appendix 2. Furthermore consultant’s conclusions have not been supported by meaningful benchmarking data and analysis.

Increased likely hood of Error and Fraud

Any removal of key checks and balances, as suggested by the consultant’s report, will inevitably result in an increase in errors and deterioration in the detection and prevention of fraud.

Deterioration of the Customer Experience

In this new fragmented business process the council will not be able to provide one stop quality experience to the customer. Transferring of calls and artificial tier creation will result in a duplication of effort and delays in responses. This will inevitably result in an increase in overall workload and inefficient processes as callers and email traffic will be passed from one department to another, as it is impossible to tell what tier the call or email is at the point of contact.

Customer care standards will drop as a result of the transfer of most types of contact to the contact call centre. Currently near to 100% of calls are resolved at first point of contact. The contact call centre aims to achieve only 80%.


This illustrates to me the drawbacks of using consultants without actually undertanding what they are proposing. It is a classic example of One Barnet Dogma - strategy for strategy's sake rather than focusing on how to deliver the service cost effectively and efficiently.

This is yet another reason why Barnet Council needs to change and change quickly before they destroy this Borough.

Open Letter to Richard Cornelius and Nick Walkley from the Barnet Bloggers

Set out below is an open letter to The Chief Executive and Leader of Barnet Council. This matter has been brought to the attention of the Barnet Bloggers but such is the concern that issues like this may get 'buried' because of the current outsourcing process, that we have taken the step of publishing this letter on our blogs.

Dear Mr Cornelius and Mr Walkley,

We would like to draw to your attention the following information, and ask you to respond to some questions on a matter that we consider to be of serious public concern.

We have reason to believe that a Private Company registered as FINANCE MATTERS FOR SCHOOLS LIMITED http://companycheck.co.uk/company/07814930
may have been formed with the intention of securing contracts with schools that currently purchase financial services from the Council.

We understand that all three Directors may be current employees of the Council.

First can you confirm that all three of these Directors are indeed Council employees?

If not then the rest of our questions are not applicable.

If this is indeed the case, we would like to ask the following questions:

- Are these individuals currently employed by the authority?

- If one or more of these Directors are Council employees, can you confirm that it is not a breach of any regulations for employees to set up a private company whilst still being paid by the Council that will deal directly with services directly associated with their current employment?

- Furthermore please confirm that they may continue to have access to confidential data, and that this would not secure unfair advantage over any other possible bidders for these services?

- Do you know how many Barnet schools have given notice that they are terminating their contracts with Barnet Council Financial Services?

- When did they give notice of termination?

- What reason did they give for termination?

- How many schools have signed contracts with FINANCE MATTERS FOR SCHOOLS LIMITED?

- Were any senior managers including the section 151 officer aware of this company

- Have there been public and private discussions amongst senior managers on the creation of this new company within the Council?

We understand that Financial Services to schools are included in the NSCSO One Barnet bundle of services.

It would seem extraordinary, therefore, to us as residents, that council staff could allegedly be openly touting for business during the Competitive Dialogue process, and we would ask you to confirm that an urgent investigation should take place, and that you can assure us that all four bidders will be informed that such an investigation is in progress.

Yours sincerely,

Derek Dishman
John Dix
Vicki Morris
Theresa Musgrove
Roger Tichborne