An Alternative to One Barnet - Mr Reasonable's Eight Point Plan

One Barnet outsourcing is seen as the only answer to the financial woes of Barnet. Cllr Cornelius has repeatedly said there is no alternative. Well I simply don't believe it. I have reviewed Barnet's spending very closely over the last two years and I am convinced further savings can be made. I run my own business and I check every single invoice because I know that money is coming out of my own pocket. I have a very clear idea of what I want to invest in and whether it will give me a realistic return on investment. In large organisations people don't talk about money they talk about budgets, some amorphous concept which has no direct correlation with the person spending it. I believe that is happening in Barnet and that has to change.

Set out below is my eight point plan of how I would make savings in Barnet and it is something on which I would welcome an open debate - because it is only through dialogue that we can change things in Barnet.

1.       Management restructure  with the objective of creating a more responsive, flatter management structure. Objective to take out at least £1 million of management costs above and beyond the current proposed restructure. - Mr Mustard illustrated in a post recently how the number of senior managers have rocketed in the last two years from 57 to 95. The restructuring proposals brings that down to 49 but that is in a commissioning model where there are very few staff to manage. I reckon there are further senior posts to go and when you add the 23% pension contributions to the high salaries, the £1 million target looks deliverable.

2.       Immediately halt the use  all external consultants unless specifically authorised by the leader. Objective to cut at least £2 million a year from the budget. - This year to the end of September Barnet have spent £2.52 million on one firm of consultants alone and last month they billed £447,000. Barnet has become consultant dependent to make all their decision for them and that is an exceptionally dangerous and expensive approach to running an organisation. A £2million saving is definitely deliverable.

3.       Adult social care – set up a project team to look how efficiencies can be generated at council funded care homes  focusing on staff scheduling and energy management. Objective to share savings made with care home providers and reduce costs to the council by at least 3% (£2.4 million). - 55% of Barnet's entire budget is spent on adult social care and children's services. In 2011/12 Barnet paid invoices to the value of £78.8 million on adult social services. That isn't for social workers salaries, simple what was paid out to other organisations for providing adult social care. Your Choice Barnet are looking at a £700,000 deficit next year due to difficulties in scheduling staff  as efficiently as possible. Energy costs are a significant care home overhead. By getting all the other care providers in Barnet to work more closely together on areas such as staff scheduling, training, food and energy purchasing I believe the target saving of £2.4 million is deliverable without any impact on the quality of care provided.

4.       Set up a procurement panel  of officers, members and residents to review monthly spending with all invoices over £5,000 to be scrutinised by the panel. Objective to weed out non essential spending with a target of saving at least £1.5 million per annum. - This is something I suggested almost two years ago via the Pledgebank website, an offer that was never taken up. Once you have a panel who start to challenge spending much more vigorously I am convinced this level of saving is more than deliverable. There needs to be an open mind on strategies like shifting to open source software which would save Barnet a fortune on Microsoft licences for all their computers.

5.       Review the top ten contracts to see if they can be renegotiated downwards/ retendered at a lower price or brought back in house at a lower cost.  Objective to save 3% off top 10 contracts. - Many of the contracts have inflation clauses built in which automatically push up costs every year. This is something that should be aggressively challenged. For example where the supplier costs are mainly labour and pay has been frozen for their staff, the inflation factor simply upgrades their profit element,

6.       Set up a project team to the review the number of agency and interim staff with the objective of reducing agency/interim staff costs by at least 10%. - In 2011/12 Barnet spent £7.7 million on Agency Staff and Interims. A number of public sector bodies have made significant savings in exactly this way so £770,000 appears deliverable

7.       Review  office accommodation studies already carried out with the objective of further rationalising space and identifying the minimum space required then develop an exit strategy from  North London Business Park (NLBP) as quickly as possible. In the mean time initiate an energy reduction plan to cut energy consumption at NLBP and Barnet House.  - Based on last year's invoices I estimate we paid just over £5 million in rent and service charges for NLBP offices. This is something that needs to be addressed urgently with a target of reducing rental payments by at least £1 million per annum.

8.       Open discussions via London Councils and GLA representative to cap the ever increasing charges made by TFL (Transport Trading Limited). Barnet paid Transport Trading Limited £13.1 million last year. - This is in addition to the sum we pay TFL via the GLA precept. As I understand the situation most of this money pays for the Freedom Pass. With Boris having just announced fare rises of 4.2% today it looks like this will filter straight back to us for the Freedom Pass payments (I have the detailed mechanism by which Barnet is billed for Freedom Passes but it is too lengthy to go into here but happy to share it with anyone who is interested). If we could secure a freeze in payments next year that would generate savings of £550,000 per annum.

      In total I estimate my plan could save in the region of  £9.5 million per annum, more than the One Barnet DRS and NSCSO savings. These proposals could be implemented any time and from my perspective I don't know why they haven't been implemented already. There is much talk about the need to make savings but frankly I see plenty of savings to be made without a penny being spent on expensive consultants. You just need a lot more attention to detail and a desire to drive out efficiencies. The Councillors and officers need to spend  a lot less time on the mad cap high risk One Barnet Outsourcing and a lot more time running the council efficiently.

One Barnet Joint Venture - "There is a risk that the focus on commercial goals and development of new business can be at the cost of service delivery".

Someone kindly reminded me of a report published back in September 2010 when Barnet Council asked their expensive consultants to look at what would be the best structure for the One Barnet (FutureShape as it was still called then) project. You can read the report here. This is what they said about Joint Ventures which, on Friday, became the chosen option for Barnet:

Private Sector Joint Venture:

Price: Whilst capable of delivering a low price this would be a costly option to implement ‐ the joint
venture procurement being more complex than a straightforward partnering arrangement. Joint
ventures are best suited to situations where there is significant potential and appetite to develop
third party business.

Flexibility & risk: Where third party business is a more secondary goal it may be possible to build
many of the benefits that a JV can provide, such as gain sharing and a reasonable degree of flexibility,
into a more conventional partnership contract. It is likely to provide a good degree of flexibility due
to the control the Council could retain.

Performance: Whilst performance can be high in joint ventures there is a risk that the focus on
commercial goals and development of new business can be at the cost of service delivery.
Citizens & stakeholders: JVs have the potential to enshrine old operating assumptions, which can
limit the scope for transformation and therefore more radical change is less likely.

Pace: Due to the complexity in developing the arrangement this option is likely to take a relatively long time to implement.

Here is the Scoring Matrix they included in the report:

Note that Joint Venture scores lower than Strategic partnership or Incremental Partnership and only just ahead of a management buyout or consulting led solution.

It is also interesting to note that the outsourcing programme is now running 14 months behind schedule and has gone more than £1 million over budget on the consultancy costs.

The One Barnet programme is dead and the sooner Councillors accept it and start running the day to day services of the council cost effectively and efficiently the better for every single resident.

One Barnet Outsourcing Is destorying the Council - Yet more evidence

Today I received an email from Barnet Council.

Dear Mr Dix,

Thank you for your request for a review (of an Information Request) received on 18 April 2012.

I apologise on behalf of the council for the delay in acknowledging your request. Due to an error on our case management system your email requesting an internal review was not picked up until late last week.
 
I am however sorry to that you are unhappy with the council’s response to your request for the following information:

Please provide me with the Members Allowances paid for the year 2010-11.

We will now conduct an internal review.  The review will be independent and impartial, will reconsider the merits of the case, and will identify any errors in the handling of your request.
 
We aim to complete internal reviews promptly and in any event within 20 working days from receipt of a complaint.  In exceptional cases we may take longer, but we will not exceed 40 working days.  This is in line with guidance issued by the Information Commissioner. In these circumstances however, we will aim to complete the internal review 10 working days from today.

Quoting guidance from the Information Commissioner is a bit rich considering they ignored my request for an internal review for 8 weeks. It is also shocking that more than a year after the financial year end I had to submit an FOI request to try (but fail) to see Councillors expenses that still have not been published. However, this pales into insignificance compared to the 7 month battle I have had to get a response to another FOI request. I have emailed, telephoned, I have tried to be reasonable, some would say overly reasonable. The Council resolutely ignores my request.

It is clear to me that Barnet Council are utterly out of control and I blame it all on the fixation with One Barnet Outsourcing.  A year ago I spoke at an audit committee meeting where I made it clear that senior management had taken their eye off the ball to focus on One Barnet. Here is yet more evidence that the problem is just getting worse and worse.

I would again make a plea to Cllr Richard Cornelius. Pause this One Barnet Outsourcing programme now, get your managers refocused on doing what they should be doing which is running the day to day business of the Council properly. The Council has spent millions on consultants but complying with the law seems to elude them.

I am increasingly if the opinion that the destructive nature of this One Barnet programme will leave such a mess that both Capita and BT will either end up charging a fortune or they will simply walk away from this basket case. Frankly it is turning into a lose lose situation. Cllr Cornelius please take control of this mess before the One Barnet Zealots destroy this Council once and for all.

Barnet Council Audit Committee - What on earth is going on!

Ploughing through the 278 pages of the forthcoming Audit Committee report pack my heart started to sink. Internal Audit carry out reviews of various services and in the latest report 11 of the 20 systems audits received only “limited assurance” opinions including:

•Parking – permits and vouchers
•Payroll
•Contract management – EPR
•Data quality of Human Resources performance indicators
•Libraries
•Establishment List
•Value for money – facilities management
•Domestic Violence
•New Homes Bonus
•IT review of LiquidLogic (Children’s Services) and
•IT penetration review

The report on Contract Management – Environment, Planning and Regeneration made particularly painful reading with quotes such as:

•All officers interviewed confirmed that they had not received contract management training in the past two years;

•Officers queried about contract variations were unclear about the specific Contract Procedure Rules (CPR) requirements for variations confirming a need for development / training in this area.

•Officers interviewed for 5 of 6 contracts confirmed the lack of a formal contract risk log, documenting risks relating to contractor delivery and performance. This was consistent with a review of the JCAD risk register (the Council’s risk management system) which did not consistently reflect risks relating to performance and delivery by the relevant contractor. In particular, there was no documented risk in JCAD for review and assessment linked to the decision to cease monthly progress meetings (including KPI discussion) for the one contractor with an annual value of £30m.

•Officers interviewed for 5 of the 6 contracts confirmed that there were no formal documented business continuity plans to address delivery failure by the contractor (although some officers stated that informal business continuity arrangements existed)

•There was not always formal record of meetings held reflecting KPI output and discussions, and resulting actions that were agreed within the meetings;

•The management and the officer responsible for the administration of the EPR contracts register confirmed that central EPR processes for identifying contract management arrangements in the contracts register and reviewing for compliance were planned but had not been implemented;

•Central EPR processes for using the contracts register for the timely assistance of contract managers in initiating procurement for terminating contracts were planned but had not been developed, this had however been partly mitigated by the Council-wide work on the central contracts register and Forward Plan that resulted;

•The documentation of formal procedures/protocols for the administration of the EPR contracts register was planned but had not been completed;

•Arrangements for identifying variations to contracts needed to be developed and implemented; and

•Instances where noted where purchase orders were not raised prior to the invoice.

On Value for Money – Facilities Management there was one high priority finding and five medium priority findings including:

Contract Management of Leases
There is a lease in place, for Building 2 Lower Ground Floor, and the lease contract has not been signed, despite the Council starting the tenancy in January 2008. In addition, this and two additional leases were identified against which some of the rents and service charges had not been billed since the start of the lease in January 2008. A provision had been made for these costs for £190K covering 2009-10 and 2010-11, this is to be increased to £310,000 for 2011-12. We had estimated the cost at the time of the audit was £590,000, against the payments of £257k since 2009-10 the accrual appears reasonable however in the absence of correspondence from the lessor could not confirm appropriate provision had been made.

Monitoring of Invoices
In a sample of five invoices, none were evidenced as reviewed by the Chartered Surveyor for appropriateness as required by Council procedure. Management confirmed that an invoice would only be reviewed in practice if there were queries around it. Management confirmed an annual process is performed to reconcile invoices received against the leases. This had not been performed at the time of audit, and the planned frequency (annually) means that issues may not be identified and resolved in a timely manner, nor is it appropriate for good budget management.

Meetings with Leaseholder
Only two meetings could be confirmed as occurring during 2011-12, despite the requirement for them to be held every six to eight weeks by Council procedures during 2011-12. Management confirmed that meetings and correspondence occur on a more frequent basis, but that this was not part of a formalised regime, and it was more reactive than proactive.

Three Year Budgeting: Planning
Management confirmed that budgeting was performed on an annual basis for Facilities Management with no active consideration of the longer term financial impact of operations. Given the size of the operational property portfolio and the cost of Facilities Management, it would be useful to profile the budget for a longer period.

Three Year Budgeting: Monitoring
Budget monitoring performed on a monthly basis. The budget monitoring reports for July 2011 and November 2011 were reviewed, and neither included comments to explain the variances against budget.

Key Performance Indicators (KPIs)
There are currently no KPIs in place in Facilities Management against which to monitor performance. Management confirmed that this issue has been identified and a set of KPIs is being developed; however, this could not be corroborated at the time of audit.

On Parking the following was noted:

•There has been a failure to retain permit application supporting documentation for sufficient time period, in accordance with the Records Retention & Disposal Guidelines, or in a structured manner. As a result of this finding we were unable to review the effectiveness of the controls in operation as an audit trail only existed for 3 months and the filing of records for the three month period was completed on an ad hoc basis.

•The controlled stationery (scratchcards and permits) is kept in multiple locations, with loosely controlled access, we also could not verify that stock was counted and reconciled periodically.

•Whilst procedures exist, they are not currently up-to date and it is not clear when they were last reviewed.

•Changes to the Civica parking system in terms of permit values, discounts or property addresses for example are not made through a formal change control process for the Civica system. In addition, there is an ability to create a new account or issue a discount without appropriate authorisation.

•There is not currently a formal service level agreement between the Customer Service Organisation (CSO) and the Parking Service.

•Within our audit sample there were instances where the daily cash-up reconciliation were not independently checked and evidenced as such.

•There are currently unexplained differences between the parking system and SAP income reconciliations which have not been followed up promptly or resolved.

This makes pretty gruesome reading and worries me significantly. Finally, at page 251, we come on to the report of Contract Procedure Rules. This also provides limited assurance and flags up the following issues:

Training Package:
Although a training package for contract management has been developed, and there are minor amendments to be made to bring it fully in line with the CPRs, it has not yet been rolled out to relevant staff members. Without consistent training delivered to all staff members who are involved in procurement, the CPRs may not become culturally embedded within the Council.

Controls and Monitoring Action Plan:
New contracts: 20% of our sample of new contracts tested could not be verified as compliant with CPRs. This was because the contracts could not be obtained/located.

Existing contracts:
10% of our sample of contracts tested were still non-compliant, despite being recorded as compliant. Additionally, 80% of contracts within our sample were waived in order to become compliant. Whilst the option to waive is in accordance with the CPRs, this should be used as an exception to the rule; the Council should consider whether the CPRs provide the necessary framework to enable compliance, however training should start to address knowledge gaps across services.

New vendors:
In 80% of the sample of cases we tested there was not an appropriate level of authorisation evidenced and recorded on the new vendor form. Of these, 62% were not authorised through the correct form, rather this was achieved by email.

Corporate Oversight:
There are limitations with the reporting in place for the completeness of the contracts register, meaning management cannot easily assess their data spend for the current financial year, it currently covers 3 year historical spend but doesn’t indicate where there is current spend. Additionally, there are still some contracts not added to the corporate repository for contracts without valid reasons. We do however note that managers do have access to SAP spend reports, reports extract spend by vendor, year, category which is an improvement from our previous reporting in December. Training is now available on these through the E-portal.

Retrospective purchase orders:
There has been a negative direction of travel, with a high percentage of retrospective purchase orders being raised in February 2012 when compared with the rest of the year.

Personally I found this report shocking and I am sure many other residents would also agree. My concern, which I have expressed on previous occasions, is that Senior Officers care much more about implementing One Barnet than ensuring the day to day operation of the council is carried out properly. How much longer will this go on before Cllr Cornelius gets a grip on how the council is being run. Perhaps he planned to do it but never got round to implementing it!