Inspection of the accounts - What we pay to Capita.

I don't know about you but I was keen to see the details of the £83.2 million Barnet Council have paid to Capita in the last year, especially as the contract value for 2019/20 was just £39.7 million.  

I have found issues in the past and feel it is my civic duty to at least provide a modicum of scrutiny to the huge amount we pay Capita.  I used to be able to attend committee meetings and ask detailed questions about the contract, but Barnet hated that, so  they introduced the gagging rules stopping that level of public scrutiny. Luckily, every Barnet resident has the right in law to inspect the accounts and that is what I have just completed, checking 421 Capita invoices. It presents some interesting data.

Contract Fee:

We paid £24.2 million on the Capita CSG contract and £20.3 million on the Capita Re contract for the basic fee.  What isn't made clear, when some councillors talk about savings with the Capita  contract, is that this figure excludes an inflation element which is billed separately under the heading of indexation. Last year this amounted to an additional £3.44 million. I would love to have a contract that gave me an automatic uplift for inflation each year and I can't think of a single council department where that inflation proof guarantee since 2013 is in place.

Gainshare:

We are still paying out on the gainshare clause whereby Capita get a share of any savings. They don't get gainshare on any procurement now, thanks to my persistent campaign showing that we were being ripped off by a poorly worded contract. However, last year Capita received £109,198 on printing gainshare and just over £100,000 gainshare on property income where Capita  keep 30% of the additional income from rent reviews, lease renewals and letting on the property portfolio above an agreed baseline. They received £180,421.92 gainshare for exceeding the council tax collection target on the basis that if they collect more than 98.5% of council tax  revenues Capita receive 50% in gainshare.  They also received £125,057.81 for gainshare on recovered housing benefit over-payments and £230,702.89 for reducing the number of people claiming single person discounts.  

In total, gainshare amounted to £837,218.66 last year, which I would suggest is money that Barnet desperately needs and should have been retained by the council. Capita supporters say it is essential to incentivise a company to gather this extra revenue, but I doubt the front line staff who do the actual chasing get a share of that gainshare. Barnet used to publish a schedule of how much gainshare had been paid to Capita (Benefits Realisation Schedule) but as with so much else in Barnet, they no longer publish it, possibly because it paints a very different picture of the contract performance.

Out of Hours Service:

Last year we paid Capita  £86,031 to answer the phone out of hours. We pay £1,200 per month as a fixed fee,  which guarantees 80% of call will be answered within 40 seconds, and then between £5.86 and £7.58 per call answered. We also pay and additonal charge if they have to escalate matters with an outbound call. According to Capita's website "'Response out of hours’ is a nationally shared out of hours customer service partnership, delivered by Ealing Borough Council and Capita. Public sector bodies such as local authorities, housing associations and health service providers can join the partnership, wherever they are in the UK, to access a large pool of highly skilled and experienced customer service agents, to deliver their out of hours customer service requirements". It does make me wonder if it might be a bit cheaper if we got together with some of our neighbouring London Boroughs and did this ourselves.

DBS Checks:

Last year we paid Capita £152,972.60 for DBS checks. Nobody is doubting the need for DBS checks, but this seems like a large number of checks and makes me wonder if this is driven by the large number  and churn of agency staff.

Other Items:

The are lots of other costs such as the £1 million paid to Capita for Office 365 licences, £463,628 for mailroom & photocopying, £1.96 million for pension deficit payments and £683,500  for TUPE payments. This again highlights that the savings talked about in headlines are quickly eroded by so many top up charges that are never discussed. We also had to pay back to Capita £801,775 which was money recovered through the proceeds of crime act. When the massive fraud happened within Capita Re with one member of staff stealing over £2 million, Capita had to refund all the money stolen. As money has been recovered and returned to Barnet, we have to refund it to Capita, so in this case not an actual cost to Barnet.  However, the other big cost area is Special Projects which I have detailed below:

Special Projects:

Capita have carried out a variety of special projects with a value of around £8.39 million including:

• £503,441 for the Corporate Transformation Programme (yes I wondered what that was as well);
• £286,458 for Customer Transformation Programme to deliver "improved and additional digital online transaction function to deliver a better service"
• £256,985 to "provide an impact assessment of all relevant and appropriate IT infrastructure for the introduction of the new office and subsequent closing of NLBP B4"
• £270,457 to provide support to the LBB;
• £357,787 to prepare a business case for development opportunities under the One Public Estate  (OPE) programme.

The Capita Re contract it is structured differently so they simply bill for work requested.  So in addition to the £8.39 million they have  also billed £659,523 on the new Council Offices in Colindale, £1.065 million on the Local Implementation Plan (LIP), £132,000 for Enhanced Advice and Adaption Services £436,930 for work on the Upper & Lower Fosters regeneration project, to name but a few. 

However, the biggest source of billing for Capita is for work on the different elements of Brent Cross project including the new waste transfer station, the new Thameslink station and the Brent Cross South regeneration. In total these Brent Cross projects clocked up £14.1 million of charges from Capita.

Brent Cross is a massive regeneration project and it has become a major source of income for Capita. I will be writing a follow up blog on Brent Cross in the next few days which I would urge you to read as the consequences of this project could be exceptionally serious.

In summary, when councillors tell you about all the money that the Capita contract is saving ask them about all the extra charges, and whether they have factored these into their claims. It is a bit like the £350 million pounds a week sign on the big red bus. It makes great headlines but dig a bit deeper and you know it simply isn't true.

The Politics of Bins, Rubbish and a Collapsing Depot

Last week the Environment Committee held a very full meeting under the new gagging rules. No public speakers and severe restrictions on questions. Barnet Tories have achieved what they want - no public scrutiny. The agenda was stuffed to the gunwales, two public questions on one item limited to 100 words, no opportunity to speak, same answer to both questions, yet there were so many other issues.

If you live in High Barnet you may be unhappy to learn that Barnet have agreed to give 100 resident parking permits to Barnet General Hospital for their staff to park in residents bays as the hospital's staff car park is full. Interestingly, the no public speaking rule was waived to allow someone from Royal Free Trust to speak about their plans and justify why this should go ahead. Apparently there are plans at some stage to build a multi storey car park  but they need this proposal to meet an immediate need. Labour councillors had asked for a review of the CPZ to be undertaken before these new permits were introduced to get local residents views but the Tories were keen to push it through and undertake the review once the hospital had been given the 100 permits. It also touches on a broader issue which is that many of the staff at Barnet General simply can't afford to live in Barnet and hence have to drive in from lower cost areas. This is a problem that is only going to get worse and highlights the failing in the Council's affordable housing strategy (what strategy?)

Onto another serious matter, the review of the Reduction and Recycling Plan (RRP). This is a plan Barnet were required to produce in conjunction with the GLA because of Barnet's withdrawal of the food collection service last year. It has taken a long time to get this report, and I have to say I found it very interesting. It highlights that Barnet is slipping down the rankings in recycling rates from 11th to 15th of the London boroughs with most of the lower ranking boroughs being the inner London ones.

What the independent consultants report identified was a series of options ranging from the status quo plus food waste collection to fortnightly collections of general and recycled waste.

The options also looked at the introduction of charging for green waste collection at a cost of £35 or £50 per annum, something that was mooted last year and has yet to be confirmed.

What the study did reveal was that simply adding back in a weekly food waste collection service would cost an extra £1.26 million a year. I found this somewhat surprising as the justification for its removal was a saving of just £300,000 a year. So scrapping a service which will now have to reintroduce by 2022 at the latest has cost us at least an extra million quid. This is because they have bought 16 new refuse vehicles, 4 in October and another 12 last month at a total cost of £3.2 million. However, these new vehicles cannot collect the food waste separately on the same vehicle (which is how they previously operated the service) so they will have to buy and operate a new fleet of dedicated food waste collection lorries.

What the report also shows is that the option of weekly food and recycling collections with fortnightly general waste collections (Option 3) could save over £400,000 a year and boost recycling rates from the current level of 34.6% to a respectable 48.2%. While this seems like the most sensible option, in Barnet sensible doesn't cut it. The Tory party manifesto focused on keeping weekly bin collections in spite of the fact that three quarters of English Local authorities have already moved to fortnightly (or even less frequent) collections.

This report does include the treatment costs of waste and it confirms what I said last year that anaerobic digestion of food waste will continue to be significantly cheaper than burning it with the general refuse. Interestingly, last week Barnet also published a report on the cost and savings generated by the refuse rounds reorganisation when the food waste collection ceased. That shows a net saving of just £335,000 but ignores the additional cost of waste disposal. Add that back in and the savings fall to just £50,000. That looks like an incredibly bad decision now that we know we will have to reintroduce food waste collections at a cost of £1.26 million.

When pressed as to whether Barnet will ever reinstate the food waste collection they repeated said that it was their "aim" but would be influenced by the cost of the service. Anyone listening to what was being said will be in no doubt that the food waste collection service will not be reintroduced while we have a Tory council in charge.

What caps all of these problems off is the continuing subsidence at the new Oakleigh Road depot. This is a scheme that was rushed into at great expense even though it was inadequate for our needs resulting in Barnet having to rent additional depot space from Harrow Council. Capita project managed the depot delivery at this site even though it was known for problems with subsidence. Within weeks of the depot opening cracks began to appear and the problem has simply got worse. Some cosmetic repairs were done filling in the cracks  but the problem has never gone away. At last week's meeting it was announced that the problems had become much worse over the summer and that major works were now necessary as a matter of urgency. This will need to start in November, taking six month to complete and is likely to cause significant disruption including weekend working, reduced number of vehicles at the depot and use other satellite depots. There are likely to be additional costs over and above the remedial works, such as the extra costs of renting space, paying staff to work weekends etc. but it is not clear who will be picking up the tab for these costs and as the officer said they will be "part of a commercial discussion" as to who pays. Willmott Dixon are the builders but I cannot understand why Capita who were responsible for project managing this scheme  and have been paid a large sum on top of their core contract fee, allowed this to happen and to drag on for such a long time that such serious and disruptive works are now necessary.

As ever, we will never get to the bottom of this saga as Barnet hate any form of criticism of them or their contractors.

Barnet Supplier Payments - Will Capita's £16.3 million in September bust the budget?

Supplier payments are out for September and yet again it has been a bumper month for Capita. Between the CSG and Re contracts, Capita was paid £16.3 million for September. This brings the running total to £39.5 million for the first 6 months of the financial year compared to £21.7 million for the first 6 months of last year and is more than the total value of the two contracts for the entire year, suggesting that Special Projects and Gainshare must be coining it in for Capita. Last financial year Barnet paid Capita a total of £51 million. This year, the budgeted payment to Capita is £41.8 million, see below, so if we have paid them £39.5 million in the first six months of this year there isn't a cat's chance in hell of hitting that target and I am increasingly concerned that the total payment for this year could easily hit £80 million.



To reiterate a challenge I made to Richard Cornelius earlier this year, if he can demonstrate to me Capita are saving Barnet residents money overall, I will donate £250 to a charity of his choice.

Another beneficiary has been Comensura who in September were paid £1.55 million and in the first 6 months of this year have billed a total of £9 million. I have raised my concerns about this contract previously and I remain convinced it is going to overshoot the £15.5 million Comensura billed Barnet last financial year. Also bear in mind that this contract is for temporary and agency staff  yet it follows a period of mass redundancies. Previously I was told that this was because Barnet are struggling to recruit social workers so they have having to use agency staff instead. However a hole was blown in that myth when a freedom of information request revealed that social workers made up less than 20% of the agency spend.

I also note that Conway Aecom received £1.84 million in September for all those roads that have been surface dressed with tar and grit much to the annoyance of many Barnet residents.

There were also a couple of entries that caught my eye. The first was for £118,911.02 to a company called Senator International who supply office furniture. Given the libraries services are due to be decimated especially my local library in East Barnet it does seem somewhat strange to be spending this much money on new office furniture. I was also surprised to find that Senator International are not currently listed on Barnet Council's Contract register for 2015-16. Mind, it does say next to the contract register "Created 6 months ago, modified 6 months ago"  so maybe it will find its way onto the register next time someone gets round to updating it - I wonder if there is a KPI for website updates given that procurement and website are both Capita responsibilities.

The other company that caught my eye were Shaylor Group who were paid £509,805.22 for equipment and materials purchases and instructed by the Commissioning group. As with Senator International, I couldn't see them on the contracts register. Let's hope the update comes soon.

Here are a few more  payments that have caught my eye.

The council paid TMP UK Ltd £51,501.99 for advertising and professional services. TMP UK describe themsleves as a "resourcing business that helps organisations hire and retain the right people by leveraging their employer brands". Given that Barnet is a commissioning council determined to outsource as many jobs as possible with a brand associated with cuts to vital services spending over £50k with this company seems a bit excessive.

Barnet also paid Claer Lloyd-Jones £7,500 in September. You may remember Ms Lloyd Jones was brought in last year after the Committee allocation fiasco saying that "nobody" at Barnet had an understanding of Local Government law as set out in the Barnet Times here and on Mrs Angry's blog here. I wonder why, a year later, we are paying another bill for her services - we paid her £6,000 last year on 15 August. Have the problems been resolved or have Barnet just been very late paying the bill?

As always, I will continue to monitor the payments - I just wish some of our councillors took a little more interest in just how much we are paying out.