Why Capita's Gainshare is Such a Rip Off - Day Three - who made the saving?

For the last couple of days I have set out details of gainshare payments on the Capita contract in Barnet. There are numerous payments and I have just picked out a selection. Today I have included a couple of other examples where the issue relates to who generated the saving and was any value added to warrant a gainshare payment.

The first is an example of where it looks like all the benefit was generated by a Barnet Council officer yet Capita are still able to claim the gainshare. Up till 2012 (pre Capita) Barnet were full members of the not for profit London Housing Consortium (LHC) set up to provide "effective procurement solutions for local authorities, housing associations, schools and other public sector bodies".  In 2015 it was decided that Barnet should rejoin the LHC as an associate member; you don't get as big a share of any rebates but there is no liability for any losses nor is their a membership fee.  At the time Barnet were about to embark on two construction projects, Monkfrith School and the refurbishment of Barnet House with a value of £5.3 million. The report was submitted as a delegated powers report and signed off by the Council's Commercial Director, not a Capita employee. The rebates from LHC are small as a percentage but when you are dealing with large projects it all mounts up. As a result of our membership Barnet received a rebate from LHC of  £47,797.32. Not a fortune but that is enough to fund two care staff. Problem is Capita say they are entitled to a gainshare so we end up handing back 31% or £14,817.17.

The second is where Barnet's bank withdrew from the local authority market so there had to be a new contract. The new contract was less expensive so yes there is a saving. However the paperwork states clearly that "procurement support has been delivered from within the LBB Core Team". Now we pay for the core procurement service in the core contract payment. Nevertheless Capita say this is a gainshare so Barnet pay them £35,381.25 - enough for a social worker.

The third example is focused around the assumption that costs always rise. Barnet tendered their interpreter and translation service. Assumptions were made about volumes and by looking at historic prices. When the current bids came in lower than the historic prices, charged Capita claimed a gainshare of £22,155.91.  What I was also aware of was that there has been a lot of downward pressure on translator and interpreter pricing.  I have used translations services in the past and have been told that prices are at best static and in many cases falling, obviously depending on skill level and language. The problem with the Capita contract is that if market prices fall, Capita see the benefit in additional gainshare.

Tomorrow I will be looking at the "extras", additional charges made by Capita which in my opinion are excessive.

Capita Day Rates - Disclosure at Last

Capita have billed many millions in extra charges on the Barnet CSG contract. A significant chunk of those charges are for "Special Projects" charged at pre agreed day rates - in 2016-17 alone Special Projects cost £16.8 million as reported here. 

The contract stated quite clearly that these rates should be disclosed after three years but when I asked for them it came as no surprise that my request was refused. After going through the Information Commissioner's Office (ICO) and having to appeal their initial ruling they eventually upheld my appeal. Today was the deadline for Barnet to provide the information and last night it was sent to me. Set out below are the Day Rates as stated in the original contract signed in 2013 but rates may have risen since that time, especially as Capita have an indexation clause within the contract. I will leave you to judge whether you think these rates are reasonable and whether, for a number of roles, utilising a council employee might have been cheaper. It is interesting to note the day rates of the Legacy One Barnet Project Managers (Table 4) as they may be a reflection of the rates we were paying pre Capita and compare those to the day rates being charged by Capita.