Does This Make You Cross?

I do like a nice pen and I was lucky to be given a very nice Cross Pen for Christmas last year. At Barnet Council they also like Cross Pens. I don't know how many they ordered - because that is commercially sensitive (WHY?) but I do know they spent £2,304 (inc VAT) on them last year. As I understand it they were given out to staff as part of the London Borough of Barnet Value Awards scheme. Now it may be that these pens have been cherished by staff and if that is the case then fantastic but they appear to retail, when engraved, at around £30 a pop. Maybe the Council got a good deal and got 100 of the pens but maybe there are more effective ways to engage and motivate staff than giving them an engraved pen - like treating them fairly and not making them redundant. Any staff who received a pen and would like to give their views I would be more than happy to publish them.

Chipping Barnet Residents Forum - Patronising the Plebs

Tuesday's residents forum was disappointment peppered with a few jewels of delight.

Most of the issues were, unsurprisingly to do with traffic and parking (as that is just about all we are allowed to discuss at forums these days. There were two petitions submitted from Walksafe campaigns, one in N10 and one in N14.  A number of children sat quietly and politely taking it all in while the petitioners were either deflected from their objectives or utterly patronised. Sarah Perman who was putting forward the N10 Walksafe has been to the forum before and when Cllr Evangeli tried to push the item to the October Environment sub-committee she may the point very politely that nothing had happened in the last six months and now they were being asked to wait another 3 months before it could even be referred to cabinet for action. Cllr Kate Salinger seemed pretty irritated (as did most of the audience) and eventually common sense prevailed with the item referred to the meeting that immediately followed on from the forum. Cllr Salinger  thanked the schoolchildren for their excellent behaviour and they politely trooped out of the meeting. The next Walksafe petitioner was, in my personal opinion, treated in an exceptionally patronising manner. I am not sure whether it was properly resolved but the way it was handled left much to be desired.

Robert Newton asked a number of questions relating to double yellow lines on corners but again I was not clear if the matter had been adequately addressed. That notorious troublemaker and blogger Mr Reasonable asked a question about the Council's community engagement strategy in light of the events at the Somali Community Centre. I wanted to understand what the council was doing to engage with the community to understand where tensions lay and to help formulate possible solutions. Now is was a genuine concern of mine because I think it falls into the category of the Council "don't know what they don't know". Cllr Salinger said that there was no community tension but I made the point that the event had taken place so clearly there was a problem. One forum attendee also pointed out that there had been some negative comments about the rebuilding of the community centre so maybe there are some tensions. I also made the point that not all tensions are racial. The Government's austerity policy and the difficult economic situation could give rise to serious community tensions but by failing to engage with the community the council runs the risk of being, or being seen to be, complacent. An officer said that someone on the council was working on this but I helpfully pointed out that there is a Community Engagement  Toolkit which has been developed and sit on the Communities department website so don't try reinventing the wheel. There was a useful debate on theis topic culminating in the request to ask Cllr Robert Rams to speak to the next forum about the Council's Community Engagement Strategy. Good that is what should happen at forums.

Next up came a presentation about the new recycling bins that will come into use in October. Now residents had already discussed this issue at an earlier forum where a number of residents expressed their concerns about the size of the new recycling bins (240 litre wheely bins). We were told that yes we will have these large bins along with a food bin and food caddy (total cost £3.7 million). several people said they didn't have room. One forum regular made the point that she lived in a maisonette and that didn't seem to have been factored in to the equation. Each comment was met with the reply, "Thank you for your comment". "Who is that woman?" a gentlemen next me asked, " is she stupid or something".  Well no actually she is rather senior and paid a very large salary (£91,215 plus £22424 pension contributions). Look of shock and horror on the gentleman's face.

We were told that this will help improve recycling rates and that will help the council save £4 million a year in landfill tax. I'm afraid I couldn't let that one go and told the officer that I though that figure was wrong. Now having looked into this in the past I knew that this £4m figure seemed dodgy and I set out below my calculations:


According to q4 performance report http://www.barnet.gov.uk/download/downloads/id/2928/performance_monitor_quarter4_201213 residual waste was 670.6kg per household and the percentage of recycled was 31.7%. Depending how the recycling is calculated it is either 31.7% of 670.6kg or as I suspect 31.7% of 981kg to leave a residual of 670.6kg. The officer said the council want to add 10% point to recycling rates so that is 10% of 981kg per household or 98.1kg. There are approximately 145,000 households in Barnet making a total saving of 14,224.5 tonnes of waste from landfill per annum. Landfill tax is currently £72/tonne so I make that a saving of just over £1 million not £4 million as the officer kept repeating. It also doesn’t take into account the lower value of the recycled waste caused by co mingling.

My rule as always is check the facts and in this case I am simply not convinced. There may be additional savings due to the reduction in staff numbers - but the May Gurney contract is only £4 million per annum in total so I can't see them saving three quarters of that value by going to co-mingled.

At the very end we were told to fill in a questionnaire about the residents forums and send it back to the council either in the post or scan it in and email it. I made the point that this was an entirely self selected audience and that if they wanted to improve forums they needed to understand about the people who did not come just as much as those that do come. The survey is not on the consultation hub and the results will have to be received collated and turned into a report by Monday - I wonder if the report is already written?

As we were breaking up I had to remind Cllr Salinger that she had promised to make a statement about the Themed residents forums which are a requirement of constitution (or were when I first requested one) and the promise Cllr Richard Cornelius had made to host a forum on One Barnet. Cllr Salinger said that she had reminded Richard of his promise but in light of the Judicial Review he thought now was not the time - well he knew about the Judicial Review when he first agreed to host the forum so what has changed.

Many unhappy residents shuffled out not wishing to prolong the torture by staying for the Environment sub committee - me included!

£1 million pounds of talent around the table

The Cabinet meeting on Monday saw a collection of senior officers around the table. When you look at the Council's website you start to realise what an expensive lot they actually are.

Kate Kennally Director for People £153,464
Chris Naylor our new Chief Operating Officer £158,464
Craig Cooper Director of Commercial Services £132,480
Pam Wharfe Director for Place £134,870
Maryellen Salter  who I believe£103,486
is Assurance Director
Andrew Travers Interim Chief Executive £187,683
Andrew Nathan Head of Governance  - not listed as he is comparatively new to the post
There was a lady there from the legal department but I do not suspect her salary is anywhere near as eyewatering as the others present.
Sat in front of me throughout the meeting was the Assistant Director of Communications who last year was paid £117,432 and sat next to me was Dawn Wakeling, Adults and Communities Director on £124,870.
It is a shame that the Assistant Director of Commercial assurance wasn't there (or was she) - her pay for last year was £179,250.

When Richard Cornelius talks about cutting costs perhaps he should start with his senior officers. Oh and just to be clear, all this salary information is in the public domain no secrets have been revealed.

Barnet Cabinet - Just Not Listening

Last night was the Cabinet meeting to rubber stamp the award of the DRS contract. Possibly having learned their lesson from the previous NSCSO contract, Richard Cornelius took lots of questions and allowed several speakers. However, asking a question is not the same as getting an answer and those were in short supply. In fact the whole event was stage managed with the illusion of councillors listening and then asking their set questions. It was quite clear that they just were not listening.

Although the evening was generally a disappointment the one highlight was when Mrs Angry got rather cross with naughty councillor Robert Rams and told him off for sniggering and tweeting while she was talking. Well done Mrs Angry!

I would love to have included a link to all the questions and answers but the Council has not yet published them. However, in a self indulgent moment I have included the speech I gave below. 

As I have stated many times, I have no ideological issue with outsourcing per se, so I come at this contract from a perspective of: will it work, will it deliver the promised results and do the risks outweigh the rewards? And risk is my biggest worry with this contract.

Risk number one - are you going to be able to manage this contractual relationship once the contract is signed? I am gravely concerned that over the last two years you have been deskilling the council with interims and/or Agilisys fulfilling so many key roles. When this and the NSCSO contract start there is going to be a massive skills vacuum on the council’s side and that will place you in an incredibly weak position in the JV. You only have to read through the council’s accounts to see how many senior posts are filled by interims. I have been going through Agilisys invoices as part of the inspection of accounts and their reach within the council is shocking. You have created a consultancy dependent culture in the council and you are going to pay for that dearly when this contract kicks into gear.

Risk number two – will entering into a joint venture force you, directly or indirectly, into making unpalatable decision. The shareholders’ agreement will set out rights and obligations on both parties. We have heard a great deal about Capita’s obligations but I have not as yet heard a single council obligation. Do you think there aren’t any? If there aren’t then I doubt very much it is a JV because by the very nature of the agreement both parties have responsibilities and obligations. Whilst you as a shareholder may insist on certain actions being taken or not taken, your directors on the JV board through which you decisions can be enacted have a fiduciary responsibility to the JV and that is where the problems will arise. I have a horrible feeling that when certain services are deemed unviable or when income streams don’t materialise your directors who sit on the board of the JV will be obligated to make some pretty difficult decisions which you as councillors may disagree with but you will be powerless as they are your representatives.

Risk number three  - will there be a cultural fit? There will be a massive cultural difference between Barnet and Capita. You are a not for profit organisation focused on delivering services and for want of a better phrase doing the right thing. Capita is a FTSE 100 company focused on shareholder return. That cultural mismatch can work satisfactorily in a straight contract but when you form a JV it becomes much more difficult because you have to adapt to your partner’s culture and that I fear will be a massive shock for Barnet. No mention of cultural fit has been made at any stage of this contract and that suggests it has been either overlooked or ignored.

There are many more risks that I could mention but sadly there is no time. However, the one thing that you could at least do to test these risks is undertake independent due diligence. I simply cannot understand why you have refused to bring in an independent expert to carry out financial and commercial due diligence. You have had only one set of opinions, those of your expensive advisors. All the way through they have been advising you to continue with this process – well they would wouldn’t they because this project is generating millions of pounds in fees for them.

Any sensible, rational person would have said, “before I make this massive decision I need a second opinion, I need to double check the thinking and what is on offer”. If you had had a second opinion on the Catalyst contract perhaps you wouldn’t have been landed with a £10 million bill. If you had had a second opinion on the Your Choice Contract perhaps it wouldn’t be in financial crisis.

Three weeks and £40,000 would give you at least some comfort that you were doing the right thing. But you have resolutely refused to take a second opinion. Well that, in my opinion is probably the biggest risk of all; it is arrogant and it is reckless. You still have time – think again - get an independent second opinion.

Barnet and the Art of Tautology

On Tuesday I attended the Budget & Performance Overview and Scrutiny Committee meeting. I had submitted 30 questions well in advance of the meeting so I was looking forward to some detailed answers. Well that was not to be. Before I go through just a few of the answers I want to make it clear why I asked them. Some people have branded me an "activist" or "troublemaker" or "lefty". Personally I don't think I am any of those. I come from a business background and have dealt with contracts  and contractors over the last 27 years. Barnet is where I live and I want to make sure that the Council are not messing up mine and my children's future. That's all.

So coming back to the questions.

My first question was asking how much additional gross revenue would be required to generate the net income growth of £33.8 million that Capita are promising. The reason for wanting to know that is to understand how much additional business Capita are going to need to generate and what the ,margin is. If the margin is high, say 50% then Capita will need to generate an extra £67 million of gross income which might be achievable. However, if the margin is lower, say 10%, after you take into consideration all of the staff and overhead costs of providing these additional services, that would mean that Capita would have to generate an additional £334 million and that stretches the bounds of possibility. So a logical reason for asking the question and if I was a Councillor it would be critical to my assessment of their proposal. The answer back from Barnet was significant additional gross revenue. In other words we aren't going to answer your question.

Second question asked what circumstances have changes between March 2011 and today to justify a tripling in net income. The answer came back that the March 2011 business case was very prudent. Now this is important because back in 2011the council may decisions about how they would outsource these services based specifically on the business case and it has now been proved to be wrong by a factor of three. To my mind this entirely undermines the credibility of the original business case and the people who put it together as if may have ruled out other options which should have been considered.

The third question related to the cost savings that Capita are promising. In the original business case carried out just 2 years ago Barnet's consultants estimated that cost savings would be £19.7million whereas now Capita are only promising £5.3 million of cost savings. So I asked what reason has been given for savings that are only 26.9% of that originally forecast?  The Council's answer  to why the savings are so much smaller is "The bidder has identified a more modest saving". Now I think that must rank with one of the most useless answers of all time.

Now many of the other responses displayed similar tautological dexterity, however there were a few nuggets of information which came out as follows:

• Capita will receive £18.5 million in profit and overhead recovery
• 30% of the staff will be on joint employment contracts, i.e. employed by both the Joint Venture and Barnet Council. How that will work in practice is anyone's guess!
• The Council can veto any director of the Joint Venture being paid more than £150,000 - so that will mean a bunch of unelected people will sit on the board of a JV company running Barnet and as long as they are paid salaries of £149,999 or less then there will be absolutely nothing anyone can do about it.
• The extended opening hours at Hendon Cemetery and Crematorium and pre-purchasing of graves which Capita are saying will generate additional revenue, are actually in operation now before the contract has been signed.
• Capita will not have any contractual requirement to hold open meetings with the public to explain what they are doing but they will "provide Community Liaison Officers to attend Town Centre Forums  - sorry but don't council officers do that already?

My last question asked if the chairman would consider separate workshop meeting so the public could ask more questions to which the response was:

"It is not appropriate for Scrutiny members to hold workshops with members of the public on matters that are the domain of executive decision making". 

As it so happens I was reading just yesterday about a Scrutiny Camp run by the Centre for Scrutiny Studies. Take a look and see examples of best practice where local authorities engage with and involve local people, something that simply does not happen in Barnet.

I would add that actually there were 77 questions in total asked and the answers do make interesting reading which you can see here. Barnet is fortunate in having a very inquisitive and questioning resident base and that should be something the Council embraces not evades.

£3,400 booze up paid for by Barnet Ratepayers

The Claddagh Ring Pub, located close to Hendon Town Hall, hosted an event on 26 April for the Revenues and Benefits staff who will lose their jobs when (if) Capita take over. Having seen the pub's name in the suppliers' payments list I requested a copy of the invoice under FOI and today it arrived (See opposite)  The invoice is referenced "Barnet Council Event" and which states that the £3,400 was for "Food and Room Hire" - no mention of drinks, I note.  ( I have edited the pub's sort code & bank account number btw). This was authorised by the Head of Revenues & Benefits and described as a team building exercise. In the supplier payments it is categorised as training.

Now, the reports I have had from staff who were at the event say that there was a free bar and that staff were led to believe  that the Head of Revenues and Benefits, who is a consultant/interim, and another consultant would be picking up the bill. Some staff are indeed very upset that Council money was spent on the event and would not have participated if they had known it would be billed to the Council.

Looking at the Claddagh Ring's website it mentions that finger buffets start  at £7.95 per head with the deluxe buffet at £19.95 per head. Given that there are only 126 FTE staff (so maybe 150 in total) that works out at  over £22/head. From what I hear there was a little food available but the main incentive appeared to be a free bar.

I have no problem with team building events as such and have been on many in my former corporate days - but they were not paid out of the public purse at a time when all budget are being cut. I think it is also offensive to the staff to mislead them about who was paying for the event. This shows a serious error of judgement and needs to be investigated further.

Come on Richard Cornelius tell me this £3,400 booze up was not paid for by ratepayer.

My Questions on the DRS Contract

On Tuesday there is a meeting of the Budget & Performance  Overview & Scrutiny Committee (7pm Hendon Town Hall). Set out below are the questions I have submitted:

1.       How much additional gross revenue is required to generate the net income growth share to Barnet of £33.8 million?

2.       What circumstances have changed between March 2011 and today to justify a tripling in net income growth?

3.       In the March 2011 business case it stated that cost reductions over the period of the contract would amount to £19.7 million yet the Capita bid suggests the savings are now forecast at only £5.3 million or just over £500,000 per annum. What reason has been given for a saving that is only 26.9% of that originally forecast.

4.       At Table 7.1 in the business case it illustrates that the DRS staff numbers will stay relatively static over the period of the contract. How can the same number of staff generate so much more additional revenue?

5.       At Table 8.2 in the business case it suggests that the £5.3m guaranteed benefit represents a saving of 3.5% of costs. It also says that CSL will retain 13% of the cost savings as their fee. Based on my calculation that means that CSL will receive £31.8 million of the costs reduction. Does this seem to be an equitable split of cost savings?

6.       Where will the 21% reduction of core operating costs be made given that staff numbers are virtually unchanged over the period of the contract.

7.       At Table 8.2 in the business cases it states that pre-purchasing of graves will deliver additional benefit. As an advance payment for a service to be provided in the future surely it should not be counted as additional revenue?

8.       At Table 8.2 in the business cases it states that there will be extended opening hours (at Hendon Cemetery and Crematorium) and additional cremation activities. What opening hours are envisaged and will this mean that local residents will have to wait longer for their loved ones to be cremated unless they choose an early morning or late night slot?

9.       How much additional highways advertising will we be forced to endure in order to generate the additional £9.8 million of guaranteed benefit?

10.   Of the £6 million investment in IT what is the phasing of that investment over the 10 year contract period, what specific software will be purchased and what mechanism is in place to ensure that the money promised is actually spent?

11.   Where specifically will the DRS staff be located?

12.   How many posts will be joint employment contracts?

13.   What happens if council and Members’ do not approve new services or changes to fee levels or fee structures and how does this impact on the guarantees?

14.   If the contract is terminated early how much will Barnet have to pay CSL in compensation?

15.   When a planning decision is made, who will make that decision, a Barnet council employee, a Capita employee or an employee of a new joint venture company?

16.   Given that the report states that Capita Symonds will maximise the financial and economic benefits of new developments including increase receipts of New Homes Bonus what reassurance can we have that they will not push through massive new housing developments simple because they have a financial incentive to do so?

17.   Who will sit on the board of the Council wholly owned company that will manage its interests in the Joint venture company, how many company directors will be created and how much will they be paid?

18.   Will directors of the Council wholly owned company sit on the board of the joint venture company and what level of decision making will they have discretion over?

19.   What provisions are in place to stop the directors of the council wholly owned company or the joint venture from paying themselves excessive salaries?

20.   What is the anticipated level of corporation tax payable by the joint venture company over the ten year period of the contract.

21.   On page 12 of the business case it states that one of the reasons why a joint venture was favoured over the original strategic partnership is that “the risks were lower”. Please can you clarify which risks are lower under the JV model and are there any risks that are higher?

22.   At page 14 in the business case it states that the council reserves the right to veto salary and rewards schemes above £150,000. Is that £150,000 in total for all DRS staff or £150,000 to any one individual?

23.   At the end of the 10 year contract how will the joint venture be dissolved, what liabilities will accrue to the Barnet wholly owned company and how will DRS staff be separated from the staff carrying out duties for other customers?

24.   Why are 30 posts to be added in year one only for them to be removed in year two, will the posts to be removed in year two  be the individuals are were brought in in year one and what safeguards do existing staff have that Capita will not simple bring in 30 new staff on much lower terms and conditions and then make 30 Council TUPE’d staff redundant at the end of year two.

25.   At the end of the contract can the shares in the JV owned by the Barnet wholly owned company be sold to a third party?

26.   Why was this report cleared by Trowers & Hamlins not the council’s own legal service (outsourced to Harrow Council) and does this not represent a massive conflict of interest given that Trowers & Hamlins have provided legal advice on the outsourcing project?

27.   Why were registration services included in the 2011 business case but excluded from the Capita bid and who will provide registration services when the DRS contract is let?

28.   Please can you tell me what, specifically, is the Barnet Observatory?

29.   Is there any requirement in the contract for Capita Symonds to hold open meetings with the general public to explain what they are proposing and how the new contract will operate?

30.   Will the chairman consider setting up a separate workshop meeting open to and involving members of the public at which a more detailed analysis of the contract proposals can be discussed.

Let's see if I get some clear answers!