Wednesday, 1 October 2014

Another Million for Capita - August Supplier Payments

Barnet's supplier payments for August are out and as ever there are some big payments to the usual culprits.

  • Barnet Lighting billed £1,186,455.15 for all those new street lights that we actually didn't need.
  • The Barnet Group billed £7,245,939.88;
  • London Borough of Harrow £7,167,500 Health authorities - Third Party Payment whatever that means;
  • Comensura who provide agency staff to the council billed £1,331,152.06. Yet again the bill is very high regardless of what was said at the Council meeting in July. Given that the an Internal Audit report earlier this year said that "There is no requirement for the order of agency staff on the Comensura system to be approved by a more senior officer. There is therefore a risk that agency staff may be appointed without appropriate approval." It is also interesting when looking back to four years ago before outsourcing was forced upon us when in 2010/11 the total annual bill for agency staff was £8.99 million or an average of £750,000 a month, almost £600,000 a month LOWER than under the 'wonderful' efficient commissioning council model.
  • Saracens were paid £50,385.50 in rents. I do find this a little surprising given that Mr Mustard uncovered that in July Saracens owed the council £380,000 for parking permits. I hope that £380k has now been paid.
  • And so we come to Capita. They billed £1,113,319.01 a sizeable bill  and one for which we have no transparency.
I hope our councillors scrutinise the payments as rigorously as the residents. (Oh yeh!)

Monday, 22 September 2014

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.


Monday, 15 September 2014

Barnet Council's Clap-o-Meter tactics to push through more outsourcing

Over the years Barnet Council have produced some highly suspect and biased reports to support their political ideology of outsourcing the entire council. The One Barnet Business Case reports are the most obvious examples and I blogged about the DSG report back in March 2011. In that business case there was a lack of evidence to support many of the assumptions and a series of what I can only describe as entirely untruthful statements about investment and who was going to make it. At that time they said that all of the investment was going to be made by the outsourcing company and the only exception would be the cremators at Hendon Crematorium. Roll on two years and Barnet Council sign a cheque for investment for £16.1 million for all of the investment.

With the election out of the way, the council zealots now have another four years to push through their commissioning council agenda, one dictated entirely by political dogma and lacking in both financial rigour and common sense. Tonight we see yet another of these  fallacious reports which is supposed to dupe any stupid, ignorant, lazy or unquestioning councillors on the committee. Luckily, I think (hope) that today we have some rather sharper councillors who aren't going to put up with this utter tripe and who are going to ask some probing and challenging questions.

I have read an excellent report by Dexter Whitfield which sets out those deficiencies concisely and I would urge as many people as possible to read it here. However, I believe that the report will not be allowed to be taken at the meeting nor are the unions who represent the staff that will be impacted by the decision allowed to speak.  Barnet Council don't believe is balance, in evidence or in alternative view points so any report which seeks to challenge the Council's view point must be suppressed. This means that council officers employed by Capita are promoting another outsourcing project of whom the most likely winner will be Capita. No conflict there then.

I have included one example from the council report  that incensed me as follows:

"The in house option is the representation of the service continuing to operate broadly as now, but on the basis that budgets are to be reduced significantly. This option would therefore require significant service reductions to meet budget targets."... "The in house model cannot meet all the objectives for this service, as the level of service cannot be preserved and it would not actively involve schools in the development process."
The report then lists out the potential risks of an in house team as follows (my comments in red):
  • Limited experience in trading outside the Borough - but what if there aren't any buyers outside the borough. We have seen this with the Your Choice Barnet (YCB) contract which having been outsourced on the basis of winning external business is in massive financial difficulties because there are no external buyers of the service
  • Limited ability to generate new income - but the successful schools catering service run by an in-house team already makes a profit of £190,000 a year which is ploughed back into Barnet coffers
  • Over time, non-DSG services will be reduced to a statutory minimum, with potential impact on services to schools and on children and young people - and who says that won't happen with an outsourced provider exactly as is happening with YCB
  • Less ability and freedom to innovate - an entirely groundless and unsubstantiated assumption based on a prejudiced view of "public bad private good"
  • Delivering savings will limit the capacity to generate income - again an entirely unsubstantiated and false statement. The in-house team have already had to cope with budget cuts every year for the last four years and at the same time generate £9.1 million of income per annum.
  • Potential gradual reduction in strategic influence * - and the asterisk denotes a footnote which say this applies to a "number" (and in my opinion all) of the options
  • Redundancies will be required, the cost of which are retained in house - and all the staff redundancies paid when the two main contracts were let to Capita were paid  for in full by the Council so again an entirely misleading and erroneous statement
  • Cannot secure additional private funding - so what happened to Invest-to-Save?
  • No sharing of risk with schools or third party - who says the schools can't share some of the risk?
The council have also fiddled the option evaluation scoring scheme so as to load it against the in-house option. No one is answerable for the scores given, and as far as I can see they are entirely made up and without substantiation, simply a personal view of the officers involved.
Set out below is the scoring chart:
Strategic direction is given 30% of the marks whereas performance - what they actually deliver -get only 20% of the marks. This illustrates perfectly how dogma trumps how the service is actually delivered and why the officers are completely out of touch with reality.

Don't let anyone believe that just because there are lots of numbers it is a scientific or rational mechanism. It isn't. I would liken it to Hughie Green's Clap-o-Meter - unscientific, driven entirely by the amount of noise made by the audience and for amusement only.  (Any resemblance between Hughie Green and Richard Cornelius is entirely coincidental). I hope that at the meeting tonight the Labour Councillors make plenty of noise, and ensure this report is consigned to the rejects bin where it belongs.

Thursday, 11 September 2014

Barnet supplier payments - another £675k for Capita

This month the overall supplier payments were £35.5 million. Aside from the usual suspects such as TFL, Barnet Group and Barnet Lighting there were a few payments which deserve a little more examination

Capita  billed £675,137.58 the majority of which related to the CSG contract. Discovering specifically what it is for shall have to wait until the inspection of accounts next year and even then I don't hold out much hope of getting any real detail on the figures.

Councillor Shooter asked at a council meeting back in July about agency staff cost with  the response that the costs are falling. This month the bill from Comensura, the council's agency and interim staff provider was   £1,268, 836.97, down slightly on June but still higher than May. Given the council has spent many millions on redundancy costs it seems ridiculous to be spending an average of £1.3 million per month temporary staff. A few others were as follows:

Paul Winter & Co billed £112,469 for what I suspect is legal advice on Brent Cross
NSL  billed £561,943.35 which looks like two payments instead of one.
Hags Play Ltd  billed £387,858.28 they are suppliers of playground equipment
Facultatieve Technologies Ltd who have been installing new Cremators at Hendon billed £185,288.

Apologies to readers for my prolonged absence from blogging but I will pull my finger out and get back into the swing of things now the summer holidays are over.

Thursday, 31 July 2014

Another day another £10.68 million for Capita - The cost of Barnet outsourcing continues to rise.

The supplier payments for June have just been published and at £45 million they are up considerably on the previous two months.

Capita received £10,687,650.86.  £4.23 million was for the Re contracts (planning trading standards, environmental health etc) and £6.45 million was for the CSG contract (call centre, finance, council tax collection, housing benefit administration etc). I am assured that Capita payments are thoroughly checked by Council staff, but when dealing with so much money to just one supplier I think a greater degree of public transparency is vital.

Comensura, who Cllr Shooter was asking about at the last council meeting http://reasonablenewbarnet.blogspot.co.uk/2014/07/is-councillor-shooter-getting-straight.html were paid £1,329,285.59 in June, a rise of £271,477.11 on May's payments. So any suggestion that this is a reason for back slapping and congratulations seems a bit premature.

Other payments included £3.66 million to Transport Trading a subsidiary of TFL, £676k for Barnet Lighting for all those new street lights many of which were replaced entirely needlessly. Ridgeland Properties is the company owned by the Comer Brothers and is for rental on Barnet's offices at North London Business Park. A further £186,250 was paid out to a company called Dancastle Ltd which represents the rent on Barnet House in Whetstone.

£866k was paid out to Fremantle for the care some of our elderly residents, a company who have been the subject of blogs by the formidable Mrs Angry  http://wwwbrokenbarnet.blogspot.co.uk/2013/09/the-death-of-yuk-kiu-lee-barnet-council.html

NSL the council's outsourced parking contractor received £320k this month. I wonder if Barnet really are getting value for money on that contract?

The top 25 payments by value are below:


The council also paid out £18,777 in subscriptions to CIPFA Business Limited the business arm of the Chartered Institute of Public Finance & Accountancy. It may be that this is for subscriptions to services such as benchmarking but these days of austerity should mean that all subscriptions come under the closest scrutiny.

It is also interesting to see that Barnet Council paid Saracens £3,819 especially as in today's Barnet Times it say that Saracens owe several hundred thousand pounds to Barnet.

I still think that there needs to be much greater external and independent scrutiny when signing off over £45 million of payments in just one month but this is Barnet where proper scrutiny remains a wish not a reality.


Friday, 25 July 2014

So how much is this Capita contract costing us in Barnet?

As you may know, I like to exercise my right to inspect the accounts and in particular to review invoices. This year my focus was on Capita invoices given that in 2013/14 they amounted to £62,743,081.83. Yes you have read it correctly £62.75 million and that isn't even for a full year.

At the very outset of the 2013 financial year Capita billed Barnet £340k to pick up the pieces when 2e2 went into administration and to maintain the IT systems through till 15 June 2013. A not insubstantial sum but definitely embarrassing given that Barnet had paid 2e2 their fees in advance so this was paying a second time for the same work.

On 27 June Capita invoiced Barnet for £14.74 million for "Interim measures to provide critical services". According to the annotation on the invoice this also included elements of capital. Now bear in mind this payment was made 6 weeks before the main contract was signed. Interestingly when I asked where the contract for this interim support existed I was pointed to the main contract where it had been neatly written in. So to me this looks like the main contract was signed in Augiust to include a contract for an interim service that had already taken place. Very curious and swiftly followed up with a further invoice for "Interim measures to provide critical services" for another £125k for the period 17-28 June or an extra £10k a day.

We then had a tranche of invoices on 6th August (the very same day the contract with Capita was signed) for capital investment - remember the capital investment that previous councillors said Barnet did not have and could not fund. Those invoices amounted to £10.478 million for various IT systems.

At the end of August and the first couple of days of September Capita invoiced Barnet £11.7 million for "Periodic Service Payments". From what I can understand these are the payments for actually delivering the service and relate specifically to the NSCSO (CSG) contract.

On the 30th September Capita under its "Re" contract (DRS) invoiced Barnet £5.18 million for the contract that started on 1st October.

From then on to the end of the year there are a number of payments including two periodic payments for the CSG contract each of £6.89 million and a further Re contract payment of  £3.4 million.

What intrigued me were a couple of comparatively small invoices,one on 27 November and one on 9th december for a total of £417,007. What this payment relates to is a clause in the contract called "Gainshare" where Capita get a cut of any savings made. Although the contract is redacted it is apparent from the numbers on the invoices that Capita receive 40% of any savings made.

I felt deeply uncomfortable about these savings and have been trying to understand how such savings could be made so quickly. Following a great deal of correspondence with the council and having several subtly different version of how the savings are justified I have been  told that these savings are the estimate of savings to be made over the next year, that Capita invoice Barnet upfront and then at the end of the year if the savings are not as great as Capita forecast then Capita have to return some of the money.  Frankly I was staggered that the council should be sharing out quite so much of the savings of our money and paying out forecast savings as much as a year before they are realised.

Personally  I cannot believe that any commercial organisation would countenance such a one-sided deal but this is Barnet Council we are talking about. Transparency on these savings is absolutely zero. I have asked repeatedly for evidence and it has been promised as recently as Tuesday but it still has not materialised. Indeed one of the largest elements of this saving relates to an area which I believe is virtually impossible to audit which should make everyone very uncomfortable.

So what you may say. It's £417k out of a massive budget. However this week Barnet signed off approval for contracts worth £594 million to be procured. Most of these are existing contract so will Capita be entitled to 40% of the savings on all those contracts? Let us say that they realise 10% savings possibly by squeezing residential and nursing homes who will in turn squeeze staff wages in exactly  the same way that Your Choice Barnet have cut the wages of staff by 9.5%.

 If that were the case would Capita be entitled to £23.76 million of "Gainshare" which they will bill upfront?
Do any of the councillors who signed the contract know? Was the matter raised by councillors on Tuesday evening when the approved the procurement exercise? There was no debate on the subject and Dan Thomas did not allow any scrutiny from Cllr Paul Edwards who wanted to asked questions.

Barnet have signed up to a contract which increasing appears immensely complex and entirely one sided with not one councillor bothering to query why so much money has been paid to Capita in such a short period of time.
At the Audit Committee this week one of the independent committee members said quite firmly " I am not prepared to sign off accounts I have not read". What a shame Conservative councillors did not take the same approach before they signed off this massive Capita contract.


Monday, 14 July 2014

Is Councillor Shooter Getting a Straight Answer - or are Barnet Fudging the Figures?

At tomorrow's Council meeting there is a section for questions to the Leader which you can read in full here.
Question 5 is asked by Councillor Mark Shooter and says:
What was the trend in the last quarter of 2013/14 with regards to the council’s spend on agency
workers?
Answer by the Leader
There was a 12% reduction in agency staffing expenditure. Agency staff costs incurred during
2013/14 was £3.276m lower than in 2012/13.

As I take a great interest in how much things cost at Barnet Council - because it is our money being spent - I knew this did not seem correct. Set out below is the email I have sent to Cllr Shooter and I genuinely hope he bothers to ask some more probing follow up questions. We will have to wait and see tomorrow. If not it will demonstrate that these questions are simply about showboating and not about genuine scrutiny.

Dear Cllr Shooter,

I see that you have asked a question at the Council meeting tomorrow regarding the trend in use of agency staff. I am however puzzled at the response you have received as these figures do not appear to concur with the figures produced in the supplier payments system.

The response you received states that agency staff costs fell by 12% in the last quarter. I am not clear what they are judging that against and I have set out the figures as stated in the supplier payments below:

Agency & Interim Staff – October, November, December 2013 -                 £2,933,778.80
Agency & Interim Staff – January, February, March 2014 -                          £3,061,789.21
That represents a rise in the last quarter of approximately 4.3%

There may be anomalies in those figures relating to the designation of interim staff so I also looked at the amount paid to Comensura who are the Council’s main agency staff provider. Their figures are slightly lower but are as follows:
Payments to Comensura – October, November, December 2013 -                £2,801,445.26
Payments to Comensura – January, February, March 2014 -                         £2,799,054.12
This represents a decline of £2,391.14  or 0.08% and definitely not 12%

In addition I would point out that whilst the response says that agency staff costs fell by £3.276 million in 2013/14, the supplier payments system suggests that agency and interim staff costs in fact rose by £1.249 million compared to 2012/13 (2012/13 £12,526,942.66 versus 2013/14 £13,775,545.95).

Perhaps someone will be able to explain why there are such massive anomalies between what you have been told and what the supplier payments system states. Either way there is a major error. I would also point out that I did discover an £8.4 million error in Supplier Payments in April 2014 which led to the figures being re-issued. I would also point out that since April 2014 it is no longer possible to make comparisons of activity type for payments as many are now simply classified as “various” significantly reducing the transparency of the supplier payments system.

If you wish me to provide the evidence supporting my figures I would be more than happy to do so.
Kind regards

Mr Reasonable