Tuesday, 1 December 2015

Supplier Payments for October - Comensura still a problem in Barnet

October supplier payments are out and this month there a number of large unusual payments. For some reason Barnet have paid Harrow Council £7,167,500 under the heading of public health - not sure what that is for? In addition Bevan Brittan LLP was paid £2.45 million for IT services. Given that they are a legal practice I suspect that someone in Barnet has mislabeled what this payment is for.

Capita had a relatively light month receiving only £1.57 million but one old favorite, Comensura, received a whopping £1,815,572.53. That brings Comensura's running total for this financial year to £10,812,965.97 and, as I have mentioned before, there is no chance of Barnet hitting its target of £15.5 million for the entire year. It is also important to remember that Capita get a percentage of that spend under their gainshare clause so the more Barnet pay Comensura, the more Barnet have to pay Capita.

Another old favorite, Impower, was paid £82,912.40 for "other, professional and various services" but not consultancy fees so that's ok then - not.

CBRE Indirect Investment  Services Ltd were paid £120,000 and Network Rail Infrastructure were paid £416,808.66 both for "consultancy services".  In addition, Affinity Water received a single payment for £831,952.67 in addition to a number of much more modest payments. I suspect some of these large payments may relate to the Brent Cross Development and may or may not be reclaimed from the developer. It would be really helpful if we could have a clear designation of what is recoverable and what isn't so we can see exactly what this Brent Cross development is costing Barnet residents.

As always I will keep monitoring payments.

Sunday, 22 November 2015

Two Nights, Two Committees, Two Fingers to Scrutiny - Part 2

If you wanted to witness mindless political dogma at work you should have attended the Children's Education & Library (CEL's) committee last Wednesday.

This committee is chaired by Cllr Thompstone and on this occasion was supported by a phalanx of consultants and officers.

Of particular interest to me is the plan to outsource the Educational Services, including the in house school meals service. To set it in some context Barnet’s Catering Service provides approximately 3.23 million primary schools meals each year and approximately 1.14 million secondary meals.  The service provides freshly prepared meals cooked mainly on site from fresh ingredients in accordance with Government Food Standards. The service also holds the Soil Association Food for Life Silver 
Catering Mark which means farm assured meat, free range eggs and some organic foods. It also makes an annual operating profit of £241,770.

I have blogged about this previously here and here and in summary the situation is as follows:
  • Barnet have tendered a contract for which there is only one bidder;
  • Barnet didn't know what margin they would achieve on the largest component of the business and are dependent on the sole bidder telling them;
  • The company Barnet are in dialogue with don't actually provide the largest component of the service being tendered;
  • Capita, who run the two large outsourcing contracts and have the best opportunity for economies of scale, have walked away, which may indicate that the contract isn't viable.
When the CSG and DRS contracts were tendered there was a business case which summarised what Capita had offered, including how much investment they were going to make (which never actually happened) and the net revenue they would generate by service line. This time we are not allowed to know. In fact we aren't even allowed to know what the potential savings or costs are in the last 3 years of the contract. All we are allowed to know is whether or not the contract meets the medium term financial saving target of £5.4 million between now and 2020. We absolutely aren't allowed to know how that will be achieved.

Cllr Thompstone announced that there were two people who had requested to speak. Up pop two head teachers extolling the virtues of Cambridge Education and how they had been consulted during the tender process. One was head of an Academy and used a contract caterer that was part of the academy package. Cllr Thompstone then announced that that was the end of public speakers. No, not again! This is not the first time that someone has accidentally forgotten to register my request to speak. Cllr Thompstone in an act of "kindness" said that I could ask my questions and maybe I could cover my point then. Luckily I am not a shrinking violet and told Cllr Thompstone that I had requested to speak and ask questions and that I intended to do both. Nervous huffing and puffing and then surprise surprise an officer discovers that, yes, I had requested to speak. It's not that I'm paranoid but these antics to try and stop me speaking are wearing a bit thin.

I gave my speech which I have set out at the end of this post. It made it clear that while I have no objection to outsourcing the majority of education services (although I think it is a somewhat pointless exercise as schools are free to purchase services from Cambridge Education already). Any questions from committee members? No not one.

I then had the opportunity to ask supplementary questions to the ones submitted and largely unanswered by officers. You can see the questions and the answers provided here . Critically the responses tell us that:

  • There was no catering expert on the evaluation panel, even though the school meals service makes up 77% of the current revenue.
  • Details of the last 3 years of the contract are secret and the public have no right to know the details.
  • We have no right to know what upfront investment is being made, how much revenue the company will generate, or where savings will be made.
  • We know that there is a gainshare clause on the contract but we are not allowed to know the upside of the contract and therefore how much gainshare is up for grabs.
  • The council will have no contractual relationship with the company supplying the catering service.

The topic was then opened up to councillors. A few questions from conservative councillors. One that particularly alarmed me was from Cllr Alison Cornelius asking whether there have been any problems with the proposed catering subcontractor. Well Cllr Cornelius why didn't you Google that before the meeting; did you ask anyone if the caterer serviced any schools in Barnet and why, for example, they lost the contract for school meals at a school in North Finchley in July this year? 

Don't get me wrong, I have no specific problem with ISS. I am sure they are a perfectly good caterer. My issue is that this £7.2 million a year contract has simply been handed to a company without any real competitive process - the decision to use ISS rests entirely with Cambridge Education and not Barnet Council. 

All of the important financial details, I was told are in a separate secret report for Cllrs' eyes only so I was expecting that at some point during the meeting the committee would move into private session and interrogate the details. However, Cllr Hutton asked if the contract could be amended to take school meals out of the contract package. No absolutely not said the lady from Capita. Cllr Thompstone said that if Cllr Hutton wanted to propose an amendment if would have to be to the recommendation of acceptance of the report. A form of words was agreed and then it was put straight to the vote. Defeated on party lines 5 votes to 4 and that was the end of it. No questioning of figures in the secret report, no challenge, no questioning. Frankly every single Cllr should be utterly ashamed of their performance. Why bother having a committee when nobody challenges or questions what officers are doing in their name. But this is Barnet and that is the norm.

My speech to the CELS committee:

Tonight you’re being asked to approve a tender which is fundamentally flawed. I want to make it clear from the outset that I am not opposed to the outsourcing of the Education services but I am concerned about the subcontracting of the school meals service. Barnet has a school meals service providing 4.3 million meals a year, which is successful, has won external work and is profitable. It was originally included in this business case to sweeten the deal for the other services as it currently contributes 78% of the total revenue.

You started with six companies and you’ve ended up with just one bid from a company that does not operate a catering service. Catering will be subcontracted to ISS with whom Barnet council will have no contractual relationship. I’ve asked how much additional revenue ISS are promising to  generate but I am not allowed to know that. Bear in mind that the key driver for including catering in this contract was forecast £963,000 of net profit it would generate.

If this project was about efficiency and cost effectiveness, the logical option would have been to market test the catering service separately where there is a very healthy competitive market.
However I am sure you are also aware that in the Department of Education Survey from January 2015  it noted that school meal prices charged by private catering companies are on average 6.5% higher than in house or local authority catering services.

You had no catering expert on the tender evaluation panel for a contract that may last up to 10 years so I hope you have read appendix B thoroughly. Unlike the CSG and Re contracts where there was a reasonable amount of disclosure this will receive no public scrutiny and the assumption will be that you have read and understood the implications of Appendix B. For example  are you clear on the VAT status of this contract bearing in mind it became a significant issue in the Your Choice contract.

I’m concerned that actually the biggest saving here is the removal of Barnet’s central overhead charges and it’s debatable whether that is a true cashable saving.

I ask you to reject the contract as proposed and to withdraw the school meals service from the contract unless you are entirely satisfied it will deliver savings identified without affecting the quality of the service or cost schools more money. And if you really feel it will benefit the service carry out a separate school meals market testing exercise. In that way you will get a much greater level on transparency on what this service is costing and how realistic the savings really are.

Friday, 20 November 2015

Two Nights, Two Committees, Two Fingers to Scrutiny - Part 1

This week I have attended two Barnet Council committees. The first on Tuesday night was for the quarterly Performance and Contract Monitoring Committee chaired by the avuncular Cllr Finn.

This is a very broad ranging committee covering a large number of services. Although the Officers' report and separate appendices ran to a mere 126 pages, there were an additional 13 reports comprising a further 272 pages of charts and analysis. I would be surprised in any Cllr on the committee had read every page of every report.

In addition, Barnet are supposed to publish a set of raw data which underpins the Customer Service report. As usual I had to chase officers for publication but, surprise surprise, it wasn't published until after the deadline for submission of questions. You can see the data here and it makes interesting reading especially is you need to contact the council about housing benefit, council tax or adult social care.

What the  main report and appendices revealed is that whilst everyone would like to believe that everything is hunky dory it isn't. As a resident you can request to speak and ask questions of which I did both.  The text of my speech is below:

Complaints are at a record high. Only 40% of users said they were satisfied with their website experience, response to emails failed to meet the target timeframe.  CSG’s performance in managing cases on behalf of the Commissioning Group, Education & Skills and Family Services was particularly poor due to staff shortages in Coventry.  Average housing benefit wait times at Barnet House in September 22 minutes with average 2nd floor wait time 34 minutes and no wait time figures were provided for Burnt Oak Library. Call centre performance for Adult Social Care, Council Tax and Housing benefit consistently fail to meet the service level targets and almost 10,000 calls were abandoned in the quarter.

Some of the report figures simply aren’t credible. According to this report we now have 4,552 Total Established Positions yet 6 months ago we only had 3,080 and in March 2014 we only had 2,002. We also have 300 more occupied posts than 6 months ago. I don’t believe these figures.

No one seems to be questioning why payments to Capita for special projects and true up are so high and you are likely to pay them £80 million this year.

The situation in adult social care shows no signs of improving and the announcement of outsourcing that department  will only make a bad situation worse – exactly the same thing happened when you announced the CSG and Re outsourcing with key staff leaving in droves before they were made redundant. You requested a recovery plan to be shared at this meeting – where is it?

There are the same problems cropping up each quarter yet I don’t see any evidence of performance tracking or problems being resolved.  There are 13 ancillary reports running to several hundred pages but they are not listed on the agenda for this meeting. Has every member of this committee read them all?

The problem is this committee isn't holding anyone to account, it isn't doing any serious analysis of the figures and I think that is because you have a huge remit and are swamped with data. As such you seem to simply rubber stamp what you are told by officers.  I noted that in the constitution and ethics committee survey councillors were questioning what this committee is for and I think they are right to question that. As a committee you either need to step up your game in terms of monitoring maybe by allocating tasks to individuals or you need to rethink the role and remit so that your focus can be effective.

Here is some of the data relating to call handling for key services but as the data was only published after the questions deadline I wasn't allowed to ask questions about it.

Thanks to Cllr Kay who asked a couple of questions I was allowed to elaborate a little more and Cllr Geof Cooke noted that there was a discussion about pushing more of the performance monitoring back to the theme committees but that was it.

There was then a rather awkward situation. Cllr Geof Cooke had submitted a members item but it had been ruled out of order, not by the chairman, but by the  Monitoring Officer. Even Cllr Finn said he felt uncomfortable about the situation. Dark mutterings but unclear what it was about and how it will be addressed.

The next item was about members enquiries versus service requests. It quickly became apparent who is running the council and that is Capita not councillors. An officer made it clear that for examples of pothole, roads and pavement members enquiries, officers would prioritise what should be done first, something which did not go down well with both Conservative and Labour Cllrs. As several Cllrs put it, if residents come to Cllrs with a problem it is typically because it hasn't been addressed already. The officer said that they would prefer Cllrs to use the web portal that the public used. Cllr Zinkin said he had tried the website to report problems but that it was difficult and time consuming so he just wanted to be able to speak to someone. So residents can use a difficult and time consuming system but not cllrs. I don't think he realised how crass he sounded.

Cllr Mittra also raised a very serious concern that Cllrs were sometimes told a problem had been resolved when in fact it hadn't. In my day they called that lying. In the past I suspect that if an officer had done that they would have been hauled over the coals and disciplined but this is a contractual relationship now and the link between Cllrs and the outsourced officers who deal with problems is now much more tenuous. That item took more than 45 minutes to not resolve.

Next we got into the core of the meeting and Cllr Finn decided the order of which items would be dealt with.

First up was a review of Adults and Families which clearly has problems but which was discussed at the the Adults and Safeguarding committee last week. Nevertheless the officer responsible was called to the table and asked why he wasn’t meeting the savings target. Bear in mind Adults have already had to make very large savings, currently they are around £2.5 million short of the savings required. Like a number of the services Barnet provides, the council is not always in control of demand. The officer mentioned that, for example, some people who have been funding their own care have now run out of money so the burden falls to Barnet to pick up those fees. He mentioned that Barnet has 101 care homes, more than any other London borough which drives demand. But we need to get more for less insisted  Cllr Finn “Negotiate with the care homes on things like inflation”. The problem is care homes are already being squeezed and with the introduction of the national (non)  living wage that problem is only going to get worse. If care homes are squeezed too far they will either stop accepting local authority clients or they will go bust, something Cllr Finn fails to grasp. 

Indeed, Sarah Woolaston, Conservative MP, a GP for 20 years and the chair of the all-party Commons select committee on health, is calling for the government to act, saying that social care providers are reeling from rising costs and declining fees from cash-strapped local authorities. Simply squeezing care home further is not sustainable and maybe the budget is already too small.

This was followed by Children’s service which was a similar tale. The officer told Cllrs that demand had risen 26% since April, again something over which they have little control, and Cllr Finn told them to cut costs. My concern is that maybe there is nothing left to squeeze on this budget, like Adults, and that Barnet need to increase council tax to fund these essential services, something which Conservative councillors have resisted for the last 6 years.  Adult’s and Children’s service have borne two thirds of all the budget cuts and yet they are being squeezed further. I just hope that this doesn't result in a tragedy but if it does I know who will be to blame. I recommend reading this article in the Guardian about the concerns of the Government strategy to outsource social services.

Next was highways where the issue of spray and gritting as the new road repair method was discussed. Many Cllrs are unhappy having had lots of complaints from residents. The man from Capita seemed in no way contrite. “Well it looked a good idea on paper” he said. Hang on a minute, Capita are supposed to be experts, that's why they were appointed and now they are saying it 'looked' a good idea. I got the distinct impression that the man from Capita frankly didn’t give a wotsit.

By now we were almost out of time. “I wanted to talk about IT” said Cllr Cooke, "and what about the CSG contract" said Cllr Levine. Ah well we don’t have time so we will have to deal with it at the next meeting. So we had spent the best part of 3 hours dealing with matters that are directly dealt with by other committees but the largest contract the council operates with Capita and for which this committee is specifically responsible is sidelined for another three months.

A pantomime, a farce or a tragedy, it certainly wasn’t scrutiny. For a commissioning council that is intent on outsourcing absolutely everything this does not give me any confidence that cllrs will be able to hold contractors to account.

Part 2 to follow.

Friday, 30 October 2015

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.

Tuesday, 13 October 2015

Why Barnet is such a great place to live - last night's libraries meeting

Last night was the Barnet Council meeting to discuss the future of libraries - the destruction of a brilliant service which is well used by the community. As is the case with so many council meetings, they determine the outcome and then arrange the debate around that conclusion.

Barnet Council use a well worn technique of putting up absolutely dire proposals which they then pull back from slightly to say they have listened. In the case of the libraries the original proposal was to reduce some libraries to just 540 sq ft an entirely ludicrous proposal which was never the real plan. Now they have said they can be around 2,000 sq ft and we are all supposed to jump for joy and thank our lucky stars. However, for my local library, East Barnet, that means reducing the space by two thirds. East Barnet library was also listed as closing in one of the previous options. The new proposal is that it will be saved  - woohoo! Except that it is now going to be a 'Partnership Library' which means it will be run entirely by volunteers  - if they can be recruited and sustained and open just 15 hours a week. No paid librarians, in fact no paid staff at all, just volunteers.

Last night Cllr Reuben Thompstone kept asking speakers "will you volunteer to work in a library?", the classic 'when did you stop beating your wife' question. Whatever way you answer that question you are screwed. If you say yes, then that justifies the council's proposal to make the service entirely dependent on volunteers. If you say no, then the response is that you don't care enough to save your own library. The reality is that many people have to work two or more jobs just to survive. They don't have the luxury of receiving almost £26,000 in allowances as a Councillor chairing a committee. One questioner asked Cllr Thompstone if he would volunteer - no reply, no surprise.

134 questions had been submitted to the meeting demonstrating the depth of feeling. They also illustrated the numerous holes in the proposals; the unsupported assumptions, the lack of evidence, the wildly optimistic belief that they can deliver over £1/2 million pounds of rental income from space freed up in libraries. In East Barnet's case they reckon they can generate £54,000 a year in the space they will free up by cutting the library down to just 1,991 sq ft. Yet in New Barnet redundant office blocks which simply can't find tenants are being converted to flats.

Under 16's will not be allowed into unstaffed libraries unless accompanied by an adult. The rather patronising officer who wrote the report and answered many of the questions last night said at one point "parents wouldn't want their children to use unstaffed libraries unaccompanied". Yes that is correct but parents do want their unaccompanied children to use STAFFED libraries and that is what we are fighting for. In East Barnet's case many local school children go there after school to do their homework - not everyone has the luxury of a quiet room at home where they can do their homework in peace. We are not just talking about secondary school children here. I recall when my children attended Danegrove primary school, just across the road from East Barnet Library, some parents couldn't afford after school club so their children walked across the road to the library where they were told to wait until their parents could come and pick them up; somewhere warm, safe and with opportunities to learn and have fun. That cannot happen when it is a volunteer only library open just 15 hours a week.

Toilets will be closed when libraries are unstaffed which will affect parents with young children and possibly some older users. Yet Cllr Helena Hart moaned that at Edgware library the toilet was sometimes out of use because people had done 'unpleasant things' in there. Well Helena, have you thought what they might do in the unstaffed library? Will they trash the place, will they defecate on the floor. On no they won't because they will be CCTV - unmonitored so that several days later someone can go through the tapes and try and see which person committed this act. Not very comforting and one reason why so many people in the consultation exercise expressed their concern at using an unstaffed library.

Cllr Dan Thomas kept asking what other suggestions questioners had to maintain the libraries at lower cost. Well actually Cllr Thomas there were many ideas put forward in the consultation process, all of which were ignored. Barnet are spending £6.5 million on new technology to diminish our service so I am sure with a bit of thought we could come up with alternative ways of making that investment to deliver a much better service. The council are going to spend £34 million to build a new office building at Colindale, highly inaccessible to those who live in the east of the borough. Perhaps libraries could have been developed into community hubs with council services co-located there, right in the middle of our communities saving a large chunk of the £34 million they intend to spend.

The meeting was pushed along and by 8.30 pm it was all over. It will be referred to the full council meeting next week but, with a majority of one, the Conservative group will force this through in spite of all the concerns.

So why the title to this blog? Well one thing that can be said about Barnet is that people care. 134 questions, a large meeting room full to overflowing with people forced to wait outside as there was no room for them. So many people who care about the libraries. I chatted with one conservative outside who told me he had paid his £3 to vote for Jeremy Corbyn to ensure Labour couldn't win the next election. We talked about re-nationalising the railways and other Corbyn policies and then he said, "look let's not talk about that. We are both here to save the libraries. It's a ludicrous proposal and I don't know why they are doing it".  Barnet is a great place to live because of the people who live here, the people who care, the people who are passionate about their community.

Mrs Angry, one of Barnet's most talented writers, quoted Mrs Thatcher who was a champion of aspiration. That is something Barnet residents have in bucket loads,  but something deficient in the Council where the one overriding target is money. Stuff aspiration, stuff community, stuff the poor or disadvantaged - its all about the money. The council like to claim credit for Barnet's success but it is a great place in spite of the council rather than because of what they do. Destroying such a valuable community resource just highlights how out of touch the conservative councillors are with the community they are supposed to represent.

Thursday, 8 October 2015

East Barnet Library - sacrificed to balance the books

Barnet Council are proposing to downgrade East Barnet Library to a "Partnership Library". It will be open just 15 hours a week, run entirely by volunteers and it will occupy just one third of the space of the current library. This is to save money apparently, although this will take at least three years before the council breaks even on their investment in technology, using their wildly optimistic assumptions about how much they will get renting out spare library space, in East Barnet's case £54,000 a year. My guess is that the space will never realise the £546,000 a year they anticipate across all the Barnet libraries making the business case even more spurious.

Now you would think that this is a very underused facility to be cut so severely. In fact this is a well used library with more than 9,000 users and over 167,000 transactions a year. But what does that mean in reality. I've just popped into East Barnet Library to meet someone there. The place was full of children coming from school - with two primary schools and a secondary school on the doorstep. There was a mother and daughter working together on one of the computers and people on another three of the computers - one was out of order. There were four mature residents reading newspapers in the soft seating area. Librarians were dealing with a number of requests. The library was buzzing yet this is the same library that Barnet Council have deemed an unnecessary expense to either be run by volunteers or shut. So for all those children the alternative will be to get on a bus either to Osidge library which is to be halved in size to just 2153 sq ft or to Chipping Barnet Library. However, if the children are unaccompanied they probably won't get into either as Osidge will only be staffed for 15.5 hours a week and Chipping Barnet only for 23.5 hours a week. Outside those times unaccompanied children will be excluded.

Barnet could have avoided this problem if they hadn't decided to cut the council tax by 1% just before the 2014 local election. A political hand out to buy voters which has cost us our library service.  Cllr Reuben Thompstone will chair the committee on Monday which will push this through. If you disagree with the proposals to destroy our libraries email him at cllr.r.thompstone@barnet.gov.uk and tell him what you think.

Tuesday, 15 September 2015

Capita's Money Making Machine - It's Called Barnet Council

Over the next few weeks I will be publishing a series of blogs which relate to the two massive contracts which Capita have with Barnet Council, the CSG and Re contracts. It has taken some time to compile the data and is taken from many Capita invoices that I requested as part of the inspection of the accounts in June. The reason for inspecting all of Capita's invoices is because I remain unconvinced that the appointment of Capita is actually saving any money overall. They may be making savings on the core contracts but they charge for everything extra with dozens of special project which all attract additional payments. Overall in 2014/15 we paid Capita £51 million and £126 million since the contract started so I believe this deserves much greater scrutiny.

I preface my comments by noting that I was warned not once but twice, in writing, by Barnet Council that I risked committing a criminal offence for passing on, blogging or communicating in any form any of the information I discovered other than to the auditor, Grant Thornton, or the Police.  Surely in a 21st century open democracy this type of information should be available to everyone without any threats of prosecution. I read the legislation and in the absence of any clear evidence to support these assertions I asked where such offences existed in the legislation. Surprise, surprise Barnet said they had made a mistake! Time will tell on that front.

Today I will start with the Comensura contract. Comensura were appointed back in 2012 to act as a broker who coordinates the supply of agency and interim staff. They don't directly supply any staff themselves but provide one point of contact for Barnet with a range of staff agencies. In theory they are supposed to save the council money but over the last three years the cost of the Comensura contract has risen inexorably. In 2012 the average monthly cost of the contract was just over £1 million a month. In the first three months of 2015/16 it has hit £1.6 million a month and in July alone it was £2.3 million.  Now there may be very good reasons why we are having to use so many interim and agency staff, two thirds of which are in the Adults and Children's department but Barnet have been talking about reducing this cost for the last two years and have so far failed miserably. Based on my calculations and the current run rate, Barnet will pay Comensura around £20 million this year.

So, you may ask, what has this got to do with Capita. When Capita negotiated the CSG contract they included a Gainshare clause which means they get a share of any savings they make on contract negotiations. Although the percentage they receive is confidential by my reckoning it is 40% and so far I estimate they have been paid around £750,000 on this single contract. This contract was due to expire in October but because the procurement function ( run by Capita) have not started the tendering process and they don't want to be rushed,  the contract will be extended for another 12 months. If Capita continue to receive gainshare at the same level I estimate they will receive another £750,000 in gainshare payments over the next 12 months.

I would also point out that there are a number of people taking their cut on the agency staff contract in between what the staff get paid and what Barnet Council pays. The contract was originally let through a framework agreement from the Eastern Shires Purchasing Organisation (ESPO). They charge a small levy on every contracted hour purchased to cover their costs. The staff agency takes their cut on the staff supplied, Comensura take their cut of all the staff supplied and finally Capita get their gainshare payment. So four different organisations are taking their cut on this contract.

Some people may say that if Capita are getting 40% we are saving 60%. I would suggest that any contract that is so generous for one contract discussion should itself be renegotiated. It also make me wonder what on earth the Barnet commercial team were up to before Capita were appointed that allowed such poor contracts to be agreed - oh yes they were all too busy working on the Capita contract. I raised all my concerns  on the Comensura  contract at the recent Policy & Resources committee and although treated politely and courteously by Richard Cornelius the committee still voted to extend the Comensura contract for another year. Looks like another good year for Capita - unless they tell me otherwise?