Friday, 8 November 2013

The curious case of the £16.1 million payout to Capita: a joint statement from the Barnet bloggers



Dear Councillors
 
Throughout the history of the One Barnet outsourcing programme, statements by the leader of Barnet council, Cabinet members, Conservative councillors and the senior management team have all maintained that as a fundamental commitment to the NSCSO contract Capita would make a large ‘upfront’ capital investment.



The necessity of this investment by a private sector partner was given as the reason why the authority refused even to consider an in-house option as an alternative to privatisation of council services.


If an in-house option had been adopted, not only would many local jobs have been saved, all efficiencies made through better management of such functions as procurement would have been retained by the authority, as opposed to a limited amount capped in the contractual agreement with Capita. By ignoring this option, it is arguable that the statutory duty of the authority to make the best use of taxpayers' money may have been breached.



We have now learnt that not only has Capita failed to make the promised capital funding but that in August, in a complete reversal of  policy, the Leader of the Council sanctioned the payment to Capita of £16.1 million of taxpayers’ money held in the authority’s reserves, in order to cover the cost of the capital investment.

We believe that not only have the leadership, Conservative members and senior management team of Barnet Council promoted the need for privatisation, and the contract with Capita, on a totally false premise, they have continued to mislead residents by misrepresenting the facts, and maintaining that capital investment is to be given by the company, rather than admitting that money has been taken from the authority's reserves and paid to Capita for this purpose.


After the Cabinet meeting of 6th December 2012 which approved the contract with Capita, Councillor Cornelius made this claim in a statement published on the BBC London news website. Council leader Richard Cornelius said the combination of a saving to the taxpayer of a million pounds a month and an £8m investment in technology by Capita made it a "very, very good deal for the Barnet taxpayer".




 
This misrepresentation of the truth has continued even after the payment £16.1 million was formally authorised by the Leader of the council.
 
The business model approved by Cabinet on 6th December 2012 stated clearly that this investment was to come from Capita: how can it be lawful, therefore, that having approved the contract on this basis, we now find the reverse is true, and that taxpayers are paying for the investment?
 
If there is any financial argument for such a fundamental change, why has the authority not been open and transparent about this new agreement, and sought approval through the appropriate procedures?
 
The authorisation to add £16.1 million to the capital programme in order to pay for the capital investment was made on 5th August this year by Councillor Richard Cornelius, in an action defined as a 'non key' decision.
 
 
According to the council's own constitution, key decisions are those that are 'significant in financial terms or in their effect on communities comprising two or more wards'.

Clearly the decision to remove £16.1 million from reserve funds in this way most certainly is a key decision, and departs in the most fundamental way from the business model approved in December.
 
Quite incredibly, on 6th August, the day on which the contracts were signed, and the very next day after the leader signed off the £16.1 million to cover the capital investment, Barnet Council issued a press release: 
 
 
in which it is stated:
 
"Capita will also make an £8 million pound investment in technology to improve council back office services".
 
What is that statement, other than a deliberate misrepresentation of an unpalatable truth?
 
We note that the explanation of the NSCSO contract on the council's own website, updated after 5th August, continues to maintain falsely that an upfront investment will come from Capita: see here -
 
NSCSO details

Capita will make an upfront investment which will provide improved Information Technology and telephone support to improve council back office services.
 
In regard to the approval of 5th August, the constitution says:
 
When key decisions are to be discussed or made, notification is published at least 28 days before. If these decisions are to be discussed with council officers at a meeting of the Executive, this will generally be open for the public to attend, except where personal or confidential matters are being discussed. The Executive has to make decisions that are in line with the Council’s overall policies and budget. If it wishes to make a decision that is outside the budget or policy framework, this must be referred to the full Council to decide.
 
Unless the change of policy, and a radical change to the terms of the business model represented by the decision to use reserve funds for a capital investment payment to Capita has been formally agreed through the relevant constitutional procedures, therefore, it is reasonable to conclude that the payment may well be unlawful, and as residents, taxpayers and citizen journalists in Barnet we object in the strongest terms to what would appear to be a serious breach of the regulations that are supposed to protect our best interests, and we ask you to instigate an immediate investigation into the issues we have raised.
 
Derek Dishman
John Dix
Theresa Musgrove
Roger Tichborne


(The famous five have become four as Citizen Barnet has sadly left the borough. She still maintains close links with all her old friends.)

Friday, 19 July 2013

Open Letter from the Barnet Bloggers



Were Barnet's Tory councillors secretly whipped? 
Barnet bloggers call for an investigation.

At Barnet Council’s full council meeting on 16 July, Councillor Brian Coleman alleged that Barnet’s Conservative members are ‘entirely whipped’ when attending scrutiny and other Council meetings, including those dealing with the highly controversial One Barnet privatisation programme.

According to the Council’s constitution, any whipping arrangements must be declared, but we believe that no such declarations have been made at any of the relevant recent meetings. Such actions would be in breach of the constitution and therefore unlawful.

If Councillor Coleman’s allegations are true, this clearly has very serious implications and casts into doubt the legality of many of the highly significant decisions which have been taken by the current administration, most importantly the decision to grant two massive contracts to Capita and Capita Symonds in the outsourcing of a large number of our local council services.

We therefore call on the Leader of the council, Councillor Richard Cornelius, to instigate an immediate and independent public inquiry into the claims made by his former colleague, and we also ask that the authority’s external auditors at Grant Thornton should as a matter of public interest hold an urgent inquiry into the allegations. Residents need to know whether decisions have been made legally and whether Tory councillors have acted constitutionally.

Signed:

Derek Dishman
John Dix
Vicki Morris
Theresa Musgrove
Roger Tichborne

19 July 2013

Tuesday, 7 May 2013

An open letter

Dear Mr Cornelius

On Friday 3 May Councillor Brian Coleman pleaded guilty to the charge of common assault by beating of Helen Michael, in the High Road in North Finchley. Evidence from CCTV was shown in court and proved incontrovertibly that this incident was nothing less than an utterly indefensible act of aggression. It resulted from Councillor Coleman being caught parking in a loading bay, trying to evade the hugely controversial parking payment scheme he had imposed on residents in this borough.

Despite the fact that he has now been convicted of a criminal act of assault, Barnet Council has refused to comment, absurdly claiming that this is unnecessary as the attack did not take place while the Councillor was on council business.

Indeed local Tory members, including leader Richard Cornelius, openly continued to support their fellow member after he was charged, and were privately informing others that the story of the assault was false. Councillor Coleman was suspended from the party only after intervention from Conservative Central Office. Since the conviction, local Conservatives have issued no statement.

By his own actions Councillor Coleman has shown himself to be unfit for public office: such bullying behaviour, dishonesty and hypocrisy are not acceptable in an elected representative of the community. We demand therefore that he stand down from his seat in Totteridge, and that the Conservative Party expel him from membership.

We call on Richard Cornelius, as leader of Barnet Council, and on behalf of the Conservative Party in this borough, to apologise to Ms Michael, and to dissociate himself and his colleagues from this appalling incident. To remain silent is not an option: to remain silent is to condone an act of violence against a woman, and this was and must always be absolutely unacceptable.

Signed:

Derek Dishman
John Dix
Vicki Morris
Theresa Musgrove
Roger Tichborne

Wednesday, 10 April 2013

2e2





2e2  - When Outsourcing Goes Wrong
 
Barnet Council have been having trouble with their IT infrastructure for some time. Back in 2011 an internal report identified that the Council was having difficulties with their IT Infrastructure Supplier, 2e2, stating that:
 
2e2 contract was put in place to transfer the operational management and risk of core infrastructure to a private provider. 2e2 no longer feel responsible for this and have passed all risks back to the council, on the basis that all equipment has reached EOL (End Of Life)”.

The report identified that a key risk was that,  “2e2 will pass all risk back onto the council and not deliver to their contractual arrangements” and that to mitigate that risk the council should, “Improve the relationship with 2e2 and look into terminating the 2e2 contract early and bringing services and staff, under TUPE, in‐house, if necessary”.
 
Unfortunately, Barnet ignored its own advice and continued to engage 2e2 at a cost of over £1 million a year, including an annual up-front payment of £400,000. In January 2013 2e2 went into administration and withdrew its services. This leaves Barnet £220,000 out of pocket for the unused up-front fees and scrabbling around to find someone else to run the IT infrastructure, without which the council would struggle to function.
 
To get themselves out of a hole quickly, Barnet Council have appointed Capita, without any form of tender, on the basis that it was an emergency and they had already had discussions with Capita to take over the running of this service. This new contract will cost £72,595 per month.

The Council states that they did undertake a risk analysis of 2e2 in January “using Experian reports” and that “the report stated the company was satisfactory”. However a quick check on the internet would have shown that suppliers have not been able to get credit insurance on goods supplied to 2e2 for some time and that 2e2 were handed a number of County Court Judgements in 2012.
 
If Barnet had simply followed its own risk register advice back in 2011 and brought the service back in house, we would not be in this position. It also shows the massive risk that comes with outsourcing key services and that even large companies can go bust.

Barnet need to stop taking risks with our services and abandon One Barnet now.

Signed

Derek Dishman
John Dix
Vicki Morris
Theresa Musgrove
Roger Tichborne