Tuesday 26 June 2012

Another Barnet Outsourcing cockup rears it's ugly head

A very interesting DPR has emerged on the Barnet Council website. It appears that Barnet are in the soup again, with another outsourcing cock up. Before we get into that though, I noticed another interesting little detail on the report. It appears that Jeff Lustig is no longer in charge of Barnet Legal, as the report is signed off by "Sheila Saunders, acting head of Legal". Has Lustig been pushed out? It is public knowledge that he has not been too happy with Nick Walkleys proposal to flog Barnet legal services off to Harrow's Labour council. 

Anyway, enough of that. The DPR details how Barnet Council have had to appoint a specialist legal firm "Addleshaw Goddard Solicitors" to handle a forthcoming legal challenge against the way the street lighting contract was tendered. The e deal with the legal firm is not expected to exceed £74,999 (presumably the figure at which they'd have to tender this contract as well). Given the way previous legal challenges etc have gone, I will be most interested to see how this goes. It is worth noting that Barnet spent nearly a million pounds on legal fees surrounding the reopening of Partingdale Lane and a similar amount on the enquiry into the sale of Underhill Football ground to Barnet FC. I will bet a years supply of pot noodles that the figure of £74,999 is nowhere near the amount these services will ultimately cost. 

Even if I am completely wrong on this and it comes in well under the figure, this is still a huge sum. It is nearly enough to have run Friern Barnet Library for a year. Why are we in this pickle (yet again)? Because yet again Barnet Council have cocked up a procurement process. This is the council which wants us to believe that they have the expertise to outsource the whole caboodle. Rather bizarrely, they are commissioning this firm of solicitors to advise them, even though it appears from section 8.7 that they were the original advisers, whose advice has landed us with this challenge. Rather oddly section 8.6 states that the circumstances require appointment of this particular firm of solicitors and no other firm. There are many obvious questions about these two paragraphs. Perhaps the most obvious of the lot is this "wouldn't  a fresh pair of eyes be appropriate in this case". But then I'm not a lawyer, so I clearly haven't got a clue how these things should be handled, have I. 

As with all outsourcing contracts there is a huge hidden cost, that appears in no business case. This is the cost of all the legal fees arising from when the contracts get cocked up. Many of these we never see, because they are dealt with by the in house legal team.

So my question is this. It is one Dexter Whitfield asks in the film "A Tale of Two Barnets". It is "If Barnet can't manage outsourcing contracts of several million pounds properly, how can they expect to manage outsourcing contracts of fifty times that value?".

If you want to see the full details, click this link. I've put the extracted highlights below.


5.2 The estimated contract value is not expected to exceed £74,999. 
8.1 DPR 1330 identified and authorised the measures  required to vary the Street Lighting PFI Contract, by deferring the installation of a number of Core Installation Programme assets, in order to fund the commencement of the installation of a Central Management System (CMS). 
8.2 The Council received an e-mail, dated 3rd  April 2012, from Martin Leverington, Procurement Policy Division, Energy Reform Group (ERG), informing the Council that his department was acting on an infraction process notice from the European Commission in respect of the procurement of the energy saving measures. 
8.3 The EU Infraction Pilot file states a complaint has been received regarding the procurement of energy saving measures and alleges that the London Borough of Barnet has infringed EU public procurement 
legislation  by not tendering the ‘contract’. 
8.4 The Council have been provided with a Timeline for the Infraction Pilot Response and it must adhere to this timeline.  A draft response to the complaint has been submitted to the Cabinet Office ERG.  It is important to urgently appoint legal advisers to provide legal input into the process on behalf of the council. 
8.5 The Director of Commercial Services has been consulted and has confirmed that the circumstances requiring the appointment of Addleshaw Goddard solicitors are urgent such as to justify the direct appointment of those solicitors. 
8.7. The decision to appoint Addleshaw Goddard Solicitors is being made based on urgency, on their expertise in the specific field and in light of their significant, previous, input and advice as Legal Advisors to the Council with respect to the original Street Lighting PFI Contract.   

As ever, with these cock ups, the question is "who picks up the bill". As ever, the answer is "we, the taxpayer do". The truth is that this is chickenfeed compared to the legal bills which will be racked up by the One Barnet project. At a recent cabinet meeting, Councillor Richard Cornelius stated that Barnet should learn to walk before they can run. Mrs Angry asked a question which agreed with this. She stated that surely this appoach applied to One Barnet. Deputy Leader Dan Thomas reassured her that the council was getting the finest possible advice to ensure that no further cock ups will happen. In light of this DPR, do you have any confidence in his statement?


Mr Mustard said...

A small cockup inside what is possibly a large one (surely Barnet Council procurement cannot have failed to follow EU law - I don't believe it)

Sheila Saunders is rendered as Shelia Saunders

Barnet Council are so sloppy and appear not to care.

Mrs Angry said...

The history of Barnet's lighting contract is a long and fascinating one: and yes - why are we paying more public money on another alleged procurement cock up, and how much more evidence do our Tory councillors need before acknowledging that this council is simply not ready to proceed with the £1 billion procurement of One Barnet?

Unknown said...
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Barnetwatch said...
This comment has been removed by the author.
Barnetwatch said...

Jeff Lustig is still Director of Corporate Governance

Rog T said...

Thanks for the clarification Barnetwatch. It was the term "acting" which set me thinking.

Rog T said...

Thanks for the clarification Barnetwatch. It was the term "acting" which set me thinking.