One Barnet - The billion pound gamble exposed

There is an interesting DPR on the council website. It details how the council calculates how much revenue it will raise from Council tax. You can see this here  - http://barnet.moderngov.co.uk/documents/s7306/1893%20-%20Council%20Tax%20Base%20for%20201314.pdf

As regular readers will know, Barnet Council is handing "revs and bens" over to Capita as part of the mega "One Barnet" outsourcing project. Every Barnet Council document has a Risk Management Issues section. In this document it says

3. RISK MANAGEMENT ISSUES
3.1 Over estimation of the council tax base would result in a deficit in the tax collected, which would need to be made good in full from the council tax in subsequent years.
Under estimation would result in a council tax higher than necessary.
3.2 As a number of assumptions have been made when setting the scheme with regards to collection rate and take up for council tax support, there is a risk on the collection fund. The risk will be borne by both London Borough of Barnet and Greater London Assembly (GLA).

What is of major concern to me is the fact that Barnet Council have deliberately chosen to ignore the biggest risk of all in relation to Council tax revenues. This risk is that the handing over of "revs and bens" (the bit of the council that collects Council Tax) to Capita as part of the One Barnet program will disrupt the income stream. The document estimates that the collection rate will be 98.5%. This is a figure Barnet Council have not managed in the past. They assume that in a period of change, they will perform far better than they have previously. By outsourcing the department all of the experienced staff, who know the local area will be replaced with staff scattered across the country. Will the new regime perform better than the existing team? Who knows, but surely it's a risk.  As such I sent the email below to the Leader, Deputy Leader and One Barnet project sponsor. I've also copied in the head of legal and the opposition group leaders. As the issue affects the GLA, I've alsp copied GLA rep Andrew Dismore.

From: Roger Tichborne

To: Cornelius, Cllr Richard Conservative ; cllr.d.thomas@barnet.gov.uk ; cllr.r.rams@barnet.gov.uk

Cc: jeff.lustig@barnet.gov.uk ; Andrew Dismore ; cllr.a.moore@barnet.gov.uk ; Cohen, Cllr Jack Liberal Democrat

Sent: Tuesday, January 29, 2013 9:27 AM

Subject: Possible negligence by Barnet Council in relation to collection of Council Tax

Dear Councillors Cornelius, Thomas and Rams,

 

I have just been reading the document on the council website "Council Tax Base 2013/14" - http://barnet.moderngov.co.uk/documents/s7306/1893%20-%20Council%20Tax%20Base%20for%20201314.pdf

This document states in the risks section

 

3. RISK MANAGEMENT ISSUES

3.1 Over estimation of the council tax base would result in a deficit in the tax collected, which would need to be made good in full from the council tax in subsequent years. Under estimation would result in a council tax higher than necessary.

3.2 As a number of assumptions have been made when setting the scheme with regards to collection rate and take up for council tax support, there is a risk on the collection fund. The risk will be borne by both London Borough of Barnet and Greater London Assembly (GLA).

 

This section should detail all of the possible risks to collection. As you are well aware, revs and bens are being outsourced to Capita. The document states that the collection rate will be 98.5%.

 

Should collection fall below this as a result of issues with the disruption to work caused by One Barnet, then clearly there is a risk to council finances. Surely this should be stated in the appropriate section and the relevant plans be in place to mitigate it.

 

I am aware that the council believes they have a  "guarantee", but should the cause of the issue be outside of the scope of what is allowed for in the contract, this guarantee will not apply. As this will also affect GLA revenues, it is clear that the matter must be flagged up.

 

Whatever the councils view of this risk, it is a statement of fact that one in four major public outsourcing exercises have failed to deliver. As such it is clearly negligent to ignore this as a risk to council finances. I would appreciate a response sooner rather than later as to why this risk hasn't been considered and what Barnet Council are doing to mitigate this.

 

In the event that there are problems with collection, which affects Council finances adversely, it can clearly be demonstrated that the Council has been negligent in not addressing this, now the issue  has been flagged.

 

Regards

Roger Tichborne

I would urge anyone with similar concerns to contact the Council immediately. If the cash isn't collected, then ultimately the taxpayer (us) will have to bale out the council for its incompetence.