Tuesday, 26 March 2013

Barnet Council - Where it's OK to cost the taxpayer £250K a year if you are a consultant but not to stick up for your rights

As predicted by this blog, Barnet Council have responded to the judicial review brought by Maria Nash by blaming everyone but themselves and using the argument that because it costs a lot of money to bring a judicial review, people should let the council get away with whatever it likes.

I read with complete disgust these two reports in our local papers.

Barnet Press.

Barnet Times

These stories have clearly been written at the behest of the Barnet Council PR machine to besmirch the reputation of Maria Nash and her right to be consulted.

When the Barnet PR machine put the boot into Maria claiming she's cost the taxpayer £500,000 they neglect to mention that this is less than they've been paying the One Barnet Consultancy team EVERY MONTH. These are largely a bunch of external consultants on TAX EFFICIENT CONTRACTS. By my calculations, in allowing such practices within Barnet Council, the council may have been costing the taxpayer in excess of £250,000 a year in avoided taxation (of course this is merely a guess because all of these contracts are "commercially confidential"). Has the council briefed the press on how much these consultants have avoided paying in tax? Can they tell us how much these individuals have avoided? If my sums are correct then over the four years of One Barnet, the total cost could to the taxpayer could be £2 million.

Lets be 100% clear about what Maria has taken the council to court about. She is disabled and she relies on the services provided by the council to maintain her quality of life. Because the council carried out no meaningful consultation with Maria and people in her situation, she has absolutely no way of knowing what  the changes, which the council itself have been selling as a massive change, will affect her. The council has a statutory responsibility to consult with people such as Maria. The express purpose of this is so that they can assess whether there will be problems brought about by the new arrangements and to feed back to the council vital information which teams of consultants, who have never had to deal with real issues of vulnerability, may have missed. The council, in their legal defence, claimed that they didn't need to consult people such as Maria, but any fair minded person would surely agree that if the whole mechanism for provision of council services is being changed, then surely the new process should be rigorously examined by the people at the coalface.

During the court case, I wanted to stand up and intervene. When the council stated that because the services were remaining the same, it was only the provider that was changing, I wanted to explain my own personal experience with my mother to demonstrate the fallacy of this argument. My mother used to receive meals on wheels. These were provided by an in house team. In 2007 this was outsourced to a multi national company called Sodexho. My mother was told that she'd see no difference in the service and that she'd get "more choice". She became extremely anxious about this. She was given pages of menu forms to fill in, which completely confused her. She'd had a stroke and found even the simplest paperwork incredibly difficult. Filling in a months worth of menu choices was like having to read war and peace and write a dissitation on it for her. She was also upset because the "nice lady" who had been delivering her dinner was being given the boot. At the time, I bought the line that this was "all necessary for efficiency" and didn't share her concerns. My mother however became so anxious that she insisted my sister flew over from Florida to be with her for the change. As it turned out, she was right and I was wrong. The new firm was a shambles. During the first week some days lunch didn't arrive at all. Other days it arrived at 5pm and was cold. The quality was abysmal, with the lunches being sent straight over for our dog to have for dinner. It turned out that Sodexho had scheduled each driver to deliver 40 meals in a two hour period. That is three minutes between drops. Anyone who has ever had to knock on the door of an elderly relative will know that it can take three minutes for them to open the door. The stress of what happened completely freaked my mother out. She had been used to receiving her meal at noon on the dot. The fact that the delivery time seemed completely random caused her to become ill. She relied on this meal and given her medical condition and her requirement to take medication with food, it was devastating. This was a change that we were assured would "be an improvement". We were assured that the only thing that was changing was the company delivering the food. We were also assured that the "quality of service would improve". All of these things were complete lies.

That was the moment when I got involved in the struggle to prevent anyone ever having to suffer such indignity again. If you are fit, well and able bodied and have never had an anxious, frail elderly relative who is at the mercy of an uncaring bureaucracy, you will probably not really understand why this matters. The point is that it is not your concerns or views which matter. It is the concerns and views of the people who are on the receiving end of the service. The council are not in court because Maria Nash is a trouble maker or wants to waste taxpayers money. They are in court because there seems to be a case that they have not undertaken their statuatory obligations.

Let me draw a parallel. When the 9/11 atrocity happened and aircraft crashed into the Twin towers, the buildings collapsed after the impact, killing thousands of people. The buildings were designed to withstand heat & fire and not collapse in such a manner so quickly. Engineers calculated how long the buildings should stand up after such a shock. Forensic engineering reports concluded that during construction corners had been cut which may have compromised the cladding and fire resistance of the steel structure of the buildings. The contractors who had put the building up had cut a cut down on fire cladding of steel columns, thinking that it was highly unlikely that a situation would ever occur where there would be any repercussions. For years the buildings worked perfectly well. Had a bunch of terrorists never crashed the planes into the buildings we'd still be none the wiser and that little bit of cost cutting would never have been recognised. The New York fire department allowed their men into the building because they had been given engineering reports that said the buildings integrity would remain intact for a given length of time. Sadly that little bit of cost cutting on the cladding meant all of the figures were wrong and dozens of brave firemen died in the collapse.

The lesson I draw from what happened in 9/11 is that private contractors will always seek ways to cut costs. Such companies exist purely to generate profits for their shareholders. Now I don't believe any of the contractors in the 9/11 towers construction teams or in One Barnet would ever knowingly endanger lives, but if you get your processes and controls wrong, because you want to cut costs, you are opening the door to all manner of unforeseen consequences. That is why it should be necessary to consult with the likes of Maria Nash. That is why nobody should criticise Maria for exercising her legal rights. If the council wants to save the taxpayer £500K, then there are two things they could do.

1) Treat local residents properly and consult them about changes, avoiding such challenges.
2) Abolish the practice of employing consultants on tax avoiding contracts on long term assignments.

At times it seems to me that Barnet Council is not being run for the benefit of the people of Barnet, rather it is simply seen as a cash cow for a cabal of senior managers, many of whom are contractors, supported by a bunch of tame councillors who pocket large allowances, whilst doing nothing for the people in Barnet who most need their care and support.

I must finish off by saying I am a little disappointed that the local papers have taken such an uncritical view of the council PR spin, whilst ignoring the issue of the tax avoidance by many senior staff employed as contractors. This surely is far more of a burden on the taxpayer.


RetroRuss said...

I have been following closely the transfer of services from Barnet to Capita. I am a Barnet resident, paying council tax.

I rather like the fact that my council tax which rose inexorably for many years during the nineties has been frozen for the past few years. If a deal with Capita and other third party companies means that my bill remains the same next year and the year after then great! I also somehow doubt that a company like Capita, using Barnet as a template to other councils of the types of services that can be contracted out would want any Barnet resident to suffer any change in their amenities.

I also think you are forgetting that to pay for these services, as a country, we are having to borrow billions every year. We simply cannot afford 'gold standard' services paid for out of taxes, local & national, and borrowing on the never never...

If Capita's solution is to provide efficiencies, reducing costs for taxpayers and are able to make a profit at the same time why is that such a heinous crime?

At the end of the day Barnet residents voted for a Tory council. When you do you generally get cost cutting from such a council. If we didn't want 'One Barnet' then I'm sure the residents would all have voted Labour and put up & shut with the resultant higher council tax!

Richard Logue said...

And to forget about the rises in CPZ parking charges, parking charges, business rates and anything else that Barnet charge for apart from the Council Tax?

This isn't about whether the Council Tax is reduced, or frozen. This is about a council being directly accountable to the people who pay for it.

I see no merit in RetroRuss's arguments whatsoever.

RetroRuss said...

Well Richard they are directly accountable to me & I don't pay CPZ, parking charges & business rates...if I did I'd probably moan that they are too high...Anyway how much higher would they be as well if Barnet didn't look for ways to save money..

Rog T said...

RetroRuss misses the point completely. Barnet did not consult. Whatever the merits or not of Capitas offering, Barnet should follow the rules. One Barnet was not part of the Tory manifesto at the last council election, which is also a major part of the problem.

It is also worth noting that when the Tories have raised council tax by significantly more than the rate of inflation since taking power in 2002.

Dave-ros said...

"If Capita's solution is to provide efficiencies, reducing costs for taxpayers and are able to make a profit at the same time why is that such a heinous crime?"

What about quality of service, or does that not matter?

Profits for the private company, low cost to the taxpayer, and decent service to the user: pick two.

LBB said...

RetroRuss. I work for LBB; a huge number of us have already identified many ways to both save the council money and generate more income. Every single suggestion has been ignored; for the simple fact that these suggestions will be passed on to Capita. Then the idiots involved in the process can turn round and say, "look how succesful we've been, aren't we clever. We told you it would save money"

Easy when you know how...

Moaneybat said...

@ RetroRuss

Should you become seriously ill or suffer disability don't phone Barnet Council for any FREE services. You don't want a free library, you'd rather pay market price for your bin to be emptied. You don't want free education and happy to give up your free bus pass. DONT FORGET, tell your councillors they can't pay themselves loadsa dosh for a few hours while other get a pittance for 60 hours or more. You would save taxes

Your council tax has indeed been frozen and if I'm right, was frozen by the Government, not Barnet council.Guess why?

If you don't want your country to borrow billions to pay for those services. THEN RetroRuss just like the Scandinavians PAY MORE TAXES. You did not miss the point, you broke wind

RetroRuss said...

Moaneybat - wouldn't it be wonderful if we could provide 24 hour one on one care for all infirm and disabled people. Park for free in underground car parks that are not obtrusive on the sky line, provide free travel for all Barnet residents & our bins are emptied daily and all the parks are beautiful, tendered daily by landscape gardeners!! Whose going to pay for them? The fairies at the bottom of the garden?

Let me whisper a secret to you....society is unfair....Utopia doesn't exist and never will...as I understand it Capita will direct services to those that REALLY need it and provide efficiencies that only a profit driven business can.

Let me give you an example. I recently had a driveway done as we're going to become a CPZ. The council charged me £150 each for the paving stones, that would have cost me £30. For the actual work I was charged £1800. It took 2 men half a day - if I got 2 people to do it it would have cost £400..if Capita drives down these extortionate costs then I'm all for it!

In my experience LBB, with the greatest of respect a lot of 'management' in Local Government wouldn't cut the mustard in commerce (which is why they work in local government)-your suggestions are falling on deaf ears as they don't like change or don't know how to implement it or they are scared of losing their jobs...again it needs someone to come in and shake the system up...another good reason to get Capita involved!

MickeyN said...

This is how one judges value for money:

Effectiveness is actual output as a proportion of planned output (ie I am effective if I deliver what I planned to deliver)

Economy is actual input as a proportion of planned input (ie I am economic if I use the amount of resource I planned to use)

Efficiency is output as a proportion of input (ie I am efficient if I deliver what I planned to deliver using the resource I planned to use). One can be more efficient by delivering more or using less (or any combination thereof).

The Council is trying to be more efficient by delivering services (being effective) for less input (being more economic). The way they decided to do this is to privatise/outsource.

So the Council thinks it can deliver similar services (in terms of Quality, Quantity, Time and Cost) for less money through Capita.

Hang on a minute. You'll need people doing the work (a cost), Barnet staff managing the contract (a cost), Capita staff managing the contract from their end (a cost), money to provide savings to the Council (a cost), money to provide a profit for Crapita shareholders (a cost).

Now I am sure that Crapita can make some savings by stealing current staff suggestions, by hugely exploiting staff and by moving operations to cheaper places, but if they and the Council say they are going to do this AND make stonking savings AND profits AND maintain services, I think they are either defying the laws of arithmetic, having a Steffi, or indulging in Robert Rambo's favourite pastime - LYING.

There is a fourth "E" along with Efficiency, Effectiveness and Economy that is not often used in business VFM calculations, but should be used in all civilised circumstances - EQUITY. This is what we really want from our public services, this is humanity, this is justice and care for others, this is what separates us from cave dwellers.

Moaneybat said...


A cost of £400 is a good price and a no brainer, so what happened? It can't be difficult to find a couple of pavers language barriers permitting. Ahhh!, you can whisper, loadsadoash in pocket giving you utopian lifestyle.

Private firms might bring down cost but their cowboys also bring down the quality of their services.

Regarding the lack of mustard in local government, I do agree but a good few are getting private sector wages and driving privatisation instead of shaking up the system. One is or was paid through the loop-hole on his way to Utopia. The rest we elect.

Mr Reasonable said...

Oh dear RetroRuss. You simply don't get it do you. One of the reason why the council have managed to hold down council tax rises is because they are stinging residents with huge charges over which they have no say such as cross overs. Do you really think capita are going to charge less? The reality is they will probably charge considerably more as significant price rises were identified as an integral part of the DRS business case back in March 2011

RetroRuss said...

Mr Reasonable it's not me who doesn't get it but you! The reason why Barnet council can charge me £1800 for a crossover, up the charges for CPZ's etc. is because there is no-one stopping them! Don't think it's the elected councillors dictating the rises (they're just the puppets/muppets)it's the executive who engages the consultants, Capita etc.

If they had been a bit more progressive then they would have introduced the private sector into Barnet & other public services a lot earlier. This competition would help drive down costs and reduced the burden on the residents. Don't believe me? Look what's happened in the airline industry, the grocery retail industry, the car industry - competition has driven down costs. This blind faith by you (and others) in the public sector delivering 'better' services is laughable - they don't. They get bogged down in self-imposed rules that slow down urgently needed change!

Moaneybat said...


by "executive" you obviously don't mean The Executive" being the Government central and local accountable to you and us, but the employees in the management executive role advising the "executive"?

Using your example let's start with cars, was that competition from Japanese import,American Ford and Chrysler/GM Thats money going abroad,(competing against Robin Reliant) despite giving us work and some of those car manufacturers, arguably getting subsidy of some kind. All the train services that still receive a subsidy, somehow fares keep rising for your average everyday commuter, as for the service. Just go through this blog's archive

As a result of lack of foresight and, unlike Norway and others who think of rainy days, our North Sea gas is as dry as Mill Hill Village pond. Yes, the revenue of oil and gas did raise the quality of life.

Since then, gas electricity and water have continued to rise. As for air fares the BAA and BA whom ate up BEA and BCal did everything to Freddie Laker and for a while to Slick Rick's Virgin.The smaller airline always did have cheap flights.The airline industry is a tough business and I'm sure the EU Competition Courts played their part.

Telephone. We might have loads of telcos but you know what, the infrastructure is owned by BT Wholesale and all the telcos still pay our £15+ to them. A BT subsidiary was also one of the companies interested in delivering Barnet services. BT will still get their money via Capita as income.

To get back to your "executive," one of them was Gordon Brown's advisor and look what happened. To refer to your earlir retort above, regarding "mustard." The executive (manager) 'not being able to cut the mustard,' by jove, some of them are more than likely to be employed by the likes of Capita BT etc and when they get the boot there, they will be back in some local council somewhere, maybe Barnet.

You are an intelligent man brilliant mind, giving us all a run for the money so here is a question, £1800 against to use your words "if I got 2 people to do it it would have cost £400. It's a no brainer saving £1400. So what happened? Shhh,please whisper.

I know of several instances where council leaseholders whom wanted double-glazing from the council contractor on major refurbishment thinking it would be cheaper. Like you when they received the quote as private client, they had the windows replaced through the landlord. Re-wiring same thing.

Capita would probably employ the 2 workmen whom laid your paving but Capita would charge around £2200.

Happy Easter