Tuesday, 12 March 2013

Why won't Barnet Council acknowledge the fact that outsourcing is risky?

The leader of the council, Richard Cornelius has been making a big play recently of his view that without the One Barnet Outsourcing program, the council will have to make further cuts to balance the books. He has based this supposition on the projected savings in the One Barnet business case. If you take these figures at face value, Mr Cornelius is correct. If however you look at what actually has happened in previous Barnet Council outsourcing projects, any objective person would say "Hang on, these savings are not guaranteed, in fact it could all go horribly wrong".

Yesterday it was revealed that yet another outsourcing contract had failed, this time with 2E2. Huge costs have been incurred placing emergency arrangements in place. Even more alarmingly the company passed a Barnet Council credit check shortly before going bust.

Barnet Council has a history of incompetence in managing contractors. The fact that 2E2 happened after the Metpro crisis, when the problems were supposedly fixed, shows that we just cannot trust the council when it comes to managing contracts with suppliers. APSE has suggested sensible changes to in house operations which would potentially match the savings available from outsourcing, with minimal risk and Barnet would retain control. This would also save local jobs. The council didn't even bother to discuss this. Here is a brief and non exhaustive list of major problems with council suppliers (these are a few we know about).

Metpro  - Spent £1.4 million with security firm who were insolvent, not SIA or CRB checked and when audited found that 30% of services used were unneccesary.

RM Countrysides -  Spent millions with the company and bloggers uncovered a "pay them what they want" email in an FoI request. No financial control at all and council didn't follow their own rules on employing contractors.

SAP Project - System to manage procurement. Originally meant to cost £6 million in 2006, so far has cost £24 million and still has problems.

Your Choice Barnet - Council set up this Local Authority Trading Company to manage care for vulnerable people. Despite having a virtual captive market and copper bottomed supply contracts, recently needed a taxpayer funded baleout just to stay solvent.

2E2 - Councils IT supplier. Went bust and left the council in the lurch despite Council officers doing a financial health check on the company weeks before its insolvency. Hundreds of thousands of pounds cost to taxpayer to simply keep the council IT services functioning. Deputy Leader of the Council, Daniel Thomas stated he was happy with how Council Officers had managed it when interviewed by Barnet Times.

Catalyst Care Homes - Council sued for £10 million by Catalyst as they weren't making enough money out of the contract. Catalyst won.

In every single case, the council had entered these arrangements believing it provided a cheaper and better service than an in house option. In every case it has gone wrong and cost the taxpayer a fortune. The council claims that there are no risks in the One Barnet Business plan. Would you back the council with their form? I wouldn't.

If you think the Council should see sense, join us on 23rd March for the Barnet Spring protest against this madness


LBB said...

The worst of it all Rog, is that there is no plan B if the judicial review goes against LBB. This shockingly short-sighted and mismanaged process will fall apart but Consultant Travers is still ploughing blindly ahead as if nothing has happened.

Zoe said...

I thought there was an enquiry about the street lamp contract supplied by J W Webster and fitted by D W Webster. In that case they simply sent the list of the locations of the new lamp posts. I was told directly from Barnet when i complained about the sheer number of new lamps (bearing in mind these were supposed to be energy efficient) that Barnet simply got copies of the plans out of courtesy they had no input. Have you ever heard the like when a company can simply tell a Council how many and how much.