Wednesday 28 August 2013

£16.1 million investment transferred to Capita with no democratic scrutiny

Those of us who watch Barnet Council, know that in the summer, when no one is looking, they sneak all manner of dodgy measures through. This year is no exception. They have "transferred" £16.1 worth of systems to Capita. It seems that the Council "forgot" to include this transfer in the papers passed in December 2012. No worries, the council just waited until everyone was on holiday and the Leader, Richard Cornelius, snuck through the transfer on a DPR, with no debate and no democratic oversight. For those not familiar with local Government, Delegated Powers Reports are designed to enable the Council to make small, non controversial decisions, without a full council meeting to approve them. They were not designed to facilitate the transfer of £16.1 millions worth of council infratsructure to Private contractors.

The full details are available here.

So how did the situation come about where this "Dodgy DPR" was required?

Section 8 explains

8.1 Further details in respect of the NSCSO contract are contained within the NSCSO full business case which was agreed by Cabinet on the 6 December 2012. This report set out details in respect of the investment in the NSCSO services, but it did not formally request approval for this investment to be added into the Council’s capital programme.

This report requests this approval.
I must confess I was incredulous to find out that after five years, the Council had forgotten to actually sanction the transfer of these services in the decision made in December 2012 to proceed with the NSCSO outsourcing. If they can forget to authorise the transfer of £16.1 million worth of assets, what else have they overlooked? As the Barnet Eye has consistently said, this project is risky and has not been properly thought through. Council Leader Richard Cornelius assurred us that the "contract is watertight and everything has been properly scrutinised". How on earth can this be true, if they forgot to actually sanction the transfer of the services when they made the decision. It is a pretty fundamental cock up.

More worryingly the report contradicts itself. Section 6 says

6.1 There are no specific legal issues in respect of this decision. Legal consideration was identified with the report to Cabinet report on 6 December 2012.
 As section 8 categorically states that the transfer was not formally requested or agreed. In other words, the legal issues cannot have been given due consideration, as they were not discussed or requested. I believe that this decision is open to legal challenge.

We ask what are the risks? Section 3.2 hits the nail on the head, sadly the mitigation seems wholly inadequate
3.2 There is a risk that, on termination, the Council has invested in assets, particularly in respect of IT, that, given they are located in shared services locations offsite from Barnet, the Council cannot continue to use in the future. This risk is mitigated by obligations on the contractor to provide licences for the continued use of these applications following termination of the agreement

In other words, the Barnet taxpayer is making a huge investment, creating jobs outside of Barnet and if it all goes wrong, we have no choice but to carry on using these. Capita have not agreed to refund the investment. All they have kindly agreed to do is to say that if the agreement is terminated, we can continue to use their services. This is quite clearly bonkers. What sort of mitigation is that?

The Barnet Eye has consistently claimed that One Barnet has not been thought through. We have consistently claimed that it is undemocratic and officer driven. It is clear to us that the Officers cocked up and have dealt with it by sticking this DPR on Richard Cornelius desk saying "Sign this or else !". The fact they waited until the middle of summer to do it is even more suspicious. Barnet Councillors should be shouting from the rooftops that this is wrong. I doubt any of them are even aware it has happened. 

The final question I ask. If they can forget to sanction a £16.1 million transfer what else have they forgotten.

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