Friday, 26 September 2014

How much is that doggy in the window? The myth of the One Barnet capita savings

When I was a small child, my favourite song was "How much is that doggy in the window?" I heard the song on the radio last night, first time for many years. Coincidentally I was reading Mr Reasonable's latest blog about the myth of Capita savings. As what Mr Reasonable has to say is so important, I reproduce it here (read the original here -

One Barnet and Why Capita's £75 million Doesn't Add Up

We have been told repeatedly that the Capita One Barnet Contract will save residents millions of pounds. The two main contracts and the forecast savings are as follows:

NSCSO (now called CSG)
Baseline (at December 2012) costs £38.8 million
Forecast costs savings £7.01 million
Procurement savings £4.69 million
Improved council tax collection £0.84 million
Total guaranteed saving £12.54 million
By my reckoning this means that Barnet should pay £26.26 million per annum
(Source: NSCSO Business Case Cabinet Meeting 6 December 2012)

DSG (now called Re)
Baseline (at June 2013) costs £14.2 million
Forecast cost savings £0.53 million
Increased income £3.38million
Total guaranteed savings £3.9 million
By my reckoning this means that Barnet should pay £10.3 million per annum
(Source: DSG Business case Cabinet Meeting 24 June 2013)

So if we look at the figures above this means that we should be paying Capita £36.56 million assuming they deliver all of the guaranteed savings. It may therefore surprise you that in the year 1 July 2013 to 30 June 2014 Barnet paid Capita £75,008,840.49. Yes £75 MILLION,  £38.44 million more than we should be paying.

Even setting aside the £16 million of up front investment Barnet have paid to Capita (which should be factored back into the annual cost savings)  that still means we paid £59 million when the cost of providing the service before outsourcing was only £53 million. Also bear in mind that Barnet have shelled out millions in redundancy payment, £8 million on Agilisys/iMpower, millions for agency staff as well as causing distress and heartbreak to hundreds of families that have suffered redundancy to push through these contracts.

At tomorrow night's Council meeting, Richard Cornelius will once again be selling the myth that Capita are saving Barnet residents a fortune in his response to a question from Alison Moore. I hope some of the Councillors present start asking whether these figures are real or just smoke and mirrors. The number don't add up Cllr Cornelius.

So you may ask what all this has to do with doggies in the window. Well the question in the song is "How much?" When it comes down to any transaction, the key phrase is how much? The council spends a small fortune on accountants. They produces figures that are avaialable to the public (if you know the process) which allow us to see "How much". With One Barnet, the deal was that the council would export hundreds of jobs to Capita and other parts of the  country and in return Capita would save us money. In the process Capita would make a hefty profit. This money is our money and we are entitled to know "How much" We are entitled to know if Capita have delivered the promises savings and if they haven't we are entitled to an explanation.

However the only figures we've seen are from Mr Reasonable and we've heard nothing from Richard Cornelius, the leader of Barnet Council who signed and delivered the contract. So once again, the Barnet Eye asks the question "How much". If Mr Cornelius has done us a good deal, his army of highly paid accountants suely can produce the figures. If the deal has been a good one, having run for a year, Mr Cornelius should be shouting about what a marvellous job he's done. He should be inviting the Barnet bloggers up to his Ivory Tower, giving us a cup of tea and the figures which vondicate his decision and say "There's the figures, I was right no Feck off and write that up in your blogs". And we would all come back and acclaim Richard as a genius and spend the rest of our lives telling you to vote Tory. That is what would happen if Richard had the figures to make a case.

What has happened in reality? The Sounds of Silence. No invitation around to the Cornelius mansion in Totteridge for tea and humble pie. So there is only one thing we can conclude. I wonder if the answer to the question "How much is that doggy in the window?" was "Give us your bank account details, we'll charge you what we like every month and at the end of the year, you can tot up the cost" whether you'd be taking Rover home? If you wouldn't do it for a lovable pet, why on earth would you let councillors do it with your hard earned cash to run the council?

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