Is Outsourcing really such a bad thing for the Barnet Taxpayer?

I received this press release from Barnet Unison Today

2014 11 14 DisappearingCouncil

There are two groups of people affected by outsourcing in Barnet. One is the Barnet Council Taxpayer and the other is the employees of Barnet Council. The majority of those affected reading this will be Barnet Council Taxpayers. The first question they'll ask themselves is "How will this affect me?".  If they ask one of the Councillors belonging to the ruling Conservative group in the Town Hall they will say "You will see your Council Tax Frozen because we've got a good deal from the Contractors". So you may well be tempted to think, good on them, they've done a good job and got a good deal.

There are two questions to ask. The first is "When you add in all the hidden costs, legal expenses and extra charges, is it really cheaper?" and the second is "What will happen to the quality of service?"

So lets make two assumptions. The first is that the Council want to achieve a saving on the existing cost of service. Lets say for Argument Sake they want to save 15% (seems to be around the average quoted). Then lets take into consideration the profit that the private contractor wants to make on the deal for their shareholders. Lets for argument sake (and ease of maths) say this is also 15%. That means that in fact the private company and the council, with its team of lawyers monitoring the contract, have to cut 30% out of the costs before they've even started. So is it credible that you can take 30% out of a budget and not degrade the service?

So you may say "We don't use the services". Well have a look at what is in scope for this round of outsourcing.

1. School improvement
• Statutory LA duties to monitor, support and challenge schools
• Narrow the gap service (DSG funded)
Special educational needs (subject to changes being implemented by the
Children and Families Act 2014 from 1st September 2014)
• SEN placements & performance team
• SEN Early Support Programme
• Speech & Language therapy
• SEN Transport – commissioning and assessment
• Educational psychology team (part traded)
• SEN placements (DSG funded)
• SEN specialist support service
Admissions and sufficiency of school places
• Pupil place planning
• Admissions Service (DSG funded)
Vulnerable pupils
• Education welfare service
Post 16 learning
• 14 - 19 service to ensure sufficiency and breadth of supply
• Monitoring, tracking and supporting participation
Traded services within Education and Skills
• Catering service
• Governor clerking service
• School improvement traded service
• Newly Qualified Teachers
• Educational psychology (part)
• Education Welfare Service (part)

2. LIBRARY SERVICE

3. EARLY YEARS SERVICE

4. STREET SCENE SERVICE DELIVERY UNIT
Waste, Recycling, Street Cleansing services and the Grounds Maintenance services

5. ADULT SOCIAL CARE SERVICE DELIVERY UNIT

This impacts every Barnet resident. We are giving up democratic control and putting delivery of these services into the hands of companies who have the brief of squeezing as much profit out of the services as possible.

The vast majority of costs in all of these services are staff related. The only way to cut these costs is to cut numbers or cut wages. Will it be good for the Borough to stop investing in the future. I've got two children in Schools in Barnet. This is one area which the Council has always delivered exceptional services. Will the changes improve the service? There is an old saying "If it ain't broke don't fix it". Barnet does education well, but they are taking a hatchet to the service.

What about waste & recycling. The Conservatives have tried this in Barnet before. It cost money and gave residents a lousy service. When well off residents started to get their cars bashed by cowboy contractors, who drove off without exchanging details, the public mood soon turned against the Conservatives. So much so that they've shied away from privatising this until now. Sadly nearly all of the Councillors who remember what happened last time have retired.

Finally there is adult social care. Do you really want the most vulnerable people in Barnet to have their care disrupted? I know many carers in Barnet whith adult children with major care requirements. We've already seen these services cut to the bone. It is reaching the point where the system will be broken beyond repair if aany more cuts are squeezed out.

Let no one in Barnet be under any illusion. The local administration are not outsourcing out of any real belief that they can deliver the same or better services for 30% less. They are doing it because if a third party makes cuts, delivers poor service and people suffer, there is less political fallout.

Let me give one example. There was a death not so long ago in a Care Home which Barnet Council had outsourced to a contractor called Catalyst. Did the reports in the newspaper say "Barnet Council is running a service that is not fit for purpose"? No, the Contractor took all the flack. At the same time, the contract for the Care home was up for renewal. Did the Care home lose the contract as a result of awful events? No they did not. In fact they sued the council and won £10 million extra cash because they'd not made as much profit as they'd hoped. They won this case as well and still kept the contract. I wonder if the original business case would have looked quite so rosy if all of this had been included?

So are you still convinced that outsourcing is such a good idea?