16 Million and what do you get, Silence from the Tories and deeper in debt - Barnet Peoples Choir video release

On Weds 7th May, The Barnet Peoples Choir release video exposing failure of One Barnet Outsourcing to Capita. Internationally acclaimed musician Boz Boorer, who has worked with the likes of Adam Ant, Edwyn Collins and is currently musical director for Morrissey worked played double bass on the reworked version of "16 Tons" and acted as Musical Director for the choir. 

The lyrics were revamped by Mr John Sullivan and Mr Tony Solomons, who are parents of adult disabled people adversely affected by the One Barnet project, to highlight the way the local council mislead the people of Barnet by claiming that Capita were investing sixteen million pounds in systems for Barnet Council, only to reveal, after the contract was signed that the sixteen million was in fact being paid by Barnet Taxpayers. Mr Sullivan said "The whole One Barnet contract process has been one big lie from start to finish. We were told that the reason Capita were getting the contract was because they would invest in the systems only to find out that it is the Barnet taxpayer. If Capita walk away from the contract, we won't get a penny back. Capita can sell these services to other councils, using our investment and we won't see a penny of benefit. That will go to Capita shareholders".

The video highlights how Capita have taken on management of Hendon Cemetery and are treating the relatives of those buried there as an asset to be squeezed. This week it has been revealed that Capita are removing generously donated benches in the cemetery and asking relatives to remove them. They are seeking to replace them with other items which will generate more income. The video is one of a series being produced by local blogger Roger Tichborne to highlight the effects of the One Barnet Outsourcing project on local residents in Barnet, under the title "Capita - The Movie".

Mr Tichborne, who runs the Barnet Eye blog, said "I've been working on the project for several months, but when I went to pay my respects at my parents grave recently I was shocked to see just how shabby the cemetery is becoming since Capita have taken over the management. I shot some footage as I drove around and when I got home was shocked to see just how bad it looked. I completely recut the video. If anyone has wondered what the One Barnet Outsourcing means to Barnet residents, they simply need to have a look at this short film".

The video ends with footage from the Council meeting where One Barnet was agreed, showing Councillor Robert Rams, a keen advocate of One Barnet saying "If you tell an untruth enough, it becomes the truth". Tirza Waisel of the Barnet Alliance for Public Services, who helped organise the Barnet Peoples Community Choir said "Mr Rams statement at the end of the video sums up the attitude of the Barnet Conservatives towards the electorate. They have mislead the people of Barnet from the very beginning as to what One Barnet really means and this is still continuing today. On the 22 of May we need to vote out the Conservatives, elect a council that listens to its residents and workers and respects them, and regain our control over the local services".

Barnet Council refusing to answer the questions regarding £16.1 million bung to Capita

Barnet Council have recently started claiming that they have a commitment to openness and transparency. Last week we saw various exchanges with Council officers regarding the £16.1 million of your cash given to Capita to fund investments. What we haven't seen is any proper answers from the Councillors. Let us remind ourselves what the job of Councillors is. They are supposed to provide democratic oversight of the executive and make sure that democratic processes are properly followed when decisions are made. They are meant to listen to our concerns and investigate if there are real issues. In this case, we've been met with a wall of silence.

Councillors receive huge allowances for belonging to the cabinet and being the chair of committees. In return for this, they are expected to do a job. They are not meant simply to be yes men for the officers. They are not meant to be a fig leaf, hiding the privacy of the officers. They are meant to shine a light on their actions and hold them to account when they get it wrong.

So once more, the Barnet Eye appeals to the Conservative cabinet and the committee chairs. Do the job you are paid for.

Barnet Council - Response to letter regarding £16.1 million bung to Capita

Yesterday, at 18:35, I received the email detailed below on my blog email account
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Dear Mr. Dishman, Mr. Dix, Ms. Musgrove and Mr. Tichborne

Cllr. Thomas and Cllr. Rams have asked me to respond to your open letter of Friday 8 November 2013. 

Please find attached

Chris Naylor
Chief Operating Officer

Management Suite, Building 2, North London Business Park, Oakleigh Road South, London N11 1NP
D/L: 020 8359 5193 Mobile: 07825 351801
Barnet Online: www.barnet.gov.uk

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Contents of attachment
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  Barnet Council Response t bloggers  LBB Letter 131111.pdf

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I was not surprised by the timing of the email. It had been sent so that it would make the print deadline for the local papers, whilst giving bloggers the minimum possible time to get a sensible response back before the press went to print. I was also unsurprised to be informed that promenant local Conservative Blogger, Mr Dan Hope (who blogs and tweets under the name BarnetBugle) was leaked a copy of the letter and was tweeting about it in time for the press deadlines.

Barnet Council Breaks Silence Over '£16M Capita Payment' Branding Prolonged Social Media Storm A 'Red Herring' http://t.co/PWhIYkpzUS
— Barnet Bugle (@barnetbugle) November 12, 2013

Clearly someone, somewhere at the council wanted to try and get us to rush out an ill considered response. Whilst the Barnet Eye has no objection to other bloggers writing what they like, we have to question why someone with no association with the original email was used in such a way to break the news.

Of course the Barnet Bloggers are not surprised at anything in Barnet anymore. I had speculated yesterday that just such a thing would happen, so we immediately set about mustering all of the resources available to pull together a response. Normally when we jointly draft a response, we work on it for a couple of days, but with looming press deadlines, we had to work really hard to agree a joint response, especially given the lengthy nature of the email.

The Barnet Eye found it intriguing that the Leader of the Council was not included on the list of people who Mr Naylor said were keen for him to respond. We have to ask if Councillors Thomas and Rams were actually the only ones who were happy with it. Did Mr Naylor even bother to show the semi detatched leader, Richard Cornelius? I will be monitoring the Barnet Bugle Twitter feed intently to see the next response from the Council

Here is the text agreed by the four Barnet Bloggers in response to Mr Naylor

In December 2012 the Cabinet report which authorised this contract was quite clear when it said:

“Capita’s proposal also includes (within the financial offer described above) approximately £15.3m revenue investment in areas such as information technology (computer hardware and software), and customer services. This investment not only enables Capita to deliver the transformation it is proposing, but also avoids the Council having to find money in the future to fund replacement technology for systems that are at or nearing the end of their useful life”.

It went on to say:

“if the Council chose not to complete this procurement, it would have to:

• attempt to replicate the investment, technology and other solutions being proposed by  Capita in order to drive out the future savings required”

In September 2013 Barnet paid Capita £15.2 million which Mr Naylor described as follows:

“Of the total £320m, £16m of this is paid up-front for the capital investment. The remainder of the service charges are paid quarterly in advance. The reason for making an up-front payment to Capita for capital investment, and for payment of service charges quarterly in advance is that the Council’s “cost of money” – i.e. the amount that it pays for access to cash, is considerably cheaper than Capita’s. The Council has internal reserves, and access to the Public Works Loan Board funding which is closely aligned to the Bank of England base rate. So the up-front capital contribution and quarterly in advance payment reduce the overall cost of the contract to the taxpayer.

In August, the Council made £10.5m payment to Capita which represented the balance of the capital contribution for investment in the services, and £4.7m in respect of the service charge.”

The council have made a decision to fund the investment instead of Capita and from Mr Naylor’s response in October there is a very clear inference that this would come from reserves or borrowing. 

At the audit Committee of 23^rd October the council stated:

“The council agreed to fund the capital costs up front because the council benefits from a lower interest rates which keeps the overall cost of funding CSG as low as possible. The assets are Capita’s, but Capita is obligated to provide them back to the council upon contract termination for at no further cost” - again implying borrowing or lost interest on reserves.

Mr Naylor says in his letter of 11 November 2013 that:

 “there has been no change in policy, and no radical change to the terms of the business model agreed by Cabinet on 6th December 2012”.

Based on the above this would appear to be untrue.

The Cabinet report of December 2012 was very clear when it said that:

 “As dialogue has now closed, the Regulations permit that the Council may only request a bidder to clarify, specify or fine tune a tender, but further detailed negotiation is no longer permitted.”

Relieving Capita of the obligation to fund £16.1 million of capital investment which impacts the cost of the contract by £800,000 does not appear to fit these criteria.

Clarification is needed over the specific issue of the origin of the funding source used by the authority to support the £16.1 million. Mr Naylor asserts in his response that this was not from reserves, yet in his earlier statement he refers to ‘internal reserves’ and the ‘Public Works Loan Board funding’. Was the funding from reserves, or not? Was the funding borrowed, and if so, how much, and does not such an action contradict the position taken by Cabinet member Robert Rams in criticising opposition proposals to borrow money for capital investment?

Was the £16.1 million from internal reserves, contrary to Mr Naylor’s statement, or if not, why did Councillor Thomas think so?  If some of the money was obtained by a loan from the Public Works Loan Board, how much did the sum comprise, and does the use of borrowed funding not contradict Councillor Robert Ram’s stated criticism of Labour proposals to fund investment this way?

Why have our councillors remained so reluctant to address the questions publicly, and why has the Leader of the Council remained silent on an issue of such public concern?

Why was the belated statement about the £16.1 million at the behest of Councillors Thomas and Rams, rather than the Leader?

There are further unanswered questions about the authorisation signed by Leader Richard Cornelius on August 5^th.

Why is a decision, which is not a decision, listed as a ‘non key decision’?

Why are there no background papers listed for this document?

What exactly are the ‘international financial reporting standards’ to which the document refers?

If this authorisation was merely a technicality, why was it necessary for the Leader to approve it, rather than a senior officer acting under delegated powers?

Were the backbench Conservative members aware that the funding of the capital investment was not in fact an ‘upfront’ payment from Capita, but to be undertaken by the council? If they were, why have so many statements been made seeming to imply the contrary?

Is the truth that although the method of funding the investment this way was arranged between Barnet and Capita, for reasons of political sensitivity the Conservative administration has failed properly to explain this to backbench members or the residents of this borough?

Is it fair to suggest, as the Labour leader Alison Moore commented at last week’s Cabinet meeting, that the way in which the funding has been arranged would appear to involve a ‘sleight of hand’, and is this really compliant with the principles of transparency, accountability and open government, and the duty to protect the best interests of the residents and tax payers of this borough?

It is clear that there are still many serious outstanding questions left unresolved and for this reason we repeat our call for an immediate investigation into the issue so as to ensure that our elected representatives are fulfilling their roles in the proper scrutiny of the actions of this council.

Signed 

Derek Dishman

John Dix

Theresa Musgrove

Roger Tichborne

Barnet Bloggers joint letter to Barnet Councillors over £16.1 million bung to Capita

Yesterday the Barnet bloggers sent a joint letter to all Barnet Councillors concerning the £16.1 million bung to Capita PLC, paid with your cash. The Barnet Eye was most disturbed to see zero coverage of this massive scandal in the printed press. I have received a plethora of private emails from "concerned councillors". Sadly the concern seems mostly for their jobs. None have actually been prepared to comment on the scandal. They  simply want the Barnet Eye to stop exposing the scandal until such time as the council repsonds to the email I sent them in August. 

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Dear Councillors

Throughout the history of the One Barnet outsourcing programme, statements by the leader of Barnet council, Cabinet members, Conservative councillors and the senior management team have all maintained that as a fundamental commitment to the NSCSO contract Capita would make a large ‘upfront’ capital investment.

The necessity of this investment by a private sector partner was given as the reason why the authority refused even to consider an in-house option as an alternative to privatisation of council services.

If an in-house option had been adopted, not only would many local jobs have been saved, all efficiencies made through better management of such functions as procurement would have been retained by the authority, as opposed to a limited amount capped in the contractual agreement with Capita. By ignoring this option, it is arguable that the statutory duty of the authority to make the best use of taxpayers' money may have been breached.

We have now learnt that not only has Capita failed to make the promised capital funding but that in August, in a complete reversal of  policy, the Leader of the Council sanctioned the payment to Capita of £16.1 million of taxpayers’ money held in the authority’s reserves, in order to cover the cost of the capital investment.

We believe that not only have the leadership, Conservative members and senior management team of Barnet Council promoted the need for privatisation, and the contract with Capita, on a totally false premise, they have continued to mislead residents by misrepresenting the facts, and maintaining that capital investment is to be given by the company, rather than admitting that money has been taken from the authority's reserves and paid to Capita for this purpose.

After the Cabinet meeting of 6^th December 2012 which approved the contract with Capita, Councillor Cornelius made this claim in a statement published on the BBC London news website

Council leader Richard Cornelius said the combination of a saving to the taxpayer of a million pounds a month and an £8m investment in technology by Capita made it a "very, very good deal for the Barnet taxpayer".

http://www.bbc.co.uk/news/uk-england-london-20630442

This misrepresentation of the truth has continued even after the payment £16.1 million was formally authorised by the Leader of the council.

The business model approved by Cabinet on 6th December 2012 stated clearly that this investment was to come from Capita: how can it be lawful, therefore, that having approved the contract on this basis, we now find the reverse is true, and that taxpayers are paying for the investment?

If there is any financial argument for such a fundamental change, why has the authority not been open and transparent about this new agreement, and sought approval through the appropriate procedures?

The authorisation to add £16.1 million to the capital programme in order to pay for the capital investment was made on 5th August this year by Councillor Richard Cornelius, in an action defined as a 'non key' decision.

http://barnet.moderngov.co.uk/ieDecisionDetails.aspx?ID=4903

According to the council's own constitution, key decisions are those that are 'significant in financial terms or in their effect on communities comprising two or more wards'.

Clearly the decision to remove £16.1 million from reserve funds in this way most certainly is a key decision, and departs in the most fundamental way from the business model approved in December.

Quite incredibly, on 6th August, the day on which the contracts were signed, and the very next day after the leader signed off the £16.1 million to cover the capital investment, Barnet Council issued a press release:  http://www.barnet.gov.uk/news/article/346/barnet_council_and_capita_sign_contracts_to_save_barnet_taxpayer_millions in which it is stated:

"Capita will also make an £8 million pound investment in technology to improve council back office services".

What is that statement, other than a deliberate misrepresentation of an unpalatable truth?

We note that the explanation of the NSCSO contract on the council's own website, updated after 5th August, continues to maintain falsely that an upfront investment will come from Capita: see here -

http://www.barnet.gov.uk/info/930354/new_support_and_customer_services_organisation_nscso/990/new_support_and_customer_services_organisation_nscso

Capita will make an upfront investment which will provide improved Information Technology and telephone support to improve council back office services.

In regard to the approval of 5th August, the constitution says:

When key decisions are to be discussed or made, notification is published at least 28 days before. If these decisions are to be discussed with council officers at a meeting of the Executive, this will generally be open for the public to attend, except where personal or confidential matters are being discussed. The Executive has to make decisions that are in line with the Council’s overall policies and budget. If it wishes to make a decision that is outside the budget or policy framework, this must be referred to the full Council to decide.

Unless the change of policy, and a radical change to the terms of the business model represented by the decision to use reserve funds for a capital investment payment to Capita has been formally agreed through the relevant constitutional procedures, therefore, it is reasonable to conclude that the payment may well be unlawful, and as residents, taxpayers and citizen journalists in Barnet we object in the strongest terms to what would appear to be a serious breach of the regulations that are supposed to protect our best interests, and we ask you to instigate an immediate investigation into the issues we have raised.

Derek Dishman

John Dix

Theresa Musgrove

Roger Tichborne

The £16.1 Million bung to Capita - Clarification regarding Councillor Hugh Rayner

Yesterday the Barnet Eye asked the question whether the chair of the Barnet Business management overview and Scrutiny committee, Councillor Hugh Rayner should resign following the committees inaction over the £16.1 million pound gift to Capita, passed via a DPR.

Following various exchanges of emails as to which committee should be responsible for this, please see the description of the purpose of the committee from the Council website

The purpose of the Business Management Overview and Scrutiny Committee is to monitor and coordinate overview and scrutiny work across the authority. 

The Committee has the power to appoint Scrutiny Panels and Task & Finish Groups to look at certain issues in depth, and receive reports on the progress of these groups.  The Committee can also receives petitions, and is tasked with reviewing policy framework and the development of policy which does not fall within the remit of other Overview and Scrutiny Committees.

Business Management Overview and Scrutiny Committees also consider call-ins and Councillor Calls for Action.

Full details of the committee and its membership can be found here
http://barnet.moderngov.co.uk/mgCommitteeDetails.aspx?ID=119

Councillor Rayner is also a member of the

Budget and Performance Overview and Scrutiny Committee

The council website states that the function of this commitee is

The Budget and Performance Committee scrutinises the overall performance, effectiveness and value for money of council services. This includes the council’s annual budget process, the financial management of resources, and the planning, implementation and outcomes of all corporate improvement strategies.  The Committee also has responsibility for scrutinising One Barnet projects throughout the programme’s lifecycle.

http://barnet.moderngov.co.uk/mgCommitteeDetails.aspx?ID=123

Which means that Councillor Rayner is the chair of one committe which should ensure scrutiny of decisions is properly performed. He is also a member of the committee which is directly responsible for dealing with the Budget decisions regarding One Barnet. Thus far I am sorry to report that Councillor Rayner, despite these two important roles, has been singularly unable or unwilling to respond regarding what exactly either of the two committees he is involved in has done.

Now for all I know, Councillor Rayner is preparing a full response which will fully answer my concerns regarding the transfer of assets to a private company. If he does, we will publish that response. One thing which is becoming 100% clear to me, from various emails I have received is that this issue is clearly something which no Barnet Conservative Councillor is prepared to discuss. It is clear that they know something they are rather keen for the rest of us to be "protected" from.

Barnet Council £16.1 Million Gift to Capita - Time for Councillor Hugh Rayner to resign?

Regulare readers of the Barnet Eye will be familiar with the story we broke in August detailing how Barnet Council had given Capita a bung of £16.1 million as a sweetener to take over the running of Barnet Council. This was the value of assets owned by Barnet Taxpayers and transferred to Capita PLC,  a private contractor who signed two mega contracts with Barnet Council recently. The £16.1 million was not part of the contract, it was snuck through as a DPR (ie with no democratic oversight and without a decison by the council) after the event.

When the Barnet Eye discovered what happened we emailed every Barnet Councillor to demand action. The person we expected to step in was Councillor Hugh Rayner, the Conservative chairman of the Business Management Overview and Scrutiny committee. It is his job to ensure that all financial decisions concerning business decisions at Barnet Council have proper oversight. He gets a whopping great allowance for chairing this committee. Given what had happened, Councillor Rayner should have immediately investigated the transfer with his committee. If the transfer was above board and there was some justification which the Barnet Eye was unaware of, he should have told us. We have heard nothing from Councillor Rayner and nothing from his committee which means one of three things.

a) He investigated and found a clean bill of health on the transfer, but simply couldn't be bothered to respond to our email. This is extreme bad manners, but can be recitified with an email now, which we will publish.

b) He investigated and found that the transfer did not follow rules. In this case, his committee should do its job and call the cabinet to account. A paper should be published detailing the issues and the rectifications. No such action has been taken.

c) He did nothing and ignored the concerns of the Barnet Eye,despite the huge financial implications for the council.

If options a) or b) are the case, then Councillor Rayner can rectify the matter easily, by emailing us with details. If option c) is the case, Mr Rayner has derelicted his duty and should resign, giving his allowance to someone who will do the job properly. Mr Rayner has pointedly refused to answer the question in two emails this week. He now has the opportunity to set the record straight. Over to you councillor Rayner. You believe the scrutiny committe provides robust democratic oversight. Prove it.