Barnet UNISON

Barnet UNISON Press Release:

26 June May 2011

 

FOR IMMEDIATE RELEASE

 

£.75 Billion pound contract to be signed off

 

“The CSO-NSO Business Case is another example of Barnet Council’s slap dash approach to procurement – it denies financial and operational risks, over-states savings and makes little effort to take account of service needs and the well being of staff.” (Dexter Whitfield )

 

On Wednesday 29 June Barnet Council Cabinet Resources Committee (CRC) will sign off a contract worth up to £750 million to the successful private sector company winning the contract, with the option of an extension of a further 5 years to a 10 year contact it could be worth over £1 billion.

 

Barnet UNISON commissioned Dexter Whitfield to produce a critique of the business case going to the CRC. You can read the full report here.

 

Our report found:

 

M Up to 253 staff could lose their jobs before, or shortly after, the CSO-NSO contract commences.

 

M Key procurement risks have been omitted such as :

Judicial Review if unequal treatment

 

M Key transition risks omitted such as:

Loss of critical skills before or at transfer

M Key operational risks omitted such as:

High level service user complaints

M Key contract management risks omitted such as:

Effectiveness of performance assessment regime

M Key Financial Risks omitted such as

Hidden costs emerge

M Key Democratic Governance Risks omitted such as:

Accountability & reporting failure

M Key Employment Risks omitted such as:

Pensions

To view full list of key risks click here

 

This contract is one of many contracts the Council has already put out to tender in the last five months with more contracts planned to go out later in the year. Already the combined total costs of contracts stands at more than £1 billion of public money.

 

Barnet ‘easycouncil’ has been making headlines for a number of ‘cock ups’ in procurement and failings in contract monitoring. The latest of which was the official audit report on MetPro the bust security company employed by Barnet Council. The report made shocking reading especially for a council aspiring to outsource all of its services to the private sector.

 

Here are just some of the key findings of the audit report are as follows:

 

M There was no procurement exercise in line with Barnet’s Contract Procedure Rules (CPR) and there was no written contract with the council

M There was payment of some invoices with no VAT number quoted & some invoices were from companies had different names – MetPro Group and MetPro Emergency Response. Internal Audit found inappropriate changes to MetPro’s bank accounts

M MetPro was not registered with the Contractors Health and Safety Assessment Scheme, thus rendering the council vulnerable to prosecution or civil claims

 

Barnet UNISON is recommending the following:

 

1. The Business Case has failed to make a strategic, economic, commercial, financial and management case for commencing the procurement process and should be rejected by Cabinet Resources Committee.

 

For further details of all our recommendations click here

 

“It is now three years since the Future Shape/Easycouncil/One Barnet programme started. In that time I have dealt with two chief executives, three council leaders and hundreds of consultants. Whilst the consultants pedal outrageous unsubstantiated claims to deliver £100 million in savings all I see is £millions going into the pockets consultants for a further three years, £9.2 according to the last council budget. In that time I have seen hardly any savings. What worries me is how ‘consultancy dependent we have become!” (John Burgess Barnet UNISON Branch Secretary)

 

End.

 

Contact: John Burgess Barnet UNISON on 07738389569 or email: john.burgess@barnetunison.org.uk

 

1. Analysis of Business Case New Support & Customer Services Project

London Borough of Barnet (Barnet UNISON) to view full report click here

 

 

2. Recent useful Links for Dexter Whitfield

 

M £2bn secret profits on PFI gravy train: Public-sector projects are massive money spinner

http://www.dailymail.co.uk/news/article-2003629/PFI-schemes-Public-sector-projects-massive-money-spinner.html#ixzz1QOYKpv92

 

M £2bn profit for companies selling debt on public projects

http://www.telegraph.co.uk/news/politics/8576554/2bn-profit-for-companies-selling-debt-on-public-projects.html

 

M PFI: transferring billions from UK taxpayers to private financiers

http://www.opendemocracy.net/ourkingdom/clare-sambrook/pfi-transferring-billions-from-uk-taxpayers-to-private-financiers

 

M HM Treasury ‘in dark’ over ‘excessive’ PFI profits

http://www.bbc.co.uk/news/mobile/business-13712275

 

M Massive PFI profits ”are going offshore”

Massive PFI profits ”are going offshore” – Public Service

 

M Private Sector taking full control of hospitals

http://www.spokesmanbooks.com/RevPDFS/BarnetPPP.pdf

 

M Treasury lets PFI firms’ profits run wild

http://www.dailyfinance.co.uk/2011/06/14/treasury-lets-pfi-firms-profits-run-wild/

 

M Transformation and Public Sector Reform http://www.european-services-strategy.org.uk/publications/public-bodies/transformation-and-public-service-reform/

Recommendations

 

1. The Business Case has failed to make a strategic, economic, commercial, financial

and management case for commencing the procurement process and should be

rejected by Cabinet Resources Committee.

 

2. Given the impending changes in the organisation and delivery of local government,

NHS and benefit services, the Council should avoid being locked into a long-term

contract. It should commit to engage with staff and trade unions to undertake

transformation in-house drawing on external support on an as-and-when basis (a

practice adopted by Kent County Council and Newcastle City Council in drawing on

external consultancy to support in-house transformation).

 

3. If the Council proceeds with current plans then it is essential that it:

• undertakes a full risk assessment;
• confirms the full scale of potential job losses and assesses the economic and
• equalities impacts with appropriate policies to eliminate or mitigate negative consequences;
• makes a commitment to secondment or a TUPE Plus transfer of staff;
• ensures that staff suffer no reduction in the quality of their pension;
• commits to requiring service delivery to remain in Barnet;
• requires contractors to pay the full rent for council accommodation;
• designs a new fully resourced contract monitoring and management arrangements;
• reassesses the savings forecasts to take account of the potential cost of redundancies, potential larger loss of income and the increased costs of contract monitoring and management;
• assesses the potential impact of the CSO-NSO contract on the pension fund as a matter of urgency;
• strengthens Oversight and Scrutiny
• to ensure that it carries out rigorous and regular assessment of performance and employment policies;
• increases the resources of Internal Audit to enable more effective and continuous auditing;
• introduces Gateway Reviews of the options appraisal and procurement process;
• requires improved performance of the Council’s external auditors;
• rewrites the contract monitoring and management section of the Business Plan to take account of the current fundamental problems and weaknesses in the Council’s procurement practice and
• addresses the wide range of new issues that will emerge in a strategic partnership that is going to be subject to significant changes during the contract period.

A victory for transparency…and a warning for public sector procurement

“As the London Borough of Barnet Council recently discovered…when a group of dogged local “citizen” bloggers managed to unearth evidence  – through FOI requests and Companies House searches – of Barnet Council’s rather dodgy “relationship” with a security firm called MetPro (now out of business).  Last week the findings of an internal audit were announced:  including the troubling revelation that the council had spent £1.3 million with MetPro with no tendering exercise, no written contract or SLA, no formal authorisation, no proper invoicing… thus violating just about every CPR that Barnet had.

 

Cue some serious questions about Barnet’s finance, audit and procurement processes, and some serious embarrassment for the cabinet and senior officers of this so-called “flagship council: especially so given Barnet is one of the councils planning mass outsourcing of services imminently.”

 

“Easy council” scandal puts Town Hall outsourcing reforms in the spotlight.

After the demise of Suffolk’s “virtual” council (and the electoral scuppering of Bury’s “enabling” council) it is the turn of the daddy of all Conservative-led, outsourcing-driven council reforms programmes to come under the critical spotlight: Barnet’s Flagship “easy council” project.

A financial scandal has brought the controversial model (known formally as One Barnet) under renewed scrutiny. On Thursday night councillors discussed a report which detailed how the council spent £1.3m on the services of a security firm called MetPro, without carrying out basic financial or security checks or indeed putting the contract out to tender

Full article here

Barnet not so fair? – Heather Wakefield

An internal audit report has highlighted concerns over procurement processes at the London Borough of Barnet. This raises questions about the council’s general outsourcing proposals and also the government’s wider privatisation plans

Not a good week for privatisation. First there’s the Health and Social Care Bill – ‘paused’, slightly modified and re-started following public outcry over threatened marketisation of the NHS. Next was the desperate debacle surrounding Southern Cross, filling the parts of the press and media that the bill didn’t occupy.

And just to add insult to privatisation injury, yesterday saw a debate within Barnet council’s Audit Committee about the payment of £1,361,000 to a private security contractor MetPro Rapid Response without a contract

Full article click here

In a speech to delegates at UNISON’s National Conference, the union’s General Secretary, Dave Prentis, said:

March 26th, what a day it was. We marched together, But this week we march on. Because this is our week, together not beaten. Here to experience the unique solidarity of our conference. To share, to learn, to inspire. And be inspired by the struggles of others. To show the world that we’re strong, determined, united.

They’ve declared war on our public services. With Tory donors, City firms, hedge funders back in the heart of government. Financiers like John Nash whose private equity firm, sovereign capital, buys and flogs care homes for the fun of it.

Conference, A year ago, we could have been beaten, lost our way. But in this past year we’ve grown our membership for the 17th year running. We’ve strengthened organising, a new army of organisers. Our branches, fighting back where they can.

Mike Tucker, in Southampton, John Burgess, in Barnet – their necks on the line. 40 branches in dispute, 34,000 members, balloted or taking action. Conference, this union salutes them all and what they are doing to save our members jobs and services.

And we are told that there is no alternative. And as long as they keep preaching that mantra that there is no alternative, I will state on every platform that there are alternatives. Clegg and Cameron could have the guts to go back to the banks, the spivs, the speculators, and tell them on our behalf, “you created this mess – you clear it up.” And I’ll say it again; “If there’s money to bail out the banks, if there’s money to protect their bonuses. If there’s money for war and replacing Trident, there’s money available for our local services and our NHS. If there has to be a pay freeze, make it for the bankers, get them to do more for less.

Full speech here and short video here

 

The damning report said no procurement exercise was undertaken to appoint security firm, Metpro, for which the council has paid £1.4m over five years, and that “officers cannot …give assurances that this will not happen again”.

It said: “The council has failed to comply with its Contract Procedure Rules (CPR) and financial regulations, exposing the council to significant reputational and financial risks.

“No procurement exercise had been undertaken to appoint MetPro, in accordance with the council’s CPR.

“No written contract between the council and MetPro could be found. There is no record of an approval and authorisation for the use of MetPro for providing security services.

“Although we cannot rule out fraud, there have been no allegations of fraud and there is no evidence to suggest that there should be a fraud investigation.”

See the full report here

The council is currently in the process of tendering for contracts for its back office services and regulatory services collectively worth over half a billion pounds – see LGC tomorrow for more.   

The report follows media reports last month that Metpro was to be investigated by a government watchdog after it emerged that it was not properly licensed.

Barnet cabinet member for resources and performance Daniel Thomas (Con) said: “Contract management is an area we need to tighten up on which is exactly why we have this report.  We now need to put in place a clear programme of improvement to match those we ran in these other services.”  

Professor Dexter Whitfield who has provided over 30 reports on Future Shape for Barnet UNISON has written this article:

Commissioning is a wolf in sheep’s clothing. The separation of client and contractor roles, the enabling model, is little more than a revamp of the ‘contract city’ concept to outsource most services; the ultimate neoliberal public management.

Barnet LBC, despite claims that Future Shape, easyCouncil and now One Barnet were not mass outsourcing projects, is engaged in procurement to outsource 2,600 jobs, 70% of non-school staff. Detailed analysis of Council documents has revealed in-house options marginalised, operational risks ignored, weak economic and financial cases, no service transformation proposals and no citizen engagement. Taxpayers have no evidence that the risks and impact of the overall model have been assessed…..

To view full article click here

Nine months after transfer to Lovell’s, shell shocked former council workers were told the contract which had been tendered was won by another company (Mears) making a fourth TUPE in less than 6 years!

We had only just learnt that after 9 months of chasing Lovell’s we finally received confirmation from then that they had been given admitted body status. As far as we know not a penny has been paid into workers Pensions although we understand deductions have been made since January.

Dear Councillors

RE: UNISON Analysis of Business Case for Local Authority Trading Company

Please find enclosed copy of our report here

The Council business case is 198 pages and was only released for consultation with our members and members of the public late on Monday 16 May 2011. We have prepared a brief response to highlight our concerns and proposals which I hope you will take time to read and consider. Local Authority Trading Companies are relatively new service delivery model hence our concern about rushing through a proposal which affects social care services. Earlier this week were informed that another LATC Chelsea Care has gone into liquidation. I am enclosing the full report and leave you with four key points: Value for money Value for money was not proven in the draft business plan and exclusion of the financial chapter from the published version of the plan, makes it impossible for service users, staff and trade unions to examine and challenge the viability and sustainability of the business case. Risks Risks for service users and staff have been deliberately understated because the Council is fixated with developing the LATC model so that it can “assess the commercial viability of other services before any longer-term decision is taken regarding their divestment.” The Council’s strategy is to transfer risks to service users and staff, so it can relinquish responsibility for service provision and employer obligations. We understand that Chelsea Care, a London Borough of Kensington and Chelsea LATC, has allegedly gone bankrupt! Serious shortcomings A Business Case should provide a strategic, economic, financial, operational and management case for a change in service delivery, investment or a specific project. Shortcomings identified in the trade union Interim Critique have not been addressed. Lack of market analysis A decision is being taken to establish a trading company without a clear understanding of the sector or market within which the company will operate. The Council seeks to commercialise services, yet fails to be fully prepared for the commercial consequences. Best wishes John Burgess Branch Secretary. Barnet UNISON Standing up for staff and public services Not for onward transmission in whole or part without permission