Barnet UNISON

Dear member of the Audit Committee

 

UNISON has produced a report ( see attached ) on the Greenwich Leisure contract following the revelation in a report to Cabinet Resources 27 September 2011 that officers were seeking:

 

“1. That approval is granted to negotiate termination of the current leisure contract with Greenwich Leisure Limited (“GLL”), such negotiations being subject to final approval by this committee

and

 

7.2 An external legal firm, Bevan Brittan, carried out an analysis of the current contractual arrangements and the proposals for varying the contract. Having done so, Bevan Brittan, have advised that alteration of the contract, in the manner proposed, would, for the purposes of European procurement law, constitute a material change to the content and nature of the original opportunity such as to amount to a ‘new’ contract. Without a competition, in accordance with the European procurement rules, such a material change would carry a risk of challenge from tenderers who were unsuccessful when the contract was tendered, previously, as well as from others, currently in the market.”

 

Barnet Council commenced a 15-year Leisure Services partnership/contract (annual value £1.7m) with Greenwich Leisure Ltd (GLL) on 1 January 2003. It is now considering terminating the contract.

 

I am bringing our report to your specific attention because our report found that serious concerns about this contract had previously been brought to the attention of the Audit Committee.

 

UNISON is concerned that  nine years into the contract there was:

• Poor financial controls

• No Partnership Board

• No effective contract management

• No proper risk assessment

• No key performance indicators or targets

• No checking of management fee/contract variations from GLL

• Decline in the condition of the Council’s leisure assets

 

Our report raises a number of critical key questions for Councillors in particular those members sitting on the Audit Committee:

 

1. Was there an expectation when the contract was set up that Greenwich Leisure would ensure adequate maintenance of the leisure facilities stock to last the lifetime of the contract?

2. Did GLL spend the allocated money on planned maintenance?

3. What was the annual cost of variation orders issued on this contract since January 2003?

4. Has this programme of work been audited and scrutinised?

5. If it was inadequate or ineffective, what remedial action was taken?

6. What is the current condition of the Council’s leisure facilities?

7. What has been the total cost of this contract to date?

8. Why were Audit recommendations not implemented?

 

Barnet Council’s catalogue of contract management failures on relatively small contracts has grave implications for the large multi-million One Barnet contracts currently in procurement.

 

UNISON believe that you should consider seeking independent assurance from external audit on:

·         contract monitoring and

·         long term procurement and the associated high level risks.

If councillors have any questions or concerns about the content of this report please do not hesitate to contact me.

 

Best wishes

John Burgess

Branch Secretary.

Barnet UNISON

0208 359 2088

www.barnetunison.me.uk

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11 NOVEMBER 2011- FOR IMMEDIATE RELEASE:

 

Barnet UNISON commissioned Professor Dexter Whitfield to produce a report on the Greenwich Leisure contract following the revelation in a report to Cabinet Resources 27 September 2011 that officers were seeking agreement to terminate the leisure contract with Greenwich Leisure.

 

Barnet Council commenced a 15-year Leisure Services partnership/contract (annual value £1.7m) with Greenwich Leisure Ltd (GLL) on 1 January 2003. On 27 September 2011 Cabinet Resources Committee agreed a recommendation to negotiate termination of the current leisure contract.

 

The Council agreed to conduct a review of Leisure services. However, the outcome could already be decided. Last week local politicians & LIBERTY director Shami Chakrabarti took part in a discussion with pupils from a North Finchley school about the current political system. A report in the local press quoted “Cllr Davey, cabinet member for housing, said: “My personal opinion is we shouldn’t have anything to do with leisure. People can walk or jog in the park for free.”

 

Apart from a real concern that these valued services could face closure as a result of the councils Leisure review, this is also a story of mismanagement of a single service contract that once again exposes the high-risk strategy and assumptions proposed by the One Barnet model. A council audit committee had previously identified serious weakness some of which remained unaddressed resulting in a ‘no assurance’ during a follow up review (Audit Committee, 21 June 2010).

 

This shocking revelation comes at the time where the Council is at the procurement stage of several multiservice, multi-million pound, long-term contracts that are up to 50 times the value of the leisure contract.

 

The UNISON report raises a number of critical key questions for Councillors:

 

1. Was there an expectation when the contract was set up that Greenwich Leisure would ensure adequate maintenance of the leisure facilities stock to last the lifetime of the contract?

2. Did GLL spend the allocated money on planned maintenance?

3. What was the annual cost of variation orders issued on this contract since January 2003?

4. Has this programme of work been audited and scrutinised?

5. If it was inadequate or ineffective, what remedial action was taken?

6. What is the current condition of the Council’s leisure facilities?

7. What has been the total cost of this contract to date?

 

John Burgess Barnet UNISON Branch Secretary said

“Quite frankly I am staggered at the content of the Council’s own reports. What is the point of making Audit recommendations if they are ignored? How many more times are we going to hear about contracts not being monitored properly, this is just more of the same issues raised in the Metpro Audit report earlier this year and further fuels fears about the One Barnet programme!” 

GLL won the 2011 Social Enterprise Mark Holder of the Year from the Social Enterprise Coalition

Barnet UNISON is asking for the One Barnet Programme to be put on hold whilst meaningful talks with staff, trade unions and residents take place to look at alternatives to the One Barnet Programme.

End.

 

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

 

Background Information:

Barnet Easy Council gained notoriety in 2009 when they launched the budget airline model for public services. In 2010 the model was criticised in a report by the external auditors as having failed to draw up a proper business plan.

 

Useful Links

Barnet UNISON (2010) Briefing No. 7, The impact and performance of management buyouts, social enterprises and mutual models, March.

London Borough of Barnet (2004) Access to Leisure and Community Facilities, Report to Culture, Community Engagement, Equalities and Human Resources Overview and Scrutiny Committee, 15 December.

London Borough of Barnet (2009) 2009/10 Internal Audit Annual Plan, Report to Audit Committee, 10 March.

London Borough of Barnet (2010) Internal Audit Annual Report, Report to Audit Committee, 21 June.

London Borough of Barnet (2011) Leisure Contract Review, Report to Cabinet Resources Committee,

27 September; London Borough of Barnet (2011) Decisions of the Cabinet Resources Committee, 27 September.

London Borough of Barnet (2011) Audit Recommendations – 2009/10, Report to Audit Committee, 17 February

A spokesperson for Barnet UNISON branch expressed shock at the contents of a fictitious poll carried out by world renowned research company WeeLie  International.

The Headlines are quite staggering

·         100% of UNISON members are paying income tax and national insurance

·         100 % of UNISON members are paying council tax

·         100% of UNISON members use both public and private sector services

The UNISON spokesperson who was visually shaken by the results said

“Yes, of course we had reason to suspect our members paid taxes and used public services it is just such a shock to find that they are spending their wages on goods and services. The results are there for all to see UNISON members are part of the community, I don’t what this will mean for the future.”

The Council have been rolling out the LEAN approach across a number of Council services. UNISON has repeatedly raised with a number of senior managers that this initiative is at odds with the One Barnet approach to delivering services.

Writing on the Conservative Home Blog “Benefit claims are too complicated for call centres and computers” John Seddon writes:

“Plans for the Universal Credit will create the same failures as we are seeing in HMRC: millions of unanswered calls, backlogs and errors – costing the taxpayer billions. The proposals – a website service and a national call centre – would work if peoples’ needs were simple and unvarying; taxation and benefits are anything but.

The move represents ministers’ wrong-headed belief in economies of scale; ministers think that these ‘lower-cost channels’ (web and phone) will mean a lower-cost service. In fact, because of the inherent variety in demand (people’s problems are different) the plans will increase the volume of transactions, just as these ideas have in HMRC.”

Full article here

Benefits too complex for a Call Centre model

John Seddon letter to: Rt. Hon. Iain Duncan Smith MP and Lord Freud 31st January 2011

“It would appear to be a simple proposition: take costs out of service provision by putting the provision online and/or in a call centre.  That these ‘channels’ represent cheaper transactions is not in doubt.  But it does not follow that overall the service will be cheaper to deliver.  The crucial factor is the complexity of the service.  When what is being delivered is simple and unvarying, moving it to telephone or internet channels may be effective.  When it is complex and variable, however, it is an expensive mistake, driving costs up and the quality of service down.  We can show many examples to prove this, of which the most relevant is housing benefits, of which more later. Housing benefits are not simple and unvarying; even less so will be the SUC.”

Full article here

Take a look at John Seddons evidence to the Treasury sub-Committee investigation on HMRC here:

“HMRC’s failure to pick up high volumes of calls to call centres are likewise indicative of high levels of failure demand, which will cause increasing costs and reflect poor-quality services for users

3.3.2 The assumption behind standardisation is that it will reduce costs. This is false. Management is concerned with reducing transaction costs – the cost of a telephone call or other discrete process – but the true costs of service are end-to-end from the taxpayer’s or agent’s point of view. Standardising work simply prevents the system from absorbing variety. It increases the volume of transactions (causes failure demand) and thus drives overall costs up.

4.2 Call centres, back offices, shared services, standardisation, specialisation, transaction-cost management, people management, IT-dominated processes – all these features of today’s scale approach to service reform can be shown to drive overall costs up.”

Barnet UNISON Comment

We agree that the Call Centre model will lead to an increase in ‘failure demand’ which will drive up costs. The Private Sector will recognise this as a bit of a ‘cash cow’