Looking at this list, does anyone still think One Barnet is a good idea?

At last week's Budget & Performance Scrutiny meeting back-bench councillors and residents alike tried to scrutinise whatever detail was available about the proposed £320 million deal for Barnet's customer care and back office services (New Support & Customer Services Organisation NSCSO) with preferred bidder Capita.

Much of the financial detail about the costs and the so-called £120 million 'guaranteed' savings has been kept confidential because of commercial sensitivity, which makes it very difficult for local people to satisfy themselves that the deal represents best value for money.
  

As you will have seen from the photograph Cllr Alan Schneiderman took of part of the 8,000 page contract - it is a huge document and virtually impossible to absorb all the implications of the detailed clauses, provisions and schedules.


What we do know is that the future of our council's customer care, IT, HR, finance, procurement, estates and revenues and benefits services, is likely to be tied-up in a 10 year fixed contract with Capita which will take 200 jobs from the borough.

We believe this presents real problems for democratic accountability. 

We don't know where the savings are coming from.

We don't know what the hidden costs will be.

And we don't know if this really represents the best value option.

What's more, the council haven't consulted local residents, and even local Tory councillors have said they have no electoral mandate for it.

What we do know is that this sort of contract has gone wrong in other places, prompting serious questions.

Take a look at the list below which details some of those problems other councils have faced, including examples of councils who have decided not to go ahead with large scale outsourcings.

Does anyone still think it's a good idea?
 
Somerset County Council's 'Southwest One' Joint Venture with IBM which was set-up to deliver back office services has resulted in the Joint Venture partnership suing the council over a dispute around savings and payments.  The partnership had pre-tax losses of £31.5m in 2010. The leader of the council, Ken Maddock, this year called the losses “staggering” and criticised “failures to hit modest savings targets”. In addition, councillors are now saying their budgets are locked in to the South West One contract, and they are more or less precluded from changing what they want to unless they can re-negotiate the contract. One of the local MPs made a speech in the House of Commons saying that "the price of quitting [the contract] is so high, we're stuck."

Bournemouth Council outsourced 6 departments including I.T. Revenues and Benefits, and facilities management services to Mouchel in a deal worth up to £200m. Following financial problems the company had, savings predictions being reduced by a third only a year into the contract, and concerns that information about key targets were being kept confidential because of commercial sensitivity they are facing calls to bring the services back in-house:
 

Birmingham City Council outsourced their IT and call centre to Capita in a strategic partnership called Service Birmingham – a £1bn contract which was later criticised by auditors Grant Thornton for being driven by “commercial considerations”.  They backed-down from a plan to offshore jobs to India, and the Labour-led council is now reviewing the contract following concerns about performance:

Liverpool City Council outsourced their communications services to BT in a Joint Venture called Liverpool Direct. There have been claims of overcharging by £10m a year, and a leaked internal consultants report that bringing the service back in-house would save £82 million over four years and £23 million every year thereafter.

Bedfordshire Council's £250m outsourcing contract for IT, HR, back office, social care and education departments was terminated following claims that there were failures in the contract. It cost them £7m to terminate the contract

West Berks Council terminated a £168m 10 year contract with Amey after only 3 years (IT and corporate services) – Amey agreed to pay the council £3m as part of the settlement.

Sefton Council exited their £65 million IT contract with Capita following budget cuts and concerns about savings.

Redcar & Cleveland Council took back in-house their call centre two years in to a 10 year contract following claims there were problems with customers getting through. The strategic partnership with Liberata for other back office functions – IT, HR, payroll, finance, public access and business support was then reduced after 3 years of a 10 year contract:

Swansea Council were criticised by auditors PWC for their £83m IT outsourcing with CapGemini. PWC said the council hadn't properly checked whether the savings were credible. The council reduced the contract to a £40m project to make only £26m savings over 10 years - the original contract promised £70m savings over 10 years. They then axed the second phase of the CapGemini arrangement after finding it was too expensive and went with a shared partnership with Cardiff Council for their call centre:
 
Rochdale Council axed its 15 year deal for a £180m contract for roads, property and IT with Agilisys/Mouchel to bring the majority of those services back in-house. The partnership was supposed to deliver £1bn of investment and 1,300 jobs, but there were claims of overcharging and criticisms that it didn’t deliver on its promises.  The partnership apparently charged £2,000 to paint a yellow line on a road and £2,000 for a lap top that cost £600 on the High Street.  Bringing some of the services back in-house would save the council £2-4m per year according to estimates.

 Suffolk County Council decided not to move to a commissioning council and a major outsourcing transformation project which would have seen most council services commissioned from private companies and social enterprises in return for a saving of 30% on a £1.1bn annual council budget.  Experts thought the scale of the savings were unlikely to be met:
 
Cornwall Council backed off from a £300m outsourcing deal for benefits, IT, Libraries and payroll removing the Leader of the Council in the process:

Edinburgh City Council decided not to outsource back office services (the same bundle of services as the NSCSO) in favour of a Public Sector Comparator (PSC).  Their PSC showed they could save at least £38m on the core service with extra possible savings on procurement and council tax collection:

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Better Barnet posted about Looking at this list, does anyone still think One Barnet is a good idea? on Better Barnet's Facebook page 2012-12-04 17:59:47 +0000
Looking at this list, does anyone still think #OneBarnet is a good idea?
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