On December 6, Barnet's Conservative Cabinet will make the first of two critical decisions to sell-off the running of 70% of council services to a huge multinational corporation.
Customer care, finance, procurement, Human Resources, IT, revenues and benefits and the council's estates will then be controlled by the chosen private sector corporation for the next 10 years.
I am concerned about this for the following reasons:
• No transparency: The process has been mired in secrecy - because of commercial sensitivity the entire competitive dialogue procurement process has been conducted off council premises at the appointed lawyers - Trowers & Hamlins. All the financial information about costs and savings has been presented to elected councillors at committee meetings on exempt 'blue' papers which, after ten minutes allowed for reading them and for questions, have then been taken back. This is simply not enough time for elected representatives to digest, analyse and challenge complex and often voluminous information.
• No scrutiny: Democratic scrutiny of the proposals by elected councillors and the public has been thwarted and curtailed. It took two years for the Conservatives to agree to a dedicated scrutiny committee to look at 'One Barnet' projects, and once it was finally set-up, it lasted less than a year, and met a handful of times, before the Conservatives then scrapped it. Scrutiny of 'One Barnet' proposals is now tagged-on to the business of the Budget & Performance Scrutiny Committee, which already has a very heavy work programme, giving virtually no time for proper scrutiny and challenge of 'One Barnet' items.
• No consultation: There has been no formal consultation with local residents about the 'One Barnet' programme - yet it is something that affects nearly every resident in the borough. 70% of critical council services are being handed over to a private company to run. These are services like customer care, council tax collection, planning, licensing, environmental health, building control and trading standards. This is too fundamental a change in local service delivery to not consult local people.
• No robust business case: The business case has not been made - when the Conservatives were considering options for the future delivery of all these services they completely dismissed out of hand the option to keep these services in-house. In-house service delivery was simply ruled out at the first hurdle. The only option the Conservatives were interested in was some form of privatisation. My concern about this is not that public sector is good and private sector is bad. My concern is that had an in-house option been properly assessed or a public sector comparator been undertaken then we would know for definite whether or not privatising these services was the right thing to do. As things stand, because this was not done we will never know if privatisation really did present the best value for money and for the public. The case was just not properly made.
• No flexibility: The contracts for these services will be fixed for 10 years - if elected councillors or the public want to change anything it may cost us more to negotiate that change in the contract, or we simply may not be able to. This does not make good financial sense, and it is profoundly undemocratic.
• No control: The budgets for these services will be fixed for 10 years - this gives us, your elected representatives, less control of the council's finances. It also means that future cuts of a further 28% that we already know will be imposed on local councils from national government in the next few years, will fall harder on the services that remain in the council's control. Those services are Children's and Adults Social Care.
• Huge bill for the council tax-payer: risk of failure: Risk is never really passed to the private sector when services are outsourced - if anything goes wrong, the council and council tax payer will have to pay more to put things right. This is not a hypothetical concern. Recent privatisation failures where the government has had to step in at a huge cost to the tax payer include the East Coast Mainline service where both GNER and National Express private contracts failed and the G4S contract for the Olympics security. In the case of One Barnet, the council will retain accountability and risk, but not control.
• Barnet's poor procurement record: Things tend to go wrong when there are flaws in the procurement process - both the East Coast Mainline and G4S fiascos were down to failures in procurement. Essentially the successful bidders in these two cases put in unrealistic bids or promises which did not stack-up financially or operationally. The West Coast Mainline tender is yet another recent case where this transpired. Flaws in the procurement process were found following an investigation after one of the unsuccessful bidders challenged the award of contract. The contract award was rescinded and the tender for the service will need to be re-run. This cost the tax payer £40million. What concerns me about the 'One Barnet' outsourcing is that the council has an extremely poor procurement record - the MetPro security contract scandal is just one case in point, but even today a majority of the council's contracts are not deemed compliant with the council's own rules. When £1billion of services are at risk under 'One Barnet' we can't afford to get it wrong.
• Less democratic accountability: at the moment, when services go wrong for local people they can get answers from the council and their elected representatives about what went wrong. When services are privatised, this becomes harder. Accountability is one further step removed, and getting answers to things will prove harder because so much information is deemed confidential because of commercial sensitivity. I found this myself recently, when I submitted a freedom of information request on waste and re-cycling services. Barnet's re-cycling contract is run by a private company - May Gurney - and I was not allowed the information I requested (which was incidentally just email correspondence between council officers) because it contained information about the performance of the contractor which was deemed commercially sensitive and might lead to their business being damaged were it to be published. Now, if I, as an elected councillor and Leader of the Opposition, cannot see information related to the performance of a contractor delivering a council service - how will ordinary members of the public be able to get answers?
• No control of contract / service monitoring: The successful bidders for these two huge contracts will 'self monitor' under 'One Barnet' - this is a frightening prospect. How will the council maintain any control over the performance of critical local services if monitoring performance of the contractor will not even be done by the council - the contractor will 'self-monitor'
• Fees and charges may go up: One of the ways these new contracts will work financially includes plans to generate more income. This could mean the fees you pay for services like burials, cremations, land charges or planning applications could go up.
• The savings are modest when you consider the risks: The council expect to save £26m over 10 years on the back-office services contract (NSCSO) and £41m over 10 years for development and regulatory services contract (DRS). That's £6.7m a year. The risk is £1billion. And it is more than the money that is at risk. These services affect real people's lives. If they fail, real people will suffer.
Barnet has already had problems with outsourced contracts. The streetlighting PFI was completely underfunded, and has resulted in contract failures, penalties and notice from the contractor that they may have to withdraw from the contract because financially it is not sustainable for them. This could cost the council up to £2.5m a year extra.
Barnet's recently privatised parking service is already in trouble, with the parking account £1.2m adrift from the budget that was set, and a parking recovery plan has had to be put in place to rescue the situation.
Barnet outsourced its housing repair service to Connaught some time ago, but when Connaught went bust sub-contractors and staff pension contributions were not paid. This cost Barnet’s council tax payer’s £1.5m.
Similarly, Barnet had to pay £10.5m in compensation to their care home provider, Catalyst, because the contract did not cover changing circumstances.
Other local councils have encountered problems with their large scale outsourcing of services.
Somerset County Council is being sued by its private sector partner over failings resulting from a poor procurement exercise. Cornwall halted their £300m outsourcing of customer care and back office functions - removing their Conservative Leader of the Council in the process. Edinburgh Council has also stopped a major privatisation of waste services - right at the eleventh hour and after a long procurement process.
Recently, the Chief Executive of Birmingham, the largest council in the country wrote that traditional large scale outsourcing "does not cut the mustard" for local government any more. Birmingham have had their own issues with major outsourcing projects.
Barnet are proceeding regardless.
Cllr Cornelius has pledged his unwavering political support to the One Barnet projects, and at this weeks Extraordinary Council meeting I put forward a vote of no confidence in the Leader for his stewardship of the project.
We know that there is cross-party concern about One Barnet because of all the reasons given above. We gave those Conservative councillors who are privately expressing concerns about 'One Barnet' an opportunity to vote for a motion to simply delay these two contracts while we all scrutinise the proposals in an open and transparent way.
They did not vote for this much needed pause.
We now have until 6 December before the first contract is awarded, and there are still things that you can do.
- Please sign the petition.
- Email your local MP about the project using our lobby tool
- Email your local Councillor about the Project using out lobby tool
- Join our ThunderClap about One Barnet on December 6th.
Promote the Campaign
- Please join our campaign..
- Come along to the BAPs 'One Barnet' Question Time on 8th November to challenge the Leader of the Council.
- Come along to the Cabinet meeting on 6 December to watch or ask a question.
Watch this video produced by the Barnet Alliance for Public Services. A very clear and concise explanation:
Help us try to call a halt to this in the name of a Better Barnet for all.
Cllr Alison Moore