Questions on the Development and Regulatory Services (DRS) proposals

Tomorrow at 7pm in the Town Hall, the Budget & Performance Overview & Scrutiny Committee meets to scrutinise the 'One Barnet' proposal to outsource the council's development and regulatory services (DRS) to a Joint Venture company with preferred bidder Capita.
Labour councillors have submitted a series of questions about the proposals detailed below.  DRS includes vital frontline services like planning, licensing, environmental health, trading standards, housing strategy, regeneration, land charges, building control, highways and cemetery and crematorium.

Residents themselves have also submitted nearly a hundred questions to the committee, and we want to make sure that their concerns about the proposed change in service provision are robustly answered.
Come along to the meeting to hear about the future of your local services. 

Questions on the DRS proposals submitted by Cllr Alison Moore  

1. On page four of the Executive Summary it states under ‘Financial Benefits “£39.1m over 10 years guaranteed, derived from a mixture of cost savings and income growth”

How is the council to receive the benefit ie.  what is the profile of payments  ( regularly  and/ or  reconciliation at the end of the contract ) ?

Is there a minimum business volume?

Is the council’s element of the financial cashable benefit to be provided by the joint venture (JV) company? If so, what is the overall benefit target for the JV company?


2. On Page 4 - "Commercial highlights" - 'Large potential for further benefits '

Please define what ‘large’ means and has Cabinet been provided with any evidence that there are other authorities keen to buy into the Barnet approach?


3. On Page 5 - "Contract savings" – it says £39.1m benefit is split £5.3m cost savings, £33.8m NET income growth.  Therefore circa 86% of benefit to be provided by growth,  with a relatively small proportion coming from savings. This appears to present a higher  risk  - how has this been assessed? .

Contract savings are guaranteed, but if growth isn’t achieved then does this equate to more cost savings required, if so, how? 

What is the risk of CSL pulling out or renegotiating part or all of the agreement (as happened with the street lighting PFI contract) if income growth fails to meet the projection?


4. On Page 5 – “Additional financial benefits”.

·         What are ‘the .additional commercial proposals’?

·         How can CSL guarantee ‘…further financial benefits of several million pounds.’  and how will these be detailed ?


5. On Page 6 - "Benefits for residents" in reference to online reporting systems

If it is easier to report online, more people will do it - is the funding available to meet raised customer expectations, or  is there a danger that this will this lead to customer dissatisfaction?

Significant numbers of residents and customers have protected characteristics (18% are 60+, 12% with disabilities and 36% black & ethnic minority groups).

How are the proposed new customer engagement processes able to maintain access for these people and others who have a preferred method of contact? 


6. On Page 6 - “Benefits for Members” – ‘single point of contact’

This proposes that member contact will only be through a dedicated team. Will elected Members continue to have direct access to frontline staff (ie. if there is a highways problem eg. a pothole)?

Will the councillor be able to speak directly to someone in Highways as currently happens?


7. On Page 7 - Option of terminating the procurement process … ‘The council does not currently have sufficient capacity or expertise to guarantee that all of this can be achieved concurrently.’

The business case suggests that terminating the procurement process or reducing the scope (eg. maintaining some services in-house) is not an acceptable option for legal reasons and/or the costs of compensating tenderers. If this is so, the Project Board have left elected Members with no alternative choice but to proceed and, if so, how can Cabinet satisfy themselves that this is the best choice for Barnet? 


8. On Page 8 - ‘The indications from Government are that further reductions will be made until at least 2017/18, extending the current period of austerity to the end of the decade’ and further on in the report it states “A large proportion of this cost is recovered from fees for services, such as planning applications, and from third parties, such as development partners.’

How can Cabinet be assured that the impact of these cuts on future clients will not present a high level of risk to the business plan?



9. On Page 12 - “Why make use of joint venture instead of a strategic partnership?” – ‘The key feature that emerged during dialogue was the commercial potential that the bidders saw in the DRS services and their ability to provide these services for other Authorities’.

Firstly, can you confirmation that commercial potential is “the key feature” of the deal?

Secondly, what does the reference to “commercial potential” mean for people living in Barnet? Will there be increases in fees and charges which will  impact significantly on local residents , especially as the business case recognises that we are in a period of austerity when there is little generic growth  predicted ?

Thirdly, there is a clear intention to trade with other authorities. Will this take work and expertise away from Barnet? In the absence of any JV fee details for non-Barnet work, what will be the financial benefit to the council of work outside Barnet?


10. On Page 14 reference made to - veto on incentives –

Is the £150k level in relation to the bonus value, or the total remuneration for the individual?


11. On page 25 - “Joint Employment”

The council sees this as the way of getting around the issue of non-delegable functions/duties.  Although this has been “dialogued” with bidders (and reference to a drafting insert provided by the council’s legal team), there is no reference to seeking legal opinion on this proposal,  can we have confirmation that this has one been obtained?

Has the council been advised on the  level of risk of legal challenge on decisions made by joint employees?

Particularly relevant would be how issues around conflict of interest/whistleblowing would be addressed eg. a JV/council employee who would be entitled to incentives (financial) may not feel inclined to blow the whistle on inappropriate/unlawful activity by the JV company.

What happens when the non-delegable functions conflict with the business interests of the JV company?

What would happen to the JV if the law is changed and non-delegable duties can only be performed by wholly employed council staff? 

Additionally, what arrangements would be made for those duties in the case of services being performed for another local authority and would Barnet bear any risk as the lead authority?


12. On Page 38 - ‘Table 8.2 Income growth areas – Hendon Cemetery & Crematorium - Pre-purchased graves, Extending opening hours, Additional cremation activities.’

Where is the innovation in this, why can’t the council do this now anyway?

Why would there be income growth from people pre-purchasing graves, surely this is a re-scheduling of income?

Extended opening hours/additional cremation activities presumably depend on an increase in the number of people dying –  how has the business case factored in  Barnet’s demographic trends (people living longer/increase in younger population)  and is this offset by projected population growth ?

What is the risk of competition from other boroughs and/or (new) private operators?


13. On Page 38 - ‘Table 8.2 Income growth areas – Highways - Streetworks management (coring), highways advertising.’

Why isn’t the council doing this already?

Can further details be provided regarding the issue of ‘Highway Advertising’ as there is an existing long term,roadside advertising contract with JC Decaux and large areas of the borough have controls on advertising?

Will the JV planning staff have a conflict of interest in considering advertising consent for “highway advertising” as there will be a financial benefit to the JV if consent is given?


14. On Page 51 - “Table 10.1 Dependencies list – Approval of commercial proposals” - ‘Some may involve offering new services or changes to fee levels of fee structures that may need more in depth consideration.’

Can more information be provided e.g. by how much would fees/charges possibly be changed?

What would happen if elected Members do not approve any changes?

How would this impact on the guaranteed financial benefit?


15. On Page 53 -“12.2 Intelligent Client and Contract Management”

The whole section is rather limited  and provides inadequate explanation as to how the contract will be managed for the benefit of the community and  in  compliance  with all legislation and good practice. The number of staff involved in the management of the DRS contract is not detailed, other than being part of the work of multi-functional teams.

How will the  " client  " gain the intelligence and information in order that  the contractor’s performance can be adequately monitored?


Cllr Arjun Mittra - submitted questions on DRS to Budget & Performance:

1) What action will be taken to mitigate against residents with protected characteristics being unable to access web based services?
2) What use is improved data collection for concerns about potholes if there is nothing that can apparently be done to mitigate against these concerns?
3) To whom does responsibility for the provisions within the contract fall if the Council is abolished or ceases to exist?
4) If the parent company suffers financial distress, how can it provide securities, much less find funds to secure a bond?
5) If the parent company collapses, but the Joint venture is still financially robust, what will the impact be on the Joint venture?
6) Can shares in the JV be sold by either side, and does the Council have control over whom to?
7) If CSL pull out of the contract, are there financial penalties for them accruing to the Council?
8) If service levels underperform and the Council consequently reduces payments, will payments for the service areas be reduced?
9) What are the change provisions within the contract to deal with policy changes?
10) When was it first decided that the preferred option for the DRS was to undertake a joint venture?
11) When was the leader of the Council told the preferred delivery model was a JV? When did he agree to it?
12) What details are specified under 6.17, Annex 1?
13) What happens if CSL find they cannot deliver the DRS program on the funds allocated? If the Council decides they will not provide more funds, and the contract is terminated, is the fault on the part on CSL, and will Barnet Council receive compensation?
14) Are there other circumstances than above where Barnet Council will receive compensation from CSL on termination of the contract?
15) If it becomes Council policy to become a Fair Trade Council, or a Living Wage council, will the DRS JV be covered by those policies?
16) What form will the "Barnet Observatory" take?
17) Is CSL obligated to hand over a viable organisation under all circumstances, including acrimonious dispute?
18) How will CSL decide who stays as part of their organisation and who goes back to Barnet Council at the end of the contract?
19) Will all staff be dedicated to Barnet Council, or will they be shared with other JV clients?
20) Will current Barnet staff TUPE'd to CSL, who serve the duration of the 10 year contract be re-TUPE'd back at the end?
21) Why does the Council have to set up a wholly owned subsidiary?
22) Who will be on the Board of directors of the Wholly owned subsidiary?
23) Can the Wholly owned subsidiary be sold, either in part or full?
24) Who will be on the partnership board of the JV?
25) Who will be on the Directory board of the JV?
26) Is it not the case that the system that offers the greatest level of control, transparency and confidence to other potential public sector partners is the Council itself?
27) If the 2010 options appraisals saying that a JV carried a higher level of risks was wrong, and that a strategic partnership should be preferred; Is it not possible that the current recommendations are wrong, and subject to revision?
28) is there not an inherent risk that Barnet Council staff, who are public sector workers, do not wish to work in the private sector and do not feel comfortable with profit maximisation as a consideration in their work?
29) The EIP recognises staff maybe unused to touting for business, and the mitigation will be training. How does that deal with the underlying risk that some Council staff will not be comfortable with being salespeople?
30) Why does Table 3.2 state the Council has "limited commercial ability to deliver the higher levels of income that would help meet the Council's financial objectives" when most of the proposals are simply to raise fees on existing paid for services?
31) If one of the aims of the Contract is to create "a new relationship with citizens" then why have they not been consulted?
32) How is CSL making profit out of this contract?
33) What in the contract is undeliverable by an in house bid, none of which has yet been considered?
34) If members do not agree to charge and fee rises, how is that dealt with? Are CSL still guaranteed to deliver savings?
35) Why are 30 extra staff needed in year 1 only of the contract?
36) What are the cost reductions identified in Table 8.2 (Appendix 1)?
37) Why are the other 4 income increases identified in Table 8.2 (Appendix 1) undeliverable by the Council alone?
38) Why is there only a guarantee that the contract will not be signed during the Alcatel period, and not before the JR is finished in Table 9.5?
39)Why is recruitment for the commissioning board being undertaken before Councillors have had a chance to scrutinise, let alone agree the contract?
40) How will costs to customers be "minimised" under 1.2.4 (Appendix 2) when the entire project consists of fee rises?
41) Any "Profit" the JV makes is shared with CSL and subject to dividends. Can it be confirmed that that is not the case with an in house model?
42) What is the total value of the contract?
43) If there is another recession, can CSL claim it as an excuse for not delivering on business growth KPI's or are they set in stone?

Do you like this post?

Showing 2 reactions

@BetterBarnet tweeted this page. 2013-06-10 14:24:27 +0100
Better Barnet posted about Questions on the Development and Regulatory Services (DRS) proposals on Better Barnet's Facebook page 2013-06-10 14:24:27 +0100
Questions on the Development and Regulatory Services (DRS) proposals
Barnet Labour | Working hard for a Better Barnet

Donate to Barnet Labour