Update on One Barnet

Today UNISON representatives sent the following letter to the Chief Executive of Barnet Council outlining the details of what was said at their recent meeting to discuss the One Barnet Programme - in particular the 'selling-off' of 70% of council services including planning, licensing and environmental health (DRS contract), and back office services like customer care, IT, HR, finance, procurement and revenues and benefits to the private sector.

 

4 main points stand out:

1. The One Barnet Democratic deficit: There still seems to be confusion about whether the council are or are not pursuing a Joint Venture Company arrangement for the DRS contract.  The Chief Executive says it is not a firm option, the Director in charge of the services seems to be still saying it is firmly on the table.  The important point about this is that it is elected councillors from the ruling Conservative Group who are supposed to be making these decisions, but they seem to be absent from the process.

 

2. To Joint Venture or not to Joint Venture? The Chief Executive agrees that a Joint Venture company arrangement carries more risk to the council and the council tax payer than a straight outsourcing. If this really is the case (and that was precisely the case that was argued at the Options Appraisal stage of the DRS project), what are the arguments for pursuing this route so late in the process, and how will the council protect themselves and the public from this inherent risk?

 

3. Do we really need the One Barnet programme to sort out the council finances:The Chief Executive appears to have said that the council's finances are in good shape, and therefore, the letter contends, that the council does not need the One Barnet programme in order to save money.  The point here is that this completely undermines the long standing position of the elected councillors from the Conservative Group who continue to maintain that the One Barnet programme is the only way they can resolve the issue of continued cuts to local government funding.

 

4. Let's keep jobs local: The Chief Executive appears to now be in favour of retaining jobs in the Borough for the NSCSO contract.  This is something the Labour Group have been pushing for all along, but have repeatedly been met with resistance from the Conservative Group who have so far refused to make it a requirement of the contract.

 

The opposition Labour Group of councillors continue to believe that the best course of action would have been to work up a proper public sector comparator to make sure that any outsourcing that is finally pursued really does represent genuine value for money for council tax payers when compared with an in-house service.  We will be debating this, and the issue of Joint Venture companies, local jobs and the democratic deficit in our Opposition Business Item at the Full Council meeting tomorrow  evening (Tuesday 11 September) at Hendon Town Hall.  The meetings starts at 7pm, and all members of the public are welcome to attend to watch the meeting from the public gallery.

 

Cllr Alison Moore

Leader of the Barnet Labour Group & of the Opposition.

 

-----

Nick Walkley

Chief Executive London Borough of Barnet

Building 4

North London Business Park

Oakleigh Road South

London N11 1NP

 

10 September 2012

Dear Nick,

 

One Barnet

 

Thank you for meeting with colleagues and me on 22 August to explore our concerns regarding the One Barnet programme. We advised at the time that we wished to digest and consider what you had told us, and now are writing with our response.

 

Firstly, you advised us that at this stage there was no decision to go for a Joint Venture in the DRS contract, and that this would be a decision for Cabinet. The tone of the e mail to staff from Pam Wharfe was “misplaced” and would be rectified. You accepted that a JV would increase risk to the council. You spoke of the final recommendation being a question of balancing the risk of JV with the benefits, that the benefits would clearly need to outweigh those of a straight outsourcing, which you implied you thought unlikely. You confirmed that if either or both of the current bidders put forward a JV as their final proposed bid  this would have to be evaluated against a properly costed outsource proposal to be considered by the Council in January. You accepted that the setting up of a JV involved complex discussions on the structure of the company, the powers and rights of the participating bodies, its constitution, etc and that if the Council was minded to accept the JV proposal in January, separate discussions would have to take place with regard to setting it up which would require further Council approval, you thought around April. You also confirmed that should a JV be decided than the council would afford full consultation rights to UNISON regarding the employment rights of our members, and likewise afford immediate access to the successful bidder should it be a straight outsource instead.

 

Since our meeting, Pam Wharfe issued a further communication to staff on 24 August which states “the JV has developed as a progressively more attractive option following detailed discussions with bidders.  As a result the project Board recommended to Corporate Directors Group that this be formally advanced in discussions with bidders and indeed is currently our preferred option”. Please can you clarify the apparent contradiction between this communication and your clear statement to us that no decision had been taken to go for a JV, and that this would be a decision for Cabinet?

 

Pam Wharfe’s e mail continues: “Following evaluation the final option, along with the preferred bidder, will be presented as a recommendation to Cabinet in the New Year. Cabinet will then take the final decision on whether to award the contract, the preferred bidder and the joint venture approach.” If this is the case, can you please explain how the proposals will be presented to the Council in a way which enables it to make a full assessment of the risk it will be taking on by adopting a JV approach? how this will be costed and compared to a properly costed full outsource option? whether or not it will be compared to a properly costed inhouse option?

 

Can you please also confirm the assurances you gave us that were the decision to proceed with a JV be taken in principle at the January Council meeting, full discussion and negotiation would take place between the Council and the successful bidder regarding the composition, rules and governance of the JV which would be agreed by full Council? and confirm, by implication, that the actual decision to establish a JV can only be taken once this has been put before full Council and agreed by it subsequent to the January meeting?

 

Pam Wharfe’s e mail concludes with: “  It is likely that were the joint venture organisation were unsuccessful that the commercial parent company would provide further resources to the joint venture company to ensure it continues to function to service the DRS contract.  Such a situation could reduce the value of any investment by the Council in the joint venture company however the Council is only intending to invest a nominal sum (which could just be £1) and it is not obliged to provide any further assistance in the event of failure, unlike the commercial parent company which would be obliged to deliver the DRS contract.” Firstly, is this structure a viable one under the legal framework for JVs? Secondly, by what mechanism would the JV guarantee that the Council would not be required to provide further assistance in the event of failure? Thirdly, will the Council be securing guarantees from the parent company that it will not introduce increased charges to the Council or council tax payers in the event of having to underwrite failure in this way?

 

Are you familiar with the recent developments in Somerset where SW1, the JV company, has tabled legal proceedings against Somerset county Council for alleged breach of contract? Or Cornwall where the Council has voted against having a JV?

 

Finally, should Pam Wharfe’s e mail misrepresent the current position for any reason, I’m sure you are aware that they do fall under the statutory requirements of consultation with staff under TUPE. Vicky Easton will be writing to her on this matter shortly.

 

Secondly, with regard to the NSCSO contract, you accepted that significant savings will have been accrued as a consequence of the service redesign that is taking place in preparation for the introduction of a call centre framework while the service remains in house, and agreed to consider separating out these savings from any further savings being put forward by the bidders when the Council considers the bids at its meeting in November. You also confirmed that the Council is committed to maintaining jobs within the Borough and that it was your preferred option that the bidders proposed to establish a significant base within Barnet.

 

Can you advise whether or not you now agree to provide the service redesign savings as distinct when the Council considers the proposals from the bidders? If so, would you be prepared to afford the Council the option of retaining the service in house based upon consideration of the savings and a commitment from UNISON to enter into meaningful negotiations with the council with a view to delivering a high quality, cost effective in house service in the future?

 

In the event that the bidders final proposals result in significant job loss out of the Borough are you willing to recommend to the Council that neither bid should be accepted?

 

With regard to the Council’s finances, you accepted that these were very healthy and that there was no financial imperative to proceed with such radical outsourcing proposals. All bidders would be asked to make projections for a further 30% of savings in both contracts.

 

Given the high risks to the Council of awarding the DRS and NSCSO contracts to external providers would it not be wiser for the Council to terminate the One Barnet programme and replace it with a properly planned programme of in house service redesign? Were the Council to do this UNISON will give assurances that we would engage with the Council positively and constructively on such a programme, including collaborating on finding effective savings.

 

Lastly, you indicated that the LATC could provide the mechanism for rescue of failure in either of the two contracts.

 

Could you please indicate how this would work?

 

I look forward to receiving your reply on these matters.

 

Yours sincerely

 

 

LINDA PERKS

Regional Secretary – UNISON Greater London Region

 

CC:  Richard Cornelius - Leader of Barnet Council

         Alison Moore – Councillor Barnet Council

        Jack Cohen – Councillor Barnet Council

        John Burgess - UNISON Barnet LG Branch Secretary

        Helen Davies - UNISON Barnet LG Branch Chair

        Laura Butterfield - UNISON Regional Organiser

        Vicky Easton – UNISON Regional Manager

        Andy Mudd - APSE

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Update on One Barnet http://t.co/JqboY8eh via @BetterBarnet
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