Monday, 17 December 2012

Why the Barnet 10 chose Capita


Why the BARNET 10 chose Capita

Why have 10 Tory Councillors (aka the Barnet 10), the only members of the Council to decide Barnet's future, chosen to swell the coffers of massive private company, Capita, rather than look after the interests of the residents and businesses of Barnet? Where does their loyalty lie? 

The Barnet 10, who make up the Council Cabinet, flaunt the fact that none of them have read the lengthy contract which awards the outsourcing of most of the Council's services to Capita for ten years with an extension clause of a further five. Capita would be running these services far from Barnet with contact through a call centre in Blackburn, Lancs, that could end up being anywhere in the world together with our "local" services. Capita's motivation: financial profit.

But we are assured there is no need for concern. Tory Leader of the Council, and one of the 10, Richard Cornelius, explained that just like the transaction of buying or selling a home, neither party needs to know all the details of the contract as they are being advised by experts.

Who are these experts on whose judgement the Barnet 10 have put their trust?

There is legal firm Trowers & Hamlin. According to Tory Cllr Hugh Rayner, the contract can be interpreted however you choose, depending on which side you're on. But if this is so, any decent lawyer would advise that ambiguity is certain to cause problems at times of dispute.  

And then there are the madly expensive firms of consultants, 
Agilisys and iMPOWER, costing taxpayers millions of pounds; one million in October alone. It is clear from the philosophy that appears on iMPOWER's website why the Barnet 10 chose outsourcing and never considered an in-house alternative, or any alternative for that matter.

"If councils can change their relationship with citizens and customers, they have a far bigger chance of delivering to a smaller financial envelope without ‘cutting’ in the conventional way. But citizen behaviour is only one half of the solution – councils and their staff need to change as well. So our approach quite deliberately starts at a service level. We don’t subscribe to the idea that mass consolidation of back office services creates major efficiency – these support services only account for about 10% of a council’s cost. We focus on the 90% that is in services and in winning hearts and minds for change at this level." (iMPOWER website).

It is a case of asking the advice of someone you know will give you the answer you want to hear, and paying whatever it costs to get it. And third are the home-grown Council officers. On the advice of these three sources, the Barnet 10 have made their decision to approve the first stage of the privatization scheme and to award it to Capita.

You might think that an essential way to assess the merits of the Capita deal which will move jobs and services out of Barnet to distant locations with no realistic guarantee of the savings "promised" in the contract, is to compare it with an in-house option to see which is more advantageous. But no comparison of any kind has ever been made.

With the future of Barnet at stake, you'd expect advice to be based on evidence of Capita's conduct and performance records. It has to be assumed that the advisers did their research. Capita's history is well-documented on public record. So it is hard to understand how Capita's performance could possibly be regarded as acceptable, let alone desirable. Barnet is about to be tied into ten years of privatization without an exit clause, without a safety net, and alarmingly without a mandate. If anything goes wrong it will be the residents and businesses of Barnet who will suffer when they are left without services, Council staff and a massive hole in their finances. The Barnet 10 has received their advice and has acted upon it, so the following information must have been available to them when they decided to choose Capita as their preferred contractor.

1. Capita's record of running local government services, e.g. Birmingham,  Southampton, Sefton, Lambeth and Harrow.

  • Lambeth: "Capita was in charge of housing and council tax services in Lambeth between 1997 and 2001, but Capita was sacked by Lambeth Council after bringing the south London Borough's housing benefit service to near collapse, with tens of thousands of unprocessed claims leaving many families in danger of eviction.
    "Lambeth Council dumped Capita following a scathing Benefit Fraud Inspectorate three years into a seven year contract. The council's threat to sue Capita for up to £18 million has been dropped so the service can be brought back in-house more quickly"

    • Birmingham controversies include the relocation of skilled local jobs to India,[2] [3]complaints of "unfair" choice of Capita for library contract[4] and this year £1 billion outsourcing "falling short".[5]
    • Southampton: Just substitute the word 'Barnet' for 'Southampton' in this link.[6] The Council's initial euphoria is followed by a condemning report of the failure of Capita to run Southampton's services.
    • Sefton Council were obliged to take back services from Capita after a failure to produce the savings promised.
    • Harrow Council, which outsourced it’s IT to Capita, has had a couple of significant IT failures, with “thousands of emails delayed or seemingly lost in the ether” – according to Cllr Susan Hall, Leader of Harrow Conservative Group. One piece of correspondence took the Council 89 days to respond to. And that was just to acknowledge it, not to answer any questions.[8]

    2.  Capita has been ditched by various government  departments.
    • Home Office: On October 2012 'The Times' reported that the Home Office had terminated Capita's services after ten years: "Capita has lost a flagship contract to manage the Criminal Records Bureau — and some analysts believe the reason is that the company has had it too good for too long." Kevin Lapwood, at the brokers Seymour Pierce, said: “There’s a suspicion that Capita has been earning too high a margin on certain central government contracts.”[9]
    • Ministry of Justice: Only yesterday (14.12.12): "A Capita-run database offering interpretation services for cases run by the Ministry of Justice has been described as "chaos" by the Committee of Public Accounts (CPA). The criticism comes as the CPA launched an investigation into the interpretation system, which was built to provide the Ministry of Justice with a system for supplying interpreters to the justice sector. However, Rt Hon Margaret Hodge MP, Chair of the CPA, said "almost everything that could go wrong did go wrong" [10]
    • Department of Work and Pensions. Capita lost the running of back office services for the Benefits Agency.

    3. London Congestion Charge: In 2009 Capita's management of call centres for the London Congestion Charge was transferred to IBM after its first stage.[11]

    4.  IT: (See Harrow above). Computer Weekly has criticized Capita's 10-year proposal for the running of Barnet's IT service as outdated, inappropriate and expensive and suggests that there are more up-to-date methods that are far better and cheaper. [12]

    5. Financial misconduct. Capita has been fined for financial misconduct but claims that it doesn't have the money to pay.[13] [14]

    6. Staff: Capita's treatment of staff includes terminating the employment of established Council staff in favour of cheaper staff outside of the borough, moves to relocate skilled local jobs overseas and paying many employees the minimum wage of £6.11 an hour while Capita Boss Paul Pinder recently complained that he was called a "fat cat" as he "only earns £14,500 per week.  [15]

    So this is why the Barnet 10 chose Capita! Just a selection of Capita's abysmal record of outsourcing which the Barnet 10 must have known about if their advisers have done their job. So why would anyone want to touch Capita with a bargepole?  Well the Barnet 10 cannot wait. They are content to deliver the people they are there to serve into the greedy, untrustworthy, incompetent clutches of Capita. What irresistible web does Capita weave that entraps all comers so willingly?  Whatever it is, we may never know as parts of the contract are too "commercially sensitive" ever to be revealed.

    There has been no full Council vote on this, so there can be no opposition. Both Labour and Liberal Democrats oppose the scheme. The right to vote has been denied them and their objections have been ignored. But in any case, the Tories have an unbeatable majority.

    We have not been consulted and our objections have not been heard, but we can exercise the only democratic right left to us and let the Barnet 10 know whether or not we are happy with their choice of handing over Barnet's services and jobs to Capita by using our vote in 2014. 

    If you don't know the identity of the Barnet 10, there is a list below that gives their names and the wards they represent.  

    The Barnet 10 have already started making excuses. They claim that benefits of privatization will not be apparent at first but will be incremental over the years.  

    But at least we now know that they chose Capita in full knowledge that their decision could ruin Barnet for the foreseeable future with no care for the consequences to us, its people.



    Richard Cornelius

    Daniel Thomas
    Finchley Church End
    Andrew  Harper
    Garden Suburb

    David Longstaff
    High Barnet
    Sachin Rajput

    Joanna Tambourides
    former East Barnet

    Dean Cohen
    Golders Green
    Tom Davey
    Helena Hart

    Robert Rams
    former East Barnet

    ·       Consultants: 
    iMpower, 14  Clerkenwell Close, Clerkenwell,London, EC1R 0AN Tel: 020 7017 8030;
    Agilisys, 6-28 Hammersmith Grove, London W6 7AW Tel: 0845 450 1131

    ·       Legal advisers:
    Trowers & Hamlins, London Head Office: 3 Bunhill Row, London, EC1Y 8YZ Tel: 020 7423 8000;

    ·       Officers of Barnet Council

    ·      Initiator of 'One Barnet' (Easy Council): Mike Freer, MP

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