Monday, 25 November 2013

Mike Freer: your actions show who you are - an occupation in the heartland of Thatcherism


*Updated Tuesday, see below

The story of the occupation of the People's Library, in many ways, perhaps, marked a turning point in the battle of Broken Barnet: the battle won, but not the war, and hostilities continue, of course. 

And the psychic fault line that runs through this borough, acting as a portal to some other world of extraordinary happenings. never ceases to shift and to gape ever wider, and release a series of events that ensure the continuation of this never-ending story.

After the library was returned to the community, occupier Phoenix and his friends moved on: but not very far, or for very long. They turned their attentions to the empty premises of the much loved former Bohemia pub in North Finchley, that dangerous spot, just opposite Cafe Buzz, run by Brian Coleman's nemesis, Helen Michael. 

It is in that most potent and unstable stretch of the High Road where man of the street Horace would sit, with his suitcase, his drawing pad and his crayons, and wish passers by 'the very best of luck'. 

It is in the same stretch of the street where Mrs Angry was walking when she heard our former MP and PM Margaret Thatcher had died: a departure unmourned by her former constituents, marked by a feeble offering of two sparse bouquets left outside the Finchley Tory office just down the road.

The Bohemia had closed down overnight, one night in the summer, despite doing a roaring trade, and having become the focus of the local community. 

The occupiers wanted to return the pub to that community, as well as continue to highlight the issue which is their own abiding belief: that shelter is a human right, and that the increasing level of homelessness in this country is completely unjustifiable when so many usable premises lie vacant and unused.

The new tenants of the Bohemia settled in and opened their doors to local residents, encouraging the use of the premises once more for local groups, meetings and entertainment, including a memorable night of cabaret, with Phoenix playing the part of master of ceremonies, besplendent in gold lame frockcoat, his bleached dreadlocks stuffed into a top hat, between acts like music critic Charles Shaar Murray, playing blues on a slide guitar, and spitting out his brilliant poem 'Dylan in 66', and more poetry from the poet Anna Chen, also known as blogger Madame Miaow. North Finchley, you can be sure, had seen nothing like it before.



Life is a cabaret, old chum, in Broken Barnet. 

As in any period of political repression, in this borough, where the official view of culture is that it has no place here, where libraries are only potential property developments, and museums closed, and the contents declared to be of no value, and flogged at auction, and where Tory councillors tell you to get on the tube in search of the arts while cutting funding to local projects: a clear sign of resistance is the appearance of such spontaneous, uncontrollable forms of expression. But like all such movements in a time of civil unrest, the authorities must have the last word, and the occupation ended one cold night, with bailiffs breaking down the door, accompanied by dogs - and the police.

You might have thought that was the end of this story: but the next event has brought matters to yet another level. From a community activism, to cabaret, and now to politics - the natural course of any uprising, perhaps.

Because last week we heard that the occupiers were back: in a new location, but still in Finchley. They had moved into an empty church, formerly a meeting place for the Plymouth Brethren, and now used once a week by a group of local Sufis. And it is right across the road from ... the local Tory offices, once the constituency HQ of Margaret Thatcher, now serving the same function on behalf of MP Mike Freer.


Ah. MP Mike Freer. As well as being the visionary genius who came up with the easycouncil idea which has now sold this borough and our local services into ten year bondage to Capita, Mr Freer is the proud father of the bill which criminalised squatting in residential premises, moved by the plight of the hugely wealthy homeowners of local Tory stronghold Hampstead Garden Suburb, as reported in the Standard in March 2011:

MP Mike Freer says some homeowners are so concerned by the "epidemic" of occupations that they are considering whether to take family breaks this summer.

He added: "Constituents are wary of going away for three-week holidays. They are worried that they may come back to find their home occupied.

"People have bought these large, expensive properties and the law needs to be changed to give them peace of mind."

At the time, there was much outrage expressed by local Tory politicians, especially Mr Freer, over the ocupation of the £10 million house owned by a Mr Saif Al Gaddafi, formerly of Garden Suburb, Tripoli, and now detained by militia in Zintan, Libya, awaiting trial on security charges, but apparently avoiding indictment on other charges relating to alleged war crimes. Mr Gaddafi's house was occupied by Libyans protesting about the dictatorship - their stance was inevitably portrayed as anti-social behaviour rather than a political statement, of course.


You might be wondering what Mr Freer does on behalf of the rather less fortunate constituents of Finchley and Golders Green. Is he fighting, for example, to protect local health care from the ravages of the new 'reforms'? Is he heck as like. 

Mr Freer is gushing in his support for government policy on health, and describes talk of the privatisation of the NHS as 'tosh'. He does not want us to know the unpublished risks associated with these reforms. He says those who press for this information to be put in the public domain are 'shroud waving'. 

What about those residents affected by the bedroom tax? Any support from their MP?

Nope, sorry: in the housing benefit debate on 12th November, he complained that everything was the fault of Labour:

They created the perfect storm of insufficient house building, record overcrowding and housing benefit out of control.

This is rich coming from the man who was  Leader of Barnet Council, at a time when it had the longest housing list in the country, at the same time as boasting of the success of selling off so many council houses. Barnet is only now daring to build an astonishing number of three new council homes, the first in the borough for over twenty years.

Mr Freer, who owns two properties in Finchley, one house in the the south west of France, and enjoys half ownership of another in Scotland,  does not explain where the poorest and most vulnerable of his constituents now living in social housing, deemed to have one bedroom too many, should move to, if they cannot afford the Tory tax on poverty.

What exactly does our MP do on behalf of us, in parliament? As recorded on the 'They work for you' website, Freer's interests, according to Hansard are:

Billing, Departmental Billing, Press: Subscriptions, Sick Leave, Mobile Phones

For some reason, Mr Freer asks question after question about these subjects, to each government department in turn, fretting over the cost of paper invoicing, and hard copy newspapers. Mrs Angry wonders if by any chance he knows of any alternative form of IT based solution that might be used instead, and if so, could he come right out and tell us all, and concentrate on matters of more immediate interest to his constituents?


In the meanwhile: on Friday, his new neighbours in Ballards Lane moved across the road to the forecourt of the Conservative Association offices, and set up camp, with a couple of tents, and some pithily worded posters, aimed at raising the issues of squatting and homelessness.


 As the occupiers press release explained:

Mike Freer, co architect of the anti-squatting law is our next door neighbour! 

We challenge you, Mr. Freer, to sleep out in the cold with us for a night, while the local homeless who we will invite into the warm building watch us from within. 


We can assure you that this will make you understand the reality and flip the switch in your brain which prevents you from feeling compassion for brothers and sisters! 

Or else you can use your political influence to force us out of here into the frost. 


If you are ready to make laws, be prepared for the consequences. With power comes responsibility.

'Woe to those who make unjust laws, to those who issue oppressive decrees, to deprive the poor of their rights'
                                                                                                                                                                                        Isaiah 10:12 


Mr Freer declined the invitation, as you might imagine. The occupiers are still there, in the cold, camped in front of the room that serves as a shrine to Margaret Thatcher. 



Thatcher is dead, but there is really no need for a £15 million museum - her memory  lives on in the sociopathically charged policies of Barnet's Tory councillors, who prefer, for example, to continue to cut council tax at the same time as announcing cuts in vital services to the poor, the sick, and the dispossessed residents of this borough.

Our MPs sit back and say nothing, do nothing, in their defence, intent on furthering their own political ambitions at the expense of the more pressing concerns of those they represent. 


In the debate on benefit 'reform' Mike Freer told the house his support for the bill was based on his own upbringing, which appears, in this version of his early life anyway, to have taken place in a brown paper bag, Python style, between the wars, or possibly the nineteenth century:

I would never be rude to you, Madam Deputy Speaker, as you well know, but I feel passionately about this. I was raised in a two-up, two-down, with no outside toilet—[Interruption]—with an outside toilet and no inside bathroom. Opposition Members might laugh, but I know what it is like to live in poor accommodation and I do not need lectures from them about what it is like to live in poor accommodation. The Conservative party is the party of aspiration; it is the party that is solving the mess; and I will vote for the amendment.

Of course in this pre-election interview in the Guardian Mr Easycouncil admitted he had spent part of his childhood in a council home, which his parents bought under Margaret Thatcher's right to buy scheme. He thought then that all social housing tenants wanted a similar 'housing journey'. 

Thing is, Mike, you can't even think of travelling anywhere on this journey if you have no social housing left to allocate, and if the poorest of all are finding themselves without any roof over their heads, or are thrown out of their homes when they cannot pay their bedroom tax.

My own mother, between the wars, really did live in the worst poverty, a family of ten, at one point, before her brother and sister died as a result of illness caused by their appalling living conditions, living in a two up two down hovel, in one of those mining areas where your heroine later launched her worst policies of attrition against the working people of this country. And my mother's journey out of poverty was made possible not by Tory style aspiration, but by the efforts of union campaigning for a decent wage, and decent working conditions, and by the policies of a Labour government, the creation of a welfare state, the NHS, fair access to education. 

It's not greed which drags people out of poverty, and protects them from falling into a spiral of need and even homelessness: it's the right sort of support, and compassion from others.

Everything, in short, you cannot expect to find in the political philosophy of the Conservative successors of the woman whose malevolent legacy is embedded, like a genetic fault, in the dna of everything that is wrong in the blackhearted policies of the coalition government, and in the mindless, merciless governance of Broken Barnet.


Updated Tuesday:

The story of the occupation of Margaret Thatcher House has begun to attract attention beyond the boundaries of Broken Barnet, with stories in the Standard and the Guardian , and local BBC news.

Mike Freer, it should be noted, is putting a new spin on his reasons for promoting the anti-squatting bill: 

 “I supported the criminalisation of squatting because it was a big problem in my constituency. I don’t think it was right that hard working families that have saved would come home from holiday or having a house refurbished and would find someone else living in it.

Rather a different pitch to the quote given above, you will note: Mr Freer has changed the story from worrying about the peace of mind of the multi millionaire residents of Hampstead Garden Suburb returning from their three week holidays to their 'large expensive properties' to 'hard working families' - clearly not Mr and Mrs Gaddafi, then, or oil rich overseas royalty, or even Tory party donors whose fabulous family fortunes are founded on arms dealing, but ordinary folk, like you, or me.

Mrs Angry looks forward to hearing further details of the 'big problem' of squatting that has existed in this area, and is confident Mr Freer is able to provide the evidence for this.

The occupiers want only for Mr Freer to accept their invitation to join them for one night, sleeping in the cold, and to experience what it is like for the increasing number of homeless people who have no home, no shelter, and whose numbers are set to increase further this winter as the impact of government welfare cuts makes its impact. Their view is that the effect of his bill, which criminalises the act of squatting in any empty, unused residential property, is unfair, and punishing those who have nowhere else to go. 

The Finchley MP would appear to becoming deeply uncomfortable at the unwelcome publicity that the occupiers have provoked, and the local Times paper reports now that he has told his new neighbours:

 "I appreciate you feel your point is important, but I must stress that I am trying to deal with constituents who are facing urgent medical issues and child protection issues to name but two.  “My constituents are being deterred from calling at my office.  Having made your point through your protest, I now politely ask you to stop."

In fact such claims are nonsense: Freer's Sooty and Sweep style camper van, his mobile surgery, has been happily parked at the back of the office all throughout the last few days and could easily be accessed as normal throughout all this time. The occupiers are in no way agressive, or intimidating, but very charming, reasonable and courteous. And the truth is that he appears to have given them a licence to remain on the forecourt quite legally, but now resents the embarrassing reminder displayed outside the Tory HQ of the consequences of his own actions. 

So be it. 

A message for our elected representatives:

Tuesday, 19 November 2013

The Capita £16.1 million payout: Mrs Angry misunderstands - twice

Tory councillor Tom Davey listens attentively to Chris Naylor's explanation of the £16.1 million payout to Capita, at a recent meeting


As readers will know, there has been a certain amount of controversy in recent weeks over the small matter of Barnet's enormous 'customer service' contract with Capita, and the revelation of a payment of £16.1 million to Capita for a sum of capital investment which the Tory council has always claimed would be an 'upfront' payment by  ... Capita. 

Barnet bloggers made a joint demand for an investigation of this matter, and on 5th November, Mrs Angry also made a formal complaint to the authority:

Dear Mr Naylor

I am writing to you in your capacity as Section 151 officer of the London Borough of Barnet, to make a formal complaint about the actions of the authority in the matter of the capital investment for the NSCSO contract with Capita Plc.

I believe that officers and members of the authority, at the very least, may have acted in breach of the council's own Code of Corporate Governance, Principle 4, 'Taking informed and transparent decisions which are subject to effective scrutiny and managing risk', and that there has been a further breach of the constitution rules regarding key decisions, as explained below.

Statements by the leader of the council, the Cabinet, the senior management team, press releases made by the authority and information on the council website, have consistently maintained, and in the latter case continue to maintain, that Capita would make a large capital investment 'upfront' in the course of the NSCSO contract.

The necessity of this investment by a private sector partner was given as the reason why the authority dismissed out of hand any consideration of an in-house option as an alternative to privatisation of council services.

If an in-house option had been adopted, not only would many local jobs have been saved, all efficiencies made through better management of such functions as procurement would have been retained by the authority, as opposed to a limited amount capped in the contractual agreement with Capita. By ignoring this option, I believe that the statutory duty of the authority to make the best use of taxpayers' money has been breached.

Not only have the leadership, Conservative members and senior management team of Barnet Council promoted the need for privatisation, and the contract with Capita, on a totally false premise, they have continued to mislead residents by misrepresenting the facts, and maintaining that capital investment is to be given by the company, rather than admitting that money has been taken from the authority's reserves and paid to Capita for this purpose.

After the 6th December decision to approve the contract with Capita, Councillor Cornelius made this claim in statement published on the BBC London news website

Council leader Richard Cornelius said the combination of a saving to the taxpayer of a million pounds a month and an £8m investment in technology by Capita made it a "very, very good deal for the Barnet taxpayer".


This deception has continued even after the payment £16.1 million has been formally approved by the Leader of the council..

The business model approved by Cabinet on 6th December 2012 stated clearly that this investment was to come from Capita: how can it be lawful, therefore, that having approved the contract on this basis, we now find the reverse is true, and taxpayers are paying for the investment?

If there is any financial argument for such a fundamental change, why has the authority not been open and transparent about this new agreement, and sought approval through the appropriate procedures?

The approval to add £16.1 million to the capital programme in order to pay for the capital investment was made on 5th August this year by Councillor Richard Cornelius, in an action defined as a 'non key' decision.

http://barnet.moderngov.co.uk/ieDecisionDetails.aspx?ID=4903

According to the council's own constitution, key decisions are those that are 'significant in financial terms or in their effect on communities comprising two or more wards'. Quite clearly the decision to remove £16.1 million from reserve funds in this way most certainly is a key decision, and departs in the most fundamental way from the business model approved in December.

Quite incredibly, on 6th August, the day on which the contracts were signed, and the very next day after the leader signed off the £16.1 million to cover the capital investment, Barnet Council issued a press release http://www.barnet.gov.uk/news/article/346/barnet_council_and_capita_sign_contracts_to_save_barnet_taxpayer_millions in which it is stated:

"Capita will also make an £8 million pound investment in technology to improve council back office services".

What is that statement, other than a deliberate misrepresentation of an unpalatable truth?

I should point out that the explanation of the NSCSO on the council's own website, updated after 5th August, continues to maintain falsely that an upfront investment will come from Capita: see here -

http://www.barnet.gov.uk/info/930354/new_support_and_customer_services_organisation_nscso/990/new_support_and_customer_services_organisation_nscso

Capita will make an upfront investment which will provide improved Information Technology and telephone support to improve council back office services.

In regard to the approval of 5th August, the constitution says:

When key decisions are to be discussed or made, notification is published at least 28 days before. If these decisions are to be discussed with council officers at a meeting of the Executive, this will generally be open for the public to attend, except where personal or confidential matters are being discussed. The Executive has to make decisions that are in line with the Council’s overall policies and budget. If it wishes to make a decision that is outside the budget or policy framework, this must be referred to the full Council to decide.


Unless the change of policy, and a radical change to the terms of the business model represented by the decision to use reserve funds for a capital investment payment to Capita has been formally agreed through the relevant constitutional procedures, therefore, it is reasonable to conclude that the payment is unlawful, and as a resident and taxpayer in Barnet I object in the strongest terms to what would appear to be a serious breach of the regulations that are supposed to protect our best interests, and I ask you to instigate an immediate investigation into the issues I have raised.

Yours sincerely,


Mrs Angry

The Barnet bloggers have already published the response to the joint letter, but Mrs Angry received her own version, in reply to her own complaint:

Dear Mrs Angry,

I refer to your email of Tuesday 5th November which amongst other things invites me to investigate: payments to Capita; whether the nature of these payments changes the veracity of the original the outsourcing business case; and whether there has been a breach of the Council’s constitution in relation to payments to Capita. I have looked at these matters and my response is set out below.


Payments to Capita


You assert that Capita is no longer making the investment in the Council’s IT infrastructure, but instead that the investment is coming from Council Reserves. You consider this to be: contrary to the business model approved by cabinet in December 2012 and contrary to public pronouncements about the benefits of the contract. I can assure you that none of these assertions are correct.

  • The business model agreed by Cabinet established that the Council would pay Capita £320m over the coming 10 years. In simple terms, for this sum the Council:achieves a very considerable saving on the prevailing cost of the CSG services -£320m over ten years compared to the in-house cost of £390m
  •  receives investment of £16.1million in IT and other necessary back office infrastructurereceives service performance equal to or better than that currently delivered by the Council.
The overall business model remains unchanged.

Payments of the agreed £320m to Capita have been profiled over the ten year contract to maximise savings and service improvements to the Council. In particular, in the first year of the contract, to reduce the cost of capital in Capita’s contract price £16.1m of the overall £320m has been paid on contract award. This is not an additional contribution, it is within the £320m contract sum. Doing so has saved the Council – not Capita – an additional £0.8m. This sum contributed to the additional savings set out in section 9.4 of the published public cabinet report of November 4th .


For the avoidance of doubt, the profile of payments to Capita have had:

  •  No impact on the Council’s reserves. The investments referred to in the business model continue to be made from within the £320m agreed contract sum. Council Reserves have therefore not been used to fund the investment. Reserves have not gone down by £16.1 million. Tax payers are not now paying for something that they thought was being paid for from the contract price and Capita aren’t receiving additional amounts
of investment from the Council. In fact as a result of the profiling of payments, tax payers benefit from additional savings.
  •  No impact on the Council’s balance sheet. The IT and other infrastructure assets that Capita will be purchasing will be recognised as capital assets on the Council’s balance sheet. This is the correct accounting treatment for the assets in these circumstances. It is for this reason and this reason only that the intended purchase of IT and other infrastructure assets by Capita are captured in the Council’s Capital Programme.

I would add, that at any given point in time the Council holds cash balances in the region of £200m as reported publicly at Cabinet (and also publicly to full Council – in the annual treasury management strategy. The Council finds it necessary to place cash in the order of £50m on overnight deposit often generating no or very little return. This is a function of the paucity of investment opportunities that meet the Council’s stringent investment criteria. In this context, the front loading of the cash-flow of the £320m to release savings of £0.8m makes commercial sense and is in keeping with other routine treasury management decisions that are periodically made regarding the stewardship of the Council’s investment portfolio. As set out in the Council’s publicly published financial regulations these stewardship decisions are delegated to officers and quarterly treasury management reports are monitored by Committee, in public.


Impact on the original business case


The original business case set out that one of the benefits of an outsourced option would be that a private sector partner could afford to include capital investment in their overall bid price in a manner that the Council, acting alone could not. For the reasons set out above, this is exactly what has been achieved and it is what is happening. To suggest otherwise is misleading.


I’m afraid I don’t recognise your point about capped procurement savings. The contract (published here commits Capita to guarantee the procurement savings already identified by officers in the medium term financial plan. The contract includes a payment by results provision for procurement savings that are identified and delivered by Capita over and above this guarantee – where this is agreed in advance by the Council as the most commercially sensible way to proceed. The contract does not bind the Council to use Capita to deliver procurement savings. Accordingly, in the future, we can make a case by case judgement based on what is most commercially opportune for the Council.


Compliance with the Council’s constitution


I’m afraid that you have misunderstood the purpose of the leader DPR on the 5th August 2013. Its purpose was to authorise the inclusion of Capita’s investment in IT and other infrastructure assets into the Councils capital programme. In this regard we are bound by a range of technical accounting standards. In summary, if assets are to be used by the Council, irrespective of who has paid for them or who controls their day to day use (in this instance Capita) then those assets need to be recorded on the Council’s balance sheet. In order for them to be included in the Council’s balance sheet, they first need to appear in the Council’s capital programme.


I would draw your attention to paragraphs 5.2, 5.3 and 5.4 and the report recommendation at paragraph 10.1. of the publicly published report.


Very clearly, this DPR does not concern itself with ‘the authorisation of a payment to capita’ or the ‘approval of a payment to capita’ or as you put it in your email to me “….after the leader signed off the £16.1m to cover the capital investment”. The DPR had nothing what so ever to do with authorising any payment to capita, it was simply a technical enabling decision to include Capita’s forthcoming investment into our capital programme. Evidently this needed to take place before the contract was signed, but after the judicial review outcome was known which was why it was agreed when it was.


There would have been no point including Capita’s investment in the Council’s Capital Programme while ever that eventuality was in doubt.


The key decision to pay Capita £320m (inclusive of the £16.1m) was made in the appropriate way by Cabinet on the 6th December 2012. It is quite wrong to misrepresent the 5th August 2013 DPR as decision to authorise any payment to Capita, because it was not. It’s a red-herring to connect the DPR of 5th August 2013 with decisions about payments to Capita.


In summary, contrary to your assertion, there has been no change in policy, and no radical change to the terms of the business model agreed by Cabinet on 6th December 2012. Likewise, there has been no decision to use reserve funds for a capital investment payment to Capita other than that set out in the agreed £320m contract sum agreed by Cabinet on 6th December 2012. As all payments to Capita have fallen within the contract price agreed by cabinet I cannot conclude that there has been any breach of council regulations.


I would be very happy to meet with you to discuss the contents of this letter in more detail.
In the spirit of openness and transparency, and given that you have written extensively about these matters on your popular blog, please could I ask you to publish my response to your letter in full.


Yours sincerely


Chris Naylor


Chief Operating Officer


Mrs Angry replied in full yesterday: as Mr Naylor appears to be copying all her correspondance to our elected representatives, she has returned the favour, for their entertainment and education.

Dear Mr Naylor

Thank you for your response to my complaint of 5th November.

I am afraid that I do not believe that the very serious issues I have raised have been addressed, and I wish to continue to pursue this complaint for the following reasons:

In response to my assertion that the £16.1 million transaction was contrary to the business model approved by cabinet in December 2012 and contrary to public pronouncements about the benefits of the contract, you claim that the 'overall' business model is unchanged.

If you wish to maintain that the 'overall' business model is unchanged, this is an admission that there have been other changes within the framework of the agreement. It is a matter of argument and interpretation as to how significant those changes were.

It is impossible to see how the council paying £16.1 million as part, you claim, of the agreed sum of £320 million can possibly be presented as the council receiving investment of £16.1 million, even if this was indeed what was the understanding at the time of approval by Cabinet in December.

You state: in the first year of the contract, to reduce the cost of capital in Capita’s contract price £16.1m of the overall £320m has been paid on contract award. Paid by whom, Mr Naylor, and to whom? Have you not said this is not a payment by the council?

You claim that by doing so, this has saved the council an additional £0.8 million.

Additional to what? And when was this additional benefit agreed? Why was this 'saving' and the process for achieving it not identified earlier, and openly, as part of the agreement?

According to your response:

"the front loading of the cash-flow of the £320m to release savings of £0.8m makes commercial sense and is in keeping with other routine treasury management decisions that are periodically made regarding the stewardship of the Council’s investment portfolio".

The phrase you now use is 'the front loading of the cash-flow' - of which £16.1 million is part. The point is that the council and especially the Conservative members have continually presented the capital investment in IT as being an up front investment by Capita, not a part of the massive fee we must pay them for agreeing to make a limited amount of savings.

I suppose I must refer you back to the many instances, including information on the council website, and many statements by the Leader, and Councillors Rams and Thomas, in which this IT investment is clearly portrayed as an 'up front' investment from Capita. It is not and has never been explained as the reverse - a fee from us to them, whether part of the original model or a later 'adjustment'.

This lack of clarification is by any standard a significantly misleading concealment of the truth.

You suggest the £16.1 million transaction is a routine decision, and merely one of those "periodically made regarding the stewardship of the investment porfolio".

Here is the most important question of all:

When was this decision made, and when - if at all - was this decision made clear to the elected members of the council?

If it was not, why not, if the council is truly committed to the principles of transparency?

It cannot be argued that such a decision is of no significance when clearly not one Conservative member - even the Leader - has been able to explain the issue, and in truth most of them simply did not know that this arrangement was in place. If they did know, then they have not explained this to residents and taxpayers, and have deliberately sought to present the deal with Capita as bringing a benefit which is in fact merely part and parcel of a commercial agreement that will generate huge profits for Capita shareholders, and only a limited amount of so called 'guaranteed' savings for us.

We both know that in any contractual relationship, if the 'guaranteed' savings appear not to be being delivered as and when promised, there will usually ensue a long and expensive period of 'negotiation' between the authority and the provider and possibly legal challenge before - if - any agreements can be enforced.

There is also the likeliness of hidden cost relating to service provision needs which the provider may argue was not part of the contract.

On the issue of assets: although the assets we are buying for ourselves in the name of Capita are meant to revert to us at the end of the contract, to what extent will taxpayers be reimbursed for the depreciation in value that will inevitably result over a ten year period? How realistic will it be to expect to be able to reclaim and reuse assets located over such a wide area?

In terms of IT, do the costs negotiated include the need for upgraded systems over the period? If not, why not, and how much more will we be charged? How does this affect the amount of 'savings' that we are promised?

We are told that the difference in cost between the Capita deal and an in-house solution is £70 million.

This sum, over a ten year period, is frankly negligable: £7 million a year in savings? Simply running the procurement of the many non-compliant contracts with current providers with some increase in competence and efficiency would have gone a significant way to making such savings.

You have already spent a gobsmacking £10 million of our money on private consultant fees just to set up this deal, and handed over a further £30 million already this year to Capita. Taxpayers continue to pay fees to consultants, even now: how much more will this bill increase?

After I raised questions about the supposed 'interim' payments which had not been returned by Capita, £4 million was quickly repaid.

How long will it take to recoup the other expenditure incurred to residents?

Regarding the matter of the Leader's DPR: you state -

"The DPR had nothing what so ever to do with authorising any payment to capita, it was simply a technical enabling decision to include Capita’s forthcoming investment into our capital programme."

We could continue to argue as to how this 'investment', part of the £320 million fee charged us by Capita, can fairly be presented as coming from Capita, but of course that is, as Labour leader Alison Moore stated, an act of political sleight of hand.

Setting that aside, we need to ask why a merely 'technically enabling decision' was signed by the Leader of the council, rather than the appropriate senior officer under delegated powers, and yet described as a 'non-key decision', when the matter concerns a matter with the value of £16.1 million, and affects more than one ward.

Why are there no background papers listed for this decision, which is not a decision?

You suggest that this action is compliant with 'technical accounting standards'. Is it compliant with European procurement laws? Did you take legal advice on this point?

By refusing even to consider an in-house option, I believe that the authority has not made a fair assessment of the best value for money in terms of service provision: the best approach may well have been exclusively in-house, or a pragmatic choice of individual solutions for different areas.

Why were these alternatives so studiously avoided? Could it have been due to pressure from consultants and bidders to commit to a private sector solution? Or was it that some Conservative members were following an obsessively ideologically based political agenda? Or for a combination of both factors?

Why did the authority not have an adequate policy of risk management of the conflict of interest which occurs when senior officers transfer between the authority and private companies involved in the tender process before the tender process began?

Was the in-house option discredited by a spurious argument on the need for outside investment, when there should have been an exploration of alternative ways of funding any required capital investment?

And is the truth that the One Barnet outsourcing programme has been hi-jacked by those intent on facilitating a massive act of privatisation regardless of the best interests of the residents and taxpayers of this borough?

I look forward to your next response.

Yours sincerely,


Mrs Angry


Post script: 

Mrs Angry invites readers to see this response from Monitoring Officer Maryellen Salter to blogger Mr Reasonable regarding the issue of whether or not the Leader DPR of 5th August was compliant with the council's constitution: my emphasis in bold -

As you refer to the 5th August report in question 1 I can comment on the Constitutional element of that decision -  for the capital virements that the report relates to the Constitution, specifically the financial regulations paragraph 4.4.3,  Cabinet or Cabinet Resources Committee approval is required for all capital budget and funding virements and yearly profile changes.  The use of Leader DPR - the Leader was effectively making a decision of the Executive as noted in the report “Responsibility of Functions 4.2 states that the Leader of the Council may discharge any functions of the Executive”.

This states absolutely clearly, in my view, that the Leader DPR was a decision, and therefore by the definition of the constitution as stated here 'significant in financial terms or in their effect on communities comprising two or more wards' it is therefore perfectly reasonable to maintain that this should properly have been regarded as a key decision, not a non key decision, safe from the process of scrutiny and further approval.

Update:

Mrs Angry wrote on the 10th of November to her fellow auditor (non armchair) Mr Paul Hughes, of Grant Thornton, external auditor of the London Borough of Broken Barnet, who is always terribly pleased to see or hear from her. 

She conveyed to him some of the concerns regarding the issue of the £16.1 million payment to Capita, and indeed today has updated him in the hope it might provoke a response. He has not replied yet, but Mrs Angry imagines he is a very busy man, and will get round to it one of these days.

Friday, 15 November 2013

The most there is - is silence: Bohemia, the end of an occupation


Back to court, yesterday, for the hearing of the Bohemia case, in which the occupiers who have been living in the North Finchley pub since September were due to fight a possession order which would see them removed from the premises.

The action was being taken by Antic Ltd, who had been running the pub until its sudden closure one day this summer, with no warning, and despite doing good business, and becoming a much loved venue in the high street. 

Antic is now in administration, and behind them, and their association with the Bohemia, lies a long and complex history of ownership, leasehold and tenancies, resulting in a mysterious arrangement of devolved ownership referred to as 'the triangle'.

Judge Nicholas Parfitt presided over the case with fairness, and tolerance, and going beyond the call of duty to assist the defendants, occupiers Phoenix, Daniel and Luke, who were representing themselves as best they could, with, as Phoenix pointed out, no access to legal advice due to lack of funds and the new restrictions on legal aid. 

Representatives of Antic, their administrators, and agents Colliers, were also in attendance with barrister Andrew Sheftel.

The tiny courtroom accommodated only a dozen or so people: other supporters waited outside as the hearing commenced.

An awful lot of time ensued clarifying the tangled web of ownership of the Bohemia, but it emerged that it was actually Antic that was bringing the claim to repossess.

The defendants' case was that they had a licence to stay on the premises, granted by the actions of Alex Hill, an employee acting on behalf of the administrators. Phoenix, on behalf of the occupiers maintained that Mr Hill, acting as agent, had endorsed their status as caretakers and that this amounted to granting a licence. Phoenix claimed that they had agreed with him to allow workmen on the premises, with reasonable notice, and that they would hand over the keys and leave should a new tenant arrive. At no point had the occupiers been told they were trespassing and asked to leave, either verbally or in writing.

Phoenix made the case that he and his fellow occupiers had made every effort to engage with the landlords, and wanted only to facilitate the wishes of local residents, supporting a bid by the Bring Back the Bohemia campaign to create a co-operative pub, and retain the sense of community the venue has nurtured in a high street otherwise in the grip of decline - to serve the community, as he put it.

He referred to the previous occupation of Friern Barnet library, with which, interestingly,  the Judge clearly was familiar. 

Much discussion followed as to whether or not Mr Hill had been acting as an agent, and whether or not a licence had been granted, verbally or otherwise. The claimants' counsel denied any such action had occurred: there had never been any positive assertion to that end, he suggested:  looking at the evidence, he said - 'the most there is, is silence ...'

More sophisticated than mere silence, commented the judge.


After lunch the court reconvened and the verdict was handed down. Predictably perhaps, not so much due to the arguments, but due to the lack of informed legal representation, the occupiers' defence was rejected and the court ordered the pub to be repossessed. 

The claim succeeds, declared the judge. 

For now, muttered Phoenix, under his breath.

Possession was granted 'forthwith', which really meant immediately, but the judge said it would be enforceable from midday the next day, which was the best he could do.

Not content with this judgement, counsel for Antic wanted to move the order to the High Court. The argument would be that it would be 'quicker this way'. And a lot more expensive, observed Judge Parfitt, unimpressed, and refusing to allow such an action. Of course the real reason for such a move would be that any resistance to repossession by bailiffs would then become a criminal offence, and the occupiers could be arrested.

Phoenix asked for extra time before the order was enforced, pointing out that the shortly to be evicted occupiers included a pregnant woman. The judge said he had no power to extend time. But now came the matter of costs, and he announced that he would not be allowing a claim by Antic for costs of £23,000. He criticised some of the actions of the company, saying 'I cannot see for the life of me' why a letter for action wasn't sent to the occupiers, stating that they were trespassers, and telling them to go within a specified period, giving them the opportunity to leave before proceedings began. This was just common sense. 

Even during the St Paul's occupation, he said, this had happened. He commented that the conduct of the occupiers, albeit unlawful, had been co-operative and the failure of the owners to serve notice was unreasonable, therefore the refusal to award costs.

Phoenix, ever optimistic, asked about an appeal. The judge smiled but said he was refusing his application. He could still apply through another circuit judge.

After the hearing, the mood was subdued. Why, asked Phoenix,  don't people talk to each other? There are one and half million empty buildings, and how many homeless people? He was, however 'ectstatic' to be relieved of the burden of costs.


This morning we heard that despite the Judge's refusal to refer the order to the High Court, Antic had done so independently, and bailiffs were on the way, to be assisted by police to enforce the repossession order.



Arriving outside the pub this morning, a Mental Health roadshow charity had set up its stall, while behind them, the doors were locked, and barred. Local police wandered by, keeping a wary eye on the premises. 




After peering through the windows, Mrs Angry was ushered around the back, and slipped inside to take a last look around. It was a poignant scene, the few personal possessions of the occupiers, and their eclectic collection of discarded furnishings, handwritten posters, handmade decorations, their expressions of solidarity, and love.

Phoenix talked about the likelihood of high court bailiffs arriving to remove him and his friends. The subject turned to Dale Farm, and the infamous firm that specialises in evicting gypsy and travelling people from sites, with brutality and ruthlessness. The removal of marginalised people, back to the margins where they belong, is a lucrative business.

And as for Phoenix, Daniel, Petra, Mordechai, Luke, and all the others: naive they may be, and  a bit scruffy, and messy, and existing in a world beyond the petit bourgeois imagination of the average London suburban resident, but these people, in contrast to so many of our elected representatives,  live according to their own set of principles, a clearly defined moral code and a sense of mission. Rejecting the orthodox political process, using direct action, they believe in the possibility of positive change, to reignite a sense of community. Are they wrong?


While this is being written, police and bailiffs have arrived at the Bohemia, and taken possession of the premises. Some of the occupiers tweeted:

All hell broke loose for 5 minutes when police, security and bailiffs broke in through fire doors and evicted us.

The doors are open and a bad wind has swept in...

The repossession came with every aid for the bailiffs laid on: even dogs -




 Poppy, a local resident and Green Party activist tweeted :

 Musical instruments, mattresses, brave ragged people assembled in a squalid car park behind being kept in the cold by the bailiffs

According to the local Times report here:

... the blunt force of more than 30 large bailiffs and police officers meant the barricades were breached inside three minutes.

The enforcement staff screamed “get back” as they smashed down the rear doors of the pub, while the squatters, seemingly shocked into submission, could be heard shouting “we’re leaving” and “we’re not resisting” during the chaotic reclamation.

Updated: you can see footage from the forcible eviction here http://bambuser.com/v/4101256

A horrible end to a peaceful occupation. 

A strange world, is it not, where property owners have the right to set dogs on peaceful occupiers of vacant premises, tolerated by them as caretakers for several weeks, and then evicted without notice? 

Where so many empty buildings lie empty for years, locked, and unused, and homeless people sleep in shop doorways, in sub zero temperatures?

Yesterday in Scotland, in scenes more reminiscent of the Irish famine evictions of a hundred and sixty years ago, a widow was thrown out of her home for failing to pay her bedroom tax, and left to sit outside in the cold for several hours, with nowhere to go, before the authorities were shamed into doing something about her plight. 

How many more people affected by this iniquitous tax on poverty will end up on the streets this winter? 

Why are the rights of defaulting landlords given more importance than the basic human right to shelter?

What more is there to say?
  
This is Broken Barnet, November 2013: and that was the story of the occupation of the Bohemia.


Tuesday, 12 November 2013

Barnet's £16.1 million payment to Capita: a response at last - of sorts



  
The payment to Capita? Nothing fishy, says the council - just a red herring

As readers may know, there have been a lot of questions raised over the last few weeks about the payment in August made by Barnet Council to Capita of £16.1 million, apparently for a programme of capital investment which our Tory councillors have promoted as being funded 'upfront' by Capita.

Questions to councillors, including Cabinet members Robert Rams and Daniel Thomas, who are most closely associated with the privatisation contracts, have met with a wall of silence - until now, when the two councillors have persuaded the Chief Operating Officer to respond on their behalf. The Leader of the Council has made no statement.

The Barnet Bloggers are publishing his response in full, followed by further comments and questions to address some of the issues we feel are left unresolved by his reply:

Dear Mr Dishman, Mr Dix, Ms Musgrove and Mr Tichborne

I refer to your open letter to Councillors dated 8th November 2013.


Cllrs Thomas and Rams have asked me to respond, as your letter raises a number of technical matters that I am well placed to explain. In so doing I hope to put your minds, and those of the many readers of your respective blogs, to rest.


I’m afraid that you have misunderstood the purpose of the publicly published DPR of the 5th August 2013 and as a result have made a number of incorrect inferences about changes to the business model agreed by Cabinet on the 6th December 2012. You will recall that this was the publicly agreed and published key decision which authorised payments to Capita of £320m over the coming ten years. There has been no subsequent change to the business model, no change in Capita’s investment commitments and no change or reversal in policy. The plan remains as it did on the 6th December 2012.


DPR 5th August 2013 did not authorise any payment to Capita.


Starting with the DPR of the 5th August 2013, the purpose of this decision was to authorise the inclusion of Capita’s investment in IT and other infrastructure assets into the Councils capital programme. In this regard we are bound by a range of technical accounting standards. In summary, if assets are to be used by the Council, irrespective of who has paid for them or who controls their day to day use (in this instance Capita) then those assets need to be recorded on the Council’s balance sheet. In order for them to be included in the Council’s balance sheet, they first need to appear in the Council’s capital programme – hence the need for the DPR.


I would draw your attention to paragraphs 5.2, 5.3 and 5.4 and the report recommendation at paragraph 10.1.


As you can see, very clearly, this DPR does not concern itself with ‘the authorisation of a payment to Capita’ or the ‘approval of a payment to Capita’ or as your letter puts it ‘the sanctioning of a payment to Capita’. In fact the DPR had nothing what so ever to do with authorising any payment to Capita, it was simply a technical enabling decision to include Capita’s forthcoming investment into our capital programme. Evidently this needed to take place before the contract was signed, but after the judicial review outcome was known which was why it was agreed when it was. There would have been no point including Capita’s potential investment in the Council’s capital programme while ever that eventuality was in doubt.


In short, it’s a red-herring to connect the DPR of 5th August 2013 with any decisions about payments to Capita.


The key decision to agree expenditure with Capita was the cabinet decision on the 6th December 2012.


In your letter, you collectively assert that Capita is no longer making the investment in the Council’s IT infrastructure, but instead that the investment is coming from Council reserves. You consider this to be: contrary to the business model approved; by Cabinet in December 2012 and contrary to public pronouncements about the benefits of the contract made at the time and subsequently. I can assure that none of these assertions are correct.

  • The business model agreed by Cabinet established that the Council would pay Capita £320m over the coming 10 years. In simple terms, for this sum the Council would: achieve a very considerable saving on the prevailing cost of the CSG services -£320m over ten years compared to the in-house cost of £390m;
  •  receive investment of £16.1 million in IT and other necessary back office infrastructure; and
  •  receive service performance equal to or better than that currently delivered by the Council.
This overall business model remains unchanged by payments to Capita since the contract was signed.
Payments of the agreed £320m to Capita have been profiled over the ten year contract to maximise savings and service improvements to the Council. In particular, in the first year of the contract, to reduce the cost of capital in Capita’s contract price, £16.1m of the overall £320m was paid on contract award. This is not an additional contribution; it is within the £320m contract sum. Doing so has saved the Council – not Capita – an additional £0.8m. This sum contributed to the additional savings set out in section 9.4 of the published public Cabinet report of November 4th.


All decisions about the profile of payments have been made in accordance with the Council’s publicly published financial regulations.

  • For the avoidance of doubt, the profile of payments to Capita have had:No impact on the Council’s reserves. The investments referred to in the business model continue to be made from within the £320m agreed contract sum. Council Reserves have therefore not been used to fund the investment. Reserves have not gone down by £16.1 million. Tax payers are not now paying for something that they thought was being paid for from the contract price and Capita aren’t receiving additional amounts of investment from the Council. In fact as a result of the profiling of payments, tax payers benefit from additional savings.
  •  No impact on the Council’s balance sheet. The IT and other infrastructure assets that Capita will be purchasing will be recognised as capital assets on the Council’s balance sheet. As stated above, this is the correct accounting treatment for the assets in these circumstances. It is for this reason, and this reason only, that the intended purchase of IT and other infrastructure assets by Capita are captured in the Council’s Capital Programme. Mr Dix has written to me and other colleagues in the Council about the accounting treatment of these assets and I will respond to him separately in due course.
  • For these reasons it is incorrect to state, as you do so in your letter, that “Capita failed to make the promised capital funding…. that in August, in a complete reversal of policy, the Leader sanctioned the payment to Capita of £16.1 million of taxpayers’ money held in the Authorities reserves, in order to cover the cost of the capital investment”. To reiterate this is because:Capita are making the promised investment within the £320m contract sum. In other words the Council/taxpayers will pay Capita £320m over the next ten years. Taxpayers are not paying £16.1m in addition to this amount;
  • The Leader did not sanction a payment of £16.1 million, the relevant Key decision to sanction payments to Capita was the one taken by Cabinet on the 6th December 2012; and
  •  There has been no use of Council reserves to ‘fund this investment’.
There is no change to the original business case.

The original business case set out that one of the benefits of an outsourced option would be that a private sector partner could afford to include capital investment in their overall bid price in a manner that the Council, acting alone could not. For the reasons set out above, this is exactly what has been achieved and it is what is happening. To suggest otherwise is misleading.


As an aside, I don’t recognise your collective point about capped procurement savings. The publicly published contract commits Capita to guarantee the procurement savings already identified by officers in the medium term financial plan. The contract includes a payment by results provision for procurement savings that are identified and delivered by Capita over and above those included within the guarantee – where this is agreed in advance by the Council as the most commercially sensible way to proceed. The contract does not bind the Council to use Capita to deliver procurement savings. Accordingly, in the future, we can make a case by case judgement based on what is most commercially opportune for the Council.


In conclusion, I can advise that there has been no change in policy, and no radical change to the terms of the business model agreed by Cabinet on 6th December 2012. Likewise, there has been no decision to use Reserves for a capital investment payment to Capita other than that set out in the agreed £320m contract sum agreed by Cabinet on 6th December 2012. As all payments to Capita have fallen within the contract price agreed by cabinet I cannot share your conclusion that there has been any breach of council regulations.


I would be very happy to meet with you to discuss the contents of this letter in more detail. Indeed I am due to meet Mr Dishman and Mr Dix next week to discuss a range of other matters and would very happily add this issue to that agenda. By way of this letter, I extend a similar invitation to Ms Musgrove and Mr Tichborne.


In the spirit of openness and transparency, and given that you have all written extensively about these matters on your popular blogs, please could I ask you to publish my response letter in full.


Yours sincerely

 
Chris Naylor
Chief Operating Officer


The Barnet bloggers have responded to the points made with the following statement:



Response: 

In December 2012 the Cabinet report which authorised this contract was quite clear when it said: 


Capita’s proposal also includes (within the financial offer described above) approximately £15.3m revenue investment in areas such as information technology (computer hardware and software), and customer services. This investment not only enables Capita to deliver the transformation it is proposing, but also avoids the Council having to find money in the future to fund replacement technology for systems that are at or nearing the end of their useful life”. 

It went on to say:

 “if the Council chose not to complete this procurement, it would have to:

 • attempt to replicate the investment, technology and other solutions being proposed by Capita in order to drive out the future savings required” 

In September 2013 Barnet paid Capita £15.2 million which Mr Naylor described as follows:

 “Of the total £320m, £16m of this is paid up-front for the capital investment. The remainder of the service charges are paid quarterly in advance. The reason for making an up-front payment to Capita for capital investment, and for payment of service charges quarterly in advance is that the Council’s “cost of money” – i.e. the amount that it pays for access to cash, is considerably cheaper than Capita’s. The Council has internal reserves, and access to the Public Works Loan Board funding which is closely aligned to the Bank of England base rate. So the up-front capital contribution and quarterly in advance payment reduce the overall cost of the contract to the taxpayer. 

In August, the Council made £10.5m payment to Capita which represented the balance of the capital contribution for investment in the services, and £4.7m in respect of the service charge.”

The council have made a decision to fund the investment instead of Capita and from Mr Naylor’s response in October there is a very clear inference that this would come from reserves or borrowing. 

At the audit Committee of 23rd October the council stated: 

 “The council agreed to fund the capital costs up front because the council benefits from a lower interest rates which keeps the overall cost of funding CSG as low as possible. The assets are Capita’s, but Capita is obligated to provide them back to the council upon contract termination for at no further cost” - again implying borrowing or lost interest on reserves. 

Mr Naylor says in his letter of 11 November 2013 that:

 “there has been no change in policy, and no radical change to the terms of the business model agreed by Cabinet on 6th December 2012”. 

Based on the above this would appear to be untrue. 

The Cabinet report of December 2012 was very clear when it said that: 

 “As dialogue has now closed, the Regulations permit that the Council may only request a bidder to clarify, specify or fine tune a tender, but further detailed negotiation is no longer permitted.” 

 Relieving Capita of the obligation to fund £16.1 million of capital investment which impacts the cost of the contract by £800,000 does not appear to fit these criteria. 

Clarification is needed over the specific issue of the origin of the funding source used by the authority to support the £16.1 million.

Mr Naylor asserts in his response that this was not from reserves, yet in his earlier statement he refers to ‘internal reserves’ and the ‘Public Works Loan Board funding’. Was the funding from reserves, or not? Was the funding borrowed, and if so, how much, and does not such an action contradict the position taken by Cabinet member Robert Rams in criticising opposition proposals to borrow money for capital investment?

Why have our councillors remained so reluctant to address the questions publicly, and why has the Leader of the Council remained silent on an issue of such public concern? 

There are further unanswered questions about the authorisation signed by Leader Richard Cornelius on August 5th. 

Why is a decision, which is not a decision, listed as a ‘non key decision’? Why are there no background papers listed for this document? 

What exactly are the ‘international financial reporting standards’ to which the document refers? 

If this authorisation was merely a technicality, why was it necessary for the Leader to approve it, rather than a senior officer acting under delegated powers? 

Were the backbench Conservative members aware that the funding of the capital investment was not in fact an ‘upfront’ payment from Capita, but to be undertaken by the council? If they were, why have so many statements been made seeming to imply the contrary? 

Is the truth that although the method of funding the investment this way was arranged between Barnet and Capita, for reasons of political sensitivity the Conservative administration has failed properly to explain this to backbench members or the residents of this borough? 

Is it fair to suggest, as the Labour leader Alison Moore commented at last week’s Cabinet meeting, that the way in which the funding has been arranged would appear to involve a ‘sleight of hand’, and is this really compliant with the principles of transparency, accountability and open government, and the duty to protect the best interests of the residents and tax payers of this borough? 

It is clear that there are still many serious outstanding questions left unresolved and for this reason we repeat our call for an immediate investigation into the issue so as to ensure that our elected representatives are fulfilling their roles in the proper scrutiny of the actions of this council.