Friday 17 August 2012

One Barnet: Tory panic and a whole new framework

Updated below

Mrs Angry has just seen an email sent to Barnet staff by her favourite senior officer, Ms Pam Wharfe, the former favourite senior officer of the politician formerly known as Brian Coleman, in regard to the DRS half of the two huge outsourcing dialogues currently in progress.

In case you have forgotten, this includes:

• Regeneration, Strategic Planning and Housing Strategy, Highways Transport
and Regeneration and Highways Strategy

• Building Control, Planning Development Management, Land Charges,
Highways Network Management and Highways Traffic and Development

• Environmental Health, Trading Standards & Licensing, Cemetery and
Crematorium and Registration and Nationality Service.

In other words everything from the house you live in, the roads you drive on, the shops you shop in, the rites of passage of all our lives, from birth, to marriage (if you must) partnership, and especially death, because your dear departed family members, my dear departed family members, were added to this package as a 'sweetener' to make it more 'attractive' to prospective bidders, who enjoy the thought of the steady profit there is to be made from the sheer inability of residents of Broken Barnet to stay alive for ever in this blessed borough.

As this extract shows, August is yet again being used to (try to) slip out some pretty sensational news while they think everyone is sitting on the beach. Sadly for you, Ms Wharfe, Mrs Angry is sitting in her kitchen, admiring her rhubarb jam, and forgetting to put the flour in her apricot frangipane tart.

Mrs Angry will now attempt to give Ms Wharfe a bit of a fisking, in red: oh dear - Mrs Angry has her eyes closed, of course, and is thinking hard about One Barnet, to take her mind off her uncomfortable duty as a citzen journalist ...

"Dear colleagues (aww, making'em feel like she really cares!)

Dialogue update

As with the last message, there is no specific news to report on dialogue other than it is continuing to progress well. Erm, not quite true, Pam, as we see a little later ...

This week’s meetings have included legal/commercial and technical sessions covering the bidders’ financial models, their emerging commercial development plans which provide details of new investment and income streams, insurance matters and our approach to resolving conflicts of interest in relation to service delivery. Ah, yes: conflicts of interest - Barnet is awfully good at resolving these, as Mrs Angry has often commented ... well, not resolving them, exactly - ignoring them, really.

We have also been discussing the bidders’ Service Improvement Plans which set out how the services will be delivered and enhanced over the course of the contract. Not just improvement, then, enhanced improvement, you see ... good, good ...

In addition to enhancing service delivery we also believe that the DRS project has great potential to generate new commercial opportunities, both in Barnet and further afield. (Yeah, right: first we take Broken Barnet, then the rest of the world will be submitted to our rule ...LOL ... )


So, nothing much new to report, except ...

As a result we have decided to form a Joint Venture organisation with the successful bidder,

well, f*ck me, have you, indeed? We have decided to rewrite the whole One Barnet exercise, have we? And who is we? And on whose authority? Clearly in Broken Barnet there is no need for any electoral mandate for a massive project like the outsourcing of £1 billion of council services, but has any consultation taken place within the Tory council's own decision making process before sanctioning such a huge development? And why are you doing this?

... which provides an effective basis on which the Council can benefit from these opportunities and at the same time it gives the Council greater rights of transparency and control.

Er, but you have been telling us all over and over again that the council already has adequate rights of transparency and control. More to the point, does a joint venture really improve these safeguards?

What this means is that the successful bidder and the Council will form a new organisation in which both have an interest. This new organisation will then contract with the Council to provide the DRS services. The Joint Venture approach does not change the approach to TUPE of staff or weaken any of the commitments given - staff would TUPE into the new organisation rather than to the commercial partner. We shall provide further information on the Joint Venture in the next week however as ever you are welcome to ask any questions you may have regarding this or other elements of the DRS procurement’

the One Barnet ship is sinking, but a nice rearrangement of the deckchairs will help

Well, Pam, Mrs Angry's questions would be:

a. Why are you doing this, at this late stage of the dialogue? Are you getting cold feet? Are the Tory councillors getting worried about the publicity we are generating and focusing on this issue?

b. How much of the profit from this new venture will be returning to Barnet residents, and how much of our money will be thrown into the laps of the lucky bidder?


Interesting, though, isn't it? At last, the cracks are appearing at the very foundations of One Barnet. And Mrs Angry predicts that the subsidence that this signifies will bring the house of Richard Cornelius crashing down around his ears.




The wider implications of this really astounding development are only just beginning to sink in: take a look at Mr Reasonable's post, for example:

where he makes this very important point:

'.... when the business case for outsourcing was made, the Council's consultants actually identified that "the costs and risks associated with a JV model are judged at this stage to be higher than for a Strategic Partnership". Yet today the council have committed us to higher risks and greater costs.'

In one of the comments below there is an observation made that there could be a legal challenge of the change to a joint venture model, under procurement regulations, as smaller companies may feel they have been unfairly excluded from the tender.

One might also wonder what the shortlisted companies who did not reach the final round will make of the development too. On the other hand, if it is true, as seems likely, that this panic stricken, last minute rewriting of the One Barnet project is due to pressure from bidders worrying - quite understandably - about the massive risk for their own investment, then the other former bidders may well feel relieved to be out of the game.

Finally for now, there is another consideration: if the 'smaller' ie £250 million DRS package is in trouble, then what of the whopping £750 million customer services deal, currently being vied for by Capita and BT? Capita Symonds, along with E C Harris, are up for the DRS prize - it doesn't take a genius to guess that the former has more probablility of winning. And Capita are bidding for customer services. If one deal is being rearranged, what about the other?

And bearing in mind the fact that there has never been any risk assessment of the £1billion One Barnet outsourcing plan, what are the increased chances of massive failure of such a new and even less well designed model of privatisation? Do these fools have any sense whatsoever of the dangerous consequences of their lack of preparation for this new gamble?

Why has the senior management team sneaked this massively significant development through in such a comically understated way, with no debate, and no official announcement, in the middle of the holiday period?

Oh dear.

Is One Barnet falling apart?

What do you reckon?


baarnett said...

My immediate assumption is that the private sector is not prepared to shoulder the risks with this huge contract.

Maybe they cannot even finance the deal.

But what does Barnet bring to the joint "organisation"? What assets? Are those assets at risk? Is the organisation a "company"?

At the very least, the wimps (see earlier post) in the management team are worried they will effectively lose control over the ten years, of the 'London Borough that used to be called Barnet'.

The wimps will have cleared off by then anyway, so it could be a desire by the politicians to reassert a little bit of control.

Mrs Angry said...

I think this is a hugely significant development, Baarnett, and is clearly indicative of a mjour faultline showing in the confidence of the administration. In short, they have taken fright of the enormity of the One Barnet committment and are trying to sustain an outward show of continuity whilst wrestling in the background with the monster they have created. If you see what I mean. Picture Dr Frankenstein looking on in horror at the beast breaking out of the castle.

Mrs Angry said...

It has been pointed out to Mrs Angry that this new enterprise will mean that Barnet will now be carrying half the risk of failure, so there will be a greater cost to residents if, or rather when, everything starts to go wrong, and the fairytale happy ending of massive savings fails to materialise. It would seem to suggest that the bidders have taken fright at the prospect of undertaking such a large scale project.

Oh dear.

Anonymous said...

And a big risk of challenge under procurement rules because smaller companies may have been able to take part if originally advertised as a joint venture. The evaluation criteria used to achieve the current contractors remaining also cannot have included a joint venture slant. This of course could lead to large fines and penalties that of course will be paid by residents along with the legal bill to fight the case.

Mr Mustard said...

We have 95 highly paid managers. Why oh why do we need any extra external help? If Mr Mustard assembled 95 of the brightest people he knows ( the Barnet bloggers for starters and other Barnet residents ) we could run Barnet Council in the mornings and have tea parties in the afternoon

Rog T said...

wrong. Barnet carries all the risk of failure. if it goes titties up, the other party can walk away

Mrs Angry said...

Anonymous: a very important point - it seems quite bizarre that Barnet thinks it can rearrange the goalposts at this late stage in the proceedings. I imagine there will now be consequences for which they seem not to have prepared at all. And the unlucky short listed companies who left at the earlier stage have every reason to feel disgruntled, as well as any smaller ones who did not enter the process.

Mr Mustard: I like the sound of your plan. Tea parties in the afternoon, especially. I'll bring the jam.

Rog: yes, ultimately Barnet loses everything if it goes wrong, although the other part loses only a limited investment. Here the cost of failure will be measured not just in financial terms but in the impact on every resident in the borough left to cope with failing services, and the price of eventually bringing whatever can be rescued back in house.

baarnett said...

If I were an outsourcing company in this situation, I would structure things so that I put no assets at all into the joint venture company.

The latter would just be a service provider, and have to pay costs, like rent, to the main company.

(Actually, there are likely to be several layers of companies. Thames Water for instance is said to have about ten, from the water-out-the-tap company, up to the top geyser.)

That way, if and when "Barnet (2013) Ltd." failed, even the paper clips would be safe from the liquidator. The latter would try and sell the company as a going concern, which might stop the rump of Barnet's executive from taking control again.

Mrs Angry said...

yes, yes, but you are not here in my comments box to make helpful suggestions for outsourcing companies, Baarnett. Tut - really. Go away and think about what you have done, and say sorry.

baarnett said...

They already do it, Mrs A, and have done for decades. The company at the top of the tree (did you notice my "geyser" joke, by the way?) ideally doesn't run any risk whatsoever. And that is where the directors are paid from.

Property companies on the various spiv development sites in Barnet do the same. (Not that property development isn't of benefit to society, just commonly not in Barnet.)

I have researched apricot frangipane, by the way, and no-one puts flour in it. Good job you forgot to.

Mrs Angry said...

what joke? Mrs Angry never jokes, and nor should you. This is serious business.

You sure, about the frangipane? Must say didn't seem to make much difference.

Anonymous said...

The possibility of joint venture was mentioned in the contract notice which Barnet will now use as a shield to state it was always a potential avenue. I believe the lateness of the announcement however is still the pertinent point in respect of the equal treatment of all the bidders who have now been passed over. It should have been introduced much earlier in the process to promote equal treatment in my opinion.
The notice stated"The London Borough of Barnet will select whichever service delivery model the competitive dialogue identifies as best meeting our desired outcomes. We will examine strategic partnerships and the option of setting up a legal vehicle jointly, e.g. a joint venture vehicle."

Mrs Angry said...

mmm, anonymous,exactly, changing the goalposts at the last minute hardly gives a fair opportunity to all potential bidders, and then of course the council's own consultants pointed out that a joint venture was too risky, and more risky than the model they did choose, but have now abandoned. An outstanding example of Barnet incompetence from whichever angel you look at it, in short.

Mrs Angry said...

or even angle. No: actually, angel sounds nicer. Not that there are many in Broken Barnet.

Another post on this subject on its way ...