Wednesday, 6 November 2013

A Sleight of Hand: the now you see it, now you don't process of capital investment, in Broken Barnet

A wall of silence is like any other seemingly impenetrable barrier: there is a weakness in the structure, somewhere, if you can find it - and the rules of engagement in the Battle of Broken Barnet allow for more than way of defeating the enemy.

Skulking in the cellars of their ostensibly impregnable fortress, our foolish Tory councillors believe themselves to be bound by a vow of loyalty to each other, and a sense of duty to the rule of omerta. Well: that accounts for the freemasons, anyway, of whom there are many, in the Conservative ranks, of course.

And the wall of silence that surrounds the revelation that our councillors have given £16.1 million of taxpayers money in reserve to Capita, in a total reversal of all promises made in the One Barnet contract negotiations? 

Councillors may be maintaining an unprecedented resolve to ignore all questions on this point (do you reckon they've been whipped, Brian?) but in certain circumstances questions may not be avoided for ever. 

How many years long was the Trojan siege, and how did it end?

Public questions to committees, for example. Well, yes, it is true that these are usually safely contained by carefully written answers: but the real art of troublemaking is in the supplementary questions, which you present verbally, at the table, without warning, in order to produce a more spontaneous, unguarded and often more valuable response.

Last night saw a series of three committee meetings at the town hall: Cabinet, General Functions and Cabinet resources. Mrs Angry had no questions tabled, but she had a cunning plan, and sent into the room, and the corporate circus already full of elephants and a troupe of performing monkeys, a wooden horse, in the shape of a woman called Barbara Jacobson.

In her address to the council later, Labour leader Alison Moore gave a robust rubbishing of the points made, and commented that the actions of the Tory administration in regard to the matter of the capital investment represented a 'sleight of hand'. It is perhaps the perfect description.

The verbal answers to the supplementary questions seen in the footage do not tell you anything you really want to know about the capital investment. The expressions and body language of the Tory councillors and senior officers serve that purpose: the averted eye contact, the gripped faces, the glasses of water, the very interesting papers suddenly attracting their attention on the table ...

The councillors were not expecting to be caught out with questions about the £16.1 million payment. What could they say, under the spotlight? Mrs Angry sat back and regarded the scene with a probably unreasonable degree of perverse pleasure as the Tory members squirmed in their seats.


The written question had been about the hundreds of members of staff who, because of the privatisation, have lost their jobs with the authority, and many of whom face redundancy. In reply to a recitation of facts we already knew about the job losses, came the following supplementary question:

The original argument for outsourcing council services to the private sector was that an in-house option, which would have retained hundreds of the jobs now being tuped over to Capita, could not be considered, as we depended on investment from a commercial partner to make the savings we require.

We have now learnt that contrary to the statement continually promoted by our Conservative members, the capital investment has been made not by Capita, but by us, the taxpayers and residents of Barnet. We could have used the same investment to keep services in-house, and protect local jobs. 

Can the Chair explain what would appear to be a deliberate attempt to mislead residents as to the reason for entering the contract with Capita, and explain to staff why the councillors preferred to support this contract at the expense of their livelihoods, and our services?

The response came not from the Chair, Leader Richard Cornelius, but from Robert Rams, who has been responsible with deputy leader Daniel Thomas for heading the outsourcing deal. Rams, more used to playing the part of the lovely Debbie McGee to financial magician Thomas, you will note avoids eye contact, avoids the question, and talks a load of nonsense, as usual. What does he say? 

The payment of the £16 million is agreed payment as set out in the specific payment to Capita ...

When? asks Mrs Angry, off screen, but sadly Cllr Rams appears not to hear her. 

Cllr Rams appears also to have forgotten to tell us that this 'agreed' payment has replaced a previous agreement, as approved of in the business model that went to Cabinet for approval in December, and promoted by him and his colleagues as the basis of the whole deal, that Capita would be paying these costs upfront.

Let's say it again, and oh look, it is still on the council website in the helpful explanation of the NSCSO contract published AFTER the contract signing:
CAPITA will make an upfront investment which will provide improved Information Technology and telephone support to improve council back office services.

Back to little Robert Rams in the footage. He continues:

... erm the er ... argument you put forward in terms of (it would be better implemented?) in-house is actually a false argument, because ... we are removing all the revenue costs by ... outsourcing it and erm it means we can buy in the expertise of Capita to enable us to be able to improve erm the ITT to the council erm ... do both, er behind er behind  (sounds like modern instructions and things that bite - don't ask me) ... and for ... officers and councillors alike ...

Got that? One Barnet, the case for outsourcing, by Robert Rams. Absolute drivel. 

Another question from Barbara was on the issue of the 'savings' the Capita contracts are supposed to bring us. It would be useful to tell you what the amount of savings should be, but this figure is ever changing, never the same, and is fated, we suspect, to remain an aspiration, always moving out of sight. Some of these savings are, we are told 'guaranteed', but this definition of 'guaranteed' most likely means, ultimately, to be fought for in the courts should the aspirational sums fail to appear. The supplementary question, then:

The savings from the contract with Capita are capped, for example in the case of procurement, and any excess lands in the lap of the lucky shareholders of Capita plc, yet if we had chosen an in-house alternative to outsourcing, we would have been able to retain unlimited savings, particularly in the area of procurement, where our tradition of incompetence has made a ripe opportunity for gain from efficiencies. Does the Chair not agree that in hindsight, an in-house option should have been considered and indeed was always possible as the investment of £16.1 million needed was just waiting in our reserves, and was never going to come from Capita, or indeed any private sector partner?

Oh dear. No proper response, again. The Chair did not believe a better advantage would have come from not capping the savings. 


Later on came another opportunity for vicarious satisfaction from the Labour leader Alison Moore, who demanded an explanation of the same scandalous issue: 

This again offers a marvellous opportunity to witness the discomfiture of our elected members, the chin gripping senior officers of the London Borough of Broken Barnet as they watch their colleague present such a load of guff to the committee table, and then of course there is the delightful distraction of the typically hard faced, hard lined Tory right winger Cllr Davey apparently as keen to hear the explanation as any member of the public ...

The leader of the council appeared unwilling to tackle the curious question of the £16 million handover, and deferred to the Chief Finance Officer and deputy Chief Executive, Chris Naylor, for a 'technical' answer, political answers being too sensitive, apparently: and here is the technical explanation, accompanied by some interesting open handed gestures, in homage to the default mode of open government, which Mr Naylor has written about in the Guardian recently. Oh: in fact, the open hand turns inwards, but perhaps one should not read too much into that.

First he states the investment is principally in infrastructure, and tells us those assets will revert to the council. Yes: and how much depreciation of those assets, located where, will have taken place by then, and how much will be lost in real terms from that depreciation, and was that factored into the negotiations? He moves on:

Essentially, what is happening here is ... that the funding and financing, or principally the financing of the capital ... is through the deal with Capita ...

See, this inciseful explanation is what we give our Chief Finance Officer a six figure salary for. We are paying the for the capital investment from our reserves, but at the same time, we are not, and Capita is really paying it. He continues: (Mrs Angry's comments in red)

The overall contract sum has not changed as a result of the council's decision to fund this investment through our own resources, 

when did that decision to fund the investment take place, though?

principally, erm, we have done so because, in the final analysis, this presented the best value for money for the council,

again - when was this 'final analysis' that changed the whole nature of the agreement over investment, and why did it suddenly present a better value for money, and why has the authority kept it secret and continued to tell everyone Capita was paying for it?

but the financing of that debt, and the repayment of that debt, comes through the guaranteed savings in the contract, 

but we have already been 'guaranteed' these savings when Capita was paying for the investment ...

and I guess that still is a differentiator from, er, if the deal had been, er, if the deal had been struck on an in-house basis

you guess ... are you not sure? Or is the truth that you do not know, because this was never explored, for political reasons?

as obviously those savings would not have been guaranteed, and that would would have made a different risk profile to er to the capital investment ... 

but any and all savings would have directly benefited the taxpayers and residents of Barnet, rather than the shareholders of Capita, and in the present deal we are only allowed to retain a minimum amount of any savings made ...

So this notion that, erm, there is we, er, can suddenly quote afford some additional money is an inaccurate reading of the situation we find ourselves in. We can afford as it were to fund this investment because of the contractual guarantees in the contract 

but those contractual guarantees were there already, when we were told Capita was giving the capital investment upfront!

 and indeed through funding it in this way the council has retained  additional benefits from that contract and that additionality has not gone, er, to Capita: there is no benefit to Capita.

What additional benefits? Do tell.

And ... "additionality": what the f*ck does that mean? 

Mrs Angry is consulting her copy of the Crapita Guide to Corporate House Style for Executives of the London Borough of Broken Barnet ...

Oh - "additionality": lucrative profit agreed in secret at the expense of local taxpayers's reserve savings, thanks to the breakdown in the scrutiny process by lazy, uninformed and intellectually challenged Tory councillors. 
Well, well. How very interesting.

Last week, Mrs Angry wrote to all the Tory councillors to ask for their explanation of the £16.1 million pay out. Not one replied - either this is because the issue is so sensitive, or they simply did not know the answer - or both. She also wrote to deputy leader Daniel Thomas, who did not reply. He knows the answer, we must hope, and if not, why not? 

After the meeting, Thomas walked past Mrs Angry, who took the opportunity to ask him why he had not responded to her email. He regarded her in what seemed like a less than friendly manner, and gestured to the committee table behind him. You've had your answer tonight, he said, rather rudely. No, she replied, I expect a written reply. He then pretended he did not know what was in her email, as he has so many hundreds a day, and had not noticed it, which story was rather spoilt by the fact that he had just said, well, that he thought he had answered it in committee and then proceeding to let slip he knew exactly when it had been sent. He agreed to respond by the end of this week, eventually, and Mrs Angry looks forward to that.

Another person who owes Mrs Angry a response is the Tooting Twister, Barnet's spin doctor, who made the mistake of sitting behind her. Oh, he said, rather nervously, when she asked for a reply, you will get an answer ... and the answer is ... the investment by us was because it is cheaper. 

Nonsense, said Mrs Angry - try again. 

Still waiting, Mr Palmer ...

That was the line given at the Audit Committee, on the basis of interest rates on a loan - but the money is not being borrowed, it's being taken out of reserves. This means that not only are we losing the capital sum on deposit, we are losing the interest to us that would accrue. And as Mrs Angry established at the Audit Committee, the £4.1 million paid over to Capita for interim fees that never transpired, returned mysteriously on the Sunday after her question was submitted, was not accompanied by any interest payment by Capita, so what chances are there on this factor being considered since the change in the arrangements?

There is something badly wrong here: it smells wrong, it looks wrong, and it is time there was a full and open investigation of the entire matter of the capital investment. 

Mrs Angry has now written to the Section 151 officer to make a formal complaint, for all the good it will do, and indeed she believes that others have also done so. Is open government really the default mode of Barnet Council, Mr Naylor?

There would appear, on the face of it, to be £16.1 million pounds worth of reasons to suggest this is not the case. 

Stick that in the Guardian, why don't you?

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