The Tail Wagging the Dog: Capita and Barnet
Barnet's Conservative led administration has never been so divided.
Since the local elections last May, new members of the Tory group have been confronted with the legacy of their longer serving colleagues’ failure in office: the crisis over the Capita contracts, a massive budget deficit, and the exposure of fraud by a Capita manager, enabled by a failure to put in place any adequate system of financial controls.
Members of the previous administration appear not to have grasped the seriousness of the situation, or at least are reluctant to acknowledge the extent of the problems facing this borough.
After receiving payment of a paltry £4 million from Capita in ‘compensation’, Tory councillors have now voted to delay any immediate severance of ties, in favour of a long drawn out process of assessment, during which time Capita will continue its contractual partnership with this borough, and our services will continue to be left in their control.
We believe this is quite wrong, and so, it seems, do some Tory members.
At last week's Audit meeting, for example, it was revealed that BDO, the authority's external auditors, are now obliged to visit Capita's offices in Darlington, where their administration of Barnet's Local Government Pension Scheme is based. This extra work will incur an additional charge on top of the audit fee. Capita continue to administer this scheme, despite very serious concerns about standards of performance.
Also at last week's Audit meeting, there was discussion about why new systems that should have been implemented following the £2 million fraud by a Capita employee were not in use.
Grant Thornton, Internal Audit, Senior Council Officers and Capita’s Partnership Manager in Barnet had all agreed these control systems should be implemented immediately. A Capita employee, however, based in Chichester, where these payments are handled, had taken it upon themselves not to implement this critical system, a failing only identified when Internal Audit carried out a follow up check.
At least one of the Tory members had grave misgivings about the continuing partnership with Capita.
Councillor for Hale, Laithe Jajeh, said at the meeting, “I find it really worrying that someone from Capita (can do this)..it’s almost the tail wagging the dog …’ He also commented on twitter that assurance from Capita on implementation of Grant Thorntons’ recommendations was ‘not reassuring whatsoever …’
He added that Capita’s performance was not good enough and that he was not confident that promised dates for completion would be met.
At a further point in the audit meeting it was identified that 51% of the internal audit recommendations were not completed, the majority of which were the responsibility of Capita. Labour councillor Alison Moore suggested that such a high level of actions not implemented was a sign of an unhealthy organisation. The Head of Assurance said it was a very serious matter from the officers’ perspective.
The Committee Chairman wanted to take a ‘positive’ view of the situation and suggested that we do not look at criticisms. There was a clear consensus, however, that Councillors, both Conservative and Labour, were not satisfied.
At last there is an acknowledgement, at least from councillors who were not involved with the original outsourcing exercise, that the partnership with Capita may not be the great panacea we were promised, under the lure of ‘Better services for less money’.
We are facing a review of the contract in February, yet there is a very real concern that decisions have already been made.
The dispersed structure of the contract, with Capita offices situated all around the country, makes it hard to implement change, hard to control, and hard to monitor. Different reporting lines in different organisations mean that it is difficult to pin down responsibility for actions or inaction. This exacerbates and complicates the failure in accountability between the management of local services, and the local community itself.
We call upon the council to make the outsourcing review as open and unbiased as possible, held in public, with full and meaningful consultation with residents - and with key roles for some of the new Conservative members such as Cllr Jajeh, and Cllr Prager, who seem to have a more clear sighted view of Capita’s performance - and we urge all members to look at how quickly services can be brought back to Barnet, where they can be properly managed, monitored and controlled.