Each stage of Barnet Council’s commissioning process revealed fundamental weaknesses:
Transformation: The Council failed to carry out new service reviews and improvement plans with service users, staff and trade unions. Community organisations and service users were not involved in options appraisals, business cases, procurement or the Council reorganisation proposals.
Options appraisals: The ‘high level’ options appraisals with ‘business as usual’ in-house options were designed to fail. The Council commenced business case and procurement without options appraisal for Parking Service. Housing Service options appraisal and business case merged making a mockery of the options process. Hendon Cemetery and Crematoria appraisal recommended in-house provision but was ignored. There was flawed evaluation criteria and scoring of options.
Business cases: They omitted strategic, economic, commercial and management case evidence. They failed to assess the future demand for services. The Council attempted to minimise risks by omitting financial, operational, democratic governance and employment risks from Business Cases. The cumulative cost savings over 10 years gives misleading impression. There was no market analysis to assess trends and developments. The Council imposed unsustainable and morally unacceptable profits on Adult Learning Disability Services.
Value for money unproven: Savings figures are over-stated because the cost of redundancies, full transaction costs, contract variations and operational and financial risks are excluded.
Procurement: There were no in-house bids and the Council did not examine the option of Barnet Homes returning to in-house provision. There is a lack of a Corporate Procurement Strategy and refusal to have Gateway Reviews (a peer review to draw on best practice in procurement process, mandatory in central government but recommended in local government). Non-financial benefits are unsubstantiated, ‘thin’ client and contract management and monitoring costs are under-estimated.
Risks ignored or understated: Key strategic and operational risks are either ignored or understated. Substantial risks for revenue and benefits are not included in the Risk Assessment
Impact Assessment: No assessment of economic, social and environmental impacts or cost benefit analysis of outsourcing. The Council failed to require contractors to deliver services in Barnet.
Equalities Impact Assessments (EIA): There is no assessment of impact on service users. EIA did not examine loss of employment caused by the export of jobs from the Borough or job losses in the local economy.
High cost of management consultants: There is heavy reliance on costly management consultants committed to outsourcing.
Employment policies: There is a superficial concern for staff and the risks they face. The Council rejected staff secondment and TUPE Plus options. Outsourcing and reorganisation could lead to potentially large staff redundancies.
Systemic failure in contract management in Adult Services An audit of 20 Barnet internal audit reports for Adult Services reported to the Audit Committee between October 2005 and April 2012 reveal a catalogue of failures in implementing auditing recommendations on procurement, contract management and contract monitoring (see Appendix 2).
The commissioning model Commissioning separates the client and service delivery functions of the Council and selects a service provider from competition between the public, private and voluntary sectors. Commissioning is contracting. It affects all services and will have major consequences because the Council will: • Separate client and contractor functions into a commissioning group and service delivery undertaken by largely outsourced delivery units. • Replace service reviews and improvement plans with options appraisals, business cases and procurement. • Mainstream procurement and contracting across the Council. • Create and manage markets and drive competition between public, private and voluntary sectors. • Use public money to support markets. • Manage increased risks in procurement and contracting. • Commercialise in-house services, which increases likelihood of full privatisation. • Transfer staff between public, private and voluntary sector companies as contracts are won or lost. • Decommission (terminate or replace) services.
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