Two tender exercises currently underway, for Development and Regulatory Services (DRS) and a New Support and Customer Services Organisation (NSCSO), are between them valued at £1bn. The scale of outsourcing envisaged in the Council’s One Barnet Programme, represents a largely untested departure from established local government service delivery practice. Many of the functions, which include planning, building control, environmental protection and public health along with revenues and benefits administration, go to the heart of local government responsibilities for the safeguard and protection of public health and economic wellbeing. The impact of failure could be catastrophic.
…the track record of Barnet in letting and managing contracts, is a highly significant pointer to the likelihood of the One Barnet Programme being a success. In view of the potentially catastrophic impact that failure could have for the people of Barnet, it is entirely appropriate to take a detailed look at how well the Council has handled recent and current arrangements with its private providers.
An internal audit report considered by the Audit Committee in June 2011 into the Council’s dealings with private security firm, MetPro, was heavily critical, not particularly of the framework under which contracting out occurred but of the apparent willingness of officers to ignore the Council’s rules and procedures. Most damningly, the report concluded that poor practice was not confined to the relationship with MetPro but identified that: ‘there is an absence of signed contracts and sound contract management generally across the Council’.
Detailed recommendations arising from the MetPro case were all accepted by the Council but an examination of a number of other contracts suggests that there is still significant cause for concern.
…The elected members of the Council are perfectly entitled to develop and pursue their vision for the authority. They are obliged however to do so within the parameters set by law. This includes a requirement to act reasonably whilst taking into account all relevant factors and ignoring irrelevant ones. The numerous examples of failure to abide by internal procedures, as well as various potential breaches of competition law, should be relevant to any decision about whether and how quickly, the authority should implement its planned commissioning approach to service delivery. APSE has not been able to find any evidence that there has been any formal consideration of the implications of the apparently institutional inability to let and manage contracts adequately, for the Council’s future contracting strategy.
The evidence considered in this report indicates that there can be little confidence that Barnet has the capability, and perhaps more worryingly the culture, necessary to meet the challenge posed by the letting and management of contracts that, under the One Barnet plan, will be far bigger than anything the Council has previously dealt with. The risk of implementing a strategy based almost entirely on contracting out, is high and can only be magnified, by the reduction in client capacity envisaged in the commissioning model. A reasonable council would take account of this and if it is unable to take the necessary steps to increase confidence in its procurement and contract management, could only conclude that moving forward to an unprecedented level of outsourcing would be reckless to the point of being unlawful.