Finance Matters for Schools Ltd - an open letter

http://www.econintersect.com/index.htm

At 9am on 20 February 2012 the following email was sent with a copy to Lord Palmer in his capacity as Head of Audit
 

Dear Mr Cornelius and Mr Walkley,

We would like to draw to your attention the following information, and ask you to respond to some questions on a matter that we consider to be of serious public concern.

We have reason to believe that a Private Company registered as FINANCE MATTERS FOR SCHOOLS LIMITED
http://companycheck.co.uk/company/07814930

may have been formed with the intention of securing contracts with schools that currently purchase financial services from the Council.

We understand that all three Directors may be current employees of the Council.

First can you confirm that all three of these Directors are indeed Council employees?

If not, then the rest of our questions are not applicable.

If this is indeed the case, we would like to ask the following questions:


Are these individuals currently employed by the authority?

If one or more of these Directors are Council employees, can you confirm that it is not a breach of any regulations for employees to set up a private company whilst still being paid by the Council that will deal directly with services directly associated with their current employment?


Furthermore please confirm that they may continue to have access to confidential data, and that this would not secure unfair advantage over any other possible bidders for these services?

Do you know how many Barnet schools have given notice that they are terminating their contracts with Barnet Council Financial Services?

When did they give notice of termination?


What reason did they give for termination?

How many schools have signed contracts with FINANCE MATTERS FOR SCHOOLS LIMITED?


Were any senior managers including the section 151 officer aware of this company


Have there been public and private discussions amongst senior managers on the creation of this new company within the Council?


We understand that Financial Services to schools are included in the NSCSO One Barnet bundle of services.


It would seem extraordinary, therefore, to us as residents, that council staff could allegedly be openly touting for business during the Competitive Dialogue process, and we would ask you to confirm that an urgent investigation should take place, and that you can assure us that all four bidders will be informed that such an investigation is in progress.


Yours sincerely,


Derek Dishman
John Dix
Vicki Morris
Theresa Musgrove
Roger Tichborne

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And now some additional views on the subject from Mr Mustard.

The staff involved in this venture have done the right and the wrong thing. The council have also erred.

Firstly the council should have opened up all services to in-house bids and let the £75m p.a. of work in discrete sections by directorate. That way, the experts who currently provide these services, could have bid openly and honestly. Undoubtedly most of those bids would be below what the likes of BT, Capital and Serco would bid as there would not be a huge overhead to fund. This would also have made the staff feel more valued. Currently they are being sold like cattle at the market. If they were given a true and fair chance to bid, with the same access to the data room as every other bidder there would have been a level playing field and following a fair competition they might have gone willingly to another winning bidder. 

Most residents would be pleased to see lots of small businesses being created in Barnet by Barnet residents rather than some faceless multi-national get the work.

There are questions about what the council knew about this. If any management knew and have not told the 3 employee-directors to resign and take their chance in the marketplace then management has erred and it is management who should be disciplined before the employee-directors. 

The way this should have been done is that the employee-directors could take soundings from colleagues and schools and once it was obvious that they had a viable plan, without using any council data except what is already published or available under FOI, then resigned. At that point the council should send them home on gardening leave and restrict access to systems. The employee-directors can then sell their services as a private company to Barnet schools and those of the surrounding councils. Naturally they will have the advantage of knowing who to talk to at each school in Barnet but that is just information in their heads which they are entitled to use and is probably on each school's website anyway. The school is likely to favour a known supplier in any event; that is just human nature.

The employee-directors have jumped the gun. Given the "Town Hall tax dodging" ( copyright: Eric Pickles MP ) example being set at a high level by the Chief Finance Officer, the Assistant Director of HR and others, Mr Mustard can see why ethical values might have slipped amongst the staff especially whilst they are living under the threat of One Barnet outsourcing and have seen Croydon, or worse, Bangalore, looming on the horizon.

The full story will come out in time. Has management been culpable of moral failure?

Yours frugally

Mr Mustard