Time to take stock of One Barnet

Shannon Christine Mattern

Two people who don't have an axe to grind have indirectly cast doubt upon the One Barnet programme this last week.

The first was Sir Merrick Cockell who is the chairman of the LGA (Local Government Association) although he was speaking as a council leader who was interviewed by the FT. You can register free and read the whole article here although Mr Mustard has picked out the main points below:

Sir Merrick Cockell said there had been a period when “public bad, private good” had “almost been a mantra”, accompanied by a belief that “the right way for local authorities to do things was to outsource everything". Barnet Council still think that.

I hope we’ve moved beyond that, because there are very good cases for outsourcing. There are even stronger cases for testing a service properly to see whether it’s the right service to outsource, to see whether there’s a mature market out there that may be suitable to tender against it and then properly to reach a conclusion that there is, or there isn’t. All studies in Barnet somehow come to the conclusion to outsource.

Actually, I think we’ve also underestimated just how good some council services are that are done by local authorities very professionally with the tightest budgets [and] rigorous management. This would be a better approach in Barnet. Slash the management and control everything much more tightly.

Sir Merrick suggested that it was easier to adapt services to changing circumstances if they remained in-house. He added: “If you’ve got IT in-house, actually you can be very responsive to change. If you’ve got IT outsourced ... every time you want to change it, you have to renegotiate... and that takes time."  and it will take money. This is one of the biggest challenges in Barnet as 70% of everything will be out-sourced and the council just won't be able to think of everything.

and the second article is by Andy Williams who is the managing director of CPM Training and who wrote an article in Supply Management entitled back to reality and explained why "backsourcing" which is bringing work back in-house that was outsourced, is now the way to go. We are a bit behind in Barnet as we haven't actually managed yet to get most of our outsourcing done and yet we seem to be out-of-date before we have really got going. Oh well, only several £million wasted.

Here are some snippets from the whole article which you can read on this link.

It used to be that outsourcing was all the rage. ‘Do what you do best and outsource the rest,’ said one; we’ve been told to outsource everything, including ourselves,’ said another, but now backsourcing appears to be gaining ground.

The US government is actively pursuing a backsourcing policy after studies showed it was paying 1.83 times as much per contractor on average as it would for an employee. This was despite the fact that federal employees earn higher salaries. Town Hall Tax Dodgers don't look like good value then?

Savings consist of three elements:

● Reducing quality and/or resources. We’ve all been held on the phone at one time or another by the outsourced call centre that has reduced costs by cutting back on staff. Barnet is putting together a monster of a call centre. Mr Mustard has tested it recently and the two calls he made about blue badges were shockingly unhelpful.

● Transfer savings. One party makes money by taking it from another. A simple way to do this is to pay people less, which is fine if you’re comfortable with that and can still get the calibre of people you want for less. This is what is happening on the parking contract with new traffic wardens getting £8.20 against the original staff on £10.

● Efficiency savings. These come from economies of scale, a higher level of skills, better work processes or equipment. This is where the true cost savings in outsourcing lie, but how many managers asked themselves where this efficiency came from and how genuine it was? All of these savings could be kept in-house or by sharing with another local authority.

‘The Flexibility Issue’. 

A client of mine had outsourced much of its IT. Many of its previous employees, while working in the same location, were now suppliers, with a contract and KPIs and no incentive to do anything that wasn’t part of the specification. As one frustrated customer put it: “In the old days, I’d ask Eric (his former colleague) for help and he’d do what he could. Now all I get is a quote.” BT and Capita will not do anything for nothing, why would or should they?

Mr Cornelius / Mr Walkley. Time to stop and think, methinks.

Yours frugally

Mr Mustard