|Giving stuff away for nothing|
Dear Cllr Cornelius
The One Barnet Parking Contract with NSL.
As you know I promised to write to you on the subject of Contract negotiations, savings and foreseeable consequences.
I discovered last year that May Gurney receive 50% of the income from the sale of recyclables above £702,894 which strikes me as ridiculously over-generous. Now I find a similar deal with Parking Enforcement.
I have now received a well redacted copy of the Parking Enforcement contract which removes the figures that I would need in order to properly armchair audit the invoices. I do know the following from the contract, from other FOI requests or from the published Accounts of NSL Ltd.
There was a transition period from 1 January to 30 April 2012
During the transition period, the Service Provider (NSL) shall liaise with the Council to ensure an effective and timely handover of the Services...
The contract started on 1 May 2012 ( it was only signed on 30 April which rather implies a bit of a last minute rush)
The cost schedule totals £2,553,067 p.a. and includes the following categories of cost:
· Staff; from on-street wardens up to the Contract manager.
· Equipment; e.g. handheld devices, radios, office equipment etc
· IT system.
The NSL Ltd Accounts to December 11 disclose staff costs of £90,353,000 (excluding pension cost) out of turnover of £140,668,000 (to the nearest £1,000) which is 64.23%
Thus we can estimate that on the Barnet contract staff cost will be in the area of £1,640,000
If all Key Performance Indicators are met NSL can get additional payment in a year of £290,853
The items which qualify for a 50% share of savings are all costs in the cost schedule i.e. any & everything.
In the local Times newspaper on 9 August you said "The key is that the contract needs to be written robustly".
In your column in the Press at about the same time you said "am now convinced that One Barnet is the only way to go" and "It is interesting that those who complain about One Barnet and set up websites have no suggestions as to what they would cut..."
One of the first actions that NSL did after taking over the contract was to get rid of the entire back office team. Their work was then moved out of Barnet, to Worthing I believe.
This will have boosted the economy of Worthing at the expense of Barnet's. This was an entirely foreseeable event. The supplier will move the work to wherever they can carry it out most cheaply. The only reason that the traffic wardens didn't get moved somewhere else is because they are street based.
I have seen adverts for traffic wardens (Civil Enforcement Officers in modern parlance) to work in Barnet at the princely sum of £8.20 per hour (see NSL jobs) which for a 36 hour week is an annual rate of £15,350. When traffic wardens were employed by Barnet Council they were paid from £20,205 to £21,951 p.a. (a not excessive rate of pay for being out in all weathers at risk of being the subject of aggressive behaviour) and the mid-point is £21,078
NSL are therefore paying 72.8% of what, at the mid-point, the council paid to traffic wardens. Office staff were generally paid more and it is conceivable that even higher percentage savings can be made on their salaries. The post of traffic warden is unsurprisingly one in which there is a high turnover of staff and so at some point all of the original wardens will doubtless be gone. Thus, at least a 27.2% saving will be made on staff cost and of that NSL will be paid half giving them an annual bonus profit on the assumed annual staff cost of £1,640,000 * 13.6% = £223,040 which taken with the profit to be made from hitting every KPI gives them a theoretical annual profit of £500,000 on a turnover of about £2.5m.
Now what was it you were saying about robustly written contracts? The wording may be robust but the content is ridiculously rotten.
Another problem with the Contract is that it is based upon the model of the British Parking Association (honorary treasurer John McArdle - you do know don't you that our ex Parking Manager, formerly an employee of NCP which spun NSL out of its business is now a Strategic Development Consultant at NSL - another one of those conflict of interest questions that Mrs Angry is always quite correctly banging on about) on whose Executive Council sit two NSL executives. Using the contract of the supplier is the wrong way to go about contract negotiations because it will have been written with the interests of BPA members as a foundation and not those of potential clients.
Might I just hazard a guess that your own successful business, Cornelius & Davies Ltd, established in 1943, does not have any generous contracts with suppliers in which they get a 50% share of a saving which you yourself could quite easily make? If you don't sign that sort of deal with your own money what makes it acceptable with mine and that of other Barnet residents?
So if you think that a traffic warden is only worth £8.20 per hour then that is what you should have decided to change the wages to in Barnet Council. Result: 100% of the savings to Barnet Council. Why didn't you do that instead of offering over a £1m on a plate to NSL over the next 5 years? That is my suggestion for making savings, do it yourself.
Mind you, the KPI are not being hit probably due to the wholesale removal of the back office team at the start of the contract. Take KPI9, Processing Services, which includes the requirement to process correspondence within the required timescales. This must include providing information packs to PATAS, the Parking & Traffic Appeals Service. I attach a pdf file showing that only yesterday 6 appeals by motorists were allowed, not because they were in the right but because the Adjudicator ordered it in all 6 cases. Why was this? Almost certainly because the necessary documentation had not been provided so that a reasoned decision could be made. A fee has to be paid to PATAS of £46 for every appeal. We aren't getting any value for that if paperwork to support the council's case is not being put forward.
You might say that these are teething troubles because it is a new contract. Well it is now the end of August and the contract has been in place for nearly 4 months and before that there was a 4 month transition period provided to prevent this sort of muddle. I am not convinced it will all be NSL's fault but whoever is to blame, as partnerships go, this one is in rocky seas.
Now, think about all the elements of the DRS contract, which have never before been packaged up by any council in the way that Barnet are rather ambitiously and unwisely trying to do. If the sausage machine type process which is issuing parking tickets and collecting the money can go so hideously wrong (I haven't seen many signs and lines being fixed either by the way and did I hear the ticket numbers are not measuring up to the levels the In-House team were delivering?) what are reasonable expectations of performance on DRS?
Parking is a shambles, DRS or NSCSO going wrong would be a disaster.
So, in summary:
50% of savings to the supplier is a gift, not a commercial arrangement.
Whoever negotiated this deal is not fit to negotiate any others.
Savings are made not by having bright ideas but simply by cutting wages.
Jobs are exported out of the borough, staff are just a commodity.
Contract performance is poor.
The council is wasteful with the money of residents.
One Barnet is just a simple wage slashing policy in a fancy wrapper.
Footnote: John McArdle was helpful to Mr Mustard who would occasionally send him details of parking tickets that were obviously issued completely in error (none for Mr Mustard who hasn't had one in Barnet for years) and if John agreed he would immediately squash them without further formality.