29 January 2014

Why bother having KPI if you don't enforce them?

KPI review meeting in full swing
Sharp eyed readers will have noticed Barnet getting a mention in the Standard again yesterday in an article about targets for the issue of parking tickets. Barnet doesn't have an explicit target for an absolute number of PCN but the contract does include KPI (Key Performance Indicators) which are likely to drive up the number of PCNs issued, such as (these are extracts from the contract)

KPI.2 : effectiveness will be assessed by ... PCNs issued.

KPI.11 : The service provider will maintain....the industry average for the recovery of a PCN at £45 and work to increase the value of this recovery rate for the duration of this contract.

Mr Mustard raised objections to the Accounts of Barnet Council for both of these somewhat doubtful KPI to the external auditor Paul Hughes of Grant Thornton. His reply, which for Mr Mustard's four objections about parking, ran to 8 pages which actually said very little apart from some little gems hidden away, was that everything was cushty (Mr Mustard may be paraphrasing the champion pen twiddler's reply here, you'll doubtless be familiar with Mrs Angry's descriptions on the Broken Barnet blog of the high esteem in which the external auditor is held by Barnet's Bloggers) and that he wouldn't be doing anything, apart from giving us a hefty extra invoice (actually this last bit Mr Mustard gleaned from the agenda for the Audit Committee meeting of 28 January when Mr Mustard had a snooker team to captain, which won 7-5 since you are asking, and to be fair to Mr Hughes he is at some future date when everyone has forgotten what happened going to have a closer look in the council's records at what Mr Mustard had to say, although he'd probably be well advised to sub-contract it to Mr Mustard and his fellow bloggers to ensure a thorough job does actually get done).

Mr Mustard supposes we should be grateful. When it came to paying MetPro over a million pounds, there wasn't a contract. Was that something that the external auditor picked up during his audit? oh bless me no. Mrs Angry was the lead auditor that day with her army of armchair auditors all offering their assistance, advice and publicity. Well, at least with NSL Ltd there is a Contract. 

So why is Mr Mustard unhappy? Simples, because the Contract terms aren't being enforced.

The KPI are meant to be recorded every month. As part of his armchair audit, under the Audit Commission Act 1998, Mr Mustard asked to see actual KPI in July 13 for the previous year to March 13. The actual measurements were not available even though within the Contract they are clearly specified (despite NSL thinking they had yet to be agreed - the numpties) and accordingly each month has to be considered as not met. Therefore the "Bits" - bonus payments or deductions - had to be heading downwards to the floor and Mr Mustard calculated, & he is quite good at maths, that a refund of £137,343 was due to the council (on behalf of Mr Mustard and every other resident). Somehow he feels that if a bonus of that amount was due to NSL they wouldn't have wasted any time in submitting their invoice. This refund has not been made.

Let us now look quickly at the average recovery value of a PCN.

Year to 31 March 12, when Barnet Council ran the whole show:

Income / number of PCN issued
£7,227,652 / 134,801 = £53.61 average PCN income.
Year to 31 March 13, NSL were appointed on 1 May 12 (so 11 months of this year is theirs and their figures will have been boosted by the council handling the first month)

£5,834,877 / 165,569 = £35.24 average PCN income.

From this we can see that the income achievement of NSL (and Mr Mustard doesn't want PCN used as revenue raisers) is only 65.7% as good as the council's. Quite simply, their performance is mediocre (Mr Mustard is being polite here, Private Eye would say they are piss poor)

Now the bloggers have got sadly inured to council procurement being awful. Which cretin, or cretins, agrees a KPI for £45 when the current council performance is £53.61. So some complacement idiot is content with a KPI performance level that is 84% of the current performance. If the person who agreed this hasn't yet left the council please would they now do so now and don't put your hand out for a pay-off. The first rule of negotiation is that you don't give anything away for nothing.

What is also clear though is that at £35.24 NSL are performing at 78% of a woefully reduced expectation.

Clearly KPI.11 has not been met, ever.

If a KPI that measures incoming revenue isn't a revenue raising measure then Mr Mustard doesn't know what is (no matter how satisfied our apparently easily satisfied external auditor is).

The parts of the Paul Hughes letter that Mr Mustard did find interesting are these, thanks Paul: 

In appointing NSL Ltd, the Council had an expectation that recovery rates would improve so these figures do represent underperformance to date in recovery of PCNs.

There is a clear acknowledgement from the Council that management of the NSL contract has not been acceptable.

We are aware that remedial actions are being put in place by the Council, including a recent performance meeting with NSL, resulting in a high level performance plan.

the overpayment to NSL ... remains the subject of performance discussions with the contractor.

What Mr Mustard notes from the above remarks.

Once a contract is signed even if your performance is only 65% of what it ought to be, not much will happen.

The council is unable to properly manage outsourced Contracts, as the Famous Five Barnet Bloggers have been saying for ages.

Every blunder simply results in a "lessons will be learned" improvement plan. We had one after MetPro; it evidently hasn't worked; they are just a sop.

Some 10 months after the year end, and 22 months after the contract started, the contract terms have not been implemented. 

What is the point of having contract terms that the Council don't implement.

The wider picture

The NSL contract is a simple procurement of one service, parking enforcement.

Scale it up 40 times to the level of NSCSO (customer services) or DRS (development and regulatory services) which bundle together a myriad of services with many more KPI and it is clear that the council doesn't have the skill or the will, or both, to properly enforce the contracts that they sign.

The commissioning council is going to be an unmitigated disaster, no matter how much hot air is spouted by councillors in Hendon Town Hall. 

You councillors don't have the grasp of details that the bloggers have. 

You did pick this contractual failure up before Mr Mustard, didn't you? 

Yours frugally

Mr Mustard

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