11 September 2014

One Barnet - aspirational contract savings.

"is providing"? Mr Mustard thinks this statement is not true
In the bright new world of 2012 the parking section was one of the first services to be contracted out under the One Barnet banner (a brand which has served it's purpose in 2014 according to Richard Cornelius the "leader" of the council). Has the supposed contract saving of £600,000 p.a. been achieved? Mr Mustard checked the first full year ended 31 March 2014. 

Note that costs stay fairly level during the contract period. Inflation was ignored.

The final row of this table = the difference between top & bottoms rows of table above
So this table shows roughly a £600,000 a year projected saving.

How have NSL and the council done?

Firstly, NSL have claimed, and been paid, for extra deployment hours i.e. paying for extra traffic wardens to roam the streets and dish out more Penalty Charge Notices, which might have been in order to catch up with the non-target of expected PCN numbers which would otherwise have been missed.

Month Amount £
April 42,359
May 48,013
June 44,745
July 44,596
August 44,959
September 38,876
October 48,785
November 38,011
December 23,902
January 32,681
February 20,073
March 50,289
Extra hours 477,289

So that was nearly half a £million saving down the drain. Extra hours added 18% to the contract cost.

Then the council (some highly paid consultant who is now miles away) massively under-estimated the costs of PayByPhone. That service certainly isn't cheap and is probably about the same as the cost of cash meters and collecting cash.

Month Amount £
April 28,556
May 28,754
June 28,315
July 29,588
August 24,912
September 27,812
October 31,813
November 31,977
December 24,412
January 29,486
February 27,768
March 30,676
Year 344,069
Budget 164,000
Extra costs 180,069

Then the new software doesn't appear to have been put in the main tender figures. It was quoted separately (hence the fairly level tender costs) and £174,755 has been paid out so far.

The main saving came, ironically, from performance failure as KPI payments had to be negotiated months in arrears.

Amount £
Possible KPI 284,000
Actual KPI 169,664
Saving 114,336

So, there you have the main elements of the contract variances. To summarise:

Overall contract position
Extra hours 477,289
Extra PayByPhone 180,069
KPI failure saving -114,336
New software 174,755
Extra costs 717,777
Planned saving 661,000
Net loss 56,777

So not only does it look like the contract hasn't made the projected £600,000 saving, but it has actually cost £56,000 more than the pre-savings budget. That is partly to do with the software change but NSL needed to be paid for extra hours which wiped out a nett £363,000 of the savings (after deductions for poor performance) and £180,000 went on extra PayByPhone charges which seem to have been grossly under-estimated. So much for the decision to remove cash parking meters being a minor decision. There were hidden costs.

Mr Mustard doesn't have enough data to gauge the effect of NSL on the income stream. He would if he could.

So if this is what the parking contract looks like after almost 2 years what do you suppose will be the position on the two large Capita contracts as time goes by. Will they also fail to produce the projected savings. At least we can get rid of NSL in 2017 when their 5 years is up, unlike Capita who can hang around like a bad smell until 2023.

I think the parking manager needs to start planning now.

Yours frugally

Mr Mustard

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