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.
·
Premises.
·
Equipment; e.g. handheld devices, radios, office
equipment etc
·
Uniforms.
·
Vehicles.
·
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.
Best regards
Yours frugally
Mr Mustard
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.