18 June 2013

Verrus - PayByPhone - Not a bargain

You go abroad for a few days and you come home to an unexpectantly high bill or you let your child have your iPad and suddenly you owe £thousands; that is just like getting Verrus to supply a cash free service for parking (cash free not cost free).

Let us wind back to Cllr Brian Coleman's delegated powers report of August 2011, DPR 1375, entitled "Cashless Parking July 2011" which is reproduced for you here in all of its glory (gory?)

What gems did this DPR contain?

para 3.2 - ‘Pay by Phone’ or ‘Cashless’ technology is inexpensive to set up and administer.

para 5.1 - Estimated costs for the necessary signage work would be approximately £160,000

para 5.2 - In addition, the removal of machines including making good the footway would entail civil works estimated in the region of £80,000

para 5.4 Savings

(£) Cost / (Savings ) Full Year
Pay by Phone fees (additional cost) £80,000
Pay and display maintenance costs -£200,000
Pay and display running costs -£20,000
Cash collection costs -£220,000
Staffing costs (E&O) -£100,000
Totals -£460,000

So moving to PayByPhone was meant to save bundles.

Para 8.10 - To date pay by phone transactions account for nearly 50% of all pay-at-time-of-parking transactions (Mr Mustard might just have to check this statement for veracity).

Let us see what we saved. Here are the PayByPhone costs for the year to March 13

Date Invoice Month PbP on £ PbP off £ Paypoint £
11/07/2012 12958 May 26,504.52

09/08/2012 13325 June
09/08/2012 13326 June 21,114.32

09/08/2012 13327 July 23,146.21

09/08/2012 13328 July
17/09/2012 13755 Aug 20,094.95 2,623.79
30/09/2012 14046 Sept 22,671.82

30/09/2012 14047 Sept
08/11/2012 14521 June

08/11/2012 14521 Sept

08/11/2012 14521 July

08/11/2012 14521 Aug

13/11/2012 14572 Oct 24,178.39 3,426.97 358.76
10/12/2012 14917 Nov 24,847.25 3,406.22 448.66
11/01/2013 15314 Dec 22,295.72 3,273.92 337.83
12/02/2013 15759 Jan 23,666.62 3,127.11 108.81
13/03/2013 16255 Feb 23,420.68 3,086.34 491.98
29/03/2013 16598 Mar 24,902.20 3,274.27

Totals 256,842.68 30,866.31 2,850.75

which gives a total paid to Verrus/Paypoint via NSL of £290,559.

Amounts paid to park in the year were £2,945,682 so after allowing for a few sales of vouchers by shops we are looking at 10% of all parking income going to Verrus/Paypoint. It seems a lot for simply accepting money that people willingly want to pay. Mr Mustard is a debt collector and doesn't usually earn more than 10% of sums paid by debtors who don't want to pay willingly! Did Barnet Council negotiate fees hard enough? Do they even understand commerce?

The Verrus payments in the year ended March 2011, before parking meters were removed, was £58,221 and so the extra amount has not gone up by £80,000 but by £222,000 which wipes out all of the saving of the cash collection team.

It cost £240,000 to change the signs, remove the meters and repair the pavements afterwards so that means the net saving from this change for a whole year was a mere £80,000.

Now the businesses Mr Mustard has spoken to have suffered a drop in trade of a conservative 30%. We have 20 or so centres of shopping all with 50 to 100 shops. Let us suppose a typical shop has a turnover of £100,000 (again there will be many which were much higher). So the value of trade lost to the High Street by the bonkers policy of not having cash parking meters (and do see my post of yesterday about the prevalence of cash as a medium of payment) is

20 * 75 * £100,000 * 30% = £4,500,000 which is probably a massive under estimate.
Barnet Council exists in order to serve its residents and businesses. It is serving only itself by the policy of cashless parking.

By worrying about the cost of the service and not taking sufficient account of the value of the service the council have saved a small amount of money and badly hampered many businesses.

Much as Mr Mustard would be delighted to see the signatory of this DPR, Cllr Brian Coleman, leave the council and take up a post in the real world, Mr Mustard can't bring himself to write a reference that would help. Brian isn't solely to blame as no officer appears to have stood up and said what a bonkers policy it was and the "leader" of the council, Richard Cornelius didn't step in and stop the obvious madness.

If only traders had been consulted. Oh, they have been in North Finchley, Chipping Barnet, Edgware and East Finchley and all have asked for cash parking meters and the council are deaf to their pleas.

Cllr (Dean) Cohen rules out the return of cash machines

The time has come to listen.

Yours frugally

Mr Mustard

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