Tory flagship council to sell off its core functions – after losing £1.3 million on security deal

The core functions of Barnet, a Conservative flagship council, are to be privatised in an extraordinary £750 million sale – just hours after the local authority faced a damning internal audit report revealing it has failed to control a £1.3 millon security contract and was “unaware” the firm was going bust.

by David Hencke
Friday, June 24th, 2011

The council which pioneered “cheap and cheerful” outsourced Easycare functions for residents is now proposing to sell off its core services. The tender will be for 10 years with an optional extension for another five. It will cover the council’s responsibilities for buildings, finance, IT, revenue, benefits, human resources and the future procurement of every contract.

The decision is going ahead despite damning evidence of the council’s failure to control contracts – highlighted by the collapse of MetPro Rapid Response, a private security company which received a staggering £1.3 million from the public pocket without ever signing or competing for a proper contract.The report concludes: “Officers cannot, on the basis of existing procedures, give assurance that this will not happen again, due to the lack of an accurate and complete corporate contract register and effective monitoring arrangements for contracts during their respective terms.”

The audit uncovered the fact that officials even paid the firm cash – into unauthorised bank accounts with wrong VAT numbers – and did not know if staff guarding the council chamber and care facilities had been cleared by the Criminal Records Bureau. They also had no idea about the financial health of the firm (it went bust owing £400,000, £250,000 of that to HM Revenue & Customs) or whether it had proper liability insurance or complied with equality legislation.

Nor is this the end of it. Another report into the Easycare council – or One Barnet as it calls itself these days – reveals further serious risks in council contracts.Barnet is planning to scrap its workforce code of practice and faces a backlash from staff. It warns its policies will create a negative attitude to outsourcing, low morale, and cause skilled workers to quit. It also describes as a risk “possible increased trade union activity” with the GMB and Unison campaigning against the plans.Another area to be privatised, Barnet Homes, could end with council taxpayers having to foot bills for corporation tax and VAT since they will be viewed as profit-making companies, not council services. Barnet’s local government pension funds contributions would also rise – as contributing workers quit but payouts increase

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About The Author

David Hencke is Tribune's Westminster Correspondent
  • Anonymous

    Many would prefer to call it the RyanAir Council. If all the core services go, then there’s very little left for the Council to do. This balkanisation of the Councilinti separate silos will lead to bitter disputes and decisions being taken out of the hands of Councillors and transferred to private officials with little accountability apart from to their shareholders. Its time fr the SOS to step in  and put a halt on the proceedings.