Category: Austerity
Four Days That Shook One Barnet
What a week it has been.
Background:
In August 2013 Barnet Council decided to “get into bed” with Capita, when they signed the contracts, Capita Share price was 959.
Back in 2010 another contractor (Connaught’s) went into liquidation. They provided the Council Housing repair service. Our members were sacked by a telephone conference call.
As a result of that experience, when the Council started “courting” the private sector to run our services, Barnet UNISON warned the Council about the risk of contractor failure.
The response to our feedback was, “don’t worry”, “Capita is a top FTSE 100 company”, hence there is no risk of the contractor failure.
2018 and Carillion.
Earlier this year Carillion collapsed and went into administration.
To the wider public it was a surprise and a shock.
However, as more details emerge about the fall of Carillion, more questions are being asked.
- How did this happen?
- Why did the external auditors KPMG sign off their accounts.
http://www.telegraph.co.uk/business/2018/01/30/kmpg-investigation-will-make-break-frc/
- Why did the government hand over large scale contracts to a company that was in serious financial trouble long before it finally collapsed?
“For those already thinking this sounds a bit like Carillion – you are right. A gaping pension deficit, departing CEO, shrinking cash flow and over-reliance on intangible “goodwill” in it’s accounts – signed off by KPMG.
Capita’s profit warning caps a 24 month slide which saw the UK’s largest outsourcing company tumble out of the FTSE 100 index, its share price losing 80 per cent of its value since January 2016, falling from £11.60 to £2.01 today.
It is not clear whether the above news of the fall of the Capita Share price has ever been noted in the Barnet Council register. Furthermore after listening to the Council debate (Tuesday 30 January 208) on contingency plans in the event of contractor failure it is blatantly clear that none of the councillors had any awareness of the Capita Share price position.
Day One: Tuesday 30 January 2018.
Capita Share Price opened 358.60
On Tuesday 30 January 2018 at the Barnet Full Council meeting the following Opposition (Labour) Motion was submitted in the name of Cllr Barry Rawlings
Public services and outsourcing
Council notes the collapse of the giant outsourcing firm Carillion earlier this month following financial problems, a number of profit warnings, the departure of its Chief Executive and a drastic plunge in its share price. Council notes the uncertainty and concern this causes for thousands of Carillion’s workers, the small businesses in its supply chain, the projects it was contracted to deliver, and the public who use the services it was contracted to provide.
Council notes LB Barnet’s use of mass outsourcing contracts to provide critical back office, regulatory and other services, and therefore requests that the Policy & Resources Committee receives a report on what contingency plans are in place should anything similar happen to outsourced services in Barnet.
You can listen to the debate by going to the web site http://bit.ly/2EycNU5
The following motion was agreed. This is astonishing in itself as it is extremely rare for all political parties to agree on a motion.
The contingency plans for insourcing will be submitted to Performance and Contract Management Committee, Tuesday 27th February, 2018 7.00 pm.
This is a public meeting
“Flying a kite to cause trouble” “nothing to worry about Capita”
This debate took place before anyone was aware that Capita were about to issue a Profit notice.
Capita Share price closed at 347.60
Day Two: Wednesday 31 January 2018
Capita Share Price opened 250.00
Capita plc issue a profit warning:
Capita’s new Chief Executive stated: “Today, Capita is too complex,” he said. “It is driven by a short-term focus and lacks operational discipline and financial flexibility. [It] needs to change its approach. Cost savings and non-core disposals alone will not be enough. We have also taken the significant decision to suspend the dividend and seek equity.”
Some headlines:
Capita: more than £1bn wiped off value of UK government contractor
The next Carillion? Shares in outsourcing firm Capita plunged 40% after profit warning.
http://uk.businessinsider.com/capita-profit-warning-share-price-fall-2018-1
Outsourcing giant Capita announced the suspension of its dividend as part of a transformation plan this morning – and shares duly plunged by more than 40 per cent.
http://www.cityam.com/279777/capita-shares-have-tumbled-more-than-third-city-reacting
Contingency plans being made for Barnet’s contracts with Capita
Barnet UNISON writes to Chief Executive seeking details of the contingency plans.
Capita share price closed at 183.05
Day Three: Thursday 1 February 2018
Capita Share price opened at 178.15
In the debate in the House of Commons today, a Labour MP referred to Barnet Council having a contingency plan.
UK officials met Capita bosses to discuss its financial problems
The company’s value has more than halved since a profit warning earlier this week, falling a further 13% on Thursday. Competitors including Interserve, Mitie and Serco also saw their shares slide.
https://www.theguardian.com/business/2018/feb/01/uk-officials-capita-discuss-financial-problems
Oh dear, Capita: MPs put future UK.gov outsourcing in the spotlight
Labour MP Rachel Reeves asked about the serious financial concerns at Capita, after £1bn was wiped off the company’s value following a suspension of dividends and £700m rights issue yesterday. The firm’s shares have now plunged by almost 50 per cent.
Immediately after the announcement, Barnet Council – dubbed “easyCouncil” for its extreme reliance on outsourcing (it has more than half a billion pounds worth of contracts with Capita) – put contingency plans in place to examine how it would handle the fallout should Capita fail.
https://www.theregister.co.uk/2018/02/01/mps_scrutinise_capita_uk_government_outsourcing_contracts/
Capita share price closed at 160.25
Day Four: Friday 2 February 2018
Capita Share price opened at 160.35
Carillion collapse leaves Northern Ireland staff ‘facing uncertainty’
“The news that Capita stocks have nosedived places further pressure on the system of outsourcing public services and will require a significant review. We also referred the security of the PIP assessment contract, which currently rests with Capita, to the Auditor General for further inquiries.”
Norfolk councils will monitor contractor Capita after news of group’s woes
Capita contract probed after thousands of clinical letters stuffed in a drawer somewhere
‘Business as usual’ for school support company Entrust – despite Capita profit warning
Capita share price closed at 162.30
Breaking News: Parliament debate Capita & Barnet Council
Barnet UNISON seek job security for #Capita staff working for Barnet Council
Press Release: Barnet UNISON seek job security for #Capita staff working for Barnet Council
31 January 2018.
This morning Capita staff woke up to some scary headlines that the former FTSE 100 company was in serious trouble.
The next Carillion? Shares in outsourcing firm Capita plunged 40% after profit warning.
http://uk.businessinsider.com/capita-profit-warning-share-price-fall-2018-1
Outsourcing giant Capita announced the suspension of its dividend as part of a transformation plan this morning – and shares duly plunged by more than 40 per cent.
http://www.cityam.com/279777/capita-shares-have-tumbled-more-than-third-city-reacting
This news follows on from the recent collapse of Carillion only a couple of weeks ago. Already political commentators are making comparisons with Carillion and Capita.
In light of the much publicised stress and anxiety experienced by Carillion workers in the wake of the company’s downfall; Barnet UNISON has written to the Chief Executive seeking details of Barnet Council’s contingency plan in the event Capita may have to give up their contracts.
We know that whatever happens there is going to be a great deal of speculation and uncertainty for the staff and whilst UNISON has seen the email from Jon Lewis, Capita’s, new Chief Executive trying to stem anxieties of his 70,000 workforce, we know workers will be worried about their jobs.
Barnet UNISON is looking for a statement from the Council in the event that Capita are unable to continue to run the two Barnet contracts, that Council will initiate plans to transfer the staff back in-house.
Who can we trust?
Since the collapse of Carillion, more news has emerged as to how bad things really were for that company. Furthermore questions are being asked about the role of the external auditors KPMG more here https://www.insider.co.uk/news/watchdog-probe-kpmg-over-carillion-11931818
It has happened before in Barnet……
In 2010 Barnet Homes had commissioned Connaught’s to provide Council Housing Repairs service. Connaught’s went into liquidation. Our members were told they had lost their jobs over a message on a speaker phone. Months earlier Barnet UNISON had held talks with Barnet Homes Chief Executive as it was becoming increasing clear Connaught’s were in serious trouble. There was further problems when it became clear that there was missing pension contributions which needed to be picked up by Barnet Council.
Read more here https://www.barnetunison.me.uk/wp/2010/08/19/barnet-unison-members-working-for-connaught-face-uncertain-future/
Footnote: On 26 June 2017 Capita share price was 705.50 now six months later the share price closed today at 202.09 which represents a 72% drop in their share price over a six month period.
On Wednesday 31 January, 2018 the Capita share price opened up at 347 and closed at 182.50 which represents a 47.53% fall in share price.
“Once again the market shows that it is merciless when a company is in trouble. Carillion looks as if it is just the tip of the iceberg. The minute Carillion collapsed I immediately started to look more closely at Capita Share price. I noted that Capita share price had already dropped by around 66% in the last two years. Today seems to have shocked many experts. My concern is for the staff and the local services they provide for Barnet residents. I know from speaking to staff that they are worried and quite understandably cynical about any messages trying to play down what is happening to the company. After the debacle that our former Connaught members went through previously I want to ensure this time that Barnet UNISON does it utmost to try to allay members concerns about their future employment. My view is that this event is a watershed moment for Barnet Council. Please abandon your “love affair” with outsourcing and commence negotiations to return all services back to the Council.” John Burgess, Branch Secretary Barnet UNISON
Links.
1. “NHS England has said it is ‘holding Capita’s feet to the fire’ over poor performance, and GP leaders have called for the service to be taken back under NHS control.”
https://www.gponline.com/bma-demands-assurances-gps-capita-share-price-drops-40/article/1455914
2. “No sensible public authority, whether council, NHS trust, or Whitehall department, would let a contract to a company over which hang as many question marks as hang over Capita.
Procurement chiefs and permanent secretaries should now be poring over their contracts with Capita and making contingency plans. Capita runs payroll in many councils and staff have to be paid, so immediate alternative arrangements should be in place. That costs money, which needs to be factored into the cost of this and future contracts.”
3. Wave Tata, Capita: You’ve lost mega-contract to rival outsourcer
https://www.theregister.co.uk/2018/01/16/capita_loses_biggest_contract_to_rival_outsourcing_biz/
4. Ministry of Defence ‘wasted millions on failed computer system’
https://www.theguardian.com/uk-news/2014/jan/14/ministry-of-defence-failed-computer-system
5. Thousands of court cases adjourned due to failures in interpreting services
Barnet: School budget cuts fight back
Last year there was a great deal of publicity courtesy of the NEU publishing the School budget cuts website https://schoolcuts.org.uk/#!/
Here are some KEY FACTS
- £2.8bn has been cut from school budgets since 2015
- £54.0k average cut to primary schools
- £205.6k average cut to secondary schools
Unless there is a change of government and an end to austerity, then the cuts in schools are going to mean staff are going to face redundancy.
Barnet UNISON wants to organise and support our members facing cuts and redundancies.
For example we are currently supporting our members working in Hendon School where a cuts restructure consultation has begun.
Whilst we are involved in the consultation process we are also running an informal strike ballot of our members at the same time.
As Bob Crow once said:
“If you fight, you won’t always win. If you don’t fight, you will always lose.”
Our branch will always offer full support to our members in schools if they want to fight back. We will commit our resources to organise a robust defence of our member’s jobs and services.
If your school is facing cuts to staffing please make sure you contact the branch on 0208 359 2088 or email contactus@barnetunison.org.uk ASAP in order we can arrange a visit at your school.
“Tired of the brutality of Austerity?” – join John McDonnell Barnet UNISON AGM
John McDonnell speaking at Barnet UNISON AGM 8 February
Join @barnet_unison “Save it, Sort it, Recycle everyday”
Barnet Parking Service in-house option rejected in consultant’s report.
“It is a well-accepted industry fact that without careful management, the CEO workforce in any Borough, whether in-house or outsourced, will not always be as productive as desired with a corresponding impact on the issuing of Penalty Charge Notices (PCNs).” Oaklawn Consulting Limited report to Barnet Council, Environment Committee, 11 January, 2018). http://bit.ly/2mi1Z3R
This is the outrageous statement made by the latest in a long line of outsourcing consultancy companies that have earned literally millions of Barnet tax-payers’ money over the last decade as a result of the Council’s ideological obsession with outsourcing services.
Barnet UNISON campaigned vociferously to oppose the outsourcing of the Parking Service. We argued that a well-run in-house service was more than able to deliver a quality service and it had done previously until the agenda changed and outsourcing became the only game in town. Good operational managers were not appreciated and the Council became reliant on interim consultants who presided over the demise of in- house services.
The Parking Service, once a well-run service, suffered as a result of a series of poor managers and became a soft target for the outsourcing ideologues in Barnet.
However, the Parking Service in its final year, still believed that it could turn itself around and I was informed back then that they managed almost 165k PCNs (Penalty Charge Notices) which is quite incredible considering the last three months of that period morale was at rock bottom after they learnt the hard work was for nothing.
This completely demolishes the comment made by the consultant and it is an insult to local authority managers who demonstrated they knew how to run Parking Services.
Barnet UNISON has had to trawl through hundreds of pro-outsourcing reports over the last decade all trotting out the same mantra. We had hoped that the obsession with outsourcing was wavering but this report demonstrates that is not the case.
NSL took over the Parking Service in May 2012, yet there has been no evidence provided that they have been able to secure the same level of PCNs in the last five years.
Waste of money
In light of the cuts to funding it seems incomprehensible that the Council should commission a report on the merits of an in-house bid when senior officers have already begun the procurement process.
What was the purpose of the consultant’s report?
If the report was commissioned for genuine reasons then surely that means the procurement could have been undermined if it recommended a return of the Parking service in-house?
If that is the case then why begin procurement?
Why waste money on procurement?
If you want to know what is going to be discussed you can view the reports on Parking Service here
#BringParkingBackInHouse
Staring into the face of Armageddon
On 16 December 2014 Barnet Council voted for the second wave of mass outsourcing which if implemented would result on the Council workforce reduce to less than 300 staff.
At the same time Northampton County Council announced that they would do the same.
Our branch had by this time been fighting Barnet Councils mass outsourcing ideology for over six years.
Our branch was exhausted, our reps who fought in the first wave of outsourcing simply had enough.
Our branch took a decision that we would try to rally our members build more reps and give it a go.
What was there to lose?
2015 was a critical moment in our history.
The Council came for the trade union facility time, they wanted to reduce it to zero.
Then the outsourcing projects began to gather pace.
We made a simple decision to organise and fightback.
Barnet Unison Picket lines in July 2015.
Two things happened that happened that shaped our future.
Jeremy Corbyn turned up at our picket line outside NLBP, after this Jeremy never looked back and later became the Leader of the Labour Party.
Lastly, Mill Hill depot workers joined UNISON en masse.
It was a proud moment watching workers refuse to cross our picket line and sign up to join UNISON.
The rest as they say is history, more strikes, protests followed.
In May 2017, Street Scene the last service at risk of outsourcing was kept in-house.
Back in December 2014 we were facing an impossible fight, but after much hard work our members and services are still in-house.
As Bob Crow used to say
“If you fight you won’t always win. But if you don’t fight you will always lose.”
2018 promises to be another test for our members and our union, whatever happens I know we have the team, the members to take on whatever is coming our way.
Solidarity greeting to all of our Barnet UNISON members and a Happy New Year.