Dear member of the Audit Committee
UNISON has produced a report ( see attached ) on the Greenwich Leisure contract following the revelation in a report to Cabinet Resources 27 September 2011 that officers were seeking:
“1. That approval is granted to negotiate termination of the current leisure contract with Greenwich Leisure Limited (“GLL”), such negotiations being subject to final approval by this committee
and
7.2 An external legal firm, Bevan Brittan, carried out an analysis of the current contractual arrangements and the proposals for varying the contract. Having done so, Bevan Brittan, have advised that alteration of the contract, in the manner proposed, would, for the purposes of European procurement law, constitute a material change to the content and nature of the original opportunity such as to amount to a ‘new’ contract. Without a competition, in accordance with the European procurement rules, such a material change would carry a risk of challenge from tenderers who were unsuccessful when the contract was tendered, previously, as well as from others, currently in the market.”
Barnet Council commenced a 15-year Leisure Services partnership/contract (annual value £1.7m) with Greenwich Leisure Ltd (GLL) on 1 January 2003. It is now considering terminating the contract.
I am bringing our report to your specific attention because our report found that serious concerns about this contract had previously been brought to the attention of the Audit Committee.
UNISON is concerned that nine years into the contract there was:
• Poor financial controls
• No Partnership Board
• No effective contract management
• No proper risk assessment
• No key performance indicators or targets
• No checking of management fee/contract variations from GLL
• Decline in the condition of the Council’s leisure assets
Our report raises a number of critical key questions for Councillors in particular those members sitting on the Audit Committee:
1. Was there an expectation when the contract was set up that Greenwich Leisure would ensure adequate maintenance of the leisure facilities stock to last the lifetime of the contract?
2. Did GLL spend the allocated money on planned maintenance?
3. What was the annual cost of variation orders issued on this contract since January 2003?
4. Has this programme of work been audited and scrutinised?
5. If it was inadequate or ineffective, what remedial action was taken?
6. What is the current condition of the Council’s leisure facilities?
7. What has been the total cost of this contract to date?
8. Why were Audit recommendations not implemented?
Barnet Council’s catalogue of contract management failures on relatively small contracts has grave implications for the large multi-million One Barnet contracts currently in procurement.
UNISON believe that you should consider seeking independent assurance from external audit on:
· contract monitoring and
· long term procurement and the associated high level risks.
If councillors have any questions or concerns about the content of this report please do not hesitate to contact me.
Best wishes
John Burgess
Branch Secretary.
Barnet UNISON
0208 359 2088
www.barnetunison.me.uk
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