An internal audit report has highlighted concerns over procurement processes at the London Borough of Barnet. This raises questions about the council’s general outsourcing proposals and also the government’s wider privatisation plans
Not a good week for privatisation. First there’s the Health and Social Care Bill – ‘paused’, slightly modified and re-started following public outcry over threatened marketisation of the NHS. Next was the desperate debacle surrounding Southern Cross, filling the parts of the press and media that the bill didn’t occupy.
And just to add insult to privatisation injury, yesterday saw a debate within Barnet council’s Audit Committee about the payment of £1,361,000 to a private security contractor MetPro Rapid Response without a contract.
Thanks to Mrs Angry, Mr Mustard and Mr Reasonable – the inveterate bloggers of the ‘Broken Barnet’ website – the sorry state of Barnet’s procurement and monitoring processes has been laid bare.
This follows an investigation and internal report into Barnet’s dealings with the company which was debated by Barnet’s audit committee last night. Mr Reasonable, who addressed the meeting, blogs today that the chief executive, officers and councillors were contrite, promised to investigate the position of other ‘vendors’ to the council and initiate a proper procurement process.
The key findings of the audit report are as follows:
- There was no procurement exercise in line with Barnet’s Contract Procedure Rules (CPR)
- There was no written contract with the council
- There was no record of approval or authorisation of any contract with Barnet
- There was payment of some invoices with no VAT number quoted
- Some invoices were from companies had different names – MetPro Group and MetPro Emergency Response
- Internal Audit found inappropriate changes to MetPro’s bank accounts
- MetPro was not registered with the Contractors Health and Safety Assessment Scheme, thus rendering the council vulnerable to prosecution or civil claims
- Contract monitoring arrangements were “ineffective to evaluate all aspects of service delivery including ensuring compliance with the Security Industry Authority Licensing arrangements”
- There was no evidence of arrangements for CRB checks or performance assessment
- There was no corporate contract register
So the findings of the internal audit report seemingly have wider implications than the MetPro contract alone. There appears to be a systemic failure to ensure that procurement processes in Barnet are lawful, transparent, compliant with EU procurement rules, understood by managers and generally followed. As the report says, ‘there are serious deficiencies in current procurement arrangements’ and:
‘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.’
All of this might not matter a jot, but Barnet is set on a course to deliver on its ‘One Barnet’ project - £100m worth of savings over the next decade – largely through procurement. Currently up for grabs is the first tranche of Development and Regulatory Services – cemeteries, planning, highways, land charges, Registrars, environmental health, building control and trading standards. Feeling a tad concerned?
To be fair the internal audit report does make some high priority recommendations: ‘A process of training and familiarisation of the Contract Procedure Rules is to be put in place to address these deficiencies’ and ‘sound management practices’ are called for. But will that be enough? And what about other councils speeding down the privatisation road? Barnet is not alone.
There is, of course, always external, statutory audit to rely on. In Barnet’s case, the external auditor seems not to have picked up the problems with the MetPro contract. But hey, anyone can make mistakes. Sadly, those mistakes could well multiply under the proposals made by housing minister Grant Shapps for a new regime of ‘light touch’ statutory – and guess what, privatised – audit.
Shapps’ announcement of his audit plans in March was peppered with coalition-speak. The work of the Audit Commission is to be transferred into the private sector and ‘localism and decentralisation; transparency; lower audit fees and high standards of auditing’ will apply. Audit firms will be ‘mainly self-regulated’ and will be charged with ‘helping local people hold councils and local public bodies to account for local spending decisions’.
If the hardy Bloggers of Broken Barnet feel like me, they might want to ask some more questions. Like who will audit the privatised, ‘light touch’ auditors of the future maybe? How can the public really have a say over local spending? Can privatised services ever be truly accountable to local taxpayers? And is it time to stop throwing public money at the private sector and start ‘insourcing’?
Or perhaps I’m just being Ms Grumpy.
