Councillors have voted to recommend pressing ahead with plans to outsource services in Bournemouth.
After a marathon six-hour discussion, the council’s scrutiny panel discussed the controversial move to go into partnership with private contractor Mouchel on Monday night and it will now be put before the full council on Wednesday.
The panel also recommended that written assurances should be received on the company’s financial position.
Chair of the panel, Cllr Beverley Dunlop described it as “a hugely significant issue.”
Although councillors believe the partnership will improve efficiency and deliver big savings, unions have warned frontline services could be slashed to pay for rising costs in bureaucracy.
A report by the Association for Public Services Excellence (APSE) also says moves to transfer jobs to Mouchel could spark a legal challenge.
The £150 million deal would outsource revenues, benefits, ICT and facilities management services.
But trade union Unison last night presented a council scrutiny committee with APSE’s report, which it commissioned and which claims the deal could end up costing money rather than saving it.
The report says the council’s own senior financial officer has concluded the deal would “cost more than it has budgeted for”.
It adds: “It will therefore require savings in other budgets to close the affordability gap, potentially meaning cuts in front line services to pay for more expensive back office services.”
It says the council could end up putting more money into the deal in an effort to fill a black hole in the finances.
“To act on this basis would be to effectively abandon the sort of strategic control that councillors are elected to exercise,” it says.
The report also claims the deal could be challenged in the courts because it has been substantially altered since Mouchel was selected as bidder.
It says “the regulations allow only ‘fine tuning and clarification’ and there is a strong possibility that discussions between the parties have gone beyond this”.
Mouchel has insisted it already has “a number of successful long-term strategic partnerships” with other councils.
Council leader Cllr Peter Charon said on his blog ahead of the decision that there was a “compelling” business case for the change.
“I believe that it offers the chance to dramatically improve and deliver four key services for less money, will give us the capacity to save 40 per cent of our revenue budget over the next 10 years and make a significant economic contribution to the wider Bournemouth economy,” he said.
Arguments heat up as debate rages over contract
LAST night’s Town Hall scrutiny panel meeting developed into a heated affair, with several councillors voicing concern over entering into a 10-year outsourcing deal with Mouchel, writes Julie Magee.
Bournemouth’s Unison branch secretary David Higgins, who represents 2,000 staff from social workers to home carers, was applauded following his plea for in-house managers to be allowed to achieve the required savings.
He said: “I know that our managers could do a good job. If you work with the staff and unions we can do it with less pain, instead of tying this authority into a contract where we will always be the weaker partner.”
But the council’s environment and economy executive director Tony Williams described the £150 million deal to outsource four departments as “a ground-breaking opportunity” which would create up to 650 new jobs.
He added: “It is probably the greatest investment opportunity in the last decade. The more efficiency savings we achieve the less cuts we will have to make.”
Cllr Richard Smith said: “If this was such a good deal we would not be rushed into a situation of trying to make quick decisions on the hoof” while Cllr Anne Rey told the meeting: “We have certain managers who can make fabulous savings. This is flawed and a slap in the face for our Town Hall staff.”
Cllr Ben Grower pointed out that Mouchel had recently made 2,000 of its own staff redundant, and asked: “Why should we share Mr Williams’ confidence? His confidence is not shared by the majority of people in this town.”
Cllr Claire Smith expressed concern about Mouchel’s financial position after its share price plunged more than 30 per cent last week.
She was told that Mouchel had suffered from a loss of business in the Middle East and from “very significant pressures on council budgets”. But the business’s underlying performance was profitable following “prudence measures” and it was highly unlikely Mouchel would go bust.
Members of the press and public were excluded while the final business case for an outsourcing partnership between the council and Mouchel was discussed behind closed doors.
Source: http://www.bournemouthecho.co.uk/news/8625139.Councillors_back_Bournemouth_s_controversial_outsourcing_plan/