(3/11/11) The Council’s Cabinet met on 18th October 2011 and agreed a report which outlined how they aim to become a Catalyst Council. In response, UNISON representatives sought an urgent meeting with the Council Leader to express our continued concern at the direction the Council is taking.
The proposals within the report seek wholesale change of service delivery and have been arrived at as a result of asking the providers in the marketplace what they would offer to deliver, which UNISON would condemn as a completely inappropriate basis for a major service delivery change.
The Council are looking at a series of options including expansion of the current partnership with Norfolk Property Services, develop a case for a joint venture partnership for corporate and transactional services, and to develop a “Local Authority Trading Company (LATC)”.
The proposed options will affect many Council employees and in our opinion is wholesale privatisation of Council services.
The report is in our view ideologically driven and uses the excuse in recommending the changes in Government spending cuts and legislation.
Whilst UNISON are fully aware that the Council is facing increasing pressure from Government to improve services and deliver efficiency savings, we do not share the Council’s view that this can only be delivered by external providers.
The Council’s case for change appears from the report to remain primarily economic with savings of £67million being made from 2015. However, there is no indication how much they intend to save through these changes; the speculative claim in the report of “a 10 – 25% saving on the costs, saving between £10 - £25million over the term of any agreement” comes from comments during the market testing meetings and responses and at the upper end, this is likely to be an over-estimate.
However, more importantly and worryingly, there is seemingly little consideration of whether in-house changes could match or exceed this, thereby increasing our concern that there is a clear ideological (pro-outsourcing) angle to the proposals. Of the specific recommendations we have a number of detailed concerns.
Review and Expansion of the Current Partnership with Norfolk Property Services
This is a huge problem; for starters, UNISON would argue that that contract would need to be tendered. It is unbelievable that the Council would propose to give a contract for £25million a year to one company (NPS) without fully exploring other options, including in-house.
Develop a “Local Trading Company” (LATC) for Social Care Services
This is a high risk commercial option. The report quotes three examples of this happening elsewhere – Essex, Kensington and Chelsea, and Stockport. It has also happened in Sefton.
In the Royal Borough of Kensington and Chelsea the company “Chelsea Cave” was put into liquidation in May 2011 by its independent directors. The Council has written off £300,000 of equity investment, despite it planning to employ staff on zero hours contracts, and paying just above the minimum wage.
Develop a New Strategic Partnership for Corporate and Transactional Services
There are 3 options here to establish a strategic partnership – for corporate and transactional services, public realm services and for professional support services to schools. The recommendation is to go for the corporate and transactional services and produce a further report on schools.
Therefore, it appears that the Council has already decided to establish a strategic partnership and now wants to work out which services to put in. This makes no sense in terms of best value. The Council should, in our view, be looking at the Services first, and then deciding on the options for providing them; again, in-house delivery should remain an option.
They also appear to be looking to include HR, Finance, Facilities Management, Strategic Procurement, Property and Asset Management, customer-facing services, Contract Centre, Revenues and Benefits, ICT and Legal Services because they are “areas of interest to the market” (section 5.5 of the report) rather than because it is a good idea from the perspective of the Council or service users.
Of further concern is that on the LATC proposal, the Council will transfer staff under TUPE on current terms and conditions. However, any new employees after transfer may be recruited on different terms and conditions of employment, thereby operating on a two-tier workforce arrangement. Different terms and conditions will, in reality, mean worse terms and conditions which, in the long term will, as evidence elsewhere shows, have a detrimental effect on those staff transferring.
UNISON is at the forefront of arguing for public sector solutions to public sector reform. There is a huge amount of evidence that public services deliver good value for money and quality services which cannot be matched by the private sector.
We have presented to the Council a document for agreement which, amongst a number of things, seeks to ensure that a properly resourced in-house service improvement plan will precede and inform any procurement process, and be included in any options appraisal exercise. This would enable the employer and staff representatives working together to improve service delivery and avoid any need to contract out those services.
Unfortunately, despite a number of meetings with the Council, they have so far steadfastly refused to agree to our proposed document.
The increased threat of privatisation is clearly very worrying and arrives at the same time that we are facing attacks to our pensions, terms and conditions and pay.
The Branch will be meeting with all Council stewards to discuss how best to respond to the Council’s privatisation proposals. We have already requested from the Council a copy of the business case for each service area, but we recognise that we will need to do more. We will keep you informed of all developments.
Terry Ratcliffe
Branch Secretary