Independent report concerned over Cardiff council’s new landmark strategy
Jan 14 2010 by Martin Shipton, Western Mail
A LANDMARK council plan to involve the private sector in providing public services could be an expensive disaster, according to an independent report.
Changes being introduced at Cardiff Council – which may be copied across Wales – could see all its services eventually run by private companies.
Now an independent report commissioned from research body European Services Strategy Unit by the trade union Unison urges that two 15-year contracts about to be advertised by the council should be put on ice pending a rethink.
When Cardiff Council’s Liberal Democrat/Plaid Cymru executive approved its “trans- formation strategy” last summer, executive member for finance Mark Stephens said it was trying something that had never been done by a British local authority before. He claimed the changes would not involve any council staff being transferred to the private sector.
Under the council’s plans, a number of different companies would be brought in to work in different parts of the council. The first area to be targeted was IT, and Tata won responsibility for the council’s £10m annual spending on IT.
Another area involves the “built environment” which has led to speculation that County Hall could be sold off and leased back.
The report, being sent to all councillors today, says: “We have major concerns about the ‘schools and social services infrastructure partnership’ and the ‘built environment partnership’. The scope and scale of the proposed partnerships is unprecedented in local government and therefore carry significant risks to the council, citizens, communities and staff.”
The report adds: “Procurement savings may be significant and the council needs to focus on achieving these changes quickly to maximise the financial benefits in the long term. However, the council is expecting the contractor to be both procurement gamekeeper and poacher – this usually has dire consequences.”
The report criticises the proposed partnerships with private companies, saying:
(they are) ill-defined with regard to the level/ demand of work required and thus the value of the contract – this may lead to problems later in the contract;
they expect a wide range of skills, which are unlikely to be available from one contractor leading to the wider use of sub-contractors;
it is very questionable whether these partnerships will be cost effective for the council after the cost of managing the contracts and private sector profits are taken into account.
The report says there is a common thread running through all the council’s transformation documentation – the lack of an evidence base.
Unison regional officer Steve Belcher said: “This is a completely independent report, and we gave the European Services Strategy Unit no steer at all on what to say. In fact, its contents are more hard-hitting than we expected.
“What Cardiff Council is proposing to do is potentially the biggest outsourcing project undertaken by any public sector organisation in Wales, with contracts worth billions of pounds. We are very concerned that there has been no effective scrutiny of this strategy within the council.
“It is our belief that to a large extent it was driven by the former chief executive Byron Davies, who left last month.
“While we trust the assurances given by the current political leadership of the council that they do not intend to transfer employees into the private sector, there can be no guarantee for what might happen after May 2012, when the next election takes place. One council officer has already spoken in public about the possibility of handing contracts to private companies to run Cardiff’s schools.
“We are not opposed to change and realise that the council has to find more efficient ways of working. But we believe there are realistic alternatives.
“We shall be sending a copy of this report to every councillor in Cardiff and, because what happens in the capital is often followed elsewhere in Wales, to every AM and MP covering Cardiff.
“We hope the councillors decide to step back and think. We would like them not to proceed with the two big contracts they are about to advertise.”
