JV or nothing: well, apart from the dozen other options

In the past, Councillors have been told there is no alternative to the thick JV, or as it is more known to the layman “outsourcing”. However, on Monday, a briefing was held on at least a dozen alternatives to handing over so many council service to a private company.

The options can be broken down into three types; public sector, strategic partnership and outsourcing. Though, the last two options are to a point the same, just varying levels of what is handed over to a private ‘partner’. It is interesting to note, there is an option in the thick JV of Libraries and One Stop Shops not being included, and staff being on secondment rather than, as is currently proposed, being transferred to BT.

The in-house option(s) fall into the following categories: a new wholly owned public company, Cornwall public sector shared services and a employee mutual. As part of the briefings, three Heads of Services (HoS), IT, Shared Services and Procurement gave their views on the in-house options and the amount of money that could be saved.

All three HoS said saving could happen with the in-house option. For IT, the savings over three years would amount to half of the target savings of 20%. Councillors were told this would include some job losses (roughly 10%), but these would be non-compulsory and would be achieved by natural ways like retirement etc.

Those services that are covered within shared services (OSS, call centre, Libraries etc) have identified 10% savings for the 2013/14 period for an in-house option. This equates to roughly £600,000. The HoS did say if more savings are required, difficult choices would have to be made, especially as 90% of this services cost are staff.

In procurement, again savings could be made, but it would also need investment to make sure those savings can be realised. This investment would also be a requirement for shared services and IT and this money would have to come from capital reserves.

At face value I reckon at least if not more (with more work) 50% of target savings could be made with the in-house options. If more work was done, I am sure more could be found without a drop in service to the public, or wholesale job losses. Surely that is better for staff and the public to have council controlled services, rather than relying on a contract between a private company and the council to make sure that service agreement is delivered?

However, even with the most robust contracts, there is always a very clever lawyer who finds the loophole which in most cases benefits the private sector, rather than a Government or council. History is full of public/private sector deals that have gone wrong, and it is the private company that comes out of it smelling of roses. Furthermore, from my investigations, I reckon as least 70% of shared services deals have failed to some point. Will Cornwall be lucky and be in the 30% success rate? Is that risk worth taking with tax payers money?

The feeling today that there still is not enough information, and I believe another briefing will take place before the December 11th meeting where this subject will be decided once and for all.


  • mick martyn

    Andrew, Many thanks for keeping us informed of developments – interesting as always. Re the shared services savings of £600,000, if 90% of the budget is staffing then this actually means lots of redundancies and you seem happy with this and think that more could be saved which would mean even more redundancies rather than a chink of light hope that some of this could be solved by increasing jobs in the partnership. Can you confirm you are happy about this and also where you think the additional savings could come from if more work was done as you seem pretty confident? Regards Mick

  • Andrew Wallis

    No I am not happy with many job losses. But today was the first day in which a in-house option had some credibility. The service could save money next year without job losses. However, if more is asked (which I believe is a threat) then something has to give.

  • There is still much work to be done before the vote on the 11th….and not all the Members present yesterday. Did you do a head count? I reckon maybe 60?

  • Johns

    The somewhat blinkered development of the JV proposal has taken the best part of two years to reach its current status where we now have a heavily caveated presentation by a single supplier (BT) containing guarantees which BT stress are “non-binding” and subject to T&Cs. Against this the Council have apparently produced a comparison Options Analysis in less than two months covering the other 5 alternatives. I fail to see how these can have been researched properly in the time given and certainly one of the Health Partners hasn’t been much engaged during this period. So it seems a reasonable concern that the advocates of the JV may just see the presentation of Options as a irritant and having ticked that box (rather ineffectually), will press on. There are many issues with this approach and any outcome which settles on a JV with only one bidder. I suspect it would be difficult to stay within the limits of Competitive Dialogue now there is only one potential private partner involved, if any of the components of the deal scoped so far were to change. Therefore if a JV proceeds it is reasonable conjecture that it will be as currently scoped – procurement services included etc. So in summary I consider that Cornwall is in the position where a Council led initiative has split the Cabinet, divided the Council, generated serious voter opposition, embarrassed its Health Partners, left us with a single supplier before any Invitation to Tender, and set the JV scope in stone lest we contravene procurement regulations. Given this sorry history, I’m not sure I have a great deal of faith in Cornwall Council’s ability to negotiate a bullet proof contract in which BT’s caveated guarantees become contractual ones.

  • mick martyn

    thanks for replying andrew – the service can save hundreds of thousands of pounds without redundancies – do they have a money tree or magic wand or werent you paying attention?!?!? Jude Robinsons latest blog on the subject is excellent by the way.

Please feel free to leave a comment to the post, as I like to hear your views! However, comments that do not meet the rules of the site (found in Blog Disclaimer) will not be published. Furthermore, all comment need to be approved by admin before publication.