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Cornwall Council, Joint Venture and Privatisation

July 11, 2012

For the past few months, I’ve been working on a panel with other councillors, scrutinising the proposals to move many of the Council’s basic services: council tax collection, benefits administration, libraries, IT services, One Stop Shops, procurement into a private company in which Cornwall Council would have a minority share.

The panel was cross party and worked in a non partisan way to examine the plans, which are a massive potential change to the way the Council works and will affect services in Cornwall for at least the next decade. Despite the enormity of the project, not much has been heard about its progress through the council until now and I am really pleased this is now getting the public airing it deserves, though also concerned it is too late for much democratic intervention.

The report produced by the panel is here – some of the recommendations have changed a little after Monday’s meeting but that has been more of tidying up than altering the meaning.

My concerns are these:

  • that the private bidders and senior figures at the council are claiming that (having already cut millions from services) more massive cuts can be made, services improved, staff pay and conditions protected, jobs created and a profit made by the private company. That is a very tall order and beyond the assertion that it could be done and some powerpoint slides, I felt there was no real evidence presented, no facts or figures, business plans or corroboration.
  • the decision making process was unclear. This project was considered as part of the Council’s programme to consider the most effective way to deliver its services and it scored lower than other alternatives. It was suggested that the criteria were different then – when did they change and why?  What was the change?
  • there is lots of evidence that these joint ventures are risky and can fail, costing councils huge amounts of money. Somerset for example, has just taken back a lot of its services and it is claimed that it cost the council £500 million,
  • the Council is rushing through all the negotiations and contracts at breakneck speed – although when asked why it could not be delayed, the response was that the discussions had been going on for so long that potential bidders might walk away,
  • much of what councils do – and the health service partners who may enter into the venture with the council – might change.  The government may remove benefit administration from councils, the company that delivers community health services may change when the contract is put out to tender, if government cuts continue apace – will the council be able to reduce services it can no longer afford to provide,
  • public services are funded by taxpayers. Private companies are not subject to Freedom of Information or the direct input of councillors or scrutiny committees so there is much less accountability in how the money is used,
  • if this bid goes ahead, it will be awarded probably before the end of this year, just before the local elections in May 2013. Not only does this mean the public cannot have a say, the whole political makeup of the council may well change and yet the next administration will have to live with this decision, even if the majority of councillors are not happy with it. (Just look at how that worked with the incinerator!)

Most of all, I have been very concerned by conflicting accounts of many aspects of this project and by the suggestion that Cabinet’s role is simply to note progress. There is a big political decision to be made about the way Cornwall Council should go and it should not be ducked.  There is also a business decision to be made and it is the duty of councillors to satisfy themselves that the case stacks up before they risk public funds.

Much as been said recently about the ‘graph of doom’ and the prospect  that the coalition government will keep cutting government funding until councils can no longer meet more than very basic duties.  This could be a reason to jump into the project.  On the other hand, being told there is a bogeyman on the way and expected to jump in a certain direction is not a good enough reason without some hard facts.  That wasn’t the reason given for this proposal last year.

As a Labour and Cooperative Councillor, I would prefer a lot more consideration be given to community solutions, to cooperative structures (which are working really well in many of Cornwall’s schools) and the public service ethos is valued. The days when private solutions were always seen to offer the best value are behind us.  It’s good to have a sceptic on a cross party panel and I approached this with an open mind, willing to be convinced if it could be shown to be the best solution for Cornwall. I am not convinced.

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One Comment leave one →
  1. Jim Paters permalink
    July 11, 2012 9:32 am

    This has disaster written all over it. If the private sector will walk away because its taking too long then it doesn’t say a lot for their commitment. It’ll happen though, simply because Mr Lavery wants it to and he runs the council with the Cabinet as his fall guys.

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