On 6 May the UK will be going to the polls against the backdrop of a huge £848.5 billion national debt, equivalent to 59.9% of UK GDP, following the worse recession for 60 years.
While the result of the election is far from certain, the reality facing a new Government is clear: national debt has to be reduced and that will inevitably mean public sector spending cuts as part of a measure of cost savings designed to rebalance the UK’s books.
For local authorities this presents huge challenges, notably how to maintain service levels, which the voting public will expect, while at the same time avoiding unpopular Council Tax rises and still delivering cost cuts
For local authorities this presents huge challenges, notably how to maintain service levels, which the voting public will expect, while at the same time avoiding unpopular Council Tax rises and still delivering cost cuts.
As a solution, Total Place - the Whitehall initiative to take a ‘whole area’ approach to public services, avoiding duplication between organisations in order to achieve better services at lower cost - and the collaborative working and shared economies offered by this model, are being keenly scrutinised by many town and city halls as a potential solution.
A number of local authorities have announced contracts with private sector specialists to deliver services in ways which reflect the aims of Total Place, and one of the latest involves May Gurney and Torbay Council, working together through an innovative Joint Venture (JV) company. This aims to maintain and improve service levels while creating £10 million of savings in the first 10 years of the contract. This will see May Gurney providing a wide range of bundled services to Torbay residents, including waste and recycling collections, highways maintenance, park, grounds and buildings maintenance services, street and beach cleaning and an out of hours call centre.
By working together via the JV, May Gurney and Torbay Council expect to make significant cost savings while maintaining and improving service levels. What sets this contract apart from others is that the JV will not only provide these front-line services to the residents of Torbay but can also tender to provide similar services to neighbouring local authorities and organisations. This will in turn help further reduce costs for Torbay, as profits from these contract wins will be shared between May Gurney and Torbay Council, providing an additional income stream for the unitary authority.
the main cost savings will be driven through streamlined planning and managing a portfolio of services through a single delivery organisation
However the main cost savings will be driven through streamlined planning and managing a portfolio of services through a single delivery organisation. This will enable May Gurney to use its experience of running services for 22 local authorities to implement operational methods and structures that have been proven to work most effectively across its operations and draw on Torbay Council’s expertise delivering services for the residents of the area.
By streamlining planning processes the JV also expects to be able to make greater cost savings through more extensive bulk buying and securing economies of scale with savings fed back through lower running costs.
In addition, new recycling services are expected to reduce the cost of disposing of refuse and enable the waste stream to be ‘mined’ with reusable and valuable commodities extracted and sold to recycling companies, boosting this income stream for Torbay Council.
Although Torbay is not a pilot area for the Total Place initiative, the local authority was keen to take a ‘whole area’ approach to the delivery of its services to reduce any service overlaps and duplication and find a way to secure and improve service delivery against a background of inevitable budget cuts.
The resulting JV contract is expected to revolutionise the provision of essential local authority services in the Torbay area and by adopting an innovative JV structure, both May Gurney and Torbay Council stand to gain from additional revenue streams generated through providing services to other organisations. This means the initial £10 million cost saving identified over ten years could be greater. The JV is also well positioned to act as a focus for job creation in the area and has already committed to employing apprentices and more experienced staff to scale up service provision as it wins new business.
While not strictly a Total Place scheme, this contract aims to take the spirit of the Total Place initiative and adopt it in a way that best suits the needs of Torbay Council and the residents and ensure that front line services are improved regardless of the uncertain financial backdrop facing UK public services.
Stephen Sears is director of policy and strategy at May Gurney Environmental Services