Cornwall privatisation hangs in the balance

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Cornwall Council's unpopular plans for back-office privatisation are hanging in the balance after councillors complained they didn't know enough about it to give it their consent.

The proposal to outsource £800m of council services to either BT or CSC would turn Cornwall into a pioneer for a radical new model of local government in which councils become aggressive commercial competitors.

Cornwall's plan would put it in direct competition with an outsource venture in nearby Somerset, which has been struggling ever since Cornwall refused to join it in 2007. Somerset's venture, called Southwest One, had struggled because it couldn't drum up enough business. Now both Cornwall and Somerset will be climbing over one other as they try to convince other councils around the UK to privatise their back-offices using each of their profit making ventures.

The free-for-all was launched when the coalition government introduced an 'anything goes' law for local authorities in March. Called the general power of competence, it allowed councils to operate services for profit.

But with councillors and electors struggling to understand the implications of the change, and to comprehend why Cornwall should be embracing it, the Conservative-led council has already come near the point of no return in its deal-broking with BT and CSC.

Council leader Alec Robertson said yesterday he would put the privatisation proposal to the mercy of the council later this month, when councillors will vote on whether to keep it.

He had already told councillors it was too late to go back after they voted against the proposal on 4 September. But they called a no-confidence vote against him, to be held on 16 October, and opposition Labour councillors organised a petition to bring the issue back before the council chamber.

"If the majority of councillors vote against the proposal when its brought to full council, hopefully on 23 October, it won't go ahead," Robertson told BBC Radio Cornwall yesterday.

He said councillors only withheld their approval because "they didn't have enough information to make a properly informed decision".

Doom

But while the Council Cabinet had legal power to go ahead with the unpopular deal, Robertson conceded it would be "doomed to fail" if the council opposed it, because people would make sure it didn't work.

Somerset's outsource venture had been thus doomed after the 2009 election brought in a Conservative council who opposed it. It has since embraced the general power of competence in a desperate attempt to avert financial collapse. The bid will only work if it can convince enough councils to privatise their back-offices with its venture and not Cornwall's.

When Somerset launched Southwest One in 2007 it had aimed to get 36 public bodies across Southwest England to merge their back-offices into one company. The original plan included local authorities in Cornwall, Devon, Dorset, Gloucestershire, Somerset and Wiltshire. But in the end only three Somerset bodies joined in, by selling 75 per cent ownership of their IT, accounts, human resources and purchasing departments to IBM.

Now Cornwall councillors now have to decide whether they should outsource at all. Their Council Cabinet has told them that if they don't approve the venture Cornish back-office jobs will end up being acquired by another council's outsource venture somewhere down the line; and that if they do approve it, jobs will be created in Cornwall, presumably the spoils of battle against other councils in this new private/public market.

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