21 November 2008
By Tash Shifrin Essex County Council has launched a tendering exercise that could result in ‘any or all’ of its services being contracted out to a private firm in a £5.4bn deal. However, the council has not put the proposal to its Cabinet or committees. A contract notice published in the Official journal of the European Union said: ‘It is our intention that following the contract award, the partner will have the potential to provide any or all of the council’s services, provided that a robust business case, benchmarking and best value test is passed. ‘These services will include but are not limited to corporate and back office functions, environmental services, social care and school related services.’ Nick Bell, the council’s deputy chief executive and executive director of finance, said Essex was ‘looking to enter a partnership with either one or a consortium of private sector partners’ in an eight-year deal worth between £2.3bn and £5.4bn – more than ten times the value of most similar local authority contracts. The council would retain only a minimal central structure, he said. ‘We’re looking to become more of a commissioning organisation with different service delivery arms.’ He said the partnership contract would focus on change management, process re-engineering, a potential review of IT and new ways of providing services. Other services would be contracted out to either the partner firm, council trading units or other bodies on the basis of individual business cases. Bell confirmed that the policy, which was ‘still being developed’, had not been put to any council meeting. He said it had been discussed ‘with leading members’. The authority had followed the requirements of its constitution, and was ‘not committed to go down this route until the preferred supplier stage’, when it would be brought to a council meeting, he said. The council’s plan has been criticised by the trade union Unison. Essex branch secretary Mick Mahoney said: ‘They are abdicating their responsibilities. It’s privatisation. What I don’t know is how they are going to manage it.’ Edinburgh University research fellow Mark Hellowell, who specialises in public-private policy, described the contract as ‘completely unprecedented’. He added: ‘I think it’s very risky. You’re introducing a group of providers that would have tentacles in all parts of your organisation that would be very difficult to evict if it becomes necessary.’ But Mark Fox, chief executive of contractors’ group the Business Services Association, described the plan as ‘an exciting opportunity at the cutting edge of interdisciplinary service provision – across the public and private sectors, people are looking to procure a range of services from a single provider’.