15 July 2005
Bedfordshire County Council is on the point of terminating its £250m contract with supplier HBS because it claims the firm has not tackled problems in the support services it provides.
The authority has given HBS one month to make radical improvements to its wide range of services, including IT, finance, human resources and customer call centres. If the firm fails to meet the deadline, Bedfordshire will take them back in house.
Deputy chief executive Jonathan Flowers told Public Finance that the 12-year contract, dating from June 2001, had faced problems all along and HBS had consistently failed to meet performance standards.
Flowers said: 'Basic financial functions have not been fulfilled and that has contributed to the district auditor serving us with a section 11 notice for 2003/04.'
In addition to having its accounts qualified, Bedfordshire was rated 'weak' in its Comprehensive Performance Assessment. The CPA report was negative about the partnership with HBS.
Flowers admitted there was 'potential for litigation' if the council ended the contract next month. But he said the distance between the two parties meant that termination was now the only realistic solution.
A statement issued by HBS said: 'HBS believe that this decision is inappropriate. Given the legal implications, the matter has been passed to HBS's solicitors to consider the next steps.'
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