Beware Calls for Partnerships - 4th November 2009

Now there is a renewed call for “cuts” from all political parties, there is talk once more at Ryedale of outsourcing work to “partnerships”, on the assumption that this will result automatically in huge savings. This is a mistake.

I can see some advantages in Councils working together in order to ensure a better and cheaper service to the public, but the kind of “partnership” under discussion is not this kind of arrangement. The idea is that a number of councils jointly set up a “partnership board” to provide a particular service as a separate corporate entity, and then transfer their staff to this independent entity. This new entity then charges the Councils it serves for its services.

The idea is to create savings by freeing the “partnership” from Council bureaucracy. The real effect is to free the “partnership” from democratic scrutiny and control.

Where there is commercial competition, this kind of partnership can be very effective. For example, Ryedale and other councils have set up a partnership to administer Building Regulation control. This has to compete with other organisations which are authorised to do the same work, and perhaps as a consequence of the pressure of  competition, it has been a great success.

However, the vast majority of Council services are not subject to competition. The “partnership board” is responsible for all aspects of the provision of the service, including the management structure, the work that is required, the method of performing the work, and the pay and conditions of employment. Before the year’s end they provide each council it serves with an invoice, which is very difficult to challenge.

No individual council has any control over the decisions of the partnership, because other councils are represented on the partnership board, and a majority would have to agree. There is little in the way of scrutiny, because neither the press nor the public have the right to attend board meetings. It becomes difficult to compare the cost of services provided by different Councils, if most of them subscribe to the same partnership. Once a service has been transferred, it is, in practice, very difficult to take it back.

We all know how rife empire building is in all government offices – particularly in the big mets. Your local councillors are expected to exercise effective control over the management of their Councils, in order to ensure services are efficient and economical. Handing over control to something else is an abdication of that responsibility, and where there is no commercial competition,  the result will be to make the management posts much more comfortable, and leave the door wide open for huge unchallengeable increases in charges.

Ryedale is one of 96 district councils which have a small population inhabiting a large rural hinterland. These are collectively represented by a body called “Sparse”. If Ryedale wants to make serious reductions in its costs, one thing it could do is to compare the salaries paid to its senior management and other senior staff with those paid in similar councils, and take appropriate action.

All the evidence I have seen suggests that Ryedale senior management are paid far more than in most similar councils. If new partnership proposals go ahead, the Council could end up by keeping all its highest paid managers, who will have little to manage, because the work will all have been outsourced elsewhere.

Note: It seems we are in for a repeat of a previous debate on this issue. Click here to view the articles published while the Council was attempting to set up a Revenues and Benefits Partnership.