The Times reports this morning on progress Essex Council is making on a large scale contracting out of services with projected efficiency savings of at least £200 million. They have shortlisted two companies – IBM and TI systems – for the £5.4 billion, eight year contract. Let’s hope they are checking the small print. The Lib Dems are opposing the move although the article adds that Lib Dem run Somerset have recently awarded a big contract to IBM.
Using private contractors is familiar in local government but what seems to be trail blazing about Essex is the range of services they are tendering and also their belief that further savings can be achieved by awarding one big contract rather than a series of contracts to different firms to carry out different functions.
The article quotes a number of other councils looking at doing more tendering. Havering has contracted out park security. The leader of Harrow, Cllr David Ashton says: "Privatisation is certainly something to be considered. All councils have to evaluate things that the private sector might do better."
Critics of the policy have asked how we can be "certain" that high service standards will be achieved as well as lower costs. This is where the detail of the contract including penalty clauses becomes critical. But the implication from the unions and Labour and the Lib Dems that we have "certainty" of high standards from in-house provision is laughable.