Bournemouth to end outsourcing deal at the centre of 151 tribunal

Bournemouth Borough Council is set to bring back office services back in house, a month after a former section 151 officer lost a claim for unfair dismissal after raising questions over the current outsourcing deal.

The council’s cabinet will next week meet to vote on a report recommending the council ends its 10-year outsourcing deal with Kier (formerly Mouchel) covering ICT, revenues, benefits, facilities management, human resources and financial services.

The council says the current partnership has delivered more than £10m in savings since it was signed in 2010 but government grant cuts means the authority needs more flexibility over the services.

A report going to councillors said: “Areas that will need to see the greatest proportional reduction in spend will be those within the partnership, given their back office nature.

“The ability to justify and maintain the level of spending and standards of service within the Partnership is, and will become, increasingly difficult. This creates a potential conflict in strategic aims for both the council and Mouchel/Kier.

“The council will wish to see major reductions in spend in this area of up to £10m through budget reductions or joint working over the next five years and to see 100% of the benefit.

“Mouchel/Kier will wish to see growth in income and margin. The financial drivers for both organisations are therefore now considered to be diverging significantly.”

Bournemouth said that the local government settlement has left it facing a reduction in revenue support grant of 29.8% (£7.6m) in 2016/17and 36.8% (£6.9m) in 2017/18. The council currently spends £14.1m each year on the contract.

Former Liberal Democrat councillor Roger West, said: “Only four days ago, [council leader] councillor John Beesley said, under questioning from me, that the outsourcing contract had produced great savings.

“Now we hear it has been a very costly mistake.

“This concern was first expressed by [former finance officers] Stephen Parker, followed by Liz Wilkinson and now Ian Milner. How much has this cost our residents?”

However, Beesley said: “The comprehensive spending review and Autumn Statement were game changers for local government – more clarity emerged about the devolution opportunities and confirmation was received that our government grant will completely cease to exist by 2020.

“Those factors combined mean the council needs to be agile in this changing environment. This does not, however, detract from the successes that have been achieved thus far, with savings, service improvements and local job creation all having been delivered by Kier.”

Dorset councils are currently discussing the future of governance in the county, including shared service and unitary authority options.

Anne Filer, cabinet member for corporate efficiency, said: “Given the council’s financial challenges, and the need to be able to work quickly to implement further shared services or form a new merged council, the best arrangement for the council in the future now needs to be reviewed.”

The employment tribunal was brought by Wilkinson, who claimed she was constructively dismissed after raising concerns about value for money relating to the Kier/Mouchel contract.

She resigned from her position as executive director for finance at Bournemouth Borough Council in October 2014 after complaints about her behaviour were made by senior officers.

However, the tribunal last month rejected her claim, finding in favour of the council.

Photo (cropped): Bournemouth sea front by Robert Pittman, Flickr.