Libraries among £5m part-privatisation
CORNWALL Council has taken "a leap of faith" into the part-privatisation of key services at a landmark meeting.
The council will now ask two multinational companies to bid for a contract worth hundreds of millions of pounds to jointly run services such as libraries, payroll, benefit payments and one-stop shops.
Council chiefs are looking to get other public-sector organisations signed up to the project, but the meeting heard that major partners such as the Royal Cornwall Hospital Trust had not yet committed to the deal.
Cornwall Council claims the project – known as shared services – will create 500 jobs and produce savings of £5 million in the first two years.
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However, the council admitted that the overall number of jobs would go down before it went up, while unions cast doubt on the predicted savings and said jobs would be lost.
Jim Currie, Cabinet member for corporate resources, spoke out against the deal, saying: "It's impossible not to notice the vast number of ends that have not been tied off.
"We're initiating something where we don't know what the outcome is going to be."
David Biggs, chairman of the panel that has scrutinised the project so far, told the meeting: "You now take a leap of faith."
Cornwall Council has already been speaking to BT and the IT company CSC.
Those companies will now put in a bid to do business with the council and would be the dominant partners in any arrangement.
Gill Steward, corporate director for communities, said the project would help the economy to grow in Cornwall and would bring together "the best of both worlds" from the public and private sectors. However, she admitted the scenario referred to as "the J curve" could see fewer jobs in Cornwall before all the new jobs were created.
Following the meeting the union Unison wrote to the leader of the council to say any decision should be deferred.
Unison said a review of other areas showed many joint ventures had failed, costing jobs and taxpayers millions of pounds to end contracts and bring services back in-house.
Unison South West regional organiser Stuart Roden said: "We don't see how it's possible to protect and create jobs, make savings of 20 per cent-plus, improve services and make a profit for the shareholders of private companies.
"The whole thing does not stack up," he said.