Trading company could run Hampshire adult care services
HAMPSHIRE county chiefs have moved closer to switching adult care services to a separate council-owned firm. Cabinet chiefs heard the new proposals on Monday (March 28) to set up a local authority trading company.
It could provide in-house services such as nursing homes, day centres and equipment that are currently provided in-house.
Council bosses could approve the transfer by December but the move has come under fire from union bosses and Liberal Democrat opposition councillors.
Adult social services make up nearly half the council’s budget at more than £300m, excluding education which is funded directly by government.
The department employs about 3,450 full-time equivalent staff and provides information and support to 95,000 pensioners, adults with physical or learning disabilities and the mentally ill.
The council, which is faced with an ageing population and public spending squeeze, says it needs to reform the way it provides adult care services, including cutting costs.
The department already plans to cut spending by £24m and axe 376 jobs.
Trading companies are a halfway house between keeping services in-house and contracting them out to a private provider.
The council would be the majority shareholder of the company which would run as an independent enterprise competing in the open market place.
Staff who survive the job cuts could be transferred on existing pay and benefits, including pensions.
Essex and Somerset county councils have already gone down this route, with the former launching Essex Cares in 2009.
It is wholly owned by the council, overseen by a board of about 15 councillors, and provides home and day care, employment support and equipment.
Other options for Hampshire include keeping services in-house, contracting them out to a private provider, a joint venture and a social enterprise.
However, setting up a local authority trading company (LATC) appears to be the preferred route.
In a council report, chief executive Andrew Smith said an initial study had shown the LATC could lead to a “more efficient and streamlined operation.”
He said the next step will be to develop a business case to be considered by cabinet in September before final approval in December.
The council says as more people opt to shop around for their personal care with individual budgets, in-house services must cut costs to be competitive.
However Liberal Democrat opposition leader Cllr Keith House has voiced concerns.
He said: “The risk is a trading company could be used to cut standards of care and the quality of staff, away from detailed scrutiny of councillors, residents’ groups and the press.”
Tim Cutter, acting branch secretary for Unison, condemned the proposal as the “outrageous” and a “backdoor attempt at privatisation.”
He said: “It is the start of a slippery slope and begs the question how far is the council is prepared to go down this route with other services.
“I think there will be an angry reaction from staff. They know what privatisation will mean – an attack on terms and conditions and less job security.”
Better performing councils have the power to create local authority trading companies under the Local Government Act of 2003.
County chiefs say any proposals will have to go out for public consultation and no decisions have yet been made.
Cabinet members noted the report at Monday’s meeting and are due to discuss the issue again later this year.