Council Defends Transfer Of Care Jobs As Union Voices Fears

It has been six months in the making and promises to be one of the most radical developments in Scottish local government in recent years.

Care, that most fundamental of council services, could soon be run in the country’s biggest city by a vehicle which some believe could be a “half-way house to privatisation”. The move includes jobs ranging from home helps to school caterers.

It is the latest arm’s-length body created by Glasgow City Council, which has already hived off museums, libraries and leisure centres, municipal car parks, IT, building services and even markets.

So far, most of “the agenda for change” in Glasgow has been driven by the need to get the best value for the public’s pound but the council insists the creation of the latest arm’s-length organisation to run traditional core services is for more immediate reasons – protecting 9000 jobs.

The choice, the ruling Labour administration claims, is stark: an arm’s-length operation controlled by the council or privatisation.

At present direct and care services, or Dacs, is not meeting its three-yearly rolling financial targets, a requirement for what are termed Significant Trading Operations, with the authority raising the spectre of external auditors carrying out the law and forcing Glasgow to put the services out to competition.

Coming next is the limited liability partnership (LLP) to run refuse collection, on-street parking and cemeteries.

An LLP for Dacs, the authority claims, would see the deficit wiped out and leverage provided to venture into areas it is prohibited from on account of the shackles of local government legislation.

Ultimately, it has its aims on similar services run by other local authorities, expanding its own potentially profitable operations while helping with efficiencies elsewhere.

But, by the admission of the council’s consultants, Grant Thorton, the proposal is not without risks.

With the authority attempting to make efficiency savings of 2.5% over each of the next two years, funding from social work and education to Dacs may be reduced, making the job of sourcing alternative revenue that bit more urgent.

If attempts to develop more commercial contracts falls short of business plan projections then the new LLP may be forced to increase the costs of its service and be increasingly reliant on income from an already hard-pressed local authority.

Despite some assurances from union leaders, the number of rank and file members raises the risk of industrial action, while there remains a question mark over VAT liability.

The council’s legal advice internally and externally is that the transfer of Dacs activities to an LLP meets the tests for European and UK procurement rules there remains the potential for the new body’s relationship to be challenged on the grounds it breaches EU procurement rules.

And, perhaps less tangible but core to the whole idea of local government, is the issue of accountability and the “democratic deficit” of arm’s-length operations.

Christopher Mason, leader of the council’s LibDem group, has been one of the more tenacious elected members when it comes to questioning the merits of hiving off. But even he has an air of resignation.

He said: “I wouldn’t mind in the least if Encore, the catering division, was totally privatised but I fought and lost the battle over the separation of care and social work about 15 or 20 years ago under the Tories.

“While there may not be anything particularly toxic about this particular LLP there are major issues of accountability.

There are just no proper democratic structures.”

According to the main union representing Dacs staff, the GMB, it has been given one option: “Like it or lump it.”

Martin Doran, GMB’s public services organiser, said: “Obviously we are concerned about any arm’s-length operation, from the loss of accountability to the potential impact on our members. The difficulty we have is the political decision has been taken. Like it or lump it. That’s our choice.

“We won’t stand idly back and our allow our pay and conditions to be diluted for the sake of efficiencies.”