Council looks to hand millions to private companies

A SOUTH Wales local authority facing a budget crisis is planning to hand over £220m a year of its spending to private companies to save cash.

Cardiff council’s finance chief Mark Stephens, right, said the plans, which were approved at the city’s executive board, were different to anything tried in other British local authorities.

He said the changes would not involve any council staff being transferred to the private sector.

Unions said they were “tentatively” going along with the plans but if there was any sign of services being privatised they would ballot for industrial action.

Ken Daniels, branch secretary for the GMB union, said: “They have sold it to us that they will bring in a private sector partner to work alongside us.

“They said they will not externalise any jobs. They have assured us that won’t be the case.

“As soon as they do, we will be balloting for industrial action.

“The minute they step out of that line and say they are going to privatise it, we will ballot.”

Coun Stephens said all staff would remain employed by the council and would not be transferred to work for another company that would then run the service.

He said: “This is not a traditional outsourcing model. We are bringing a private sector partner in to help deliver services.”

Under the council’s plans, five different companies will be brought in to work in different parts of the council.

In papers presented to the executive board, chief executive Byron Davies said the companies would be given responsibility for handling the council’s “external spending”.

The first area to be targeted will be IT. The company stepping in is expected to be announced today and BT, Indian giant Tata and IBM are all understood to be in the running.

The winning firm will be given the council’s £10m annual spending on IT and asked to use its purchasing power and expertise to buy and develop new systems that it is hoped will enable the council to make better use of the internet and IT to allow residents to better access services.

The next area will be the council’s land and property assets. The value of this contract is estimated as £30m.

Opposition councillors have predicted this could mean the council selling off some of its property, such as County Hall, and leasing the same buildings or new buildings back.

Three major contracts valued at a total of £180m will also be investigated in getting a partner to work with the council’s social care department, economic department and environment department, which delivers services from waste management to street cleaning and park management. It is hoped the partners could be announced by 2010.