Proposal to change the way services are delivered by Reading Borough Council

Overview

Reading Borough Council agreed a Medium Term Financial Plan in February which means that over the next three years it must achieve £42m in cost reduction from a net budget for services of £143m. As part of the plan circa £2m was identified as efficiency savings from a range of services we currently deliver directly ourselves.  

Our in-house services are working hard to be more efficient and reduce their operating costs. We need to be sure that we are using delivery models that provide the best value for money and service to residents.  The Council has therefore decided to market test these services against other providers. 

The Council has agreed to market test the following services to evaluate both the cost and quality of our delivery: 

• The collection of Council Tax and Business Rates, the management of the Council’s Council Tax Reduction Scheme, and payment of Housing Benefit.
• Waste Collection and Streetcare
• Facilities Management and Building Cleaning
• Parks and Grounds Maintenance
• Fleet Management
• Highways and Civil Engineering

This process will involve a number of formal exercises which will be carried out in accordance with rules set out in public procurement law.

This consultation exercise is asking for your views on this approach. 

Subject to comments received in response to this consultation and the Council’s decision making processes, we expect to proceed as follows:

• Advertise the services identified in accordance with public procurement rules.

• Evaluate tenders to identify the most suitable of the third party providers that meet the Council’s requirements.

• The Council will compare both the cost and the quality of our improved in-house service to the best external bids received to determine which is the most economically advantageous to the Council and residents and decide whether to recommend an award of a contract or to retain the service in house.

• Any changes to services will be subject to an Equality Impact Assessment and further consultation will be undertaken as necessary if proposals change the nature of services to the public materially.

• Report recommendation to Councillors for decision.

This consultation is open between the 6^th August 2018 and 31^st August 2018. The closing date for this consultation has been extended to 14th September 2018. 

Why your views matter

The public sector has been impacted by the adverse economic environment since 2008. Local councils have been particularly affected by real-terms reductions in government funding. This is sometimes referred to as ‘austerity’.

Reading Borough Council has approached the challenges of this funding reduction through incremental reductions in budgets and staff and by finding service efficiencies. These initiatives have delivered significant savings and have been sufficient to enable the Council to meet its budget requirements until now. However, the scale of the savings required going forward means incremental reductions are not sustainable and more fundamental solutions are required.

The Council has therefore concluded that it must test alternative ways to deliver services that may involve third party suppliers delivering them on behalf of the Council, rather than them being delivered directly by the Council. In addition the Council is planning to deploy modern technology to automate and transform service delivery where it makes sense to do so. Where doing this, the Council as a best value authority has a legal duty to consult.

We are aware that there have been both successes and occasional problems in some contracts let by public bodies, so we will learn from these and identify the measures we need to take to manage risks and the delivery of benefits effectively.  Some of the possible benefits of working with third-party partners, beyond cost savings, are the creation of greater capacity to deal with periods of high demand and potential investment in technology to improve the customer experience and promote more flexible ways of accessing services.

Alternatively, keeping services in house may have the advantage of fewer risks and give current employees time to improve services and value for money.  The Council does not need to make a profit and services have access to the Council’s wider administrative systems.  The Council has a successful track record of service delivery across many areas and will also look to develop plans for in-house services to deliver additional revenue where possible.  

What happens next

The outcome of this consultation will be used to inform the Council’s market testing exercise and subsequent report to Council Members.