Care and education to go to private firms

Essex County Council is one of a growing number of authorities, mainly Tory-led, that intend to outsource all or most of their services to save funds, including schools management, social care, roads and libraries.

Essex, which has shortlisted two companies for a £5.4 billion contract over eight years, is regarded as having developed the blueprint for town halls under a Conservative government. The county is led by Lord Hanningfield, the Shadow Transport Minister, while Eric Pickles, the Tory party chairman, is an Essex MP.

Unions are resisting the plan, which they claim would lead to 6,500 job losses and poorer services. Unison, the public sector union, is considering bringing a legal challenge against the county, claiming that it has breached EU and domestic law.

Other town halls planning to tender all or most services include Torbay in Devon and several London councils, including Barnet, Harrow, Havering, and Hammersmith & Fulham, all of which are under Tory control.

Council leaders argue that, with severe restrictions on public spending likely over the next three years, every effort has to be made to find savings. An incoming Tory government may cut budgets still more severely to avoid council tax rises.

Several authorities have already privatised refuse collection, parking and street cleaning, and many argue that bigger savings can be made by awarding much larger contracts, encompassing several services.

Lord Hanningfield told The Times that one of the two companies – IBM or TI Systems – would be awarded the multibillion-pound contract next month to review and manage all the county’s services.

Although some of the services may remain in-house under a partnership with the contractor, the peer expects the winning company to identify at least £200 million of savings. He admitted that some jobs would be lost but disputed a claim that the figure would be as high as 6,500.

He said that savings could be made by streamlining functions such as assessment, human resources, IT and finance across all services. "Assessment is pretty much the same whether you are assessing pot holes or care for the elderly," he said. "Local government has to change and do things differently if it is to meet the growing expectations and needs of the people it serves. This is not about reducing services but looking at different ways of delivering them."

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