A shared service that deals with council tax, housing benefit, non-domestic rates, debt recovery and customer services for Thanet, Dover and Canterbury will be taken over by private contractor Civica UK on February 1.
The outsourcing of the East Kent Services (EKS) functions, which currently looks after those areas for the three councils, is aimed at cutting costs without the need for redundancies.
A report to members of the East Kent Services Committee, which will meet on January 24, says the outsourcing to Civica will also provide: “Immediate savings via reduction in costs of EKS operation on day 1.
“Safeguards existing jobs and prevents redundancy costs; possible additional “one-off” savings in Year 1 and an income, shared between Civica and the three councils.
The report says the move could also create new jobs.
EKS was formed five years ago to provide IT,HR, revenues and benefits and customer services. It has saved the three councils £6million but from this year the organisation would have needed to make savings of between £300,000 and £500,000.
A previous report to Cabinet members said this would require some 30 redundancies. EKS currently employs 300 people.
Staff affected by the contracting out of services are to transfer under Transfer of Undertakings (Protection of Employment) Regulations (“TUPE”). to Civica.
If agreed, as expected, the three councils will sign contracts with the firm for a period of 7 years plus the option to extend by a further 3 years.
This will leave EKS with just ICT services, HR, some quality assurance aspects and contract management.
The report says: “In addition to the operational savings within EKS from the contract price, there will be additional savings from a future restructure within the remaining elements of EKS, overseen by the Councils’ Heads of Paid Service. It is anticipated as the residual element of EKS will be able to achieve some efficiencies due to the reduction in scale of the overall organisation.”
The amount saved by outsourcing to Civica has not been made public due to ‘commercial confidentiality’ but the report states: “Entering into the contract will result in a significant reduction in the operating cost of EK Services and consequently reductions in the contributions made to EK Services operating costs by each of the partner councils, providing direct cashable savings to each council.
“It also provides a high likelihood of income generation over the lifetime of the contract through a combination of profit share and rental income. In addition, agreeing the recommendation would avoid an estimated £1.2m of redundancy costs over the next 7 years and/or the need to increase the contributions paid by the partner councils to meet the operating costs of EK Services of circa £2m over the same period.”
Civica will take on:
- Council Tax Administration and Enforcement
- National Non-Domestic Rates Administration and Enforcement
- Housing Benefit and associated services
- Council Tax Reduction Scheme and associated services
- Debt Recovery
- Customer Services