Rebel councillors fail to stop £10m Havering outsourcing contract

An attempt by six Havering councillors to stop the council outsourcing a number of public services in a single £10million contract has failed.

Councillors from Residents’ Group, Independent Residents’ Group and Upminster and Cranham Residents’ Group banded together to “call-in” the decision made last month, forcing it to be reconsidered.

The cabinet decided on July 7 to pick a single company to award an estimated £10m annual contract for waste collection, recycling, street cleaning and controlling weeds.

However, in an email requesting the decision be reconsidered by the Overview and Scrutiny committee, Residents’ Group leader Ray Morgon argued there was “lack of data, evidence and analysis” on why this would be better value than an in-house service.

His email reads: “Given the shrinking number of private sector operators and acknowledged market congestion, the cost of the integrated service may exceed what would be deemed value for money.

“No evidence has been provided on the desired service standards and that an outsourced contract will improve performance.”

Council officers responded to his concerns by arguing that “modelling” showed an in-house service would be more expensive than outsourcing.

Their response continues: “The [in-house] model was also rejected at the time as the council had little experience… lacked the skills to directly manage the refuse service and all the financial risks would be retained by the council and not shared with a contractor. 

“Also, the [in-house] model did not enable the council to draw upon the experiences and different approaches to delivering these services that suppliers have gained from across the country and beyond to achieve the best outcomes.”

While a report explaining how the council arrived at the estimated £10m cost was not made public, the response adds: “It is too early in the process to predict the full costs. These will become clear following competitive dialogue.”

Due to technical issues, there was no audio for the livestream of the Overview & Scrutiny meeting, held on August 3.

However, a Havering Council spokesperson confirmed that the attempt to veto the cabinet decision was rejected by eight votes against six.

While waste and recycling collection and weed control are already outsourced, the council currently cleans Havering’s streets itself, meaning 80 staff will need to be transferred to the chosen company.

The change will also leave the council with a surplus of street-cleaning vehicles, which “will be disposed of through auction”, according to a report for the cabinet meeting on July 7.

The council said it is “unlikely that any savings will be made” but hopes combining multiple services into one contract will “offer overall better value for money” and remove confusion about “who is responsible for” what, and allow “swifter rectification” of issues.

However, the report also acknowledges there are “several financial risks” to the new strategy, including the government adding to the types of recycling councils must collect, making the contract more expensive, or the auctioned-off vehicles not fetching enough money.

The contract will have to be awarded before the current waste and recycling collection contract runs out in July 2023.

It will last for eight years, with an option to extend it for a further eight.

Victoria Munro

Local Democracy Reporter