At a meeting of Cambridge City Council on the 21st of October 2010 the Liberal Democrat ruling group’s plan to privatise council house maintenance was debated.
I filmed the debate and have made it available on YouTube as well as embedded within this article; the debate is presented as a “Playlist” with one video per speech.
In my view the main problems have arisen because despite standing for election on a manifesto promising transparency and consultation the Liberal Democrats had not been open about the details of the tender process, the responses to which will form part of the contract. The Liberal Democrats are proceeding with their plans despite not having conducted a full consultation of all tenants and leaseholders.
The public gallery was overflowing with council staff, union representatives, council tenants, and members of the public. Observers were directed to sit around the edges of the council chamber. Councillors and tenants raised important questions about if they would be able to chase up work as effectively when it was subcontracted to a private company as they were at the moment. The Liberal Democrats did not provide any assurances that the private contract would contain provisions enabling tenants and councillors to effectively chase up maintenance issues effectively, and the details were not available for opposition councillors, tenants, or anyone else interested to investigate.
Another major concern, raised by tenants, union representatives, and opposition councillors was the fate of the council staff to be transferred to the private maintenance contractor, Apollo. Concerns were raised that the main way a private contractor would be able to operate more cheaply than the council would be though reducing staff costs. While the current staff are protected by the Transfer of Undertakings (Protection of Employment) Regulations (TUPE) councillors and others suggested the current, expensive, staff might find themselves forced out through changes to working practices and suggested new cheaper staff might be hired on contracts offering worse pensions, and terms and conditions than offered by the council. “All Poles”, heckled the council staff from the gallery.
Despite the full council having approved a filming protocol allowing filming of public speakers subject to them giving their permission the Liberal Democrat mayor banned filming of all those speaking at last week’s council meeting. Mayor Stuart also banned filming of the executive councillors’ responses. The mayor’s reasoning was that as one of the members of the public, friend of Executive Cllr Clare Blair, Lil Speed had asked not to be filmed preventing filming of the whole item was needed to avoid undue disruption to proceedings.
Tom Woodcock, present to use the public speaking slot in his capacity as a union representative, audibly expressed his disappointment, and disapproval of the Mayor’s ruling. The public speakers were key to informing the debate; points they raised were referred to on numerous occasions by councillors. It was a member of the public who came to draw attention to the legislation the Liberal Democrat councillors were in breach of by deciding to go-ahead without full consultation.
Lil Speed was the first public speaker on the subject of the privatisation of the maintenance contract. She claimed to be speaking “on behalf of the city services workers”, this prompted some raised eyebrows among the workers themselves who didn’t appear to be aware that they had arranged for her to speak for them. This is a real problem with public speaking at council meetings; it is often impossible for councillors to determine if those claiming to speak on behalf of a group are in-fact doing so, be it a group of council workers or a group of residents. Lil Speed said she hoped the Liberal Democrats would back their workers and let them keep their jobs and said that elsewhere in the country under Apollo, ex-public sector workers were not having a good time. Lil Speed also said that the council was currently poor at following up poor work done by contractors, expressing a concern that this would get worse with more work contracted out.
Executive Cllr for Housing, Cllr Smart, responded to Lil Speed. She sid “We at the Housing Management Board one year ago agreed to go out to contract and that went through according to the rules”, Cllr Smart said she was “sorry city services did not get it”. Cllr Smart gave Lil Speed an assurance that the city workers would keep their jobs as they would be transferred to the private contractor. Cllr Smart said the the details of that transfer, for example in relation to pensions, wasn’t acceptable then the deal would be called off.
This speaker introduced himself as a City Council tenant wishing to comment on the proposed transfer to Apollo. He was brandishing an excerpt from the Section 105 of the Housing Act which he said required the council to consult tenants before taking a step like the one the council had announced. The speaker also pointed to the Local Government Act 1999 and asked if the council had considered introducing a TMO.
The Leader of the council Cllr Sian Reid prompted Cllr Smart, the executive councillor for housing to say “we believe we have fulfilled our legal obligations”. Cllr Smart duly said: “we believe we have fulfilled our legal obligations”, she explained the elected tenant representatives had been consulted and the proposals had been approved by the Community Services Scrutiny Committee (on which some appointed tenant representatives sit). Cllr Smart said she didn’t know what a “TMO” was.
Mr Dove explained that as a tenant he had not been consulted; and suggested that amounted to a failure to consult. He expanded the acronym TMO to “Tenant Management Organisation” and suggested there are provisions allowing such organisations to be created.
Cllr Smart did not comment on TMOs, and responded rather abruptly to say just: “We have been advised by our legal team that we have fulfilled our legal obligations”.
Mr Fitzjohn introduced himself as a Unison Steward and a council leaseholder. He also complained about the Liberal Democrat council’s lack of consultation, he said that as a leaseholder he had not been consulted; though had now seen a letter which he had been told was suposed to have been sent to all leaseholders. Mr Fitzjohn called for an independent review.
Cllr Smart said brusquely: “I note your request”; she also promised to get Mr Fitzjohn a copy of the letter that’d he told the council he’d already got hold of.
Mr Woodcock introduced himself as the Secretary of the Cambridge and District Trades Council; he said those he represented were both tenants and council workers. He first commented on responses councillors had given to other public speakers (who were calling for the council to take a position on Tuition Fees) saying councillors were underestimating the degree of power and influence they had (when saying there was nothing they can do). Mr Woodcock drew a distinction between “council housing” and “social housing”, saying there was a need for council housing owned and operated by the council. Mr Woodcock said that council employees were seen as safe and accountable and did good quality work.
Cllr Smart responded to say that the proposal was not to privatise the entire service, and the decision was not being made on a ideological basis. The leader of the council, Cllr Reid helped her out, saying “we have no bias whatsoever” on the question of if the maintenance ought be run privately or by the council. Cllr Reid said she had: “respect for the public service ethos” and that her response when being told the City Council had not won the contract in its own tender process, was “Oh no, I’m very sorry”. She then repeated her statement that she had: “no particular prejudice”.
Mr Woodcock suggested that the council ought actively support public service; to which Cllr Smart repeated the sentiments of her leader saying: “I would have preferred city services to have won”, adding though that getting the best value for tenant’s money was an important consideration.
The debate was technically on a Labour motion introduced by Cllr Newbold which read:
Addressing Impact of National Cuts on City Services and People Needing Support
On the tendering of the Housing Planned Maintenance Contract.
- The Council notes that the council’s tenants have twice voted overwhelmingly to retain the City Council as their landlord and a major reason they wanted to remain with the Council was the standard and quality of maintenance and repair work provided by the Council’s own maintenance team.
- The Council believes all tenants should be consulted before any change of contractor, not just tenant representatives on Housing Management Board, particularly as tenants do not enjoy the same statutory consultation rights as leaseholders.
The Council calls on the Executive Councillor for Housing to initiate tenant consultation as a matter of urgency before any final decisions on the future Planned Maintenance Contract.
The Council supports efficient direct delivery of services by council staff and notes that its staff have written to and contacted Councillors recording serious concerns about the tender process, including whether the proposed replacement contractors
- Meet necessary health and safety standards.
- Have admitted body status to the Local Government Pension Scheme.
- Will honour all local government pension and wider terms and conditions for transferred staff.
The Council therefore asks on the Chief Executive to organize an independent review of the tender process to establish the facts, to inform final decisions on future Housing Planned Maintenance delivery, and assist in better planning of future contract and service reviews.
In introducing his motion Cllr Newbold said that while the council leader and executive councillor said they have no ideological preference one way or the other on who should run public services, he does, and he thinks public services ought be provided by public employees. He suggested that the number of people in the chamber suggested the council had got something wrong and had done something which might be legally right but is morally wrong. Cllr Newbold suggested there was a danger of asset stripping and a risk to the council’s reputation, and a risk to the health and safety of tenants.
Cllr Newbold drew a parallel with the SLM leisure contract, and said there staff were transferred across, but not all of them are still working for the company. He pointed out that new staff taken on were taken on under contracts with no pensions and no sick pay; he also reported that ex. council staff had been given no pay rises for the last five years.
Cllr Newbold said the council had not been able to give him the assurances he had seeking about the potential impact on transferred staff.
Risks arising from the loss of direct control over the workers was raised by Cllr Newbold; he pointed out councillors have much harder time getting private companies, eg. those responsible for maintaining bus shelters, to fix them compared to getting action in areas where the council has direct responsibility.
Cllr Newbold asked if the council was going to be come a virtual council, mere commissioner of services. He suggested Tenant Management Organisations offered a route to improve services and cut costs.
Cllr Newbold also criticised the council for not assisting its own team to put in a good quality bid for the tender; he called the council’s failure in this shameful.
In the video of Cllr Newbold’s speech Liberal Democrat Cllr Simon Brierley can be seen applauding at the end. Cllr Brierly did not though vote for the motion he had expressed that support for.
Cllr Dryden seconded the motion; querying why the council was getting rid of maintenance staff who had done a good job. Cllr Dryden said he was with senior Liberal Democrat, Deputy Mayor Ian Nimmo-Smith when he had been told the city services had not won the tender. He reported Cllr Nimmo-Smith was more concerned with how Cllr Dryden got to know, saying : “That was your union friends was it?”.
Cllr Dryden said Cambridge Liberal Democrats have become “Yellow Tories, backing the nasty party”, and was surprised at them pushing privatisation. Cllr Dryden said the LibDems had recently tried to get old age pensioners out of their homes, and was now getting staff out of their jobs. He noted the pensioners were still living in their homes, that decision had been reversed, he said there was time for this decision to be reversed too.
Cllr Cantrill, the first Liberal Democrat to speak during the debate, chose to make a party political tirade rather than provide councillors reassurances they were seeking; for example that they will still be able to chase up repairs effectively. Cllr Cantrill said it was the Labour group who had first privatised the running of the swimming pools etc. under a leisure contract. Labour councillors later comprehensively countered Cllr Cantrill’s attack pointing out that their privatisations had been done when a regime of compulsory tendering was being imposed by the Conservative government.
Cllr Smart then proposed an amendment to the Labour motion. The amendment, which has not been distributed digitally, stated:
Delete all and replace with:
The council notes that tenants have twice voted overwhelmingly to retain the City Council as their landlord trusting them to maintain their homes properly and spend the money that comes from their rents wisely.
The council further notes that the decision to put the planned maintenance contact[sic] out to tender was advised by the Audit Commission when they inspected the City Homes in October 2008 went through the pre-scrutiny system used by the council so that decisions are throughly examined before they are taken, including the Community Services Scrutiny Committee in March 2009 was fully discussed by the Housing Management Board in September 2009 and that the advice of the HMB to the Executive Councillor was unanimous with no abstentions.
The Council further notes that the tendering process was made under strict EU procurement procedures, because of its size, and that tenant and leaseholder representatives were involved in evaluating the tenders.
The council further notes that the contract will not go ahead if the replacement contractor does not honour all local government pension rights and the wider terms and conditions of the transferring staff.
The council further notes that the Housing Revenue Account is a ring-fenced account and money saved on this tender will be spent on City Homes. As usual, HMB will be asked to advise the Executive Councillor whether it should be spent on further improvements to the houses, or to the estates, or on other aspects of City Homes.
The terrible grammar in the above is a faithful reproduction of that within the document circulated by Cllr Smart.
The minutes of the September 2009 Housing Management Board meeting do not support Cllr Smart’s assertion that there were no abstentions on the vote to go out to tender. There were seven councillors, and four tenant/leaseholder representatives listed as present, a total of eleven, yet the vote, recorded at the bottom of p.3 was 10 – 0.
Those are minor gripes when compared with the Liberal Democrat’s rejection of the concerns raised about the potential impact on health and safety and the lack of consultation with all tenants and leaseholders.
Cllr Herbert said the debate raised the key issue of if the council wanted to support its staff. He said that in other instances when the council had gone out to tender it had put effort in to try and retain the work in-house, but in this case that had not happened. He said the head of building services had written to the Liberal Democrats saying he felt he had been let down. Cllr Herbert asked Cllr Smart what was done within the council prepare to tender for the contract. Cllr Herbert criticised the Lib Dems for citing the Audit Commission and trying to pass the blame / responsibility onto another body. Cllr Herbert expressed concern about other aspects of the council’s operations, he said the stores, vehicle and building services all lined up.
Cllr Hipkin complained about the lack of information available on the details of the tender and proposed contract. He said he wanted to see best value for residents and tenants.
Liberal Democrat Cllr Ward noted that the Liberal Democrat group don’t have a majority on the Housing Board and if they had wanted to opposition councillors could have voted with the tenant representatives and stopped the maintenance contract going out to tender. I have never observed a Housing Management Board, but I have observed tenants on the Community Services Scrutiny Committee a number of times and I’ve never heard one challenge anything the Liberal Democrats are doing, or even make a substantive contribution to a meeting.
Liberal Democrats suggested they had full confidence in the tenant reps as acting as representatives of the tenants; and tried to imply that suggesting there was a need for a comprehensive consultation showed Labour lacked support for and confidence in them.
Green Cllr Adam Pogonowski said he would support the “very good Labour motion”. Green Councillor Margaret Wright (who is often confused when it comes to debating financial matters in full council), called what was proposed a PFI (Private Finance Initiative) and spoke against it. (A PFI would involve private investment in public infrastructure, while the LibDems havn’t released the details of the contract there is no indication that’s what’s being proposed here), its a procurement exercise to buy in maintenance.
Labour Cllr Todd-Jones spoke against privatisation, on the grounds of lack of accountability.
Labour Cllr Hart spoke to say many council tenants are vulnerable people and they don’t cause a fuss if work is done badly.
Labour Cllr Walker asked the Executive Councillor to commit to seek legal advice on her obligation to consult.
Liberal Democrat Cllr McGovern gave some information on the tender process. He said it was run by the Eastern Shires Purchasing Organisation and the assessment was on the basis of 70% quality and 30% cost. He confirmed that signing up to TUPE would be a pre-condition on the contract.
Liberal Democrat Executive Councillor for housing eventually, late in the debate, revealed that the council’s internal maintenance department had come seventh out of the eight organisations competing for the work.
A rare “roll call vote” was then held on the amendment, (video), during which Cllr Al Bandar, the first to be called had to seek advice from his party colleagues on which way to vote. A few final speeches condemning the decision were then made by Labour members and the Liberal Democrat amendment was passed.
- Councillors ought to have had this debate before going out to tender.
- The details of the tender process – ie. the questions asked of those tendering and the responses received ought be made public; at least for the winner. These details will, I expect, form part of the final contract so they will become accessible to Cambridge residents at some point (via the right to inspect the documents supporting the council’s accounts), so ought be disclosed as soon as possible.
- Public services need to be run as efficiently as possible. I have no objection with the council saving money by providing council house maintenance via a private company if substantial and significant concerns can be addressed in the areas of:
- Safety and quality of work
- Ability of tenants and councillors to chase up problems
- Terms and conditions, and pay and benefits, for transferred staff
- Impact on the viability of the areas of the council’s operations
- I think it would have been legitimate to enter a tender process, and at the same time to shake up the council’s own internal service such that it was in a position to compete, on a level playing field, with alternative operators. Had, following such a process, the council still been unable to compete with the offerings of the private company then awarding the company the contract would be the right thing to do. Going in to the tender process, without trying as hard as possible to make the internal bid competitive was the key flaw in what the Liberal Democrats did here.
- It is important that there is fair competition; and the council decides what kinds of benefits in terms of pay, permanence of work, pensions etc. it wishes to offer those working for it, either directly or through a contractor. The council shouldn’t be using a contractor to employ, at arms length, people on terms which it would not contemplate using itself. I’m in favour of cutting the costs of employing people in the public sector, but this is not a defensible way to do it.
- The council should have consulted with all tenants and leaseholders; and taken their views into account. I would suggest looking into the effectiveness of the various tenant representatives, and at the ways the council supports them in fulfilling their roles.
Any corrections are, as always, welcome; particularly with respect to the names of the public speakers which are quite likely to be spelt wrong