Councils spent £393k on failed merger of services


Staff reporter (Chester First)

CHESHIRE West and Chester Council spent more than £390,000 on a failed merger of backroom services with Wirral Council.

The costs were revealed to the Leader after a Freedom of Information request was made.

CWaC and Wirral council’s announced in October last year they were going to “explore a programme of shared services” to “deliver innovation, provide quality support services and protect front line services in extremely challenging financial times for local government”.

The services which were to be merged included:
l Professional corporate services such as finance, HR, IT, procurement and legal services.

l Transactional shared services such as payroll, HR administration, IT support and paying supplier invoices.

But in March this year Wirral called off the merger after it decided to undertake a complete review of all its services.

This meant a total of six months’ collaborative work between the authorities, led by CWaC head of services, Carly Brown, costing £787,000 spilt between the two authorities, or £393,500 each, came to an end.

This money came from existing council budgets and despite the failure of the merger plan both councils said they had benefited from the exercise thanks to a “close relationship” and the taking forward of shared services for schools and leisure which were not on the initial brief.

Speaking at the time of the announcement, Graham Burgess, chief executive of Wirral Council said: “The work we are doing to review and remodel all of Wirral Council’s services is vital to determining the best delivery models for the future and we have said all along that we would not share services with other authorities unless there was a strong business case for doing so.

“It is right to thoroughly investigate an opportunity and have the bravery to say it isn’t right for us at the moment. The work we have already done is not wasted and puts us in a much stronger position to deliver our internal service reviews.

“The close relationship we have developed over the last few months is already yielding positive results. Most notably, the work we are taking forward in developing a shared traded service for schools and work around our leisure offer.

“We are confident that there are a number of other areas that we can collaborate on in the future.”

However, these assurances have been met with anger by the CWaC Labour opposition, with Labour leader, Cllr Justin Madders, saying it “looks like a lot of money wasted”.

Cllr Madders added: “It is not clear why the dialogue stopped but the Labour Group believes both councils should still keep talking to make sure we get value for money for local council taxpayers.

“There has been no official report to the council on why, the costs incurred, and most importantly, whether anyone in Cheshire West will take responsibility for what looks like a lot of money wasted?

“I think its time the Tories stood up and gave a full explanation so that we can be assured that this expenditure may still have some long-term benefit for council taxpayers. Again, accountability and transparency are missing.”

The council have defended the expenditure, saying it will help them save £5 million within five years. Council spokesman Ian Callister, said: “During its time with Wirral, this authority’s team also worked on the broad principle of service sharing.

“Experience and insight gained, particularly in the field of private sector involvement, helped with the establishment of CoSocius Limited – the joint company formed and owned by CWaC and Cheshire East Councils’.

“Launched in April, CoSocius is expected to generate savings in excess of £5 million over the first five years and would have involved Wirral – had that authority decided to proceed.

“We continue to work with Wirral on the principle of shared services, notably in the areas of schools and leisure.”

The council also stressed the money spent was out of existing budgets and CWaC had saved about £133 million since 2009.

Mr Callister said: “This council’s share of the costs of working with Wirral had already been budgeted for within its change programme – a process which has saved £133 million since the formation of CWaC in 2009.”

See full story in the Chester Leader

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