Thurrock Council and Serco have ended a 15 year outsourcing relationship covering services including ICT following a review of the contract sparked by worries over value for money.
The council said in a statement that the Strategic Services Partnership signed in 2004 – costing around £18m a year – was no longer serving the needs of the council.
The review was called following a March cabinet meeting when the council’s cabinet member for central services told councillors that Serco would not provide enough information on staffing costs to be able to work out whether the contract was providing value for money.
Steve Cox, the councill’s assistant chief executive, said this week: “A world dominated today by austerity and budget cuts is very different to that envisaged in 2004 when this contract was signed and as we continue to shape a different way forward for Thurrock Council.
“Both Serco and the council came to realise this and a series of tough, but fair negotiations began, culminating in today’s announcement.”
Sean Hanson, Serco’s managing director for citizen services, said: “Unfortunately this old contract with Thurrock Council was no longer fit-for-purpose and it was in the interests of both Thurrock Council and Serco to end our partnership early.”
The cost of ending the contract early has not been revealed, but estimates have put it at between £5m and £9m.
A report to the council’s cabinet in February said: “Cabinet reports over recent years have identified a number of savings requests that have been agreed with the contracted strategic services provider, but which have not been delivered.”
The following month, councillors were told that the annual cost of the Serco contract was over £18 million for 2014/15 which represented approximately 17% of the council’s total revenue expenditure.
They were told that there had been “admitted failings which amounted to a breach of the contract in some areas”.
However, this week’s statement said that “Overall Serco has provided appropriate quality services, which have met the requirements of the contract which was negotiated in 2004.”
Discussions on transferring services back in house will now begin, and are planned for completion by the end of November.