Bournemouth Borough Council has extended its outsourcing deal with Mouchel after carrying out a risk assessment of the consultancy.
The council will hand over its finance and human resources divisions to the firm, which already manages a number of its services under a 10-year deal. About 100 council staff will be transferred on 1 February under TUPE rules, with the council expected to make savings of £2.2 million through the arrangement.
The decision by the council’s cabinet came afer Bournemouth commissioned an independent risk assessment of Mouchel, following news of the firm’s £65m loss in the financial year, along with a turbulent year which saw three executives leave and a profit warning, along with the sale of its rail and energy divisions.
Cllr John Beesley, council deputy leader and cabinet member for resources, said: “It is easy for those opposed to change to focus on recent issues with Mouchel’s financial position. In response, I should highlight that service levels already being achieved by Mouchel in the services currently provided – IT, Facilities Management, and Revenues & Benefits – are in line with contractual obligations.”
Cllr Beesley also highlighted new business Mouchel has won, including a £60m Department for Transport infrastructure scheme and a successful application to the Department for Education’s project management and education services supplier lists.
He added: “This demonstrates that we are certainly not alone in our belief that Mouchel can and will continue to deliver excellent services in the future.”
Mouchel has been an “incremental partner” to Bournemouth council since December 2010 under a 10-year, £148 million contract for facilities management, information and communications technology (ICT), revenues and benefits. The proposal to outsource the two additional services was agreed by councillors in Sepetmeber, subject to a risk assessment, but came under fire from opposition councillors.
Cllr Beesley said the independent reviews acknowledge that all the relevant issues have been fully faced and dealt with by the council, and that robust measures have been put in place to plan for a variety of risks, including a strong exit strategy in the event of needing to bring services back in house. The council has set aside £135,000 “to cover the potential cost of bringing HR and Finance back in house, should Mouchel fail”.
Cllr Beesley added: “Obviously, we do not believe that this will become necessary, as we have confidence in Mouchel’s ability going forward.”
The decision is welcome news for Mouchel, which saw a £130m deal slip away last month after Rochdale council decided to halt a regeneration programme.
New Mouchel chief executive Grant Rumbles told CN last month that he is confident of building on existing client relationships.