Three into one as councils seek to save up to £27m

Confederation map  - areas covered by Cherwell, Stratford-on-Avon and South Northants district councils
Confederation map - areas covered by Cherwell, Stratford-on-Avon and South Northants district councils

Three district councils have voted through proposals to further share services and ‘streamline’ operations in order to save cash.

Cherwell, South Northamptonshire and Stratford-on-Avon district councils have joined forces and produced an extensive draft business case which highlights savings of £27m over a ten-year period in the most profitable model.

This ‘confederation’ model is the one preferred by Cherwell and would provide the potential to trade and/or work with additional partners.

Stratford members agreed to pursue a joint working option, highlighted in the business case last Monday, and South Northamptonshire Council agreed to further explore both the confederation proposal and the joint working one last Wednesday.

CDC leader Barry Wood said: “Local authorities are facing difficult financial challenges in the future as we manage the reality of decreased funding and an increased demand for service delivery.

“It is important we do all we can to retain frontline services which are important to residents and in order to do so, we need to look at new ways to remain financially solvent once the Government’s Revenue Support Grant begins to decrease.

“In 2011 we introduced a shared management team across Cherwell and South Northants and since then we have continued to share services, where practical, across the two authorities. To date, this work has saved over 
£3 million annually.

“The next step for us is to consider whether there are benefits in having a partnership between the three councils and, for the first time, we are looking into the possibility of a confederation approach to service delivery. There are numerous ways this confederation model can be structured but in doing so we will effectively be able to create organisations which, under the ownership of the council, will be able to trade and work with other organisations offering increased opportunities to generate income.”

In the confederation model the biggest money-savers over a ten-year period are a reduction in staffing which could see more than £9m being saved, followed by savings in workforce pensions of just over £8m.

Mr Wood said the council wants to avoid compulsory redundancies ‘almost at all cost’ and said it had been planning ahead and avoided employing permanent staff for some time – meaning some fixed-term contracts would simply run out and would then not be renewed.

He added the model is novel and ‘maybe contentious’ because the terms and conditions of new council employers would be different to those currently in place.

If existing staff move to these newly set-up companies within the council, they will be provided with a ‘broadly comparable pension’ to the Local Government Pension Scheme. However, new-starters would only be getting the statutory minimum contribution.

In the draft business case, a reduction in senior management would bring in a saving of £5m through the confederation approach.

Currently Sue Smith, chief executive of CDC and SNC, gets £127,512 per year and Stratford’s Paul Lankester is on £107,574.

When asked if the confederation would consider having only one chief executive, Mr Wood said it was not part of the current plans but added that they did not want to be ‘top heavy’.

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