Firm is hired to cut money spent by council
CONSULTANTS from a major outsourcing firm will be hired to cut the amount a council spends on buying goods and services – including its contract with Kier.
Capita is poised to agree a two-year 'no win no fee' deal with Stoke-on-Trent City Council.
The firm will review the way goods are ordered and pocket an undisclosed proportion of savings taken out of the authority's budget.
Consultants will also be asked to renegotiate long-term deals, including the £30-million-a-year housing maintenance contract with Kier and a £3 million-a-year street light PFI deal with SSE Contracting.
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The decision comes a week after Capita signed a £31.4 million deal to take over 4,000 jobs and dozens of school services at Staffordshire County Council.
It is already working as a 'procurement partner' for the county council after signing a deal to save more than £18 million.
The city council has chosen to piggy-back on to the county council's contract by adopting the same terms and conditions instead of undertaking its own tendering process.
Officers said it would take months to secure a new deal and savings opportunities would be wasted – although The Sentinel first revealed the authority had decided to recruit a 'savings partner' last year.
Opposition councillors have questioned the move. Unaffiliated member Paul Breeze said: "They have had plenty of time to go out to tender for their own contract. I don't have a great deal of confidence in a lot of what the council is doing at the moment and I think there are questions to be answered."
A report due to be considered by the council's cabinet notes that the deal has brought 'ideas and skills' to the county council – but 'has yet to realise savings'.
Consultant Vanguard has already attempted unsuccessfully to find an acceptable level of procurement savings.
The authority hopes to save more than £1 million in 2013-14 by renegotiating deals.
It needs to save £21.1 million as Government austerity cuts continue.
Capita's contract will run until April 2015 with the option to extend. The council has not confirmed the percentage of savings it will hand to Capita.
Charlie Stewart, the council's assistant chief executive, said: "Senior officers at the county council indicate that Capita bring a wealth of experience.
"The council will pay Capita a percentage fee of savings delivered.
"This would only be paid on the first 12 months of savings. No fees will be paid to Capita until the savings have been agreed by the council and deducted from the relevant budgets accordingly."