Posted by: westlancashirerecord | August 7, 2018

Westley “Ground Breaking Partnership With DCT Leisure”

“Members may wish to acknowledge the success to date of the ground breaking partnership with DCT Leisure in managing the Beacon Park Golf Course for the Golf Course, Driving Range, Pro Shop and Beacon Centre Catering over the last 5 years. And “The Council now has a more favourable financial situation, with a guaranteed income from the course. DCT Leisure Limited has benefited both Council and local community, justifying the initial decision to engage them. Relevant Portfolio Holder: Councillor David Westley” to Cabinet: 15th March 2005.

As we all know, “ground breaking” is now synonymous with the ruination of the driving range by excessive, unlimited, landfill allowed by what DCT Leisure Ltd introduced and what Serco Leisure Operating Ltd (SLOL) continued. That much of it was illegal, by breach of planning conditions, is a matter of fact as witnessed by the Breach of Notice served on SLOL in May by WLBC.

And, since DCT Leisure Ltd eventually went into liquidation, stating in March 2012 its inability by reason of its liabilities to continue its business, after confirming in its 2009 accounts it had negative assets of £69,508, ie debts that included unsecured creditors HMRC VAT, Former Employee Tribunal Claim, Employee Redundancy, and Trade and Expense, how long had WLBC been monitoring it by due diligence? Short answer, never! So much for the “…guaranteed income from the course”, more like a banana republic deal?

WLBC states “Finance, Contracts and Legal Matters. Financial Management. The management of the Council’s financial affairs will be conducted in accordance with the Financial Procedure Rules set out in the Constitution. Contracts. Every contract made by the Council will comply with the Contracts Procedure Rules set out in the Constitution”.

 One of the most significant transformations in public sector service delivery in recent years has been the ever increasing tendency for local authorities to outsource. The latest Arvato UK Outsourcing Index found that the value of outsourced contracts signed by councils in the first half of this year increased by 84%, despite public sector spending decreasing overall. Moreover, according to research from Zurich Municipal, local authorities spend around a quarter of their annual expenditure – a total of around £45bn – on procuring goods and services from third parties.

If managed properly, outsourcing can reap rewards for councils and help deliver genuine business transformation with considerable benefits for services. But if outsourcing goes wrong, the impact on public services and the council’s reputation could be significant.

Councils cannot shift the blame for failure. As well as the clear financial consequences for councils who fail to achieve value for money from a contract, there are also significant reputational implications if essential public services suffer as a result of outsourcing. In the vast majority of cases where outsourcing fails, the public will view the council – and not the third party supplier – as responsible for poor service delivery. Public opinion aside, councils can also find themselves in hot water if they fail to understand their legal liabilities around outsourced contracts. In particular, local authorities need to be aware of non-delegable duty of care. In certain circumstances, an organisation will remain ultimately responsible for the safe delivery of a service even if that service has been outsourced to a third party.

Preparation and planning essential. But how can councils manage a situation where a provider fails to deliver on the agreed contact? The answer is preparation and planning from the start. Sound contract management is essential to protecting a council. This requires putting in place robust contractual agreements with any suppliers on key areas, such as the council’s expectations of a third party, who holds liability when the outsourced service fails, and which party handles public complaints. High quality contract management is particularly vital when that contract involves performing functions relating to young people or vulnerable adults.

Before any contract is signed, it is vital that councils carry out due diligence on suppliers’ financial viability and resilience. Our New World of Risk: Change for Good report found more than half (54%) of councils are concerned about the financial stability of organisations in their supply chain. Councils should also require proof that suppliers have adequate insurance to protect the authority in the event of a claim.

In addition, Local authorities should also ask themselves how the delivery of services will be monitored once signed. This is vital to achieve value for money and to ensure that services are being delivered to a pre-agreed standard. Is there a clear division of responsibilities and liabilities outlined in the contract? Are there a set of well-defined and realistic KPIs in place?

Effective procurement and contract management is no simple task, so councils should ensure they have staff in place with the right skill sets to keep their processes running smoothly. Many insurers offer expert assistance and training to staff in this complex and vital area. Following assessments of their suppliers, councils should consider whether they could quickly source an alternative provider or bring the service back in-house at short notice in the event of supplier failure.

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