The death knell for in-house services?

I mentioned in the previous post yesterday's publication of Draft Statutory Guidance on the so-called "Community Right to Challenge" (http://www.communities.gov.uk/publications/localgovernment/righttochallengestatguidance) which is one of the most pernicious features of the Localism Act.

For those not familiar with this legislative wrecking ball directed at local government services, the gist of it is that various bodies (including local voluntary organisations and, bizarrely, any two or more employees) can "express an interest" in taking over the provision of any local government service (certain services are excluded).

The Council can only refuse to accept such an expression of interest on certain prescribed grounds (the fact that democratically elected local Councillors might be committed to public services and have pledged to protect them in a manifesto isn't one such ground). However, if the expression of interest is accepted, that doesn't mean that the eager beavers who thought they could do better get to run the service.

Rather, what happens is that a procurement process is triggered, so that the profit hungry private companies which want a slice of taxpayers money in the pockets of their shareholders can submit their bids. The Government have harnessed the rhetoric of mutualism and the big society to the cause of big business like never before.

Best, or rather worst, of all is paragraph 9.5 of the Draft Statutory Guidance which reads as follows;

"9.5 It is unlikely to be possible for an in-house team to submit a formal bid as part of a tender process because an in-house team will not be a separate legal entity that could submit a tender and contract with the relevant authority. An in-house team may in certain situations submit a proposal that could be considered alongside the tender process but evaluating an in-house bid that makes use of authority premises, assets and employees against tenders submitted from external organisations is extremely difficult and any attempt to do so risks being challenged by an unsuccessful provider. As the community right to challenge requires that acceptance of an expression of interest will lead to a procurement exercise, relevant authorities should consider very carefully the consequences of considering an in-house bid at the same time."

This "guidance" which seems to go a long way beyond even the legislation ignores decades of experience, under the compulsory competitive tendering regime of the previous Tory Government of Council's being able to run competitive exercises between private contractors and in-house Direct Service Organisations.

We urgently need to respond to press Councils to continue in-house service provision.

Emergency Motion to Local Government Conference anyone?

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