The management of a £1 billion Birmingham City Council contract with outsourcing company Capita has been criticised by an independent review, a council scrutiny committee was told.
Accountants Grant Thornton found that the performance of Service Birmingham – a strategic partnership between the council and Capita, which runs the local authority’s IT and call centre – was driven by “commercial considerations” with little sign of any “strong, focused” management by the council.
However, a meeting of the Co-ordinating Overview and Scrutiny Committee heard there was also praise for the quality of service Birmingham call centre staff, who councillors said were being let down when attempting to help customers requesting housing repairs by the failure of contractors working for the council to respond.
The damaging allegations support claims made by opposition Labour councillors, who fear the council has allowed Service Birmingham to concentrate as much on making money as delivering better public services.
Only an executive summary of the Grant Thornton review has been released by deputy council leader Paul Tilsley, who ordered the study to be undertaken. But four paragraphs raise questions about the performance of both Service Birmingham and the council:
l The customer services function, service areas and the contact centre are not working together effectively enough to deliver services to Birmingham citizens.
l The roles and accountabilities of all involved in service delivery are not clearly enough defined and the relationship with Service Birmingham, while described as a strategic partnership, is one largely driven by commercial considerations.
l The council has not managed the outsourced service contract with Service Birmingham for the operation of the contact centre as strongly as it might have done.
There has not been the strong, focused contract management which we would expect to see from the client side of an outsourced relationship.
l The contact centre compares well in its efficiency with private sector equivalents, but requires greater awareness of and focus on the quality of service outcomes for citizens. There is not sufficient measurement of the quality of service provided to citizens in the end to end process of service delivery.
The council refused a request to release the full Grant Thornton report. A spokeswoman said the study would be “available at a later date”.
Labour members of the main scrutiny committee slammed the council’s Tory-Liberal Democrat coalition, insisting there were few controls over Service Birmingham.
Coun Steve Bedser (Lab Kings Norton) said: “We need to take Service Birmingham by the scruff of the neck and make it work in the way it should. This is a Birmingham farce. Capita are in this to make a profit, nothing wrong with that because it is a private sector organisation with clear profit motives. But the city council’s lacklustre management has been a complete shambles.”
Senior Labour politicians are talking to Service Birmingham about ways of improving efficiency and accountability.
Discussions have been taking place based on the likelihood that the party will regain control of the council at next May’s civic elections.
There are concerns about the scale of operations and the extent to which the council can influence policy since it does not have a majority on the board. As well as running the contact centre, which fields over a million phone calls to the local authority a year, Service Birmingham is also in charge of the council tax collection unit.
Scrutiny committee investigations have produced several critical reports, including one which hit out at “numerous failings” at the contact centre. Councillors were concerned at a “naive” contract clause allowing Capita to be paid up to £4 per call dealt with – an arrangement which, it was alleged, encouraged Service Birmingham to maximise the number of repeat calls in order to boost profits.
Labour members were angered earlier this year when Service Birmingham proposed to offshore 55 jobs to India in an effort to save money. The move was dropped after the outcry.
If Labour does take control next year, the party is unlikely to attempt to unwind Service Birmingham’s council contract which was extended by the Tory-Liberal Democrat coalition at the beginning of this year and runs until 2021.
However, deputy group leader Ian Ward indicated that a Labour-led council would seek changes to the way the company operates.
Service Birmingham chief executive Stewart Wren hit back at critics, but added that the organisation was always open to challenge.
Mr Wren said: “The joint venture between Capita and the council has been a success for Birmingham, so much so that the council has extended the agreement to 2021.
“Our long term agreement will add further significant savings in providing the council’s ICT and will give better, more flexible terms and conditions as the council changes the way it uses technology in the future.”
Mr Wren said there was no truth in claims that staff were encouraged to maximise the number of calls made to the contact centre. He added that complaints about the centre were running at less than one per cent of the 1.2 million calls received each year.