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Council moves social care services to trading company to avoid closures

Posted on 1/07/2016 by

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Bolton council believes spinning out to a local authority trading company will achieve £12m net savings in five years

Bolton council is moving its adult social care provider services to a local authority trading company to avoid service closures.

The new company will provide the council’s supported living services, day care services for older people and adults with disabilities, extra care services, and the shared lives service.

John Livesey, chief executive of the company and former social care director, said the decision was taken because the council could no longer afford to run all the services in house.

The move is expected to achieve net savings of £12m over the next five years largely through changes to staff terms and conditions, but also from more efficient business operations.

Staff currently working in the care services have been offered a range of options including TUPE transfer to the company, voluntary severance and early retirement packages.

The majority of the workforce has engaged in a ‘dismissal and re-engagement’ process whereby the council has bought staff out of their existing terms and conditions so they can move to new contracts within the local authority trading company.

All staff working in the new company will be paid at least the living wage of £8.25 per hour, as recommended by the Living Wage Foundation, and zero hour contracts will not be used.

This offer is “very competitive” in comparison to the wider care market, Livesey said.

‘Competitive offer’

But local trade unions argued that staff faced significant reductions to their existing hourly rates of pay and employee benefits as a result of the changes.

Bernadette Gallagher, secretary of Unison’s Bolton branch, told Community Care members were facing a 20% reduction in annual leave entitlement and a 60% reduction in their pension.

She said: “We are very concerned about the reduction in staff terms and conditions as a result of the council’s decision to move these services to a local authority trading company and the impact this will have on the future recruitment and retention of the workforce.

“There has been a fairly stable workforce for quite a long time, people have worked in these services with the same clients for many years and in one fell swoop that is being wiped out.

“Despite a commitment to end zero hour contracts, it is difficult to see how the service can be provided without a reliance on agency and casual staff, which will impact massively on the continuity of care for people using these services.”

Livesey would not comment on the details of the dismissal and re-engagement offer, but said any staff turnover created by some people choosing to move on would be carefully managed.

He added that the council was not able to continue to offer such an expensive pension as the local government scheme, but the new offer was “very generous”.

“We are offering a very generous workplace pension scheme that complies with the requirements of the national pension quality mark. We have also offered staff who wish to retain their local government pension the opportunity to TUPE into the new company,” he said.

“Yes, the trade unions complain that there are a deterioration in terms and conditions, but in comparison to the wider care market what we are offering is very competitive.

He added: “We have been advertising for posts in the company and are already overwhelmed by the number of experienced carers who want to work with us – that’s really exciting.

“People are seeing this company, the way that it works and the terms and conditions that we offer as being really positive in comparison to other organisation’s locally.”

‘Different philosophy’ 

The company, which is called Bolton Care and Support Ltd, commences trading tomorrow.

Livesey said significant budget cuts combined with a large growth in demand meant the council had to do something different – and this was the best option.

“We didn’t want to outsource to the private sector for two reasons. The council wants to retain some control of the market but also we have a different philosophy,” he said.

“The council and the company are non-profit making and our focus is on delivering really outstanding care that enhances the lives of vulnerable people.

“A lot of good private sector organisations do that but they do it to generate a profit for their shareholders and that is fundamentally not what we are about.

“We want to be a good and ethical employer.”

Source: Community Care