Doubts poured on local govt privatisation
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GOVERNMENT proposals to put local authority vehicle maintenance ;Ind refuse collection out co competitive tender will not necessarily bring savings.
This has been said by PSM, the management consultancy which works exclusively for the public sector.
PSM says that local authorities being forced to accept the most competitive schedule of rates will "MXnecessarily lead to the lowest overall cost-.
And it says that that it has encountered one local authority that experiences high costs in spite of privatising its vehicle maintenance.
In our experience the most common cause of high vehicle maintenance costs is excessive work content rather than high unit costs.
"The tenderer which has set lowest unit cost is probably the most likely to support this by charging for an excessive number of hours work," PSM argues.
PSM goes on to argue that local authorities will find it difficult to break the long term contracts if they suspect that too much work is being done.
If legislation is forced through, PSM argues that it should be phased in gradually. If local authorities arc forced into putting vehicle maintenance and refuse collection to tender quickly, the standard of service "will seriously suffer," it states.