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£179m council outsourcing costs disputed

"A complete fabrication," city of Westminster says

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A row has broken out over the cost of outsourcing council services from London to Scotland.

The GMB union claims that it will cost Westminster residents an estimated £179m and 400 job losses if proposals made by the local authority's outsourcing partner Vertex to relocate some council functions to Scotland were allowed to go ahead.

The plans that emerged in January following Westminster City Council's decision to ask Vertex to move out of the existing offices supplied by the local authority.

Vertex said it was unable to find new, affordable accommodation within London, and Dingwall in Scotland, where it had existing capacity, was the only available option.

The £179m figure is based on documents obtained under the Freedom of Information Act 2000, from Westminster City Council in the past three years. The GMB said it had been tracking how Westminster had been spending taxpayers money in outsourcing services through Vertex, when it believes it would have been cheaper keeping them "inhouse".

The union is claiming that the council paid a consultant £1.3m to produce a report which would justify the outsourcing costs on the grounds of "value for money".

Additional costs were factored into the Public Sector Comparator that made the council-run option appear more expensive, including £15.8m of "risk" and £23m for accommodation, kit and IT staff. The GMB said while "technically legal, these figures do not stand up to 'value for money' scrutiny".

Furthermore, the Vertex bid did not consider the staff required to monitor the working of the contract, the economies of scale lost by outsourcing, the loss of accountability, nor the cost to the community of to the redundancies.

In a written response, Westminster City Council strongly disputes the GMB figure saying it is a "complete fabrication and a wilful misinterpretation of information."

The council points to several facts in the documents released to the Union, where the Public Sector Comparator was constructed using HM Treasury rules and it predicted a saving of £30m if Vertex were recruited.

Westminster also takes issue with the number of job losses. It says no members of staff are being asked to relocate to Scotland. In fact, workers "affected by [the proposals] are being offered continued employment by Vertex in Westminster".

At the time of the original announcement, UNISON threatened strike action in response to the potential job losses. Angered by the news, UNISON national officer Dave Johnson said Westminster was "gambling" with vital services and that it was "unrealistic" to expect staff to relocate to such a remote area.

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