Council four suspended in savings row

A council has suspended four senior bosses because a scheme set up to save cash ended up costing hundreds of thousands of pounds.

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Paul Wallace, Corporate Director of Organisational Improvement and Resources at Inverclyde Council, has been suspended by Chief Executive John Mundell along with John Arthur, Head of Safer and Inclusive Communities, Gordon McLoughlin, Head of Customer Service and Business Transformation and head of IT project management Arun Menon.

The four are understood to have been involved with establishing a money-saving drive known as the Future Operating Model, which was unveiled in February 2009, with the aim of helping the council hit an over-all savings target of £6.43 million in three years.

Instead, the Evening Times understands, the scheme cost the council £650,000 in fees to consultants Price Waterhouse Cooper, and delivered only £250,000 in savings, far short of the expected £2m target.

The scheme included a raft of efficiency measures and also the establishment of a new council customer contact centre in the Municipal Buildings in Greenock, which opened in October 2009.

But one senior council source said there had been doubts about the need for the new centre.

The source said: “Social housing is no longer dealt with by the council, leisure’s not dealt with by the council, what’s this customer service centre for?

“They’ve cut away a huge chunk of what a customer service centre is used for. They’ve even detached the letting of halls to Inverclyde Leisure.

“In the short term, the expected budget cuts, almost promised savings, have not come to pass, with the result of a black hole in the budget.

“The Future Operating Model involves ‘modernisation’. No-one’s prepared to challenge what’s meant by that, but in effect it means more technology, the aspiration to cut staff.

“It’s been a budgetary mistake but I don’t think the spend has to be binned. However, the main justification for it was ‘efficiency’ and that has not been successful.”

LibDem councillor Alan Blair, a former leader of Inverclyde Council, told the Evening Times: “It’s a very concerning situation.

“It plainly means money is going to have to be found to fill a black hole.

“That may well have to come from services important to the public.

“I think the administration should have been giving much more thought to important projects than recently they have been doing.”

In July 2010, a report by a collection of public watchdogs, including Audit Scotland, warned that the then Labour-run council needed to ensure that the Future Operating Model was going to deliver its projected savings.

The ‘Shared Risk Assessment’ Report’ on Inverclyde Council was co-compiled by the Social Work Inspection Agency, the Scottish Housing Regulator, the Care Commission, Her Majesty’s Inspectorate of Education and Audit Scotland.

It said: “The council has progressed to phase two of their Modernisation and Efficiency Programme which includes designing, building and implementing the council’s Future Operating Model (FOM).

“The FOM is based on improvement to both corporate and service level efficiency opportunities through modernisation of current working practices.

“The development of a new customer service centre which allows customers to access a range of council services in a single location is expected to deliver significant improvements to customers over the next two years.

The council need to ensure that the FOM delivers the projected efficiency savings and the intended improvements.”

That warning was in stark contrast to the words of Inverclyde Council Leader, Stephen McCabe who launched the plan in May 2009 saying: “This really is a case of spend to save and is so much more than a shiny new call centre.

“This is a fundamental change in the way we deliver our services to the customer.

“This is a 10-year model and we expect it to deliver on our fundamental promise to provide excellence to our customers at value for money.”

A spokesman for Inverclyde Council said: “Following a review of the council’s operating model, four officers have been suspended, as a precautionary measure, pending further investigation.

“Whilst this investigation is being carried out it would be inappropriate to comment on the circumstances of the individuals involved.”

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