ALMOST 9000 council workers who look after some of the most vulnerable people in Glasgow are to be transferred to an arm's length company.

ALMOST 9000 council workers who look after some of the most vulnerable people in Glasgow are to be transferred to an arm's length company.

City council chiefs claim the new organisation, one of the largest of its kind in Britain, will protect jobs, wages and pension rights.

And they insist the shock decision, which is likely to be approved at the end of this month, will not affect the wide range of services staff provide.

The Direct and Care Services department employs 3868 care workers who deal with the sick and vulnerable and 4299 cleaning, catering and janitorial staff.

It is also responsible for the 522 people who make up the council's catering division Encore, which is booked by many couples for their wedding.

The service includes workers involved in building and window cleaning, school crossing patrols and the community alarm service.

All the staff will switch to the new body, which will run independently as a private company but will be owned by the council and operate in partnership.

Being at a distance from direct council control allows it to bid for private contracts and make money.

Under strict government rules, a number of the services run by direct and care must break even financially over a three-year period.

The equal pay settlement resulted in the department having a deficit of £17million - because it employed mainly lower paid female staff.

The cash shortfall could have resulted in the council being forced to ask private companies to tender for the work they currently do - to find out who offered best value for money.

Because the private sector tends to pay lower wages than the council, it is almost certain it could provide services cheaper, and as a result would have to be given the work.

However that could have led to thousands of council jobs being lost.

Bosses insist the decision to set up an arm's length company - like City Building which replaced the council's old building works department - is an attempt to safeguard jobs.

Council leader Steven Purcell said: "If we are to protect the jobs of our employees and ensure continuation of service, then doing nothing is not an option.

"If no action was taken by the council it is likely we would have been forced to put these services out to competition and winning contracts would be very difficult.

"The choice facing the council was not the status quo on one hand and a recovery plan on the other but privatisation on one hand and a recovery plan on the other."

A business plan has now been drawn up for the new arm's length company, officially called a limited liability partnership, which suggests it could be in profit within a year.

That could be achieved by the new organisation bidding to carry out work for both private and public organisations.

Mr Purcell said: "By being arm's length to the council, with the opportunity to compete in other markets, it is likely to make a profit in its first year. This has come as very good news as it protects the jobs of almost 9000 staff.

"It proves once again that the administration in Glasgow is a forward-looking, modern council not afraid to take big decisions which are in the interest of both our taxpayers and our staff.

"We only need to look at the success of City Building which has gone from strength to strength since it became a limited liability partnership.

"They are now trading with 60% of the orders on their books from the private sector."

Direct and care services executive director Fergus Chambers will be responsible for the massive amount of work needed to get the new company up and running by the start of the financial year next April.

He said: "The key thing for staff is they will still have a job at the same rate of pay and still have their pension rights.

"There will be the opportunity to develop and expand the business which in the longer term will bring financial benefit to the council and taxpayers.

"But from the customers' perspective, there will be no change at all."