Peterborough City Council 'in Serco's hands' after break clauses taken out of £105m contract

Peterborough City Council (PCC) is “in Serco’s hands” because of a decade-long contract signed with the private management company, a council finance chief has said.

Cecilie Booth, who joined PCC last year as executive director of resources, said that it’s “unfortunate” there are no break clauses in the contract worth up to £105m and signed in 2018.

Speaking at a council meeting, Ms Booth said that “there is a longer-term plan to see whether the relationship is still fit for purpose” but that “we are in Serco’s hands when it comes to getting out of those services”.

“Serco are making a profit on the contract with us and are probably quite reluctant to let services go,” she added.

Ms Booth’s comments came as she presented a progress report on the council’s corporate services, including its partnership with Serco, at a meeting this week.

The report itself was more positive, saying that Serco's “overall performance has remained very good across all service areas with all key performance indicators being met”.

The services Serco has provided for PCC since its initial 10-year contract came into effect in 2011 include ICT, HR, payroll, customer services, business services and business development.

Outsourced services reviewed

The council is in the process of reviewing its outsourced services, with some such as asset management and economic development being brought back in house.

PCC also brought procurement – the sourcing of the goods and services it uses – back into the council in November last year, which had previously been provided by Serco.

Ms Booth said that the council is looking to bring more Serco services, such as accounts receivable and accounts payable, back in house too.

But PCC's current contract with Serco, signed in 2018 and running from 2021 to 2031, “took away quite a few of the performance indicators and also any break clauses”, she said, meaning it will likely remain in some form.

It was signed off by the then-cabinet member for resources David Seaton, who stepped down from the council last year.

'Lessons learned' from ICT incident

Ms Booth also said that there needs to be greater clarity over ownership of services and that there were “lessons learned” from an incident in which agency staff had to be brought in to test a new ICT system at the last minute because it was unclear whether Serco or PCC was responsible.

It didn't end up costing extra but "wasn't ideal", Ms Booth said.

In November 2021, the Chartered Institute of Public Finance and Accountancy (CIPFA) produced a report on PCC’s finances after it requested exceptional financial support from the Government during the pandemic.

Among its recommendations were “giving notice to NPS who run our property services and to Serco who run our Procurement Service”, a council report says.

NPS, a joint venture between the council and Norse Group, has since ended.

Other private partnerships do remain in place, however, and help provide services such as road maintenance and bin collection.