Peterborough's heritage and library services contract to cost £600k more after previous failure to acknowledge rising costs
Council chief says ‘lessons learned’
Peterborough City Council is set to commission heritage and library services from Peterborough Ltd at £600,000 more than initially planned.
In September 2023, the city council approved the commissioning of these services from Peterborough Ltd, a company wholly owned by the authority, at an available budget of £1.4 million until March 2029.
This included the sub-contracting of the services to Peterborough Ltd's subsidiary company PCHLL.
However, a council report states that the decision did not take into account the need to include indexation increases such as inflation, or that savings required to achieve this fee had not yet come into effect
It also did not take into account the National Insurance increases which are due to come into effect from April 2025.
The current proposed total annual fee value of the contract is £1.99 million plus VAT, which the council says accounts for the impact of the upcoming increased NI contributions.
At a cabinet shareholder committee meeting on February 24, it was heard that the original cabinet paper failed to factor in the need for it to be index linked for future years.
Current council leader Dennis Jones asked: "How on earth did we miss the indexation? What happened and what do we do to make sure it doesn't happen again?"
Rob Hill, service director for housing and communities, assured that lessons were learned from the previous mistake and it would not be repeated.
The council report states that budget proposals for 2025/26 onwards include proposals to make savings across heritage and library services of around £0.45m which will, once implemented, reduce the contract sum.
Heritage services provided by Peterborough Ltd include at Peterborough Museum and Art Gallery and Flag Fen.
The shareholder cabinet committee agreed to recommend that the council authorise the commission from Peterborough Ltd and sub-contracting to PCHLL until March 31, 2029, up to the combined annual fee value of £1.99 million plus VAT.
The council says its proposed contracts with Peterborough Ltd are still considered to represent value for money.
More than 80 per cent of the activities carried out by Peterborough Ltd are carried out for or on behalf of the council.