Bringing it back in house to save money
South Kesteven District Council would save £352,000 a year by bringing grounds maintenance services in-house, and ending the contract with the authority’s own company EnvironmentSK.
Council officers will recommend the move to an extraordinary meeting of the authority’s Joint Environment Overview and Scrutiny Committee and Rural Communities Overview and Scrutiny Committee on Tuesday, November 15.
Members will also be told that an attempt to put the service out to tender was also withdrawn after it “did not generate any significant interest”.
Officers said that if EnvironmentSK carried on providing the service, the breakdown would result in a £384,000 increase in costs – a 37% rise.
However, they said that if the service was in-sourced and integrated with the authority’s Street Scene and Big Clean Team, it would instead result in annual savings of £352,000 – a swing of £736,000.
Officers recommend carrying out the in-sourcing in two phases, which would include moving the service from EnvironmentSK’s own location to the council’s own depot on Alexandra Road, Grantham, and bringing employees in via Transfer of Undertakings (TUPE) regulations.
A report before councillors said: “in-sourcing the grounds maintenance service would provide the council with full control of the service, including operational flexibility to deal with reactive works and seasonal demands.
“An integration of the services would provide the council with further operational flexibility resulting from the employment of a multi skilled workforce, and a reduction in the number of separate journeys to sites, thereby contributing to the council’s commitment to reduce carbon emissions.”
As part of its appraisal of the options, the authority did put the contract out to tender on the Eastern Shires Purchasing Organisation (ESPO) public sector procurement site in July.
However, despite 14 operators being on the ESPO, the report said: “The tender opportunity did not generate any significant interest, and it was clear from the clarification questions received, the market had little confidence the council intended to award a commercial contract.”
The council withdrew from the market on August 2022.
EnvironmentSK began operation in March 2019. Prior to this former SKDC leader Councillor Matthew Lee said that the plan was to bring grounds maintenance – at the time contracted out in the region of £1 million – back under authority control.
Although money would not necessarily be saved, he hoped it would generate an income by selling its services elsewhere.
However, a report earlier this year said the business’ external contracting “only accounts for 9% of the overall turnout”.
The total cost to the council for maintenance for 2022/23 is £1.016m. This is split between £428,000 Housing Revenue Account (HRA) and £588,000 General Fund.
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