Council outsourcing, TUPE, and the Big Society
IT is perhaps apt that the architect of the Big Society should visit Liverpool while a row rumbles on that gets to the heart of how the Big Society should or could work in practice.
Today political thinker Phillip Blond, author of Red Tory, and man who came up with the philosophy David Cameron used to create his Big Society idea, was in Liverpool.
Yesterday we reported how 20 job advisors have been left in limbo after a row between Liverpool council and a social enterprise Dingle Opportunities - essentially over who should pay to make half of them redundant.
This story is important for a number of reasons. More and more we will see the council trying to re-negotiate deals with social enterprises, or the third sector to give it another name.
Councils up and down the land had thought that by outsourcing services, the risk had also been outsourced.
But if the council wishes to bring the service in house they find that Transfer of Undertakings Protection of Employment (TUPE) may apply.
The TUPE legislation is designed to protect workers in the case of a change of employer.
In this case the council is arguing that TUPE does not apply because the service is being stopped in the South Central geographical area. Instead unemployed people who live in the area can use a Jobs, Education, Training Service (JET) offices elsewhere in the city.
The council is in the process of scrapping the JET service and is replacing it with a scaled down version, costing 45% less, to be called Liverpool in Work.
Around 90 people work for the council's in house JET service, with another 20 working for Dingle Opportunities. Until now they have all be doing the same job.
When the new service is launched at some point the in future, there will be less people working for it, probably about 70.
Dingle Opportunities argues that TUPE should apply because the service is to all intents and purposes continuing and that those at Dingle Opportunities have the chance to go for the jobs like those working directly for the council.
The council meanwhile argues the opposite and balks at the idea of having to TUPE staff across, at a high cost, to then make half of them redundant.
The council fears that if it transfers the workers it will set a precedent for other social enterprises that it imposes funding cuts on.
And at a time of dramatically reduced government funding the city cannot afford to take on workers from outside agencies and then pay their redundancy payments.
The waters were muddied because the council at one point considered the TUPE of staff, but said once a review of the service was completed it realised this was not an option.
The idea to TUPE staff across may also have included a suggestion that Dingle Opportunties shed some of their staff before this was to happen.
It's worth pointing out that Dingle Opportunities had £200,000 in its reserves in its latest set of accounts, and the company says that it put the money aside for contingencies, such as this.
Dingle Opps claim this is not about who picks up the bill for making redundancies, instead about fairness.
So what happened? On Friday the contract ran out, and as things stands 20 people may be made redundant by Dingle Opps.
Lawyers have been engaged on both sides, and both are currently digging their heals in.
If TUPE does not apply is it fair that outside staff, who have been doing the same job as those in the council, are not given the chance to apply for a job, while those in the local authority are?
But at a time when the council has to make huge cuts, is it right that it should have to transfer staff into the local authority, then make half of them redundant, and bear the costs of doing that? If so what is the point of outsourcing services?
The council says taxpayers have funded the £200,000 reserve Dingle Opps has, and that it would be paying twice if the council had to pay to make workers redundant.
Whatever the rights and wrongs, I am sure this is not what David Cameron had in mind when he dreamt up the Big Society.