Scottish Borders Council could lose nearly £600,000 a year for essential services if a controversial plan to hive off its road maintenance services goes ahead.
The proposal – which would include winter gritting – would see council roads staff, including the 60 employed by successful trading organisation SB Contracts, along with plant and equipment, transfer to a new limited liability partnership (LLP) run and owned jointly by SBC and the five councils which cover Edinburgh, the Lothians and Fife.
The cost-saving suggestion has come from the Scottish Government’s Improvement Service (SI) which is committed to “help improve the efficiency, quality and accountability of public services in Scotland”. But a senior officer at SBC has warned of the pitfalls of such a scenario.
In a briefing to last week’s meeting of the environment and infrastructure committee, commercial services director Andrew Drummond-Hunt said SB Contracts had a turnover of £11million last year and recorded a surplus of £584,000.
“This went into the coffers of the council to pay for services like social work and education,” he explained. “With a new Edinburgh, Lothians, Borders and Fife [ELBF] organisation, this could be put at risk.”
He admitted that SBC and the five other ELBF councils had many services in common, including road repairs, traffic light maintenance, surface treatment, flood risk management and rock salt gritting.
Advantages for councils of being part of – and jointly owning – an LLP which will formalise existing collaborative arrangements would include being able to award each other work and pursue joint procurements.
But he cautioned that SBC was already a special case because SB Contracts, which carries out the bulk of road repairs in the region and provides plant for winter maintenance, was the only arms-length trading organisation of its kind in the ELBF area.
He said income for other council services was expected to be further boosted as a result of SB Contracts signing a major sub-contractual deal this year with Amey for the maintenance of trunk roads.
He believed there was a risk to both the trading division and the council’s winter maintenance service if there was the “disaggregation” explicit in the ELBF proposal, and suggested a better option would be for SB Contracts to form its own LLP which would be “better placed to exploit wider contracting opportunities.”
Mr Drummond-Hunt agreed to prepare a detailed report on the full implications of the ELBF proposal for a meeting of SBC’s executive in the new year.
A council spokesperson said later: “The discussions at a regional level regarding an ELBF LLP are still at a very early stage and any decision will need to be taken by the full council.”