Uncertainty hangs over the future of a combined treasury and pensions department following the breakdown of a flagship shared services arrangement once lauded by former Prime Minister David Cameron.
London Borough of Hammersmith and Fulham has been unceremoniously ejected from the tri-borough partnership formed with Kensington & Chelsea and Westminster councils in 2011.
Both parties blamed each other for the collapse in the relationship.
Hammersmith & Fulham leader Stephen Cowan said the decision was “evidently a long-planned move” by the two other authorities.
He said: “We’ve had concerns for some time about the value of the ‘tri-borough’, its lack of transparency and its built-in conflicts of interest.
“In our last two budgets, Hammersmith & Fulham council found £31m in savings but the ‘tri-borough’ contributed no more than £200,000 of that, less than one percent.
“Problems with tri-borough contracts, procured by Westminster City Council, have cost Hammersmith & Fulham over £5m, including the botched contract for special needs transport that put our disabled children at risk.”
However, Westminster leader Nickie Aiken, said that although she would not have chosen to end the tri-borough arrangements, the councils were left with no option.
She said: “Both the leader of Kensington & Chelsea and I feel we are unable to continue with tri-borough when we have a partner that we do not believe is committed to it, as we are, and appears to be making their own plans to leave, without any formal discussions.”
A report to Westminster’s cabinet on Monday said that it had become apparent that Hammersmith & Fulham was making alternative plans to create its own department which would take in adult social care, public health and children services — currently shared.
Cllr Aiken said: “We can’t have that uncertainty for staff and these vital services which is why, with much regret, we have taken the very reluctant decision to terminate the joint arrangements for children’s services, adult social care and public health.”
However, she did not mention the future of the shared treasury and pensions function.
This team is understood to have a headcount of seven — one team leader plus one treasury and one pensions staff member for each borough.
A spokesman for Westminster Council told Room151: “It is too early to comment upon any particular team, but we are doing all we can to keep staff informed.”
Labour opposition councillors at Westminster said that Hammersmith & Fulham had little alternative but to look for other arrangements after delays in introducing a back office tri-borough contract with BT to provide billing, pay and pensions administration.
Cllr David Boothroyd, Labour finance spokesperson at Westminster, said: “Westminster has been done in by its own hype. Starting off with sensible proposals to share back-office staff and integrate services with neighbouring councils, they let a grand vision take priority over the practical.”
The tri-borough arrangements were praised by former prime minister David Cameron in 2011, who said shared services were a way for councils to avoid cutting front-line services.
He told the House of Commons: “Three large councils are coming together and saving £35m because they are sharing back-office services, executive teams and so on.
“Frankly, if they can do it, as large councils that have big responsibilities, many other councils should be doing it in London and elsewhere.
“Until we see that happening, I do not think it is realistic to say that it is necessary for councils to cut front-line services.”
Cllr Warwick Lightfoot, cabinet member for finance and strategy at Kensington & Chelsea, told Room151 that the two remaining councils would continue to work together and were open to other authorities joining the shared service arrangements.
