Oxford city council has announced it has turned its direct services operation into a social enterprise which means it can now bid for more commercial work.
The council explained that until now there were limits to the financial income that the DSO could earn but now it can make more money through the wholly-owned social enterprise which it has called Oxford Direct Services Ltd (ODS).
Simon Howick, the managing director of Oxford Direct Services, said the city council is now its main customer and the business would now be targeting commercial waste services: “The city council remains by far our largest customer and my number one focus will remain on continuing to improve the services we provide residents and businesses across the city. But we can also grow and continue to expand our commercial contracts with businesses and other organisations to generate additional income for the council, while at the same time continuing to innovate and becoming more efficient.”
In a statement yesterday (4 April) the city council said: “ODS will continue to deliver all of the Council’s statutory services currently provided to residents and business including waste and recycling, street cleaning, car park operations, parks maintenance and road repairs as well as additional services including garden waste collection, pest control, vehicle MOTs and building services.”
And, it explained that in addition to providing these core services, over recent years the DSO has “sold more and more services to businesses and other organisations. The income this has generated has helped fund core Council services, helping offset the cuts in Government grants to local authorities.”
Oxford is Labour-controlled with the party having 35 seats, the Liberal Democrats 8 seats, the Greens four seats and one Independent, with no Conservatives.
In terms of income, the council explained: “Council departments can legally only make a certain amount of income from private work. The success that the council’s direct services has had in trading has taken it close to those limits. By establishing it as a social enterprise it can continue to extend its commercial operations, so generating additional income for the council to use for the benefit of the city and creating more jobs for local people. ODS aims to return £10.4 million back to the council over the next four years.”
A statement from the authority continued: “For Oxford residents, who rely on the council to empty their bins and sweep their streets, there will be little obvious change. A seamless transfer will see all the high-quality services they need continue to be provided by the same frontline staff under the new ODS badge. But the focus on increased commercial activity will help protect front-line services and create more local jobs.”
Gordon Mitchell, chief executive, Oxford city council said: “The city council’s Direct Services team has long served the people of Oxford by providing high quality, reliable services. Not only that, it has been successful in the commercial world and in doing so has brought income to the council.
“Now, as a social enterprise, owned entirely by the City Council, ODS is set to expand its operations, benefiting all of its customers, including residents of Oxford.”
Mr Mitchell added: “ODS is the ‘People’s Company’, with 100 per cent of its returns coming back to the city of Oxford, benefiting the community as a whole rather than private shareholders. That money will help offset the impact of the removal of Government grant funding we receive, allowing us to maintain – and improve – Council services.”
The decision has been welcomed by trade union Unite. Stephen Davis, Unite branch secretary, said: “This is a positive step in the right direction and consolidates on the visionary step taken a number of years ago to trade out of the misguided austerity measures forced on local authorities by the government. As a result of the trading, which brings much needed revenue into the council, it has been possible to maintain services and protect jobs. Our members of Unite have benefited from this, with no compulsory job losses, unlike many other councils that embarked on outsourcing and slash and burn strategies.”
ODS staff have transferred to the new enterprise on the same terms and conditions, pay and pension arrangements they have had with the Council. The new company will be wholly owned by Oxford City Council, and the Council will be the sole shareholder. It will remain fully accountable to the Council and its elected representatives.