Liverpool City council has hailed its decision in 2015 to bring public services in-house as a “success”.
This is despite the council’s subsidiary company – Liverpool Street Scene Services Ltd (LSSL) – making a loss of £700,000 in the last financial year (2017/18).
The comments were made by Cllr James Noakes, cabinet member at the council, who was discussing the development of a contract won by the company – previously called Liverpool Waste Management and Related Services.
And, Mr Noakes pointed to the February awarding of two council contracts to LSSL, as proof the 2015 decision was the right one.
“Such has been the success of LSSL over the first 18 months, that Liverpool City Council’s Cabinet has seen fit to award the Highways’ Maintenance and Street Lighting contract to the company for an initial 18 month period,” Mr Noakes explained.
The Cabinet also approved the award of the parks and gardens contract for 10 years, he said.
In August 2015, plans for a council-owned firm to carry out bin collections in Liverpool were confirmed, after GMB union members voted to support of the idea (see letsrecycle.com story).
And, in November 2015, the council voted in favour of acquiring the remaining shares of Enterprise Liverpool Ltd, a joint venture with private contractor Amey, initially due to continue until 2022 (see letsrecycle.com story).
Later that year, the company name was changed to Liverpool Streetscene Services Ltd, which began trading in March 2016 after winning two contracts.
When contacted by letsrecycle.com, a spokesperson for the council said: “It became clear that the private sector had lost touch with the environment that local authorities were operating in. Innovation was lacking and the drive to maximise value for money was barely evident.”
“The Cabinet took the decision not to re-procure the public realm contracts and instead opted to establish a Local Authority Trading Company. This would deliver refuse collection and grounds maintenance services, which the council considered to be key frontline services.”
In the council’s annual report in May, it was confirmed that LSSL’s turnover for 2017/18 was £25.6 million, this was slightly up from the £25.5 million the year before.
“There were initial costs related to the set-up of the company but we are confident it will break even and not cost the council money going forward.”
Liverpool city council
However the company, which also carries out private contracts, made a loss of £0.7 million last financial year, down slightly from the £0.8 million the year before.
This means that since LSSL began trading, it has made an overall loss of £1.5 million.
The spokesperson for the council however, was adamant that the decision will not have a long-term impact on the council’s budget.
“There were initial costs related to the set-up of the company but we are confident it will break even and not cost the council money going forward,” the spokesperson explained.
Liverpool City Council also made a “commercial loan to its wholly owned company” of £3.5million for the purchase of refuse vehicles last year, the annual report confirmed.