Consultants could be paid up to £7m to help Northamptonshire County Council make multi-million-pound savings across its adult social care services.
A risk and reward style contract is being proposed by the financially-fragile authority and predictions are the 18-month work programme could help save the authority and its successor councils up to £25.9m in the next five years.
The proposal comes after the authority employed management consultancy Newton Europe on a 12-week £435,000 contract in August to come up with ways to change its practices in the face of growing demand for adult social care, an ageing population, the move towards unitary governance and the stretched budgets of the council and health budgets.
That work - which included workshops with staff and case study analysis - has now been completed and a series of recommendations made on how the authority can reduce its social care bill. The £435,000 contract was signed off by the council’s director of adult social care Anna Earnshaw under delegated powers and was paid for by the business rates pilot money which was approved by the leaders of the eight councils in the county.
The specific recommendations and the precise ways the council can save the funds in its highest spending department are not outlined in the paper that will go before the Conservative-run cabinet on Tuesday (Oct 8th) . Under the suggested contract the more money the consultants save in adult social care, the more fees they will earn (up to the £7m limit).
The cabinet paper says: “This report seeks approval to procure professional services to support the development and implementation of a significant programme of transformational change within adult social services over the next 18 months. This will include changes in process, pathways, ways of working and culture change and will help embed best practice in order to maximise the benefits of the new social care system being implemented and the sustainability of the new unitary authorities going forward.”
It continues: “The programme of change will be based on a fixed fee and will be self-funding as it is proposed that the commercial approach to be sought for the design and implementation will require that fees are based on the savings realised in order for any future partner to be incentivised to help the service meet its objectives and the council meet its long term goals. Fees are expected to be between £4m- £7m with a 1:4 to 1:5 return on investment.”
Chair of the scrutiny committee Labour Cllr Mick Scrimshaw said he will be asking a number of questions at the cabinet meeting on Tuesday and the scrutiny committee wants to look at the matter in much more detail.
He said: “It is not clear what the nature of this work is and we need much more detail. It is clear the council does not have the expertise it would need to do this specific work, but at the same time if we are spending between £4m and £7m on consultants, that is a lot of work and should we be using consultants to this degree?
“I thought we had moved on from that.”
It is not known whether Newton Europe will tender for the contract, but it has won similar contracts at other councils. Northamptonshire County Council has said the organisation is free to tender for the work.
On its twitter account Newton Europe describes itself as: “A team of the brightest and most curious minds. We crack some of the toughest business and public sector challenges of the day.”
The company works across a large range of sectors including rail and aerospace.
In his register of interests the council’s lead commissioner Tony McArdle, who was appointed by Government in May last year to spearhead the turnaround of the council, declares he is a special advisor for Newton Europe.
A council spokesman said: “Tony McArdle has publicly declared his interest in the company Newton Europe and this is published on the council website. Not only has he never worked on the company’s behalf in Northamptonshire, he has also left meetings when any discussion takes place regarding their work in the county.
“His role at Newton Europe is one of an advisor. He is not paid a retained fee or a salary and only receives payment for any work he undertakes for them.
"Any work carried out on behalf of Newton Europe for other organisations is a matter between them and the client.”
Newton Europe has been contacted for comment.
The organisation had previously been involved with NCC last summer as part of a national programme funded by a group of government departments and the Local Government Association, to offer support to the council in reducing its delayed transfer of care rates from the acute hospitals.
The proposal being put to cabinet is for the director of adult social services Anna Earnshaw and portfolio holder Cllr Ian Morris to undertake the procurement, negotiate and award the contract.