Liverpool ends Amey contract to save cash by insourcing

Liverpool City Council is set to end its highways services contract with Amey four years early by mutual agreement.

A report to the council’s cabinet on Friday (24 November) recommends that the contract should be closed in the New Year as part of a drive to deliver £90m of savings over three years in the face of Government cuts.

If approved, the council and Amey will complete the ‘mutually agreed exit’ by the end of January 2018. The contract began in 2013 and was due to run until 2022.

The council said it considers that savings could be achieved by looking at alternative smarter and more flexible delivery methods, as shown with its new pothole repair contracts with the private sector.

Cllr Ann O’Byrne, deputy mayor of Liverpool, said: ‘The stark reality of these punitive Government cuts is forcing the council to look at every single penny we spend to ensure not just value for money but to help protect the vulnerable as much as we possibly can.

‘The highways contract with Amey LG did initially deliver savings but we believe more can be achieved by bringing the operations back in house.

‘We have seen with other services such as street cleansing and refuse collections that insourcing can deliver savings which can be reinvested to make our money go further.’

Amey’s highways business director, David Ogden, said: ‘Both Amey and Liverpool City Council have come to a mutual agreement to end their highways maintenance contract early after both sides raised concerns about the sustainability of the contract. The financial environment has changed significantly since the signing of this contract and both parties agree that this is the best course of action for all.

‘Working together since 2013, Amey and Liverpool City Council have maintained the highways and street lighting service across the city, and are now committed to ensuring a smooth transition to a new service delivery approach in the coming months.’

The council said that following the negotiated exit, an interim service is set to be put in place for an 18-month period to allow it to carry out a detailed review of the various options for future service delivery.

In the short-term, it is proposed to separate the current service provision as follows:

  • client-based functions and associated resource be transferred back to the council. This will include, for example, the highway inspections, street works inspections, project management and work scheduling, and professional services (e.g. design)
  • the operational element of the service and the associated resource, be transferred to Liverpool Street Scene Services Limited (a wholly owned subsidiary of the council). This will include, for example, the gully cleansing and the street lighting operatives.

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