In the current economic climate, local authorities must find savings across all their services. Sometimes these can come from redesigning the way that services are delivered or from increasing productivity. However, where services are contracted out, it can seem like an impossible task to make savings until the contract is retendered.
However our experience shows that contractors will often be open to reducing contract charges provided that their own costs can also be reduced as a result of any changes to the service that are agreed.
Eunomia has helped numerous authorities to open and manage dialogue with their contractor, with the aim of identifying compromises that can work for both parties. Eunomia’s role can range from designing and leading the negotiation process from the beginning, to providing independent scrutiny and evaluation of the contractor’s proposals.
Roles in previous projects have included:
- Working with the contractor to review current service methods;
- Providing evidence that efficiency improvements can be made through techniques such as work study and cost and financial modelling;
- Leading negotiation processes ranging from the constructive to the highly confrontational;
- Working alongside officers and contractors to successfully implement agreed service changes.
It will be necessary to gain the cooperation of the contractor in identifying opportunities to reduce the cost of the service. The change mechanisms built in to most contracts should make it possible for local authorities to negotiate changes that reduce cost and/or change the method of service delivery without leaving themselves open to challenge under the public procurement rules.