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Councils’ road and maintenance contracts can yield £3bn saving

Engineering firms’ work with local authorities could be under threat as the Conservative Party outlined a plan to save £3bn.

The party said renegotiating contracts for goods and services could yield the £3bn savings within 12 months of the General Election.

A further £2.5bn saving was projected for cuts to “discretionary” spending, which includes consultancy services, and £2bn could be saved by cutting 20,000 to 40,000 public sector jobs.

David Cameron last week said the plans were “not actually talking about people losing their jobs, it’s talking about not filling vacancies as they arise”, adding that 400,000 public sector vacancies become arise each year.

Renegotiations could affect engineering contracts for local transport, including road building and maintenance, and waste treatment.

But local authorities and industry firms said it would not be as easy as the Tories might hope.

“Our plan is not talking about people losing their jobs, it’s talking about not filling vacancies as they arise.”

David Cameron

Many councils contacted by NCE were reluctant to speculate ahead of the election but a Birmingham City Council spokesman said renegotiations would not be that feasible on some arrangements, such as its £2.7bn highways PFI contract with Amey.

Meanwhile, a spokesman from Bristol City Council said it may not be in a position to renegotiate road contracts in the next 12 months as they tend to last for three to five years.

The plans were detailed as part of the party’s wider plan to achieve savings in the public sector. The party’s manifesto, released this week, said it would seek “immediate negotiations to achieve cost reductions from major suppliers”.

By contrast, the Labour manifesto pledged to make efficiencies by taking “a tough stance on public sector pay, saving over £3bn by capping public sector pay rises at 1% in 2011-12 and 2012-13”.

Readers' comments (1)

  • We need competion for all public services. If Local Council staff can do the job at a realistic cost then OK. Tax payers pay and demand a good level of service, roads included. The real cost of direct labour should be used in comparisons. Pensions, sick pay,transport,office space,etc. Also a percentage of management saleries.

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