COMPULSORY COMPETITIVE tendering may have to be re-introduced into Scottish council direct works contracts, the country's local authority body warned this week.
The threat follows publication of a scathing report by the Government watchdog, the Controller of Audit, which found that a dozen councils faced deficits last year in their highways or building maintenance direct labour organisations.
Convention of Scottish Local Authorities president Keith Geddes told NCE: 'If these failing councils cannot provide value for money they must face competition again and there is a real possibility some [DLOs] might have to close.'
English style compulsory competitive tendering was suspended in Scotland last year in favour of trials of a 'best value' system. The aim is to increase the quality of DLO operations by guaranteeing work levels over a sustained period.
The CoA report came in the wake of prolonged political scandal following pounds4.2M losses last year by North Lanarkshire's DLO and a pounds2.6M deficit at East Ayrshire. Both DLOs have since been ordered to close.
The CoA report alleges that 40% of councils had flawed accounting systems and nearly half of their DLO/DSO activities possessed no business plans.
The Government this week promised 'firm action' and ordered all 16 councils that showed overall losses to draw up action plans immediately. Failure to do so would result in the Government 'using its
powers to protect the council taxpayer'. This is understood to include the options of closing or privatising failing DLOs.
Geddes and the Association of DLOs both blamed Scottish council reorganisation two
years ago for current inefficiencies.