Council building services company almost collapsed

ARADICAL plan could save a failing Birmingham City Council building services company which lacked ‘effective leadership’.

The firm, Acivico, which was set up in 2012, has been a major headache for councillors after costing the authority £9.5 million in 2017/18.

Now a new three-year plan has been drawn up along with proposals to rebrand and restructure the company.

A report said the company lacked a ‘clear strategic vision’, suffered from poor operational and financial performance, ‘confused’ support from the council and disproportionate costs.

The original business model has restricted the company, the board of directors and bosses were unable to address failings, and there was an overall lack of ‘effective leadership’.

One particular failing followed a decision by the council’s cabinet last year to outsource Acivico’s design, construction and facilities management (DCFM) services – the main component of its business.

The move, which has since been suspended, would have caused the company to collapse if it had gone ahead.

The report adds that the decision was based on inaccurate information at the time.

But the council demanded things change from the start of this year, ordering Acivico’s directors to ‘take whatever action they deem is neccessary’ in order to stabilise the business.

As a result a number of senior company bosses have been axed and around £4 million of staff cuts have been made, including agency and consultancy spending.

The report states that this year the firm is close to breakeven and concludes that the actions taken so far along with the new business model mean that it is possible for Acivico to continue.

Closing the firm would cost more than £3 million and cause ‘significant reputational impact’ for the council.

The new plan will be assessed for approval by the council’s cabinet bosses next Tuesday.