Coun­cil build­ing ser­vices com­pany al­most col­lapsed

Birmingham Post - - NEWS - Carl Jack­son Lo­cal Democ­racy Re­porter

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.

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