Salford City Council is spending £20 million a year outsourcing road construction works, a report has revealed.
The figure was shared in a meeting at Salford Civic Centre on September 24, with council officers admitting it is “really difficult” to find the right members of staff to complete the work in-house. On top of this, the report shared that half of the council’s engineering consultancy work is being outsourced at a cost of £1.2m per year.
It also found that the value for money of outsourcing the work and the social benefit it brings to the city was ‘limited.’
The document stated: “Due to recruitment and retention challenges, technical services is required to outsource 90 percent of the highway’s construction works at an average cost of £20m per year.
“Disproportionately high volumes of works are being outsourced, making the current delivery model unsustainable in its current arrangement.
“Recruitment of experienced staff is challenging in the current model, with significant evidence of industry competitors including other local authorities paying higher salaries, compared to Salford.”
The update comes just weeks after Salford City Council admitted its finances are under ‘significant pressure,’ with an expected £6.8m by the end of the year.
Children’s services and temporary accommodation make up the bulk of the problem, with the council spending more to tackle a ‘crisis’ in housing and homelessness. The ‘financial gap’ is set to get worse in the next few years, and could reach as much as £38m by 2026/27, the council said.
To try and reduce the costs of road construction works, the town hall is planning to set up a new company to take over the work and act as a separate entity to the council.
Officers said the move would offer “a degree of commercial freedom and flexibility not available to traditional local authority departments.”
In Feb 2020, after a 15-year partnership with Urban Vision, all road construction services were brought back in house at the council.
This was aimed at improving the quality of the service and saving money, but was done ‘without the understanding of true service costs.’
Coun Mike McCusker, the council’s transport lead, said creating a new arms-length company to take control of road works in the city could see a boost in local jobs for Salford residents and people at the start of their careers.
He added: “There’s a real opportunity here to make sure we get some social value out of the work we’ve got coming up. This will provide opportunities for our young people if we get it right.”
