Dispute Over Who Hired ‘Reshaping Partners’ PwC To Help With Council Cuts

Three weeks ago saw an Executive Board debate the timeline of appointing a ‘reshaping’ partner.

The clash came over a report that covered the final payments to PwC, the ‘reshaping partner’ who were been brought in to help the council with saving money via cuts and also more positively creating new revenue streams.

February’s Executive Board saw those Councillors who attended presented with a report, prompting some wider queries on the reshaping contracts, including an interchange with Cllr Dana Davies and Council Leader Mark Pritchard.

Councillor Pritchard is part of a coalition made up of Independent grouped Councillors, along with other Independents and Wrexham Independents group (see: Independents To Work With Independents While Staying Independent from 2014 when back  in 2014 the direction of the Council changed as ten Councillors changed horses) and Conservatives. Councillor Dana Davies is Leader of the Labour group, and with the local Council elections only weeks away it was a venue for some attempted line-drawing on decision responsibility.

Cllr Davies enquired if work carried out at a regional level was being attributed locally, and therefore fees paid by Wrexham Council, to the reshaping partner, were perhaps being paid for work taking place elsewhere.

Cllr Pritchard dived in, helpfully ‘reminding’ Cllr Davies, “When we first started on this journey, this first phase was agreed by yourselves. It was £204,000 for Stream A, and we have continued on that exact same path. The fee has been 10% and that has not changed. We have made that clear numerous times.”

“I am perplexed this morning, you come to table asking, you are fully aware of the contract. It was yourselves who started this process, you are fully aware of it. I despair. You come to table to challenge us, you know it all, you have got it all and you keep asking questions. I repeat, you know the contract agreement.”

The Head of Finance at Wrexham Council offered a more specific answer, explaining how there was work taking place at a regional level however the local work ‘was around the speed, depth and intensity we went into those savings’, pointing out that regional work would have taken longer to filter in locally and essentially that was what the fees were paid for and why it was seen as a good thing. The Officer did note some ‘considerable challenge’ between Wrexham Council and the reshaping partner over such issues.

Later the Officer added further detail on the fee arrangement to another query, explaining the headline 10% figure could be made up of milestone payments, or 5% based off a targeted saving (even if not met) and 5% on realised benefits – describing the 10% figure as a fee ‘envelope’, “The overall level of savings we were anticipating was £21m, so with these payments we will have got to around 1 in 10, but in each work stream the ratios will vary.”

The Officer also noted that although the 10% fee was paid on the savings made, there would be unbilled ongoing savings year on year.

Cllr Davies said she was ‘ecstatic’ the PwC contract was coming to an end, referring Cllr Pritchard to a scrutiny meeting back in October (our report here) where several questions were raised about the reshaping deal and external consultants. Cllr Davies pointed out their preferred option to have hired a ‘reshaping manager’ internally to oversee savings, a move she said would have been at a fifth of the cost of PwC.

Disputing Cllr Pritchard’s claim it was the Labour grouping that had hired the consultants she said, “I disagree in regards to phase 1, we signed up for a £70,000 ‘desktop review’ exercise, it was yourself who signed to take it further”

“It is my job to ask questions and will continue to do so.”

Cllr Pritchard replied, “It is her job to ask questions, it is my jobs to state facts”, pointing to the first ‘workstream 1a’ citing a £200,000 cost adding, “It was yourselves who brought them in.”

Wrexham Council told us in early February  the full and final figure to PwC for this work was £2,120,000 , with around £21,200,000 attributable to work carried out by PwC.

We spent a good while looking back through reports to piece together the decision making process, including asking a few Councillors and Wrexham Council itself.

The detail from Wrexham Council states: “The approval to appoint external support to assist with Reshaping Services to Meet the Financial Challenges was approved at the Executive Board on 16/7/13. Recommendation iii) in the minutes notes that the relevant Strategic and Performance Director, in consultation with the relevant Lead Members, appoint external support for the work on lean, in line with commercial principles outlined.”

“The cost of this Diagnostic piece of work – Phase 1 – was £100k. The partner was appointed following a procurement process with presentations to a panel of officers and members in February 2014 and April 2014. The contract was dated 1 July, 2014.”

“The approval of progression to Phase 2 of the Contract was given by the Executive Board 13/1/15 following a report (LR/02/15) from Cllr Pritchard Lead Member for Governance, Corporate Support , Finance and Planning. Recommendation 3.3 in the report notes that the Executive Board approve PwC to progress Phase 2 in line with the commercial principles outlined.”

We did ask if the initial £100k contract had any clauses or mention of further work to enact what was discovered. We also asked with the termination of the current phase, and mention in the meeting that it is final but future councils could re-visit things, was there anything in the current active agreement on future work. As yet, there is no answer to those specific points.