MEDIUM-SIZED regional practices are expected to be the big winners in the CCT game, with low overheads and smaller staff numbers enabling them to undercut larger firms in the bidding price war.
A straw poll of local authority figures shows they believe the type of work likely to be put on the market will include routine business such as debt collection and basic property transactions, rather than core advice and higher profile contentious cases.
David Hawkins, head of the planning group at London-based national firm Nabarro Nathanson, says the practice, which has represented more than 100 public sector bodies, has identified a trend towards authorities placing only basic work on the market for voluntary tender.
“Our experience of the work being put out or which is being specified in market testing exercises is that it is of a relatively routine nature,” says Hawkins. “Whilst the private sector would, in many cases, have the expertise to deal with the work, it is likely to be difficult to compete on cost grounds with an in-house team.
“If it’s work of a routine nature like debt collection, which can be done from a long distance, the private sector may well be competitive, but if it’s local work which needs personal contact, it may be a different story.”
Hawkins says work won by the private sector will go to firms with a sophisticated IT system but low overheads, “and therefore probably not a City or central London firm”.
The secretary of the Association of Metropolitan Authorities, Rodney Brooke, says authorities should be able to retain a sufficient percentage of their workload in-house so that core functions can be carried out internally.
Brooke agrees routine work is more likely to be placed on the market, but says there is a good chance the contracts will be awarded to council teams.
“I think it may be that private firms can offer a cheaper service of appropriate quality in areas like debt collection, but there are core services which should be kept in-house,” says Brooke.
“I don’t think you’ll see big City firms being interested in the bread and butter work of local authorities. I think that the type of firms which will bid for the work will be medium-sized firms outside of central London.”
Chair of the Law Society’s Local Government Group, Gillian Phillips, says: “The first decision that authorities will have to make is whether they want to put out a big mixed box of work or divide it by topic and type.
“They’re going to have to consider whether they’re being anti-competitive when making those decisions – whether the packages they’re putting together are ones which the market they’re approaching is likely to be able to cope with.