Interviewee: Simon Howick, managing director at Oxford Direct Services
Issue: Oxford City Council is setting up two new companies
08 May 2018 | Simon Howick
Simon Howick, managing director at Oxford Direct Services, discusses Oxford City Council setting up two new companies.
When was Oxford Direct Services set up?
In 2012, as part of a change programme. The council consolidated most of its frontline services into one organisation to serve the community's needs and supply services to local organisations and businesses.
What has happened?
The council has transformed its frontline services into a wholly owned social enterprise called Oxford Direct Services. That's two companies registered at Companies House. One will provide all of the work that we currently do on behalf of the city council - the FM work that would include street cleansing and management of parks, repairs to social housing, and landscaping. The other part is the commercial business, which is where we have a workforce of more than 700 frontline workers and we have built a business with waste, civil engineering, and pest control services. We sell those services through this arm of the business. If I were a builder I might be working on our council stock in the morning, and in the afternoon I might be working on the property of a letting agent. That's how it is structured. On the council side we want to provide those services as efficiently as possible and we will look to drive efficiencies and provide those services more cheaply back to the council On the commercial side we want to grow that to make more money. The savings we generate and the profit made goes back into public services.
You called it a social enterprise - is that the official model you are using? What I mean by the term is that the savings generated and the profit made is going back into something for the greater good by going back to the council and into public services rather than back to private investors who are looking for a financial return for themselves. So what I mean is a company with a wider social purpose.
You say you will save £10.4m over the next four years. How does that work?
Over the last few years we have returned £4.7m to the council through savings and returns from commercial activities. Our plan for the next four years sets out how we will double that return through savings or profit from commercial business. That's based on market potential, the services we offer, and setting good plans to deliver.
Why have you decided upon this now?
Other councils are interested in this, but don't have a business that they can sell commercially. However, there is a legal limit to how much trading a local authority can do and how much selling of its services it can do. We are close to that limit. Part of the move to social enterprise is that it takes away those limits.
Over the last few years the government has cut the grant to councils and next year it won't give any money at all. Other councils have cut services and jobs. We didn't want to do either of those because the most vulnerable people in the city would suffer.