THE company set up to save Herefordshire Council £33 million over 10 years faces a cuts hit of its own.
This morning (Friday), the council confirmed its intention to save £1.2m on back office services provided by joint venture company Hoople.
In a joint statement, the council and Hoople say they have reached agreement to achieve "substantial savings" by focusing on essential back office support and efficiency improvements across all services currently provided by Hoople.
As part of the savings process, Hoople has actively been involved in seeking a mutually agreeable variation to its current contract with the council.
Mike Dearing, Hoople MD said the confirmation of the council contract for 2014/15 gave the company "revenue certainty" to continue providing services and expanding its customer base.
"Whilst delivering these savings will be a challenge, I am pleased to be able to continue to support the council in its aim to deliver value for money services," he said.
Councillor Philip Price, council cabinet member for infrastructure, said cuts to back office services protected priority services.
“Whilst this will unfortunately have an impact on Hoople and council employees, I would like to thank the Hoople board and management team for their continued support and positive committed approach to helping us deliver the savings necessary,” he said.
Earlier last year, the Hereford Times reported Hoople as being in talks with the council as to how it could audit areas of its operation for itself, rather than have those audits conducted for, and reported to, the council.
The council’s audit and governance committee was told that such changes would reflect the “distinct organisational status” of Hoople and may lead to the removal of certain audits from the council’s audit plan.
Instead, the work would be performed as part of Hoople’s own internal audit arrangements, with the council willing to accept assurances from the company over the operation of controls.
Set up in 2011 in the form of a joint venture company, Hoople, with the council as a 65 per cent shareholder, took on what was previously known as the shared services partnership (SSP) and its 10-year £33m savings target which the then council chief executive Chris Bull told cabinet had already been deleted from the council’s budget plans.
Hoople provides financial, IT and other back-office services on behalf of the council. Since formation, Hoople has delivered some £3m in savings to shareholders.
The scope of services Hoople provides to the council currently covers human resources and training; finance, revenues and benefits; information technology (IT) and transformation project management.
Transactions between the council and Hoople totalled £9.29m over the 2012-13 financial year, down from £9.37m in 2011-12.