Potential Parking Chaos as Serco Pulls Out of Contract

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Hounslow Council institutes emergency powers to find new provider

A new provider needs to be appointed in the next few weeks. Picture: GMB Union

October 13, 2023

The possibility of no parking enforcement in the borough of Hounslow has been raised after the existing contractor decided to quit.

The issuing of Penalty Charge Notices on street and off street in places such as Chiswick, Brentford and Isleworth is currently done by Serco which has had the contract since 2013.

It was operating under a 5-year deal signed in September 2019 but Serco informed the council on 6 June this year that it intended to terminate the agreement on the grounds that it was no longer viable.

Originally the arrangement was due to terminate in July, but Serco agreed to continue to continue to provide enforcement services firstly until the end of September and latterly until the end of November. A council report says this is subject to the appointment of a new alternative service provider but it is not known whether Serco has agreed or is obliged to cover if a new provider is not found.

It is believed that one of the reasons that the contract became less attractive for Serco was an increase in costs including higher wages after sustained strike action from staff.

At the end of 2022, Ealing Council announced that it was planning to bring parking enforcement in-house after the expiry of its current contract with Serco with the switch due to take place on 31 March 2024. The council has confirmed to us that Serco will be remain in place until this date.

The annual value of the Hounslow contract was £3.6 million and it brings in an income surplus of over £1million. Serco managed Civil Enforcement Officers and the operation and the management of CCTV enforcement services.

A forthcoming meeting of the Hounslow Council cabinet is being asked to authorise the borough’s Assistant Director of Traffic, Transport & Parking to enter into negotiations with a new provider who would need to take up the enforcement role by 1 December. The cost of the new contract, which would be award by the Executive Director of Environment, Culture and Customer Services, would need to be within existing budgets.

Normally, the arrangement of such a contract would take around 12 months but, given the circumstances, it is not feasible for the council to do a full-scale procurement exercise. Therefore, it has been decided that an agreement with another service provider without a tender is the only realistic way forward. Council officers have argued that this situation qualifies as an “extreme emergency” under the Regulations and that, because the termination was not a decision made by the council, it can be exempted from requirements for full procurement.

The council did look at the option of declining to accept Serco’s notice of termination and requiring it to fulfil the contract to its expiry until the end of next year. Although this may have been within the council’s legal rights, it was felt that it was better not to require a contractor to undertake such a ‘critical’ service unwillingly. A report to the cabinet states, “it would not be prudent to oblige a party to continue delivering such a critical contract when it has indicated that it is no longer able to do so. This would create a challenging Council-contractor relationship, potentially compromising the quality and effectiveness of the service.”

On balance it was felt better to maintain a collaborative relationship during the transitional period rather than working in an adversarial environment with both sides involved in litigation.

Any interruption to parking enforcement services could have ‘potentially significant financial implications due to the scale of income that is generated via this contract’ according to the council report.

The new contractor will need to fully operational by 1 December to minimise disruption and avoid any breakdown of financial controls during the transition period. Existing bases for enforcement officers in Chiswick Town Hall and Bridge Road will be made available to employees of the new provider.

Councillor Salman Shaheen, Cabinet Member for Recreation, Public Spaces and Parking said,
“The parking enforcement contract, which includes all parking enforcement activities between the Council and Serco, will be terminated at the end of November subject to the appointment of a new parking enforcement provider.

"Hounslow Council's Cabinet meets next week to discuss putting in place a procedure to swiftly find a provider to fulfil the remainder of the contract with Serco. The proposed solution, subject to Cabinet approval, would mean replacing Serco without having to go out to tender so as to avoid any disruption to services. However, once the current contract period expires next year, we will consider all available options and providers, including taking the service in-house.

“We would like to reassure our residents and businesses that there will be no disruption to services. In the event of a new provider not being appointed, we will continue with the current contract with Serco until the contract ends in 2024.”

Serco has also been approached for comment.

 

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