Taxi Driver Online

Council backs down in battle with taxi firms over multi-million pound contracts

https://www.leicestermercury.co.uk/news ... xi-5049287

The authority said it had been overpaying to get special needs children to school

The city council has abandoned an attempt to cut its annual multi-million pound spending on taxi journeys in the face of opposition from cab firms.

The authority pays out around £10 million each year on taxi trips, mostly transporting young people with special educational needs to school and back.

Officials have spent around a year negotiating with taxi firms about a new deal that would have seen the £7.5 million cost of home to school transport, for around 1,000 children, reduced by £1 million.

However the council says that taxi firms agreed to undertake new contracts, but now refuse to do the runs for the pricing offered - forcing it to extend the old deals for another year.

The council’s strategic director of social care and education Martin Samuels said: “The council currently spends around £10 million a year on taxis - right across the range of all its services.

"But the vast majority, about £7.5 million, is spent on taxis taking children to and from school.

“The £7.5 million that is spent on home to school transport is something like two-thirds to three-quarters of the total amount of non-ringfenced funding that the council has to support education.

“That’s why it is really important we make sure we are making the best use of this.”

Mr Samuels said the council found the amount it was paying per journey was significantly higher than other similar authorities, adding: "We had rather more children being transported than you would expect compared to our statistical neighbours.”

He said the council had been paying around 10 per cent more for journeys than other similar authorities.

He said the council had spent most of last year working closely with taxi operators on a new model with an agreed fixed price for each school-run route made up of a flat-rate fee for any journey and a per-mile rate.

The council said it agreed the new structure and a number of taxi firms bid for, and were awarded, contracts under it.

However, when the council came to provide routes to the winning bidders they said they were not content with the rates offered and that they would not do them, he said.

He insisted there had been complete clarity with the taxi firms about the deal on offer when they agreed to it, but added: “At a very late stage the operators said this did not work for them."

The dispute began in late-November and meant the council was unable to start the new contracts as hoped in the New Year, so the existing contract was extended until half-term to try to resolve the dispute.

Mr Samuels said: “It has become clear that is not possible and we are not able to reach agreement and therefore we have concluded we need to, very regrettably, abandon the process.

“We are looking at going back to the drawing board to see what the various options are that could be used.”

He said this could involve ‘travel training’ for children and providing extra support for families so taxis might not be needed.

He said the hope was that contracts with taxi firms could be agreed for those children who cannot travel any other way by summer term next year.

That means a budgeted saving of £1 million will not be achieved this year.

The council says the dispute has not led to any children being unable to get to school.

Mr Samuels added: “The feedback from the taxi companies is that when we placed the routes they realised the figures that had been agreed would not work for them.

“The fairest assumption is that although we believed we had been absolutely crystal clear from the start of the process about the prices being quoted and that those were fixed prices, the taxi companies thought there would be scope for further negotiation after the contacts had been awarded.”

He said it was possible the taxi companies had understood things differently to the council.

One cab firm boss said: “This is a real mess. The taxi companies believe the council hasn’t been clear but they are also holding the council to ransom by not doing what they agreed to.”

A city council spokeswoman said the remaining £2.5 million spent each year on cabs was largely to move adults in care around the city.

Indeed, I was kind of wondering why the council didn't hold them to the contracted price that had been agreed. But if all the firms changed their minds then obviously the council hasn't made the pricing structure clear enough, or something, but not really enough information here to come to any kind of conclusion.

I assume all contracted prices where a hackney was involved were at the metered rate or less.

Interesting, All our school transport is with Leicestershire County Council and 80% of this is special needs. This is the first that I have heard of them doing the pricing in this way. I have never been asked about this. and based on the details mentioned I can't see how they are including the cost of escorts. What usually happens to us when they are looking to renew a contract is that they ask if we want to carry on at the same price and I either agree that price or suggest the new price I would like taking into account such things as the annual increase in the minimum wage. They don't seem to get this thing about drivers and escorts earning at least the minimum wage at all and they seem to encourage firms to pay less. For instance, I will quote a price for a contract along with other companies and when the results come back and you work out the costs for the winning tender and you can see that there is nowhere enough money on the job to actually pay the minimum wage let alone make any profit. I have asked them on several occasions to check that the winner is complying with the minimum wage and the usual answer is that they can't be accountable for such things because they winning bidder may be using a volunteer.

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Grandad,

Well I did wonder about that, because I thought the county councils in England dealt with this kind of thing, whereas the article is about Leicester City Council?

Anyway, I'm guessing from reading the article that the agreed pricing structure was so complex that the council thought it meant one thing, but the cab firms thought it meant something else. But now the latter has realised precisely what it means they've cried foul?

So kind of surprising the council caved in if the contracts have been agreed. Or maybe that's an admittance from the council that the pricing structure was too opaque.

Or maybe, although in theory the council were within their contractual rights to insist on the agreed pricing structure, because all the firms threatened to withdraw, in practical terms the council had no choice and had to cave in.

But kind of one of the reasons I've always steered clear of this kind of thing

Sounds to me that Leicestershire are operating a cartel, and are trying to impose one on operators.

Now isn’t organising a cartel kinda, what’s the word I’m looking for? ILLEGAL?

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Former taxi driver

Can't see any cartel, which implies collusion, and the council can't really collude with itself. In fact, if there's any cartel it's maybe evident in the behaviour of the operators, since by the looks of it I wouldn't be surprised if they got together and decided to dishonour the contracts

I kind of see what you're getting at, though.

But if anything it's an abuse of buyer power rather that supplier power, the latter what's normally thought of in terms of a cartel.

There's something in competition law called 'abuse of a dominant position', which would maybe be more appropriate for what you're getting at.

But whether or not that could apply here, I haven't the foggiest, and you'd have to consult a competition lawyer for a more informed opinion

Wasn't the whole point of competitive tendering to get the costs down ?

There must be plenty out there desperate to grab contracts who would be tempted to go very low...

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lack of modern legislation is the iceberg sinking the titanic of the transport sector

B&H Council recently employed a firm of consultants to come up with a plan to cut the costs of home to school transport. The consultants fee was about £400,000.

They came up with some kind of dynamic pricing system which they hoped to save £1 million a year. Firms tendered and the work was divvied out.

About 20-30% of the work was returned to the council as being unviable and/or impracticable.

In the end the contracts were given, in the main, to the old contractors, leading to the council having an overspend of just under £1 million a year.

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IDFIMH

I think it all depends on how the tendering process takes place.

What caused the mess down here was inviting firms that had 3 or 4 cars to tender for 100s of contracts they couldn't fulfil.

Then when those firms with 3 or 4 cars got 20 contracts they gave back the 16 less viable ones days before the contracts started.

Leaving richer picking for those with vehicles who were able to name their prices.

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IDFIMH

That will teach me to read the article properly. I assumed that this was the County Council. I did not read that it was the City Council. now it makes more sense. The City Council are a unitary authority and they do sort out the school transport for the schools within the city.

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Grandad,

the title of the thread says leics council

Stuart is very good at booby trapping threads !

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lack of modern legislation is the iceberg sinking the titanic of the transport sector

Ah, that explains that - I realised it was about the *city* council, but couldn't work out why they were involved, but didn't realise they were a unitary authority.

You're partly bang on - I was thinking last night that my thread title may have been slighly misleading after reading Grandad's post, but couldn't be bothered with any more typing last night. So

But you've also gotten it slightly wrong yourself, which I'll explain later once I've had a shower and breakfast etc

It's a tough life

Anyway, Edders is right when he says my thread title may have been slightly misleading. As many will be aware, there's not as much space for thread titles as some may think. So to get as much relevant info in as possible, I often use abbreviates like Brum, Manc, Oxon or Leics.

So I used Leics yesterday for an article about Leicester City Council, thinking Leics referred either to Leicester *or* Leicestershire.

However, it seems that Leics is normally just an abbreviation for the county rather than the city. (And I left out the word City or County to save room).

However, I might have been on firmer ground if I hadn't capitalised the letter 'c'.

1 Leics Council abandons cheaper contracts after ops refuse

2 Leics council abandons cheaper contracts after ops refuse

So 1 is incorrect, because it's an abbreviation of Leicestershire County Council, while the article was about Leicester City Council

But I might have got away with 2, because there's no capital c in council, so it could mean a council in Leicestershire

Which reminds me of a certain taxi news site, which used 'Merseyside Council' in a headline. Which is incorrect, because there's no Merseyside Council. What they really meant was 'Merseyside council' as in a council on Merseyside, and the capital C makes all the difference there.

So Edders was right in that 'Leics Council' looks more like a reference to Leicestershire County Council than Leicester City Council, but since he doesn't use any capitals at all (leics council) then he's undermined his own point about clarity of expression

(An even more pedantic point might be that since Leicester City Council is a unitary authority, then it's not actually a council in Leicestershire, at least in the sense of Leicestershire County Council, although it's obviously still part of the ancient 'shire' )