Dozens of school catering workers have pleaded with Greenwich Council to delay deciding on their futures.
The bleak financial forecast for GS Plus and Greenwich Services Solutions – companies set up by Greenwich Council to provide ICT, school meals and transport among other things – has sparked an in-depth review into their future trading set-ups.
Councillors were told last night the best option to stop the companies losing money was to “in-source” some services, but move away from catering, ICT and cleaning.
In-sourcing means the council would take on some services provided by the companies – but stop short of providing school meals and cleaning – because cash-strapped schools aren’t buying in as much.
Fearing redundancy, dozens of workers piled into last night’s cabinet meeting calling for a decision to be pushed back – claiming they could help find cost-cutting measures to make the businesses sustainable.
According to council documents, GSS is operating with a small profit before tax – while GS Plus is operating at a loss.
The council’s chief executive Debbie Warren said last night: “The current climate that the business is trading is one where costs are increasing, but the company is experiencing a decline on income.
“This has left the company on the edge of insolvency.
“Catering and school cleaning face significant pressures. Part of this is down to school funding cuts and the difficult decisions that governing bodies face on how to best spend their resources.
“The bottom line is, as a supplier of school meals, the company relies on schools’ finances and they are simply not buying them anymore.
“There are mitigations as the company moves on a new journey focussing very much on retaining jobs whilst recognising that doing nothing is not an option.
“The tightrope of insolvency, with losses and shrinking market, means there is an inevitability about catering and cleaning businesses.
“Doing nothing will see these businesses wither on a vine, with schools making their decisions over time.”
Council bosses set out three options, recommending sustainable parts of the businesses are in-sourced to the council, while the authority would “move away” from providing catering and cleaning services.
This would mean redundancies and the likelihood that the companies are “wound up” – potentially impacting the lives of 740 employees.
Unite union branch secretary Danny Hoggan said said: “From the number of people here you can see how deeply people feel about their jobs.
“You have a duty to them to give these workers proper management to see what can be done over the next few years.
“Give people an opportunity to prove and show how committed they are. 740 employees, 714 are women – those are the ones who would be losing their jobs.
“You need to work with the staff to give them the opportunity – we would put pressure on our colleagues in the education sector, we should be proud of the high standards of catering and cleaning.
“We would implore you to delay this decision to consult with the workforce and look at all options. With proper management, a fantastic workforce can go forward.”
Hoggan also criticised the past management of the firm, adding: “One of their strange decisions… was to set up a mini-cab firm. They were the kind of decisions being made across the organisations.”
The meeting was told that stretched school budgets meant there was less demand for services, and that doing nothing at this point would result in insolvency.
Danny Thorpe, leader of the council, said: “It’s clear to us the threat of insolvency is a very real issue. If we did nothing that will lead to a big risk to everyone’s jobs, which is why we have considered these options.
“The big challenges that we all face is that school budgets are absolutely on the floor. Unfortunately, that has created an economy that has been driven into a downwards spiral.
“We will have conversations moving forward and, in the end, we will try and make sure as many schools as possible take things back in house.
“I hope you understand our commitment that all of our communities are protected and moving forward we will be very clear and have conversations.
“We will provide people with retraining and re-employment in other areas if that’s necessary.”
Additional reporting and video by Darryl Chamberlain.
Tom Bull is the Local Democracy Reporter for Greenwich. The Local Democracy Reporter Service is a BBC-funded initiative to ensure councils are covered properly in local media.
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