A controversial deal between Liverpool City Council (LCC) and Queensland company Propel Partnerships to privately manage the council’s customer service centre goes live on July 1st.

Under the deal, the Liverpool Services Alliance – a partnership between LCC and Propel – will run a new council customer service centre from the ground floor of its Moore St headquarters. The service had previously been run from a cramped second floor room, after a fire ripped through the council’s administration building and chambers in 2010.

United Services Union (USU) secretary Graeme Kelly previously labelled the deal: “a launching pad for this private operator to cannibalise work from surrounding local government areas”; while Propel and the council have announced the newly-signed contract as a win for ratepayers, promising faster and more efficient customer service.

Propel is owned by the Local Government Association of Queensland and Aegis, a company which runs call centres all over the world and is a subsidiary of Indian multinational conglomerate Essar which has interests in steel, oil, energy and infrastructure and a turnover of US$35 billion.

The latest foray into New South Wales is significant because it shows that ventures backed by interstate local government associations are increasingly willing to go beyond their state borders to secure new business, a move that blurs the demarcation boundaries of what constitutes a government procurement organisation’s territory.

Sandie Morthen, an organiser for the USU, said the union had initially feared there would be redundancies and possible erosion of pay and working conditions but the outcome of recent negotiations with Propel meant staff were protected from forced or voluntary redundancies for the length of the contract, which was likely to be ten years.

“The union is happy with how the process is going and how negotiations are being handled,” Ms Morthen said.

Around 70 Liverpool City Council  positions could be affected, including those working in customer service, rates, records and administrative positions and some jobs in accounts. Propel staff will take on around seven management roles to transform and operate the centre.

Relations between council staff, the union and the Alliance soured after the union complained it was locked out of the deal and only found out about it by accident from a councillor. Liverpool City Council staff staged a one-hour stop work meeting in March to protest the changes.

“The problem was the council wasn’t saying anything and the union wasn’t consulted until we found out about it. They didn’t follow the award and sit down to discuss the changes,” Ms Morthen said.

“The staff who are moving into the model are still worried. It’s still very uncertain, but I think they’re less worried than they were three months ago when we didn’t know if wages or conditions were dropping.”

Government News spoke to Propel CEO Steve Crowe who said that the new customer service centre would provide a single point of contact for inquiries and make government transactions faster and easier for individuals and business owners.

Mr Crowe added that there was “no intimation” that any council staff would lose their jobs.

“That’s never been suggested, either by ourselves or by the council,” he said.
The company would conduct further staff training on more systems so that customers could get more enquiries finalised in one hit, a bit like the current Service NSW model, and put stronger performance indicators in place.

“We want to make sure that the customer has a seamless experience, a variety of enquiries at the same touch point, and over time additional services will be introduced into the mix – [which is] up to the council,” Mr Crowe said.

“It will be a much more comfortable, modern environment and much more satisfying for people to work in.”

In the future it could be possible to dispense with queues and numbered tickets in place of a more personalised response to individuals, who often had multiple inquiries, a bit like the banks do now.

Mr Crowe said Liverpool had a growing population and the council could not afford to constantly add staff to cope with population growth.

“We will manage transactions, processes and training. The council will make savings because they’re going to find out that their requirements to put on additional headcount is going to be limited,” Mr Crowe said.

He said that this type of model was relatively new in Australia but well established in local councils in other countries, such as the UK, but would become more important with the emphasis on shared services.

“This type of delivery model is something that’s really going to take off in Australia and it’s happening pretty quickly.”

But not everyone shares Mr Crowe’s enthusiasm. One of the reasons the deal stirred up so much anxiety was that Propel struck a similar deal with Ipswich City Council (ICC), QLD about eight years ago, which LCC Chief Executive Carl Wulff was instrumental in securing when he used to work at Ipswich City Council.

Ms Morthen said the experience of ICC staff had not been comforting. She said that around 50 staff had left , partly because they were intensively monitored, including having their toilet breaks timed and reported on and they were not replaced.

A testimonial from Ipswich Council on Propel’s website say that since the new customer service system was introduced at  the council eight years ago the backlog of inquiries has been slashed in half.

Ms Morthen said the experiences of two other Queensland councils, Mackay and Rockhampton, who had also signed on with Propel had been problematic and led to disquiet among some council staff and councillors.

“The union is going to be very aware of any approach to made [by Propel] to other councils. Whilst the jobs are protected at Liverpool if they go to other councils they may make their staff redundant and transfer to the Propel model. That’s what’s happening in Queensland,” she said.