DACS, which has 8000 staff, is the in-house provider of a range of services including home care, cleaning, janitorial services, and catering, including Encore, the commercial division providing contract services to a range of organisations.

The move, agreed on Friday, April 18, 2008, by the Council’s Executive Committee means a business plan will be developed which will examine how much of the department would move to the LLP.

Transferring to an LLP would protect jobs by giving staff full protection on their terms and conditions, while allowing the service to grow the business in the external market and become more competitive in the longer term.

The move comes after a review of Significant Trading Operations (STOs) in DACS, covering Care and Community Services, and Facilities Services.

This review was approved by the Executive Committee in June 2007 when it was noted that the STOs were not meeting statutory targets to break even over a rolling three-year period.

Although trading well currently, the summary financial position of the two DACS STOs (for the period 2005-2008) will show a historic rolling deficit of £17m. This has been attributed to the increase in employee costs and compensation payments as a result of the Council’s Workforce Pay and Benefits Review.

The review, conducted by senior Council officials, consultants from Grant Thornton and Burness solicitors, came up with 10 possible options for future service delivery models, with the preferred option being an LLP.

Councillor Steven Purcell, Leader of Glasgow City Council, said: “Our review was quite clear – if we were to protect the jobs of our employees and ensure continuation of services, then doing nothing was not an option.

“If no action was taken by the Council it’s likely that we would have been forced to put these services out to competition, and winning contracts would be very difficult.

“Therefore, the choice facing the Council was not the status quo on one hand and a recovery plan on the other, rather privatisation on one hand and a recovery plan on the other.”

He added: “This is a forward-thinking local authority which is not afraid to make big decisions.

“Of course, at the heart of this is our commitment to ensure that we provide accessible, accountable and effective Council services that offer value for money.

“We have already established a number of similar arms-length companies in Glasgow, such City Building, Culture and Sport Glasgow, and Glasgow Community and Safety Services.

“We are continuing that process with this new business plan. It represents a significant development for us as we continue our efforts to improve the lives of everyone who lives and works in the city.”

Creating an LLP has worked well for the Council in the past. In 2006, City Building (Glasgow) LLP was formed, evolving from the former Building Services Department of the Council. It operates as an autonomous company, employing over 2200 skilled employees, enabling the organisation to deliver quality construction and maintenance services across the public and private sectors.

In March, the Council announced that it was to create an LLP to run its wholesale and farmers’ markets services.

The Council has also recently joined forces with Serco to provide Information, Communication and Technology services for employees, residents and businesses, making a saving of around £70m over a 10-year period.

Officials are already working closely with the trades unions and it is expected that the business plan will be presented to the Council later this year.