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What is Medway Commercial Group?

By Ed McConnell

A trading company which runs many services for a council has come under the spotlight after being accused of incompetence by opposition politicians. Ed McConnell reports.

In the run up to next May’s council elections to say there’s no love lost between the Towns’ Labour and Tory parties would be something of an understatement.

Pre-vote mud-slinging is nothing new and goes on all over the country but what is marking Medway out this time around is not so much a policy issue as a commercial one.

Medway Commercial Group (MCG) is often referred to as the trading arm of the council.

Medway Commercial Group runs CCTV cameras for the council
Medway Commercial Group runs CCTV cameras for the council

It maintains CCTV cameras and operates governor services.

Most recently it’s been put in charge of a massive project to build a £25 million ‘learning village’ in Gillingham.

Labour councillors aren’t happy about this because, they say, MCG is incompetent and has shown as much through various failures in the jobs it has been given.

In October, they poured scorn on the council after it was revealed many cameras were beyond repair, while the councillor in charge of them admitting last week he did not realise they were his responsibility.

They have vowed to scrutinise it in every possible way.

MCG is not happy about that because, it says, it’s ‘exceeded’ what was asked of it in every respect.

But who is telling the truth? And more important what is MCG?

Medway Council's headquarters Gun Wharf
Medway Council's headquarters Gun Wharf

We were confused so approached council leader Cllr Alan Jarrett (Con) for some answers.

MCG was set up in 2015 against a background of swingeing government cuts to allow the council to continue providing services to a high standard while giving it the opportunity to get involved in projects which otherwise would have been out of its reach, explains Cllr Jarrett.

He said: “It was clear MCG could run services far cheaper than the council as it doesn’t have to abide by EU procurement laws.

"We pay it to run services for us, it runs them more efficiently and returns any left over money and it also gets paid to provide CCTV for other councils as well as telecare services.”

Without MCG, which this year will make £200,000, Cllr Jarrett says many services would have been on their last legs by now.

Cllr Alan Jarrett
Cllr Alan Jarrett

But Cllr Jarrett did acknowledge last month (November) the CCTV partnership — one of the first joint projects — wasn’t exactly “a marriage made in heaven”, adding mistakes had been made and the council and MCG would learn from them.

Labour has since blasted the council for funding repairs to cameras, which it owns but MCG maintain, to the tune of £47,500, but Cllr Jarrett says that’s nothing compared to the £200,000 plus running the service in-house used to cost.

Despite initial teething problems Cllr Jarrett is adamant MCG is good for Medway.

In fact, he says other than social services, which have been run badly by similar enterprises elsewhere, he’d be comfortable allowing MCG and similar companies to run any service.

The council also owns Medway Development Company, which focuses on building homes.

MCG is forecast to make £200,000 this year
MCG is forecast to make £200,000 this year

While Medway Norse, a 50/50 venture with Norfolk council, delivers £15.5 million of facilities management services, something the council would never have been able to do, claims Cllr Jarrett.

Norfolk council’s Norse, which works with authorities across the country, is now worth upwards of £200m and Cllr Jarrett is not ruling out trying to emulate its success.

He said: “Councils are suffering from government cuts and we’ve got to get creative about how to make money.”

While MCG seems like an economic victory for the council, as Labour and some Tory councillors have been quick to point out there are questions over whether it can really provide the quality of services residents deserve.

If they can’t Cllr Jarrett says the council can be trusted to hold them to account.

The public may have to settle for those assurances — as MCG is a private company it is not subject to Freedom of Information laws and other regulations which govern public bodies.

Like it or not MCG seems to be the future and the council is likely to rely on it and similar companies to deliver increasingly complex projects.

The alternative, says Cllr Jarrett, is fewer and worse services.

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