Lambeth Communications (LamCo), a commercial offshoot of the comms team at Lambeth Council, has provided a full comms service – staffed by a six-strong team – for Harrow Council for the past two years.
LamCo offers various comms services, which it groups under "tactical, strategic and people", to public sector clients.
The four-year contract with Harrow Council began in April 2015. It was worth some £400,000 in 2016/17 alone – a year in which LamCo made a modest profit of £32,000 from the contract.
But after discussions between the two councils, which began in February this year, the contract will end at the start of July.
The Lambeth comms staff who have been working on the contract are expected to be taken on as staff at Harrow Council, which will deliver comms in-house from July.
A document obtained by PRWeek, detailing the council's decision to terminate the contract, claims there is a low risk of "reputational damage".
It said: "The decision to end contract was not due to underperformance or other adverse issues but a mutual agreement by both parties due to change in circumstances."
The report by Lambeth Council added: "There are changes in Lambeth with the director of policy and communications and Harrow contract finance lead leaving Lambeth Council, so this was an appropriate time to review the contract.
"Without the current finance, contract and stakeholder management, the contract will not be able to meet Harrow’s expectations and neither meet Lambeth's need for financial return. For these reasons, both councils are in agreement that an early exit will be beneficial for both sides."
Other clients LamCo works for include Plymouth City Council, Croydon Council, Leicester City Council, Leicestershire County Council, Rutland County Council, Somerset County Council, Huntingdonshire District Council, Wealden District Council, and Slough Children's Services Trust.
In the case of Harrow Council, "The arrangements were intended to improve the communications service for Harrow while reducing costs through efficiencies and sharing of resources", according to Lambeth Council's report on the Harrow Communications Contract Termination.
It added that the decision to end the arrangement with Harrow "will not impact upon the work being delivered to other clients".
Michael Stringer, policy and comms manager at Lambeth Council, told PRWeek: "Over the past two years, Lambeth Communications has established a strong team and communications model at Harrow, which has resulted in excellent outcomes.
"The decision should not result in any job losses because the current Harrow communications team will be transferred over from Lambeth Communications and will continue to deliver against the approach established in the last two years."
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