AN OUTSOURCING firm with a multi-million pound Bournemouth council contract has been pulled back from the brink by the banks.

Controversial Mouchel , who run a number of council departments, have been taken over by a consortium of banks after piling up debts of £147m.

The ‘debt for equity’ swap will safeguard the company’s 8,500 jobs, including the 458 employees transferred from the council when four core services were outsourced to them.

Council leader John Beesley has been in constant contact with Mouchel chief executive Grant Rumbles throughout the negotiations over its debts.

And councillor Beesley is defiant that his confidence in the contract has not faltered.

“I’ve not changed my view from the beginning of Mouchel’s internal problems,” he said.

“The outcome they’ve reached is very similar to what I was expecting.”

He added: “I’ve been in very close contact with the company and been able to get the reassurance that I needed and my confidence has never waivered.”

Cllr Beesley said he has not considered making contingency plans of moving staff back to the council as he has remained sure that the services would continue in spite of any changes to Mouchel.

He said: “The delivery of our partnership is one thing and it’s going very well whatever the future of Mouchel plc.

“The chances of receivership or administration were very slight.

“The local government side of their business is valuable and they were always going to be either a takeover target or a source for fresh equity injection.”

Cllr Beesley said council and taxpayer money was protected under the agreement with contractual liability in place.

The Mouchel deal with the banks Lloyds, Barclays and Royal Bank of Scotland was agreed after months of negotiations over the debts.

The three banks will take over control and write off £87m of debts but that will still leave Mouchel £60m in the red.

Mouchel’s shareholders will receive just 1p per share and once agreed at a general meeting the company will be delisted from the stock exchange on September 25.

A year ago the shares were worth 147.5p But Cllr Beesley said if the banks felt the company was not valuable they would have put it into administration.

“If this gives us anything it gives us security of continuity,” he said.

Cllr Beesley said the outstanding £60m debt is not unusual for a company of that size.

PARTNERSHIP OR TAKEOVER?

WHEN the contract started in late 2010 Mouchel took on revenues, benefits, ICT and facilities management for the council in a 10-year deal worth nearly £150m.

A total of 480 staff have transferred to the company and human resources and financial administrative functions have also been handed over to Mouchel.

Last month 22 workers returned to the council in what was described by leader John Beesley as ‘fine tuning’ to help start a new project providing finance to small and medium sized businesses. Councillor Beesley said lots of people were still opposed to the partnership but said it was getting results.

“All I ask is for people to measure us on two issues,” he said. “The first is the performance of services, and we are not reducing front line services. The second is to judge us on the level of council tax. And this partnership with Mouchel has strengthened our ability.”