Former council partner in administration

The company that was until recently a key part of the Impact Partnership delivering council services in Rochdale has entered administration after its shareholders rejected a proposed restructuring.

Shareholders in Mouchel turned down a plan to swap its £87m of debt for stock.

The company's shares have fallen from highs of about 485p in 2008 to less than a penny on Friday before trading was suspended.

The partnership between Rochdale Borough Council and Mouchel was set up in 2006 to run for a 15 year period and it was only just over a year ago, in June 2011, the council was trumpeting Mouchel's plans to expand its presence in the borough. At the time, Rochdale Borough Council Leader, Councillor Colin Lambert, said: "The company is an essential partner as the council shapes up to meet some tough financial challenges in the years ahead and I am pleased that Mouchel is accelerating its plans and making a bigger investment in Rochdale.”

However, just four months later, with Mouchel in trouble with large debts, the share price having dropped and their Chief Executive and Chairman having resigned, the Council announced a strategic review of the Impact Partnership was to be carried out. Council Leader, Councillor Colin Lambert, said: "The Council has for some time been working with Impact on performance issues and more recently the Partnership have engaged in a focused mechanism for addressing these concerns."

Rochdale Online reported that the review would look at whether or not the services provided by the Impact Partnership needed to be brought 'in house' - neither the council nor Impact Partnership would confirm this at the time. However, with Mouchel posting losses of £65 million earlier this year, the Council review into Impact Partnership concluded with the council deciding to move highways, property, payroll and elements of ICT services to the council, whilst the other key player in the Impact Partnership, Agilisys, was to continue to provide the contact centre and remaining elements of ICT.

Council Leader Colin Lambert said: “During the review we have very carefully considered all options with the senior management of Mouchel, Agilisys and the Impact Partnership and this proposal is a mutually agreed solution.”

The 'solution' effectively ended the Council's relationship with Mouchel, with Council Leader Colin Lambert saying: "The original contract included targets for the delivery of jobs growth which have become increasingly difficult to achieve under the global recession, and this, together with our push for even further efficiencies, are the key drivers behind these final recommendations.”