Soaring staff sickness levels and a slump in productivity sent a Birmingham City Council unit threatened with privatisation plunging £500,000 into the red. An increase in absenteeism at the Highways and Street Lighting Direct Labour Organisations last autumn contributed to a financial crisis at the Transportation Department. More than 500 DLO workers are fighting a planned £2 billion Private Finance Initiative which would see responsibility for improving and maintaining Birmingham roads, pavements and street lighting handed to a private consortium for 25 years. The workforces fear wage cuts and poorer conditions of employment if they are transferred to the private sector. Council leaders admitted yesterday that they might have to postpone a number of roads maintenance and enhancement projects in order to balance the books. Problems at the DLOs reflect wider concern about an estimated £2.9 million deficit at the Transportation and Street Services Department. The council is overspending on refuse collection by £824,000, on recycling by £ 695,000 and on street cleansing by £300,000. Soaring oil prices will put the cost of electricity for street lighting up by £1 million a year. Absenteeism was described as "severe" by Neil Dancer, the council's chief highways engineer. "When you have trading organisations like these you have to confront the issues that have been around for many years," Mr Dancer told a scrutiny committee. Len Gregory, cabinet member for transportation, was unable to give sickness levels for the DLOs. However, he admitted that employees of the highways division, took an average of between 12 and 15 days a year off sick. The figure compares to a council average of 9.4 days. He said action was under way to cut unjustified absenteeism and he was confident the DLOs' overspend could be cut to about £300,000 by the end of the financial year. Coun Gregory (Con Billesley) insisted the council's controlling Conservative-Liberal Democrat coalition inherited an appalling staff sickness record across all departments from the previous Labour administration. "We are doing what we can to remedy it and there have been reasonable improvements in many areas. We do need to deal with it," Coun Gregory added. Coun Kath Hartley (Lab Ladywood), shadow transportation spokeswoman, claimed council-wide sickness levels had risen by 1.5 per cent since the coalition took control. | 
