Evidence from Call - In Witnesses
- Meeting of Call-In Meeting, Sustainable Communities Overview and Scrutiny Committee, Thursday, 20th October 2011 6.15 p.m. (Item 36.)
David Green Director of Technical Services
Jim Lester Head of Cultural Services
Jenny Spick Chief Accountant
Ray Williams Corporate Procurement Manager
Mark Gandy Group Auditor
Mark Smith Deputy Director of Technical Services
Councillor David Elderton Chair 2010/2011
PACSPE Members Steering Group
Councillor Chris Meaden Cabinet Member
Culture, Tourism and Leisure
(Proposer of Cabinet Motion)
Chris Rance Atkins
Malcolm Burns Atkins
Ian Halton Director, Capita Symonds
Professor Robert Lee Friends Forum Steering Group
Martin Harrison Friends Forum Steering Group
Mr Ian Halton, Director, Capita Symonds
Mr Halton talked the Committee through the Business Case process. He informed, through questioning, that during the PACSPE process account had been taken of the objectives and aspirations of the Council (which were very similar to those of other local authorities). It was noted that obtaining value for money had been very important, as was bringing about much needed improvements to the facilities within the Council’s Parks and Countryside Service. This would involve identifying funding to improve equipment and to assist staff training and development. A benchmarking exercise had been carried out using both similar and neighbouring authorities. This exercise had considered service delivery, taking on board the views and opinions of internal staff and contractors. Mr Halton reported that an options appraisal had been undertaken. He also detailed the six procurement options that had been considered, the SWOT analysis carried out, along with the estimated costs, quality issues and the flexibility in the contract to make efficiency savings.
Members were told by Mr Halton that he had been led to believe that an in house bid had been ruled out because it had been considered that the Council did not have the staff with the expertise required to develop it; and there would have been a problem with service delivery if staff had concentrated their energies on drawing up a bid. Mr Halton informed that the Project Board had told him that in house staff did not have the appetite to draw up a bid.
Mr David Green, Director of Technical Services
Mr Green reported that he would have been happy to run an in house service but the brief had not included an in house option. However there are significant challenges to overcome and it will probably take two years to provide a broadly comparable service to that which an external provider could provide from shortly after the commencement of the contract. Initial discussions had taken place with the trade unions who recognised that working practices would have had to change significantly. They had set out their ideas of how working practises could change. There had been an informal understanding between the two parties about what would be required. Mr Green reported that he was of the opinion that the Council’s staff could deliver a broadly comparable service but, realistically, it required change, investment and time. Mr Green said that the PACSPE had been a big, complicated procurement exercise and that was why a Project Board had been established. The Board was made up of those officers with the appropriate skills from within the Council. A business case had been developed which included three options for service delivery in house; outside; or a combination of both. This had been presented along with a report to the Cabinet. The report had set out the advantages and disadvantages (which had been scored) and the likely efficiencies. Mr Green also reported, when questioned about whether the staff had the ability to draw up an in-house bid to run the Service, that he was of the view that Mr Halton had been referring to the staff’s technical abilities. Mr Green considered that there was a lack of in house expertise and staff would not have been able to put together a competitive tender for the work required without the assistance of an expert. This would have involved additional costs for the external advice required. It was noted that 70% of the evaluation had been on price, whilst 30% had been based on quality.
When questioned on why there had been an in house bid for the HESPE and not the PACSPE, Mr Green informed that in both cases the decision had been made by the Cabinet. In both cases it had been what the Council’s Administration, at that time, had wanted to do. Also, it was noted that the Council did not have the staff that could put together a competitive tender within the timescale laid down. The appropriate infrastructure was not in place within Parks and Countryside Service and unit costs were unknown. Mr Green was still unaware of the costs of running individual parks. Systems needed to be put in place so that this information is available in future. The Cabinet was aware of the situation and the lack of financial information available. Initially, Mr Green informed that his instructions from the Cabinet were to do as much as he could and develop an action plan and, depending on the business case, there may be some more investment available.
It was noted that since the Cabinet had made its decision at its meeting on 22 September 2011 on the PACSPE an initial meeting had been held with the trade unions. There had not been any discussions with user groups since the decision had been made. Mr Green confirmed that, subject to the call-in, he would be able to deliver a first class service in house, over a ten year period, but that it would take approximately two years to get the service up to the appropriate standard. The Cabinet had asked him to provide an action plan and he intended also to share its detail with the staff, trade unions and user groups. The aim was to provide the best in house service possible, within the resources available.
Professor Robert Lee, Friends Forum Steering Group
Firstly, Professor Lee distributed a paper to all Members of the Committee from Martin Harrison, Secretary to Wirral Parks Friends Forum. Professor Lee presented the paper informing that the community-based Parks Steering Group had been involved in the PACSPE process from the beginning. It had identified the following key problems with Wirral’s parks and open spaces:
- Poor gardening standards
- Areas of parks abandoned and uncared for
- Varying standards across Wirral
- Lack of firm supervision and direction
- Broken and obsolete equipment
- Lack of training and apprenticeship
- Low staff morale
- Low staff productivity
- Deteriorating buildings and infrastructure
- Budget cut on top of budget cut on this supposedly unimportant service
- Areas of natural interest and wildlife uncared for
- Statutory standards for designated nature areas not being met
- Wirral gems such as Hilbre Island are being neglected
Professor Lee informed that the Wirral Parks Friends’ Forum had come to the conclusion that contracting the work out was the best and only way to achieve much needed change, save money and improve quality. The Friends and had been involved in the process, feeding in a series of position statements. This was because the Friends’ Forum believed that there was a lack of skills and equipment; and there was weak management. Professor Lee referred to ‘The Corporate Governance Report’ written by Anna Klonowski Associates Ltd which summarised organisational weakness and had found that the Council could not manage performance or spot failings. In the light of this, he could not see how quality improvements required could be brought about in-house.
Professor Lee considered the PACSPE process to have been robust. All the contractors involved had impressed the Friends’ Forum with their innovative ideas and because they were passionate about parks. He informed that the Friends’ Forum was concerned about the process behind the Cabinet’s decision, as there had been no consultation or formal notification of that decision.
In summary, Professor Lee informed that Wirral’s parks and open spaces required investment. Standards had to be raised as green flag awards were needed to maximise what parks had to offer. There was huge potential but was on balance his preference remained for outsourcing parks and open spaces. This was because the Council did not have a structure in place to move them forward in a meaningful way.
Mr Chris Rance, Atkins
Members questioned Mr Rance on his experience of similar procurement exercises. They were informed that he had undertaken work for a number of other local authorities, including Birmingham City Council and that he was a green flag judge. He told the Committee that he had a strong grounding and expert knowledge in this particular area. Mr Rance was also questioned on the risk of the contract not delivering value for money. He informed that the contract had been developed through a very thorough process and would, in his opinion, deliver excellent value for money. He added that the whole focus had been on achieving results.
Mr Malcolm Burns, Atkins
Members questioned Mr Burns on the number of similar procurements he had been consulted on previously. They were informed that he had been consulted on one that had been very similar to the PACSPE and a lot that were similar to a lesser degree. He also informed that he had been involved with similar procurement projects: e.g. rail and waterway projects. He informed, through questioning, that all of the work that had gone into developing the contract, had been targeting improving value for money. This had been built into the process and the documentation used. The prices provided via the tender process in comparison to in house costs, demonstrated savings.
Mr Burns told the Committee that, in his opinion, the contract was as robust as a contract could be; and he did not believe that there were any serious abnormalities in it. It provided for variations and this meant that the Council could alter the tasks to be preformed by the contractor in line with the funding available. It was also output based and would deliver a given standard in a particular area. Finally, and there was provision in the contract for price adjustments.
Jim Lester, Head of Cultural Services
Mr Lester was questioned on cost accounting. He informed that he was aware of the lack of financial information available and knew this was something that his Service would have to improve upon. Costs were not broken down on a park by park basis. However, information was available on the costs of delivering specific services e.g. The Ranger Service.
Mr Lester informed that he was confident that the Parks and Countryside Service could be retained successfully in-house. This would require resources and it would take time, as there was a lot of work to do. He told the Committee that he would commence discussions with staff and trade unions on how costs on a park by park basis could be achieved.
Jenny Spick, Chief Accountant
From questioning by Members Ms Spick informed that Project Board meetings had been held approximately every four to six weeks. Her view on value for money was that it was demonstrated in what came from the contract process. This means looking at cost price and specification and comparing what was delivered at the moment and what was specified in respect of future delivery.
Ms Spick was asked for her views on the value for money judgement made by the District Auditor but informed that she was unaware of the detail around it. Members asked Ms Spick if she had been surprised by the District Auditor’s comments and her response was that the question was hard to answer.
Members noted that in order to move to unit costing it would be necessary to look at where staff worked and how much time they spent on different tasks etc. A method for apportioning costs across parks would have to be introduced and the work of Finance Teams would have to be broken down on a park for park basis.
Ray Williams, Corporate Procurement Manager
Mr Williams was asked about his professional experience and informed that he had worked for all of the Councils on Merseyside conducting tender processes, complying with regulations etc. Members asked whether, in Mr Williams’ opinion, the PACSPE procurement had been a safe and robust exercise. His response was that it had been; and that lessons had been learnt from the HESPE process which had been carried into the PACSPE process.
Mr Williams was also asked about the risk of a legal challenge to the Council and responded that as the Council had withdrawn from the PACSPE process, contractors who had tendered for the work were very disappointed; but the question of whether there may be a legal challenge to the Cabinet’s decision should be addressed by a legal officer.
Mark Gandy, Group Auditor
Mr Gandy informed that he was happy that the PACSPE procurement process had been robust and there had been no problems encountered. His focus had been to ensure that all of the tenderers had been treated fairly when he had drawn up the tender documents.
Mark Smith, Deputy Director of Technical Services
Mr Smith informed that his primary role in the PACSPE procurement process had been to lead it since the Cabinet made its decision in 2010, to agree a single strategic contract. On being questioned on the robustness of the process Mr Smith informed that although there was some criticism about the Council at the moment, there were some things it was good at. Officers had built up experience on this type of work, lessons had been learnt from the HESPE process, and an action plan had been drawn up and used along with an OGC Gateway process to deliver the objective set by the Cabinet at that time.
Mr Smith explained the Gateway process which had become well established over the last ten years and was recommended by Central Government for contracts of this nature. There were recognised common features for every procurement project of this nature. The project was split up into gates and checks and balances were put in place. Mr Smith told the Committee that his staff had a good and strong reputation for using this process effectively.
The Committee asked Mr Smith if, in his opinion, the PACSPE delivered value for money. Mr Smith responded by pointing out that the tenders, submitted at the end of the process, proved this and that efficiencies could be made if the work had been outsourced. He informed that a detailed scoping exercise (involving 15 – 16 scoping papers) had been carried out following the District Auditor’s advice.
Councillor David Elderton, Chair 2010/11 - PACSPE Members Steering Group
Councillor Elderton informed that he had been the Cabinet Member with the Portfolio for Culture, Tourism and Leisure during the 2010/11 Municipal Year. As such he had been heavily involved in the process to externalise the Parks and Countryside Service. The Labour Group had started the process some years ago but, for reasons unknown to him, had decided in September 2009, not to pursue it. The Conservative Group had picked it up after receiving expressions of concern over the way the Parks and Countryside Service was being delivered.
Councillor Elderton reported that a detailed specification had been included in the tender process. All tenderers had been given the details and had returned their tenders on that basis. The aim had been to provide the best possible service for the Council Tax Payers of Wirral and he had been unable to understand how the workforce could submit a tender. The contract was to have been based on outcomes and if the successful tenderer failed to perform, the Council would have been able to impose sanctions. The workforce could not be invited to submit a bid on that basis. The options had been to provide the service in-house or go out to contract. There had been no middle course of action.
Councillor Elderton told the Committee that he had spent thirty years of his working life engaged in similar processes to PACSPE and as the Cabinet Member with responsibilities for the PACSPE, had spent a lot of time pondering over the details. He had seen all of the tender documents, had been delighted in the way everyone had responded; and had made every effort to make sure it would work. Externalisation of the Service would have provided best value. Plant and equipment would have needed to be replaced and the workforce trained and looked after when it transferred over to the contractor.
The Committee had been informed by a previous witness that the Golf Groups had been unhappy. However, Councillor Elderton informed that he had attended a very successful meeting with them and that there were certain issues on golf courses which would need to be addressed.
Councillor Chris Meaden, Cabinet Member – Culture, Tourism and Leisure (proposer of the Cabinet Motion)
Councillor Meaden, through questioning, informed that Parks and Countryside staff had been told that the Service would be retained in house at the Cabinet meeting held on 22 September 2011. The last Steering Group meeting had been cancelled as the PACSPE was to be considered at the Cabinet meeting, and at the time it had been cancelled Councillor Meaden had been unaware of the Labour Group’s proposal to keep the Service in-house. The Cabinet had still to decide what resources would be made available to replace plant and equipment.