Agenda item

The Executive Director – Services is attending the Task Group to address issues relating to the Council’s current contracts.

Before the meeting, members are asked to consider their experiences of the Council’s current contracts:

- How were Members involved prior to the contract being signed?

- What involvement do Members have now the services are running?

- Do Members know who to approach or who residents should be referred to if complaints are received?

Introduction

The Executive Director- Services introduced her report. The Council’s experience of Watford Community Housing Trust (WCHT) had not been considered as it was set up in a different way. The housing stock had been transferred and WCHT was responsible for delivering social housing like any other Registered Social Landlord.  It was a specific arrangement which would not be used for other services.

How the contracts were set up

The Executive Director- Services listed the ways the Council had approached the contracts to mitigate risks. These included:

·        Being clear about the end product

·        Having discussions with Members at the start of the process

·        Understanding the importance of using technical expertise as the Council only undertakes each process once. Experts could advise the Council on the market.

·        Ensuring knowledge is transferred to the staff before advisers stop working with the Council

·        Understanding the different procurement routes

·        Understanding the importance of having a detailed project plan and change procedure

·        Ensuring that the decision-making arrangements and financial controls were appropriate

·        Proper use of the scheme of delegation and ensuring that it did not delay the process

·        Awareness of the risks and what level of risk can be tolerated and ensuring that the Council has a Plan B. The Plan B for SLM was better than the original plan.

·        Communication was very important, both with staff and users

·        The importance of being an intelligent client so that the Council could avoid risks

The Executive Director- Services confirmed that with SLM the original plan was to find a contractor who would be responsible for the design, build and management of the centres. The market was nervous of this and the approach was changed so that one contractor built the centres and another was brought in to run them.  SLM were involved in the design but not as early as if the original procurement route had been followed.

The Executive Director- Services said that the original idea with the build and management of the Colosseum was that the management contractor, HQ Theatres, would oversee the construction. However the construction contractors, Kier, did not favour this arm’s length management and so the Council oversaw the build instead.

Governance of the contracts

Councillor Johnson asked about how the contract was managed in the absence of a leisure committee.

The Executive Director- Services explained that under the Mayor and Cabinet system with scrutiny there were no longer committees for each service. Outsourced services were managed in the same way as any other service. Quarterly reviews were undertaken with the Portfolio Holder, service objectives were included in the Corporate Plan and issues were reported to Cabinet. For services run by a third party there were clearer mechanisms for changing or terminating the contract if there were problems. There was an impression that delivery by a third party meant less accountability, but this was not the Council’s experience.

The Portfolio Holder for Finance and Shared Services, Councillor Wylie added that the agendas under the former committee system were strictly managed; it would have been very difficult for opposition Members to raise topics of concern. The voting was whipped and debate was stifled by the nature of the governance structure.

The Executive Director- Services noted the example of the petition related to women-only swimming sessions. This could have been dealt with through SLM’s complaints procedure or through talking to the council. She encouraged Members to remind residents about the complaints procedures that were in place and said that it was learning experience about how we needed to ensure that everyone knew the route to discuss services rather than jumping straight to a petition.

Councillor Jeffree asked what the democratic input was in this process. The Executive Director- Services responded that for the leisure centre contract there had been a series of workshops for Members on the design stage and different procurement routes. The Portfolio Holder was on the project team and all key decisions were reported to Cabinet. She confirmed that staff had been transferred under TUPE arrangements. After ten years the Council would have to re-tender the service, the existing provider could bid and there could also be a decision to take back in-house.

Councillor Martins said that he felt there was not enough democratic influence in the contracts. There needed to be regular reports to the Overview and Scrutiny Committee. The monitoring remained at Portfolio Holder and officer level. The connection between the councillors and the service provider was not visible enough.  The Chair agreed and said that the Overview and Scrutiny Committee needed to consider which performance indicators it would like to be reported.

The Executive Director- Services noted that a number of factors influenced the payment mechanism. For example there were clauses in the agreement related to utilities: if the overall costs changed significantly the levels of funding could be varied and the Council received the full accounts from SLM. 

She added that if the Council were undertaking the process again, she would have ensured that the team which oversaw the contract were in place at an earlier stage. The contract with SLM was the first big contract of its kind that the Council had undertaken and it had been extremely successful overall.

The advantages of the contracts

The Executive Director- Services noted that the core business of SLM was running leisure centres. The Council was a generalist organisation and did not have, for example, the market knowledge and the buying power that SLM did.

Prior to signing the contract, the Council had undertaken a lot of consultation with residents about what they wanted from the leisure services. As such, there was a confidence about the design of the service that was not as clear with other services

There were some functions that councils undertook which were rarely delivered by a third party. These were mainly the statutory functions, such as the homelessness duty.

The Executive Director- Services explained the challenges of joint working with other authorities. The councils had to agree on what their vision was for the service before they proceeded. The economies of scale were not achieved if the services that the councils wanted to offer were different.

Councillor Hastrick commented that she did not favour outsourcing and preferred the shared services model.

The role of Members

Councillor Wylie explained that it was necessary to consider the legislation to understand members’ roles. Under the Mayor and Cabinet model the portfolio holders were responsible for the performance and policy framework. The role of non-executive councillors was not oversight but scrutiny.  This scrutiny role meant that councillors could become divorced from what was happening in a service. There was a national framework of key performance indicators but these had been reduced and Members could ask for specific performance indicators to be monitored.

The Chair said that the Overview and Scrutiny Committee needed to consider which performance indicators on what services across the Council it would like to be reported and would review this at its next meeting.