The Staff Side would like to discuss the Commissioning process and state:
Communications to staff regarding commissioning always make reference to the budget pressures. However so far the commissioning of services does not appear to be delivering significant savings in Bromley and indeed elsewhere in the country e.g. Birmingham. It appears that the commissioning contracts are in fact a financial burden on the council.
We are concerned as the council has to date failed to show how the outsourcing proposals comply with its responsibilities under the Social Value Act 2012.
We are also concerned that the council may not be following
its CPR and ask whether the council is assured that through its
commissioning process it is acting lawfully in this and other
respects. Has a “Risk Register” been
prepared?”
Minutes:
The matter of Commissioning was raised for discussion by the Vice Chair.
The Vice Chair stated to the Committee that LBB’s Chief Executive had commented recently that commissioning was not making the cost savings that had been hoped for. The Vice Chair mentioned that staff had been receiving commissioning letters, and that these were stressful. The Vice Chair further stated that when potential providers were receiving soft market testing letters, it was the case that they were being asked what they wanted, rather than what LBB required. The Staff Side stated that the unions and many LBB employees were convinced that LBB were committed to commissioning on an ideological basis, rather than being influenced by objective facts.
The Vice Chair expressed concern with respect to an apparent list of defaults from the contractor “English Landscapes”. These were noted as:
· poor documentation
· inexperienced staff
· playground checks not being undertaken
· lack of firm commitment to resolve issues
· complaints from the public
The Staff Side then referenced problems with the cleaning contract; the Staff Side stated that toilets and kitchens had to be recleaned. Two other high profile failed commissioning contracts were referred to and these were the G4S failure during the Olympics, and the problems with contractors moving prisoners in vans. The Vice Chair then referenced the problems and high costs that had been experienced by Birmingham City Council and the “Service Birmingham” contract run by Capita.
The Chairman stated that LBB contracts were closely monitored by LBB officers, and if there were problems with contractors, they would be penalised and action would be taken against them.
Mr Marc Hume (Director of Regeneration and Transformation) attended to answer the queries and concerns expressed by the Staff Side concerning Commissioning. Mr Hume made the following key points:
a) Savings: It was not the intention of LBB to use the commissioning process to provide all of the cost savings that LBB were looking for; commissioning was just one mechanism that the council were using to achieve cost reductions. In this regard it was noted that business cases should be well thought out and presented. Officers would make recommendations, but Members would make the final decisions.
Mr Hume informed the Committee that savings and income totalling over £300,000 had recently been made on two new commissioning contracts; these were with respect to customer services and Financial Assessment and Appointeeship. Mr Hume stated that LBB was good at commissioning, and that LBB should build and learn from these successes. Mr Hume also referred to the commissioning that had been done with respect to “My Time“ and Waste Disposal, and commented that LBB were satisfied that these contacts were running successfully.
b) Mr Hume then moved on to discuss the Social Value Act, and confirmed that LBB were fulfilling their legal obligations under the Act. In this regard, Mr Hume highlighted LBB’s actions with respect to the customer services contract, and that the council had opted for a local solution, which avoided relocation.
c) Mr Hume stated that LBB were correctly following Contract Procedure Rules, and that service heads monitored the Risk Register. Mr Hume also made the point that all the commissioning reports would be lawful, and had a legal section incorporated.
The Staff Side Secretary reiterated the belief of the Staff Side that the council was ideologically driven with respect to commissioning, and averred that most of LBB’s contracts had been given to large companies like Liberata and Capita, indicating that this was not really a free market exercise. The Staff Side Secretary stated that the £300,000 mentioned by Mr Hume was misleading.
The Chairman reiterated the point that the Council would not always use the commissioning option, and that in some cases there would be no inducement to use outside contractors.
The Staff Side expressed the opinion that inadequate preparation and thought was undertaken before pursuing commissioning options, and that many of these options were not really suitable for contracting out, wasting staff resources. The opinion was expressed that certain contracts were being micro-managed, but that this was often not the case with costly commissioning contracts. The Staff Side felt that cost holes were not being identified, and that the analysis undertaken with respect to large commissioning contracts was qualitative rather than quantitative. The Staff Side were concerned that large contracts were not adequately scrutinized.
The Chairman maintained that PDS Committees were providing adequate scrutiny of contracts.
Councillor Wilkins was concerned that in certain cases, the commissioning out of contracts was resulting in cuts to services, degrading the quality of services, and resulting in job cuts. Councillor Wilkins highlighted problems with the contract for street cleaning services and stated that the quality of street cleaning had worsened. Councillor Wilkins questioned the ability of just three LBB officers to adequately monitor LBB’s waste and street cleaning contracts. It was suggested that in certain cases, contractors did not apply the same enthusiasm and resources to fulfilling the requirements of the contract that they had applied in gaining the contract initially. Councillor Wilkins also referenced problems with commissioning that had been experienced in Birmingham and Barnet.
Councillor Owen stated that it would be a good idea if the Staff Side provided details of alleged contract defaults in a particular contract, so that the council could have the opportunity to thoroughly investigate and deal with any issues that were identified. Councillor Owen expressed concern that there was a lack of flexibility in long contracts, and also with the fact that there was a “democratic deficit”, in that these contracts were harder for councillors to influence than internal services run by LBB staff.
The Chairman asked the Staff Side Secretary to make a report to the Committee pertaining to inefficiencies in a selected contract, so that this could be presented to the Committee for investigation. The Chairman requested the Staff Side to submit the report to the Committee Clerk in plenty of time to be incorporated into the next agenda.
A Member from the Staff Side stated that there were no Bromley staff to monitor the Parks Contract.
Councillor Carr responded that this was not the case, and that Bromley staff would monitor the Parks Contracts, and that service level agreements would, be adhered to. Councillor Carr explained that LBB had already negotiated improvements to contracts, and that negotiation was crucial in these matters. Councillor Carr acknowledged that there were issues with street cleaning services, and that these would be investigated. Councillor Carr stated that the process of commissioning had in fact resulted in savings with respect to front line services.