Agenda item

Context:

 

To provide the Joint Select Committee with an Outline Business Case (OBC) and associated papers that considers the range of alternative delivery models for the Tourism, Leisure, Culture and Youth Services (TLCY) following an independent options appraisal by Anthony Collins Solicitors.

 

Key Issues:

 

As one of the Council’s key priorities is to ‘maintain locally accessible services’ the options appraisal needed to assess which of the principle Delivery Options could create the potential for growth and sustainability for the services as well as an analysis of the legal and governance structures available and make recommendations on:

 

·         Growth and investment opportunities.

 

·         Skills gaps.

 

·         Human Resources (HR) including TUPE and future pension arrangements.

 

·         Procurement routes for awarding services.

 

·         Asset / leasehold transfer implications.

 

·         Stakeholder engagement to maximise staff, community and service user involvement.

 

The objectives of Anthony Collins have been to consider the right mix of services and the best new Delivery Option to help the Council address the projected £542,000 funding shortfall over the next four year period.  A full analysis of options of the OBC has resulted in four recommended Principle Delivery Options namely:

 

·         Delivery Option One:  Do Nothing.

 

·         Delivery Option Two:  Transform the Services ‘in house’.

 

·         Delivery Option Three:  Move the Services into an Alternative Delivery Model (ADM).

 

·         Delivery Option Four:  (a) Outsource the services to a private sector operator or (b) existing Charitable Trust.

 

The Pros and Cons of each of the four delivery options were then measured in order to assess the strategic, economic, commercial, financial and management case for change. In addition, a wider analysis was undertaken, informed via a due diligence process. Best practice research was also carried out to find other Councils that have implemented innovative Delivery Options.

 

In addition, the Options were also assessed against their ability to meet the Council’s four key priorities whilst also providing enhanced opportunities to:

 

·         Increase flexibility and agility in responding to needs and change.

 

·         Freedom to market and trade its services.

 

·         Improve services through innovation and a culture of enterprise.

 

·         Introduce lean processes that reduce duplication of effort and increase use of technology and self-service, making it easier for residents to access services and obtain information and advice.

 

·         To establish a sense of ‘ownership’ amongst staff and service users with a view to improving morale, motivation, job satisfaction and ultimately the quality of service.

 

·         Access funding and tax efficiencies currently outside the scope of the Council.

 

·         Offer higher levels of engagement and achieve economies through collaboration and partnership.

 

Should the Council agree the Outline Business Case, the next steps would be to move to preparing the Full Business Case. There is considerable work to be done to demonstrate a full comparative analysis between Options 2 and 3, and to ensure that all questions raised by the Senior Leadership Team (SLT) and the Finance Department are fully responded to.

 

The Full Business Case will provide more detail in the following areas: outcome of the procurement process, a final check on affordability and value for money; staffing considerations; the contract details; a comprehensive delivery plan and benefits realisation.

 

Member Scrutiny:

 

·         The whole process was to identify relevant grants that fitted the criteria that the Alternative Development Model (ADM) was relevant to. The County Council has a good record of obtaining grants. Due to the breadth of services, Anthony Collins, Solicitors, has advised that there should be a holding company (Teckal Company) and then below that, have a trading company and a charitable organisation also.  Each of these have separate advantages and separate disadvantages.  This will maximise the company’s ability to obtain grants and maximise its ability to draw upon charitable opportunities.  It will also maximise the ability of the Council to respond quickly to opportunities that arise and to take advantage of trading opportunities also. 

 

·         Control and governance is being worked on resulting in more opportunities for Members to hold workshops on the governance side of this issue. The workshops will investigate how standards are being measured, public expectations, efficient and effective organisation and protection of resources.

 

·         It is important that the Authority has the right level of control over what happens.  The right balance, via a shareholder agreement, will allow the ADM to undertake its role without having to have undue influence from the Council.  As a shareholder, the Council will be able to set the parameters of how the company should be run in line with the Authority’s values, have a say in who should be appointed as company director, have a say in the granting of shares and loans, have a say in approving the company’s business plan, receive regular updates from the company, have senior officers and non-executive directors on the Board.

 

·         Accountability is important.

 

·         In response to a Select Committee Member’s question, it was noted that if the service goes into a Teckal company, it will be wholly owned by the Authority.  There will be regular meetings with an officer to ensure that the services are responding and delivering quality of service. Regular meetings and updates of the ADM will be presented to a scrutiny panel or board, i.e., a similar process that currently occurs.  The role of local councillors is important and needs to be taken into account when the constitution is drawn up ensuring that there is joint ownership between the Council and the public. Senior officers will be able to focus on the strategic issues of running the Council.

 

·         In response to a Select Committee Member’s question regarding options should the ADM fail to be successful, it was noted that an exit arrangement should be written into the agreement. There are options available to the Authority, should this happen, one of which would be to bring the Service back into local Authority control.

 

·         Elected Members that serve on the Board of an ADM could be appointed for the Council term.

 

·         Full Council will make a decision on proposals by the end of March 2017. At his stage, all the details and facts are presented to Members. A new Council will be elected in May 2017.  During the summer of 2017, new Members will be made aware of the options with a view to a full business plan being presented for decision in September 2017.

 

·         This presents an opportunity to get closer to communities via the ADM.

 

·         In response to a Select Committee Member’s question regarding the Youth Offer, protection of staff and pension protection, it was noted that the Youth Offer would be most suited within the ADM alongside other services.  Transferred staff will be employed with the same terms and conditions and pension rights under TUPE arrangements.  The new body would become an admitted body of the Gwent Pension Fund at the outset.  Preparatory work is being undertaken to ensure staff are ready for the transfer.  The Trade Union Side are being kept abreast of developments and are being consulted in this matter.

 

·         Regular staff engagement events are being held.  All staff have been met over the last 12 months. Staff may also post questions on the Hub, via email or through change ambassadors to ensure engagement occurs at all times. It was noted that the vast majority of staff are looking forward to the future and the potential opportunities that will arise.

 

·         The ADM will need to build up a working capital reserve likely to be in the sum of £400,000.  It is intended to build up to this figure over a five year period.

 

·         In terms of establishing a business plan for the ADM and a prediction of grant funding over the next five years, it is anticipated that a 10% fall is to be predicted for every successive year.  Therefore, officers are trying to ensure that the ADM will be based around realistic grant funding provision and the business case will take account of that.

 

·         The business plan has been subjected to various stress tests.

 

·         There are areas of funding that are currently not available to local authorities.  This area is being investigated and being scrutinised.  This is a potential area to obtain funding as access to grants are likely to decline in the coming years.  Sponsorship opportunities will also be investigated.

 

Committee’s Conclusion   The Chair summed up as follows:   On behalf of the Joint Select Committee, the Chair thanked officers and the representatives from Anthony Collins, Solictors, for providing and presenting a clear and concise report.   The outline business case was clear and precise and the Committee looked forward to receiving the full business case in the future.   The importance of scrutiny must be identified in the constitution of the ADM.