PIP Transformation Partner

1
PIP Transformation Partner

• Due Diligence Launch
• 05 03 07

2
What are we doing today?

• Introduction George Krawiec
• Background
• How weve got here
• The case for change
• Objectives
• Capita and Capita Symonds Tony Lubman
• What happens next Dave Shaw
• Our thinking at this stage
• Approach
• Plan and timetable
• Questions and Answers

3
How did we get here?

• Transformation partner is the Councils NELC
  response to
• Customer, e-government, ICT
• Property rationalisation
• Strategic service delivery strategy
• Addressing wider context issues
• Capacity and capability issues
• It is not an outsourcing project

4
Capita proposal

• An outcome based proposal
• 6 Programmes
• Partnership Services
• Customer Service
• Agility and focus
• Service Improvement
• Regeneration partnership JV proposal to be
  developed
• Shared Services JV proposal to be developed
• Cost 38M over ten years
• Potential for significant performance improvement
• Benefits of 125M (110 cashable) 66M
  guaranteed

5
The case for change?

• Services essential to regeneration are split
  within the Council
• Several under-performing services
• Inadequate capacity and capability
• Regeneration team are isolated
• Historically the Council has achieved lower
  funding than deprivation and economic activity
  would merit
• Recent success in funding (BSF, LEGI) good news
  but need capacity to deliver
• New Horizons widely supported

6
Objectives for this proposal

• Service and process improvement
• Increase regeneration activity
• Joined-up delivery of services
• Build confidence with funding partners to lever
  further investment
• Achieve results more quickly
• Become sub-regional delivery partner of choice

7
Introducing Capita
8
Our thinking at this stage

• CMT and the member working group have considered
  the proposal and formed views on
• Scope
• Staffing
• Ownership
• Reserved issues
• Support services

9
What is in scope?

• Planning
• Development control
• Building control
• Local plan
• Highways
• Network management
• Transport planning
• Traffic management
• Car park management

• Building design and engineering
• Property and facilities management
• Economic development
• Regeneration
• Strategic Housing

10
Examining JV Options in More Detail Staff
Options
Legal issues currently under discussion

• Secondment
• Employees second into Joint Venture
• Employer remains NELC
• TCs remain unchanged
• Stay in Local Government Pension Scheme
• Pay Review NJC National Pay Awards
• Unions existing representation continues

• TUPE
• Employees TUPE into Joint Venture
• Employer becomes JV Company
• TCs remain unchanged
• Stay in Local Government Pension or Broadly
  Comparable scheme
• Pay Review NJC National Pay Awards
• Unions existing representation continues
• Opportunity to join share options plan
• Company shopping discounts
• Staff insurance benefits
• Child care voucher scheme

11
Examining JV Options in More Detail Council
Ownership Scale
Less than 20 shareholding is off the Council
balance sheet. Private sector responsible for
VAT, Tax, CIS and statutory filing greater
financial benefits to Council
Outsourced Model
In-house Model
Council Ownership Scale

Greater than 20 shareholding becomes a
subsidiary on the Council balance sheet Same
asset treatment, transactions all within LG
Finance Act, consolidation into statutory report
and accounts. Additional costs
12
Examining JV Options in More Detail Council
Ownership Scale
Less than 20 shareholding is off the Council
balance sheet. Private sector responsible for
VAT, Tax, CIS and statutory filing greater
financial benefits to Council
Outsourced Model
In-house Model
Council Ownership Scale

Golden Share
Greater than 20 shareholding becomes a
subsidiary on the Council balance sheet Same
asset treatment, transactions all within LG
Finance Act, consolidation into statutory report
and accounts. Additional costs
13
What are our reserved issues?

• Statutory issues
• Policy and strategy
• Business plan
• Service standards
• Impact of contracts beyond a certain size
• Staffing issues
• Based in NEL
• Others.

14
Examining JV Options in More Detail Service
Level Agreements

• The JV Company will need support services, these
  include
• HR
• Payroll
• IT Help Desk Support
• Finance
• Legal Services
• FM Support
• The options for delivering these are
• The JV Company buys back the services from the
  Council
• The JV Company provides its own support
• Transfer existing Council support to JV Company

15
Approach

• To work collaboratively with Capita to
• take the thinking at this stage
• lift the lid
• reality check
• Develop the outline proposal into a service
  specification
• Objectives
• Definitions
• Outputs corporate objectives, performance,
  value
• Open and honest engagement
• Consultation with all staff and unions
• No closed cupboards on either side

16
Timetable key milestones

• Start discussions and engagement 05 03 07
• Engagement and due diligence 3 weeks
• Wider staff consultation and open day w/c 12 03
  07
• Understand developed proposal Late March
• Report back to CMT and members early April
• Negotiation April / May
• Decision May / June
• Start date Early June

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Key DeliverablesDue Diligence Stage

• Allocate Due Diligence questions Monday 5th March
• Response to Due Diligence questions by Friday 9th
  March
• First Draft of the output specifications to be
  shared with Heads of Service by Monday 12th March
• Follow-up 1-2-1 w/c Monday 12th March
• Final draft output specs to be issued Monday 19th
  March
• NELC Final comments on output specs w/c 19th
  March
• All documents completed 23rd March
• 15 DAYS TO GO!

18
Regeneration joint venture

• Labour Group
• 01 03 07