Hampshire Fire and Rescue Authority Item 16 Minute 39refers

Performance Review Committee

Date of Meeting 15^th May 2006

Best Value Review of Vehicle Workshops

Report of the Best Value Review Working Group

Contact: N. Whitehouse, Deputy Performance Review Manager

Telephone: 023 80626850

e-mail [email protected]

1. Summary

This report summarises the outcome of the Best Value Review of Workshops, which has been in progress since April 2004. It details improvements made, actions taken, and those agreed for the future to ensure a system of continuous improvement in the provision and delivery of services provided by the HFRS (Hampshire Fire and Rescue Service) Workshops. The recommendations made are based upon evidence gathered during the whole review process.

2. Recommendations

That it be recommended to the meeting of the Fire Authority on 31^st May 2006 that:-

1. The Vehicle Workshops remain in house, continues to adopt the practices identified during the best value review process and identifies and implements areas for future improvement and efficiency.

2. The recommendations detailed on the `action plan' that have been recognised as `ongoing', and reported in Appendix B be implemented and progress reported annually to the Performance Review Committee at the first meeting of each financial year.

3. A performance summary for workshops to include performance information in the form of indicators be put to the Performance Review Committee at the first meeting of each financial year.

4. A review of the changes to the working practices already implemented, and a review of the current staffing levels and skills mix should be undertaken by 31^st March 2007.

3 Introduction

3.1 The aims and scope of the Best Value Review of Workshops as set out in the Terms of Reference presented to the Performance Review Committee on 21^st April 2004 was to `identify opportunities and action plans for improving the way the service provides vehicle maintenance and repair at its central workshops located at Winnall, Winchester.'

3.2 The review team comprised of three HFRA members, the Workshops Manager, two members of workshops staff, three users/customers, and a representative from the Performance Review Department. This team was accountable to a Steering Group comprising of the Chairman of the Performance Review Committee, the Deputy Chief Officer, two external challengers, the Fleet Manager and the Performance Review Manager

3.3 After a considerable amount of work had been undertaken, a comprehensive report was presented to the Performance Review Committee on 9^th March 2005, recommending that the service should be retained in house and that in order to achieve best value, a number of recommendations should be implemented.

3.4 The Committee deferred its decision until March 2006 as to whether the Workshops facility should remain in-house as it felt it had insufficient information to make an informed decision, but agreed that the other recommendations for improvement detailed in the report be implemented as soon as practically possible.

3.5 These recommendations were set down in an action plan, which was approved by the Performance Review Committee on 15^th June 2005.

3.6 Since March 2005, a great deal of work has been undertaken to implement the recommendations made in the previous report. The actions taken to progress the recommendations have been reported regularly to the Performance Review Committee. In January 2006, the Performance Review Committee recommended that the work done be formally independently reviewed. The team that undertook and facilitated this work comprised of three HFRA members, including the Chairman of the Performance Review Committee, two external challengers, the Fleet Manager, and a representative of the Performance Review Department. That work has now been completed, and a summary of the review can be found in appendices A & B. Certain actions/recommendations are `ongoing', and have been reported in appendix B, as recommendations for continuous improvement. Those actions that have been fully implemented are detailed in Appendix A.

4. Background

4.1 Second to fire-fighters, a fire service vehicle is one of the most important assets to the Fire Service, without which it is unable to operate effectively. The maintenance of fire service vehicles is not an option, but an essential requirement if the service is to prove efficient and reliable, as well as create public confidence. The public expects a well trained professional organisation. They rely on fire service personnel arriving at an incident quickly and with a vehicle and equipment capable of performing the duty entrusted to them.

4.2 In order to meet incident response targets, set by the Service as part of our Integrated Risk Management Plan (IRMP), the vehicles must be reliable and in good working order. A high quality specialist fleet is essential if the Service is to meet these targets. In addition, the excellent appearance of our vehicles promotes the Fire Service and improves public confidence.

4.3 The level of maintenance required on a fire service appliance and its equipment is generally higher than that of a commercial fleet due to the nature of its use. This is because unlike a commercial vehicle, fire service appliances always carry their maximum load and may experience periods of inactivity followed by protracted and strenuous periods of activity.

4.4 Some of these vehicles also incorporate a number of non-standard items such as the back-up engine used on aerial ladder platforms. These items also require maintenance to the highest standard to ensure the safety of both our staff and the public.

4.5 Ongoing quality standards are greatly influenced by those specified and accepted for new vehicles. In effect, the care and maintenance of fire service vehicles is expected to achieve "as new" standards throughout the life of the vehicle. Such standards are central to the ethos of a well run Fire Service, which will look to the vehicle service schedule and maintenance organisation to sustain them. Workshop staff, being an integrated part of the same organisation, will understand this culture and their own quality standards will be influenced by the conditions affecting the vehicles presented for maintenance.

4.6 The legislation covering the construction and use of vehicles contains a number of exemptions for vehicles and appliances used for fire-fighting purposes, or constructed as fire-fighting vehicles. Separate legislation and guidance applies to these vehicles, and this identifies areas where claims and prosecutions could arise where infringements occur.

4.7 It is some time since the CFOA (Chief Fire Officers Association), Appliance, Equipment and Uniform Committee launched the Best Practice document on Vehicle Maintenance for Fire Service vehicles. The document has continued to be developed since that time, with the support and endorsement of the Vehicle Inspectorate and the Institute of Road Transport Engineers. As such it presents an authoritative set of recommendations and standards that aim to ensure legal compliance and an accepted standard of operations from the fire service fleet.

4.8 The Service must also ensure a `duty of care' towards their employees. This duty includes the maintenance of operational equipment, ladders, pumps and tools as well as the vehicle itself, to avoid unnecessary injury. It is the responsibility of the Service to ensure that adequate preventative measures have been taken to avoid potential hazards whilst using the vehicles and their equipment.

5. Services provided by the Vehicle Workshops

5.1 The services provided by the Workshops include the following:-

· The servicing and maintenance of all Service vehicles.

· The servicing and maintenance of specific operational equipment for example, ladders.

· A call out facility for the breakdown of vehicles.

· The bollarding and maintenance of stowage facilities for appliances.

· Servicing of a small number of vehicles from organisations external to the Service.

5.2 The Workshops facility is split into three main areas:

· Mechanical - maintenance and repair of vehicles and mechanical equipment.

· Electrical - maintenance and repair of electrical components.

· Allied Trades - Specialist equipment maintenance/repair. Vehicle body repairs and refurbishment.

In addition to the Workshops Manager, current staffing includes the following

· 7 Engineering technicians

· 2 Electrical technicians

· 1 Electrical apprentice

· 8 Allied Trade technician

· 1 Allied Trade apprentice

· 1 Workshops chargehand

· 1 Workshops GDA (General Duties Assistant)

The estimated net expenditure for the financial year ended March 2006, for the Workshops facility totalled £1.37 m. The vehicles in the fleet number approximately 250, but this is likely to rise in the future due to new initiatives such as those relating to Community Fire Safety.

6. Methodology of the Review

6.1 The Local Government Act 1999 places a statutory duty on Local Authorities to demonstrate Best Value. In order to do this the Fire Authority must show that its service meets the needs and priorities of the population, in the most efficient and effective and economic manner. The review of the HFRS Workshops has been approached with an open mind and a commitment by the Review Team members to carry out an extensive and rigorous review of the existing method of providing the Workshops facility. Its aim was to establish a process of continuous improvement in the way services are provided and delivered.

6.2 This work has been independently reviewed by an experienced Auditor who has detailed knowledge of the Fire Service. A summary of the independent review can be found in appendices A and B.

6.3 Examining practices, processes, systems, resources and structural arrangements used within the Workshops, the review has established a means of continuous improvement in the way these services are provided and delivered.

6.4 To meet the review objectives it was necessary to addressed the four `C's' -

· Challenge - why and how the individual functions are being provided.

· Compete - where fair competition could be sought.

· Consult - with users, customers, and other stakeholders, and analyse satisfaction ratings being achieved.

· Compare - how the various functions are performing across a range of relevant indicators.

7. Challenge/Compete

The following challenges have taken place:-

7.1 Challenging the content of the servicing:-

The content of the vehicle servicing, for both appliances and light/ancillary vehicles has been examined by the Fleet Manager and those elements that were deemed to have been `over serviced' have been omitted. The format of the servicing schedules has been revised to streamline the servicing activities. The outcome of this is that the target times set for standard jobs has reduced when measured against those at the beginning of the review period, and there is standardisation of tasks.

7.2 Challenging the costs

Detailed below is a very basic calculation has been undertaken, using the published CIPFA statistics for the number of vehicles, and the annual cost of workshops to determine the cost of the servicing and maintenance per vehicle. This has been used to compare against a Service that has outsourced the majority of its vehicle servicing and maintenance facilities. As can be seen, the overall costs are comparable, especially if contract management costs, and other considerations such as quality, reliability, and security are introduced. The calculation has been further explained in appendix F (confidential appendix).

	Net Cost of Workshops (£)	No of Vehicles	Cost per Vehicle (£)
Hampshire	1,369,000
Operational Appliances		114	9,090
Other Fleet Vehicles		122	2,727
Service X	450,000
Operational Appliances		37	8,911
Other Fleet Vehicles		45	2,673

7.3 The market testing of parts of the service:-

Comparisons were made of the costs against other providers for a number of the services provided by the Workshops. These comparisons included obtaining quotes from external suppliers for the following-

· the servicing of the appliance chassis.

· appliance fit outs.

· the annual servicing of ancillary vehicles.

· the fitment of HX (main scheme) Radio, Blue Lights and Two Tones.

· the fitment of mobile phones.

· the servicing of some items of equipment, for example, ladders and pumps.

7.3.1 Specialist/front line vehicles servicing

The front line vehicles are specialist in nature. There are a number of main elements to the work of the servicing and maintenance of these, for example:

· Vehicle chassis/mechanical servicing

· Pump service and overhaul

· Equipment servicing

· Bodywork maintenance

· Specialist electrical maintenance

When market testing was undertaken at the beginning of the review, it was found that there was no one specialist provider within a suitable geographical area, who could provide all the elements of the servicing that would be required. To fully compare the costs of possible external suppliers with those of the Workshops for all elements of the servicing activity, it would be necessary to undertake a full tendering exercise. This, in itself would be costly and time consuming, due to the need to draw up detailed specifications of the individual components of the vehicle service, including ancillary equipment. Based on the data in para.7.2., the experiences of other Brigades, the number of possible contracts that would be involved, the additional costs and the logistics involved in transporting vehicles from one site to another, together with the security, availability and reliability issues, the review team are of the opinion that a full tendering exercise is not a realistic option at this time.

However, given the above, a market testing exercise was still undertaken for one element of the service. Four vehicles were sent to an external provider for the service of the vehicle chassis. From this exercise, it was concluded that cost savings would not be achieved that would outweigh the issues in respect to quality, availability, logistics, flexibility, and security, if even part of the servicing was outsourced. See appendix D for further details of the market test.

7.3.2 Fit outs

Market testing is being undertaken during 2006/07 on appliance fit outs. Two appliances are being fitted out by an external supplier and the results in terms of cost and quality will be assessed. The outcomes will be reported to Performance Review Committee once the results are known. (See appendix B ref 2.14.2).

7.3.3 Ancillary Vehicles

Quotes were sought from external providers for the annual servicing of the Service's ancillary vehicles. Market testing of servicing was also undertaken on three HFRS ancillary vehicles.

A calculation was made of the cost of the basic twelve month servicing of the Service's ancillary fleet, and this was measured against the quotes obtained. The summary of this exercise can be found in Appendix C. It should be noted that the calculation was based upon the average times achieved for the servicing activity multiplied by the workshops hourly rate plus the cost of parts for an average service that was compiled by the Workshops Manager. It only includes the basic 12 month service.

It should be borne in mind that without a full tendering exercise being undertaken, the best external price could not realistically be obtained. However, the exercise has confirmed that the Workshops undertake the work competitively, and that when considering the issues of tendering, availability, security, and the fact that any contract would have to be monitored by a member of HFRS staff, the viability of outsourcing at this time is not considered appropriate, although this should be kept under review in the future.

7.3.4 The fitment of HX Radio, Blue Lights and Two Tones

The method of fitments of HX Radio, Blue Lights and Two Tones by the in-house Workshop was found to be cheaper than outside organisations, at the last report. It was recommended that this be continued in-house, and this remains the case.

7.3.5 The fitment of Mobile Phone Hands Free Kits

After cost comparisons, the fitting of Mobile Phone Hands Free Kits - Officers and Non- Uniform has been outsourced to a contractor. The contract is now managed by IT Services, resulting in a saving of time to the Workshops, with a resultant impact on IT Services.

7.3.6 Ladders and pumps

During the early part of the review, quotes were obtained for the servicing of ladders and pumps. The findings from this review were that the in house costs of these were lower than the quotes obtained in the large majority of cases. (see appendix D).

7.4 Restructuring of the Existing Management Structure

During the review, a recommendation was made to review the organisation and management arrangements of the Fleet Management and Vehicle Workshops. As a result, a report was made, accepted by the Performance Review Committee on 8^th March 2006, that the Service's Human Resources Department be asked to review the potential advantages and disadvantages of combining the organisation and management of the Transport and Vehicle Workshops functions, and to make recommendations to the Human Resources Committee on the most beneficial future structure.

7.5 The Best Value Review process has been externally challenged

A file was compiled of evidence to support the actions taken to implement the recommendations made in the action plan. This file was examined in conjunction with the action plan by the Auditor, who is also an external challenger on the Best Value Review team. The outcome of the independent review is attached to this report in appendices A & B..

8. Consult

The following consultation has taken place:-

8.1 Consultation with customers

Initial consultation found that customers, who included Station staff, uniformed and non uniformed officers, had the following comments:-

- They did not feel they were informed when vehicles were required to be serviced.

- That appliances were away from the Stations for servicing for too long.

- That fit outs to officers cars took too long.

A formal notification which outlines the service content and duration is now provided to customers. This, together with better communications with customers, has helped to address the above problems. A satisfaction survey is now in place, the results of which form part of the agreed Performance Indicators for the Workshops. Feedback from the survey should highlight any residual or new issues arising.

8.2 Consultation with staff

A survey was undertaken of Workshops staff. Respondents did express concern that better communication was required within Workshops and that tighter controls of time were required.

The Workshops Manager has introduced regular meetings with staff to ensure that they are fully informed of ongoing issues and developments. The introduction of a time management system has addressed the latter issue.

9. Compare

The following comparisons have taken place:-

9.1 Comparison with other Brigades:-

· During the review, the team visited four other fire and rescue service workshops, of which one had outsourced to an external organisation. Where other Fire and Rescue Services identified potential areas for improvement, the benefits of these being introduced within HFRS were evaluated.

From this exercise, some new working practices have been examined and adopted, for example:-

· Alternative `pegboard' style stowage systems. Initial visits had revealed substantial time differences for vehicle fit outs. Altering the new stowage system and employing more modern methods has reduced the cost by approximately £2,700 per `fit out' since 2004, and further improvements are expected in the future.

· An `Imprest' stock system has been adopted for some items such as batteries and tyres in order to improve efficiency and the cost effectiveness of stock.

· A regional discount structure for Volvo parts has been agreed with local suppliers.

· Alternative ways to deploy the GDAs (General Duties Assistants) have been trialled, and these trials are ongoing.

· It was difficult to compare performance of other Brigades against our own as there were no commonly used Performance Indicators, and in some cases the method of calculating data for measures such as the hourly rate differed. Performance Indicators have been agreed and established for HFRS Workshops with targets aimed at continuous improvement. A list of these can be found in Appendix E.

10. Continuous Improvement

10.1 All recommendations made at the last report have either been implemented, or are in progress and it should be noted that some will be in the process of development over the current year (see Appendix B). Many of the improvements will be required to be in place for some months to assess the trends and the extent of improvement in performance and cost. Useful Performance Indicators have now been agreed and will be calculated over the coming months to provide management information in respect of improvements made to date and to monitor those made in the future. Performance Indicators will be reported to Performance Review Committee on a quarterly basis from the next financial year, until further notice Please see appendix E for a list of Local Performance Indicators agreed.

10.2 Improvements have been made in the planning process. Servicing schedules are compiled and passed from the Fleet Manager to the Workshops, and quarterly planning meetings are held. An annual plan will be drafted for the next financial year to ensure that resources available are aligned to resources required, and this plan will be monitored by management and reported to the Performance Review Committee on an annual basis. Once the plan is in place, then a review is required of the staffing and skills mix of the workshop staff. (see appendix B para2.12.1)

10.3 Ongoing collaboration between the Procurement and Fleet Manager, and other Brigades will ensure that future procurement opportunities are identified and utilised by sharing of knowledge and networking.

10.4 Previously, management information in respect of job costing was found to be unreliable. The implementation of a new job costing system at the beginning of the financial year 2005/06, and a new system of time recording now means that data in respect of costs is more accurate, although problems do still exist with the software. Time and costs allocated to jobs are now broken down across a number of job codes. The information produced by the job costing system has improved since the system was implemented, and is being further refined. This process must continue on an ongoing basis to ensure that the system fulfils the Service's requirements, that accurate management information is generated and in turn ensures that informed management decisions can be made.

10.5 The management information generated has enabled monitoring of productive and non productive time both across the workshops and for the technicians individually. This information is helping to manage time and plan more effectively. The productivity rate of the workshops against target will be reported annually from the year ended 31^st March 2007.

10.6 All Workshops technicians have now completed the VOSA `Fire Service Best Practice Inspection Course', and it is intended that they will be given further IRTEC training during the year ended 31^st March 2007.

10.7 A number of recommendations for ongoing actions have been made a result of the independent review. These can be found in Appendix B.

11. Contribution to corporate aims and objectives

11.1 Facilities to manage the repair and maintenance of the vehicle fleet and associated equipment to an appropriately high standard in terms of quality and appearance are essential in assisting HFRS to meet its corporate aims, particularly to Corporate Aims number 1 and 5 - to reduce the number of deaths and injuries by 20% by 2010, and to be one of the top performing Fire and Rescue Services in the country.

12. Risk Analysis

12.1 Failure to implement the recommendations made by the review leave the Authority vulnerable to the consequences of the identified risks and shortcomings, and may inhibit further improvement.

13. Resource implications

13.1 There are no new or significant resource implications associated with the recommendations in this report.

14. Human resources

14.1 As discussed previously in the report, a recommendation was made to review the organisation and management arrangements of the Transport section and Vehicle Workshops. As a result of this a report was made to and accepted by the Performance Review Committee on 8^th March 2006 that the Service's Human Resources Department be asked to "review the potential advantages and disadvantages of combining the organisation and management of the Transport and Vehicle Workshops functions, and to make recommendations to the Human Resources Committee on the most beneficial future structure".

Any Human Resources implications will be reported on the outcome of this review.

15. Physical resources

15.1 There are no physical resource implications directly from this report.

16. Information and Communications Technology resources

16.1 There are no current Information and Communications Technology resource implications arising from this report. However there is a recommendation in Appendix B (ref 2.8.5) that the Job Costing system should be reviewed on an ongoing basis to ensure that this continues to fulfil the Service's requirements.

17. Financial implications

17.1 There are no significant financial implications arising from the recommendations in this report, although the comment in para.16.1 should be noted.

18. Equality Impact Assessment

18.1 Carrying out equality impact assessments will strengthen our Best Value Review practices by ensuring that the consequences of our proposed policies and actions comply with current legislation and expectations for improving equality and diversity in the workplace and in our delivery of services to the public.

18.2 The proposals within this report are compatible with the provisions of the European Convention on Human Rights and the Human Rights Act 1998 and considered in the light of the Race Relations (Amendment) Act 2000.

19. Consultation

19.1 The initial review involved considerable consultation with other Fire and Rescue Services and outside contractors. The views and aspirations of our own workforce was also sought to identify examples of best practice.

20. Conclusion

20.1 From the evidence gathered during the review, the cessation or outsourcing of the Workshops is not a tenable option, due to the cost, quality and risk to service operations. The review has already resulted in significant improvements being made to the working practices of the workshops. However it is important that this work continues to develop, and that the outcomes are measured and reported annually to the Performance Review Committee. Many of the initiatives require time to `bed in' before outcomes can be fully achieved, and in the case of the IT system, work needs to continue in order to ensure that management information is accurate and as relevant as possible.

20.2 The ongoing recommendations for continuous improvement that are included in appendix B should be implemented and progress reported to the Performance Review Committee.

21. Background information (Section 100D of Local Government Act 1972)

21.1 The following documents disclose the facts or matters on which this report, or an important part of it, is based and has been relied upon to a material extent in the preparation of the report: None

F Workshops Costs per Vehicle. (Confidential appendix)