Archived decisions

Hampshire Fire and Rescue Authority

Performance Review Committee Item 8

16 June 2006

Best value review of service level agreements for various support services provided by Hampshire County Council

Report by the Chief Officer

Contact: David Howells, Director of Corporate Services, Tel: 02380 626833

1

Summary

1.1

In its Integrated Risk Management Plan for 2005/06 - and as a key action of its Best Value Performance Plan (2005/06) - the Authority decided to carry out a review to examine the effectiveness and value for money of current service level agreements for various support services provided by Hampshire County Council. It was further agreed that this review would be best carried out by an external consultant. The review has now been completed and the final report, with recommendations to improve the way the current arrangements are managed, is attached.

1.2

The overall conclusion reached - that the provision of services should continue to be provided by Hampshire County Council - needs to be clarified, in particular the extent to which the Public Contracts Regulations 2006 oblige the Authority to undertake a full tendering exercise in respect of all or some of these services. A recommendation (2.2) to this effect is made. Until the situation is clarified, implementation of some of the consultant's recommendations would need to be deferred.

2

Recommendations

That it be recommend to the Authority:

2.1

That, in respect of the current service level agreements for support services provided by the County Council, the following recommendations (2.1.2 to 2.1.5) aimed at improving the cost-effectiveness of the arrangements be implemented:

2.1.1

That the documentation of the various agreements be updated and improved to describe the services being delivered in a clearer and simplified way with emphasis on shared values, outcomes and consistent quality standards for all services.

2.1.2

That monitoring meetings should take place at least quarterly to review overall performance and performance on all individual services.

2.1.3

That arrangements be made for the Service to employ directly the Information Services Manager on or before 1 April 2007.

2.1.4

That arrangements be made as soon as possible for the Service to employ a full time person to provide the web support services, as detailed in the current agreement with the County Council, for the day-to-day support of the Authority's web site.

2.1.5

That a benchmarking group is established building on existing arrangements with other fire and rescue services to build a source of comparable information on the costs of similar services provided through service level agreements.

2.2

That further advice be obtained as to the extent to which the Public Contracts Regulations 2006 oblige the Authority to undertake a full tendering exercise, prior to any decisions being made in respect of the following recommendations of the consultant's report (2.1.1 to 2.1.4)

2.2.1

That the provision of various support services provided by Hampshire County Council should be established under a strategic service partnership with a single set of documents that describe the services delivered in a clearer and simplified way with emphasis on shared values, outcomes and consistent quality standards for all services. This to be achieved by 1 April 2007.

2.2.2

That there should be discussions between the officers with the aim of a single monthly itemised invoice for all services provided through the partnership.

2.2.3

That an annual strategic meeting should take place involving senior managers from both the Service and the County Council to discuss the plans for the partnership and make decisions about overall performance and effectiveness, strategic developments and any changes needed in the overall approach and agreement.

2.2.4

The partnership should include the delivery of efficiency savings as one of the key new partnership principles rather than presume that rates and charges should simply be raised by the rate of inflation each year and agreement on the achievement of targeted efficiency savings should take place at each annual review.

3

Introduction Error! Bookmark not defined.and background

3.1

The Committee approved the need to undertake this review at its meeting on 15 June 2005. Given the nature of the review, it was considered that it would be best carried out by an external consultant. Accordingly, tenders were invited from external management consultants to: "Examine the effectiveness and value for money of the Authority's current contracts for services and service level agreements with Hampshire County Council and make recommendations on how the arrangements to deliver these support services might be improved in the future."

It was expected that review should include:

· Examination of the quality of current (and any proposed revisions to) documentation for the range of different support services provided by Hampshire County Council (HCC);

· Gathering and analysis of both customer/end-user (HFRS) and contractor/provider (HCC) views about the day-to-day effectiveness of the current arrangements;

· Identification of any `good practice' in the management of service level agreement arrangements operating in other combined fire and rescue authorities;

· Identification of any sources of comparable information on the cost of similar services provided under service level agreements.

SOLACE Enterprises (the trading arm of the Society of Local Authority Chief Executives) was successful in its bid to undertake the review and this was carried out by Mike Ellis as senior consultant.

3.2

In setting up a Steering Group of Members and Officers to oversee the review, it was agreed that the Member representatives should not be Hampshire County Council appointees. Cllr David Horne and Cllr Mrs Elaine Baker - both Portsmouth City Council members - were appointed to the Steering Group.

3.3

As the consultant's report is reproduced in full, the substance of it is not repeated in this covering report.

4

Contribution to corporate aims and objectives

4.1

Best value reviews are a recognised means of improving the delivery of services to the public. We recognise that if we want to be in the top 20% of high performing fire and rescue services in the country, we need to be able to demonstrate our commitment to improving the quality of all that we do.

4.2

Further, in wanting to divert 2% of our current resources to prevention activities by 2008 (and also to meet the Government expectations for annual efficiency gains), we need to continue to identify opportunities for improving cost-effectiveness and this must include how we manage and deliver all our support and `back office' services. This review has concluded that there scope to make such improvements.

5

Risk analysis

5.1

The 2005 Comprehensive Performance Assessment (CPA) noted that: "Strong links have grown up between the fire authority and Hampshire County Council in respect of the delivery of corporate support services ... [and that] ... the fire authority is intending to complete a best value review of corporate support to ensure that they have effective and efficient provision." A commitment to carry out the review was therefore given and this has been included in our Improvement Planning Register.

5.2

A review of this nature, particularly given the range of diverse support services it examined, inevitably highlights both good and poor practices and value for money. There is a risk - identified at the outset - that there might be the temptation to `cherry pick' and continue to outsource only those services - or parts of services - that offer the best possible value for money. To do so, might put at risk the County Council's willingness to continue to offer to provide the wider range of services. Also, it is recognised that many of the services provide by the County Council are interdependent and to disaggregate them in any way may result in increased costs in the those that continue to be provided. The consultant has recognised the special relationship that exists and this is one of the reasons for recommending the consolidation of the provision of services under an over-arching partnership agreement.

5.3

It will have been noted from the summary (paragraph 1.2) that following completion of this review and consideration of its recommendations, the Clerk to the Authority has recommended obtaining further advice on the extent the Public Contracts Regulations 2006 oblige the Authority to undertake a full tendering exercise in respect of all or some of these services. The situation needs to be clarified so that the Authority is not at risk in failing to comply with the Regulations.

6

Resource Implications

6.1

Human resources

6.1.1

There are two recommendations that suggest employing staff direct rather than through contracts for services. If implemented, the cost of implementation would be contained within existing resources.

6.1.2

Several recommendations require some management time to implement: e.g. the need to improve the formal documentation and to improve monitoring arrangements. The associated tasks will need to be prioritised (taking into account the capacity of both HFRS and HCC officers' time) if these are to be achieved within existing resources. The aim would, however, be to implement all the main recommendations by end of June 2007.

6.1.3

If, following clarification of the Authority's position under the Public Contracts Regulations, full tendering exercises need to be carried out for all or some of the current supports services provided by the County Council; then significant additional senior officer time will be required to undertake the work. This is most likely to require the services of specialist external consultants. See also 6.4.2 below.

6.2

Physical resources

There are none.

6.3

Information and Communications Technology resources

6.3.1

A recommendation suggests examining the scope for revised billing arrangements. This might have implications for the way the current financial systems (invoicing/payment) application works. This may well be a determining factor on whether it is practicable to implement a `one-bill' arrangement.

6.4

Financial resources

6.4.1

The primary aim of review is to seek improved value for money, so there will be no additional funding requirements arising from this review. The primary future aim arising out of the recommendations will be, in partnership with the County Council, to jointly seek opportunities for increased efficiency in the way that these support services are provided.

6.4.2

If a significant level of tendering has to be undertaken (see 6.1.3 above) then there could be significant costs involved in obtaining the services of external consultants to assist in the specification and procurement process. It is difficult to provide a realistic estimate of the costs (and when these are likely to occur) until the extent of any required tending is known.

7

Equality impact assessment

7.1

There are no equality issues that have been highlighted in the review.

7.2

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

8

Consultation

8.1

The consultant, Mike Ellis, interviewed all the key people involved in both the day-to-day and strategic management of the various service level agreements. On those issues considered more sensitive (mainly concerning future staffing arrangements) discussions have subsequently taken place with the staff concerned on the practicality and consequences of implementing the recommendations. Consultation would need to continue to determine implementation timescales.

9

Conclusion

9.1

It is considered that the review has been an extremely positive one for both the Authority and the County Council. Using an external consultant has led to recommendations that might not have been identified had the review been conducted internally - both at the strategic and tactical levels. All officers concerned in the review found it a challenging, but very worthwhile exercise.

Background Information (Section 100D of Local Government Act 1972)

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:

· Report by Mike Ellis, Consultant, SOLACE Enterprises (attached and on website) `Service Level Agreements for the provision of support services by Hampshire County Council'

http://www.hantsfire.gov.uk/review_of_service_level_agreements_report_may_06.pdf

Note: The list excludes: (1) published works; and (2) documents that disclose exempt or confidential information defined in the Act.

Secretarial/WP/Corporate/HFRA/Committee HFRA Per Rev 16 6 06 BV SLA report DH/JMW/8/6/06