Issue - meetings

To consider the attached report of the Director of Shared Services (East Kent Services).

Please note that Annexes B, B1 and D contain exempt information and are contained elsewhere within the agenda.

The Director of Shared Services made a presentation to Members on the proposals for the contracting out of certain functions provided by East Kent Services.

Members were advised that for East Kent Services (EKS) was required to deliver annual savings of £300,000 - £500,000 to maintain the current situation in addition to absorbing growth items such as salary and inflation. For the period 2017/18, EKS was required to realise £832,000 of savings to ensure the 2017/18 budget was balanced.

EKS had historically achieved its savings through a combination of economies of scale, the deletion of posts using natural staff turnover to avoid redundancies and the reduction in operating costs from the rationalisation of systems. However, it was no longer possible to use these methods to achieve the required level of savings. The following options had therefore been considered:

(a)  EKS could increase its current management fees (resulting in £2m of growth over the next seven years) to the three Councils to ensure viability of the current operation. This would be to the detriment of other council services as they would have less money available to them; or

(b)  EKS could reduce costs by a similar amount within EKS which would require significant staff reductions (c.15 posts in 2018/19 and a total of c.70 posts over the next seven years) which introduced a major risk to services and required significant redundancies; or

(c)  EKS could consider the likelihood of delivering income of similar quantity through expansion or exploitation of shared services; or

(d)  EKS could enter into a strategic partnership with a commercial provider for the delivery of Revenues, Benefits and Customer Services in order to significantly reduce operating costs, avoid redundancies (and possibly generate new jobs) whilst also providing a revenue stream through a combination of profit share from the hub and rental of desk space within Council buildings.

The option of entering into a strategic partnership was the preferred option as it had a number of potential benefits for EKS and the three Councils over the other options:

·         It could deliver immediate savings via a reduction in the cost of EKS operations on Day 1;

·         There would be guaranteed performance levels;

·         It would safeguards existing jobs, provide TUPE protection to transferring staff and prevent redundancy costs;

·         There was a high likelihood of additional one-off savings in Year 1;

·         It would deliver an income stream from a profit share arrangement that provided services to the public sector from current District Council locations; and

·         It would generate new jobs growth in East Kent if the South East hub expanded (as had happened elsewhere).

EKS and the three East Kent Councils had contacted authorities that had entered into a similar arrangement and had received very positive feedback on the arrangement from the client councils, trade unions and staff.

Members were advised that any agreement would include the provision for exit arrangements should the Council wish to exit the arrangement in the future.  

RESOLVED: That the report be noted.

To consider the attached report of the Director of EK Shared Services.

Responsibility: Portfolio Holder for Corporate Resources and Performance

Appendices B, B1 and D of the report are included in the private part of the agenda as they contain exempt information (under paragraph 3 (Information relating to the financial or business affairs of any particular person (including the authority holding that information)) of Part 1 of Schedule 12A of the Local Government Act 1972.

It was agreed:

(a)  That the business case for entering into a strategic partnership and contract for the delivery of the Revenues, Benefits and Customer Services functions be approved and that the East Kent Services Committee to requested to give effect to the recommendation.

(b)  That the East Kent Services Committee be authorised to discharge the following functions and delegations on behalf of Dover District Council:

(i)            To act in consultation with the chief legal officer of the Council, to authorise entry into contracts with third parties in relation to the discharge of all or any of the Revenues, Benefits and Customer Services Functions, including the granting of interests in land.

(ii)           To exercise the powers and functions of the Council in relation to any contract entered into by the Council pursuant to (i) above, (to include but not be limited to) making decisions on behalf of the Council in relation to:

(1)   Contract management

(2)    Renegotiation of the contract (acting in consultation with the Solicitor to the Council)

(3)    Variation of the contract (acting in consultation with the Solicitor to the Council)

(4)    Assignment of the contract (acting in consultation with the Solicitor to the Council)

(5)    Novation of the contract (acting in consultation with the Solicitor to the Council)

(6)    Termination of the contract (acting in consultation with the Solicitor to the Council)

(7)    Renewal of the contract (acting in consultation with the Solicitor to the Council)

(8)    Enforcement of the contract including the making and settling of any claims arising under it (whether or not legal proceedings are actual or contemplated)

(c)  To authorise the doing of anything in relation to the exercise of the powers and functions of the Council under Part ll of the Deregulation and Contracting Out Act 1994 and the orders and regulations made under it.

(d)  Acting in consultation with the Solicitor to the Council to authorise entry into contracts with third parties in relation to any functions of the Council which are not the Revenues, Benefits and Customer Service Functions but which can usefully be entered into in connection with or in order to facilitate contracts entered into, or to be entered into with regard to the Revenues, Benefits and Customer Service Functions.

(e)  That all contracts shall be entered into in accordance with the Council’s Contract Standing Orders.

(f)   To authorise the doing of anything incidental to, conducive to or otherwise expedient in connection with (a) to (e) above.