Issue - meetings

Report of the Cabinet Member Corporate Services

The Cabinet Member Corporate Services, Councillor Whyborn, introduced the report.  He described the motions before council as simple and in themselves uncontroversial, namely to respectively appoint Paul Jones and Councillor Steve Jordan, both of whom he considered to be eminently suited to the roles, to the posts of continuing Section 151 Officer, and Member representative of Cheltenham Borough Council, to the planned Support Services Company. 

Recommendation 6 noted the retention of the Revenues and Benefits service by Cheltenham Borough Council consequent to the decision of Cabinet not to move it from the Joint Committee to the new company. 

The Cabinet Member explained how the project had originated as a result of Central Government’s aspiration to promote innovative and cost-effective solutions to delivering local authority services, and Cheltenham had first-hand experience of shared services in Gloucestershire and the use of a Teckal companies.  At the time, Ubico was unique in being a shared service and a company using the Teckal exemption, meaning the service ran largely as an in-house service and did not have to go out to EU-type tendering.  Government grant funding (TCA funding) was available and the 2020 project councils were able to secure £3.8m for business transformation and related costs.  Further financial advantage would result from the fact that new employees would be engaged on terms outside of the Local Government Pension Scheme (LGPS).

 The initial vision, which was largely the one which other partner authorities were still working to, was a group of companies which would employ all employees and include all in-house services including Democratic Services, etc.  Only Statutory Officers were to be outside of the scheme, with their services being seconded from the companies and not surprisingly this revolutionary approach has proved hugely controversial.  Though early pioneers in shared services and arms-length services, Cheltenham has always adopted a “one size does not fit all” approach and decided at an early stage that it would not include the following: Regulatory services; Wellbeing and Culture; Legal and Building Control; Property; Democratic Services; Media; Elections; Community; Customer Relations; Bereavement; Green Space and Client and Commissioning officers, as well as social housing services already in CBH. 

He had spoken at length on the issue of Customer Services (CS) and Revenues and Benefits (R&B) at a recent scrutiny meeting and Members seminar, to say, in short, that the relatively modest savings involved, compared to the potential reputational risk to the council, did not justify the change.  The administration considered these to be highly sensitive front-line services, which were best directly staffed by the Council and managed locally, unlike GO Shared Services and ICT. 

These services were already largely shared and the only question was whether to take further advantage of a Teckal Company.  There would be no immediate advantage to CBC as staff were already shared and on the payroll of other authorities, but there would be a long term gain and moreover, preliminary costings for reverting the services to CBC, were expensive in terms of both revenue and  ...  view the full minutes text for item 10

Report of the Cabinet Member Corporate Services

RESOLVED THAT

1. the updated 2020 Partnership Business Case at Appendix 2 be approved in so far as it relates to Cheltenham Borough Council for the delivery of GOSS and ICT functions.

2. the transfer of GOSS and ICT functions as outlined in Schedule 2 of the Inter Authority Agreement dated 11 February 2016 to a local authority support services company owned by Cheltenham Borough Council, Cotswold District Council, Forest of Dean District Council and West Oxfordshire District Council be approved.

3. it be agreed that this authority’s revenues (including council tax), benefits and customer services be withdrawn from the 2020 Partnership Joint Committee with effect from 14 November 2016.

4. the Head of Paid Service be authorised, in consultation with the Leader, Cabinet Member for Corporate Services, the s151 Officer and the Borough Solicitor to work with the Partnership MD to finalise and complete the Articles of Association, Members Agreement, Contract for Services and  documents and to take all necessary steps to enable the support  service local authority company formation.

5.  the Democratic Services Manager, in consultation with the Borough Solicitor, be authorised to make such changes to the Constitution as are necessary to reflect and facilitate the implementation of the recommendations in this report.

The Cabinet Member Corporate Services introduced the report and reminded Members that in October 2015 Council approved the creation of  the 2020 Partnership Joint Committee, the delegation of GO Shared Service and ICT from the date of its creation and, following Cabinet decisions on 9 February, the subsequent delegation to the joint committee, of revenues, benefits and customer services. In October 2015 Council also delegated to the joint committee employment matters for all partner council staff including HR policies and procedures, pay and grading policy and total reward policy. Along with other partner councils CBC requested a further report during 2016 on the business case for a local authority company. A company structure and governance proposals was approved by the joint committee on 30 September 2016 which included proposals for CBC to become a member of a support services company from which it would receive GOSS and ICT.

Cabinet had reviewed the position regarding the inclusion of revenues, benefits and customer services and had determined to withdraw those services and to return them to the direct management of CBC rather than commit them to the company.

The Cabinet Member stated that Cheltenham Borough Council had positive experience with shared services. It was now a question of tailoring an all embracing project in its initial concept to something what would be appropriate for Cheltenham. Transferring the existing partly shared services to a company would provide resilience and the Cabinet Member gave the example of the positive experience with UBICO.

The following comments were made by Members :

• Austerity had driven the council to pursue shared services. However it was important to protect those front line services which Cheltenham were providing uniquely.
• There was a fear among some Members that as the partnership model moved towards a company model openness and transparency could be compromised. Decision-making would move further away from each authority and therefore individual Members. It was essential for Members to be able to scrutinise decisions of the company and that they had all the necessary and relevant information available to them in order that they could uphold their duty to residents.
• The decision to keep customer services and revenues and benefits in house should be kept under strict review but it provided CBC with the opportunity to shape these front facing services with a different view in conjunction with other partners. There was a strong belief among some Members that keeping these services in house was in the very best interests of the council and its residents.
• A Member made particular reference to the £159k savings target identified in the Medium Term Financial strategy from including customer services and revenues and benefits in the proposals. He highlighted that CBC’s current collection rate was 98 % compared to the national average of 97% and questioned whether this rate could be maintained within a company model. Based on £45 million received by the council a year, a 1% decrease represented £450k which in his view illustrated the scale of the risk  ...  view the full minutes text for item 9