Agenda Item No
The Vale of Glamorgan Council
Cabinet Meeting: 08 September 2014
Report of the Cabinet Member for the Environment and Visible Services
Transport Savings Programme Update
Purpose of the Report
1. To update Cabinet on the work being undertaken to review the Council’s current transport arrangements.
2. To determine the actions and resource profile required for the introduction of a comprehensive transport savings programme.
1. That Cabinet agrees in principle the recommended actions required by the Transport Savings programme detailed within the Transport Savings report (Appendix 1).
2. That Cabinet agrees in principle the outline resource profile required to undertake the actions required by the Transport Savings programme.
3. That this report be referred to Corporate Resources Scrutiny Committee for consideration and Economy and Environment Scrutiny Committee for information.
4. That a further report be presented to Cabinet following the above scrutiny process.
Reasons for the Recommendations
1. To obtain approval in principle for the Transport Savings programme.
2. To obtain approval in principle for the Transport Savings programme resource profile.
3. To enable the Transport Savings programme and required actions to be subject to the appropriate scrutiny.
4. To allow Cabinet to consider the views of the scrutiny committee prior to taking a decision on the final Transport Savings programme.
3. A requirement to review significant areas of current spend, including arrangements related to vehicle transport was highlighted via the Council’s 2012 / 2013 medium term financial plan. In December 2013, a diagnostic review of current transport arrangements was commissioned by Corporate Management team in order to identify both process improvements and significant cashable savings in respect to the transport operations of the Council.
4. The diagnostic review project was sponsored by the Director of Visible Services and Housing and project managed by the Senior Business Improvement Partner. As a result of a competitive tendering process to obtain the services of an experienced transport change partner, Edge Public Solutions were selected to perform the diagnostic review, supported by a member of the Council’s Business Improvement team.
5. The review required a detailed analysis of existing transport related service arrangements in order to identify;
· strengths, weaknesses and opportunities relating to current service delivery processes,
· consideration of internal opportunities for improvement,
· an appraisal of change options,
· clear recommendations for future operating models and;
· a detailed project plan to support the implementation of a transformational change programme that would enable significant cost savings to be achieved; targeted at a budget reduction of approximately £1m addition to the £690k savings already identified by departments for the 2014/15 budget. .
6. In respect of project scope; the project brief provided a specification for the review of fleet management and vehicle maintenance, transportation of service users and use of vehicles for service provision (e.g. Education, Social Services), public and community bus services and staff travel.
7. From a corporate perspective, consideration was required of both strategic and operational service planning for transport in order to confirm alignment with corporate policies. This included a review of the end-to-end transport provision process for the Authority, including policy setting, eligibility control, compliance, utilisation of resources, delivery management, customer experience and identification of expenditure in addition to controls of that expenditure.
8. The review of current fleet operations included overall size and make-up of the existing fleet, arrangements for sizing the fleet and removing redundant vehicles, processes for the renewal of vehicles and review of overall vehicle lifecycles, current financing of fleet, spot hire and fuel cost control and vehicle maintenance. A diagnostic review of the current procurement and operational provision and administration of education, social services and community transport services was required, including review of eligibility and control policies. A review of current staff travel and grey fleet arrangement was also necessary to ensure that appropriate control arrangements were maximising the operational efficiency for staff travel.
9. The diagnostic review was conducted between February and April 2014, led by experienced Transport Consultants from Edge Public Solutions and supported via internal staff from the Council's Business Improvement team. Interviews and work studies were held with over 60 staff and suppliers during the course of the review.
10. As part of the governance arrangement for the review, a structure was put in place to provide governance to both the initial diagnostic review phase and for the programme to implement any agreed recommendations. In the first instance the governance consisted of the setting up of and holding regular meetings of a Transport Savings Steering Group Board, consisting of a mix of Directors, Heads of Service and Operational Managers from relevant Service Areas (namely Visible Services and Housing, Education, Social Services, Development Services and Resources).
11. The Steering Group Board provided advice and recommendations to the project team and approved the final Transport Savings report in May 2014. In parallel, the project team reported their findings to Corporate Management team at the close of the diagnostic period.
12. The resulting document, entitled â€œVale of Glamorgan Transport Review is attached at Appendix 1. The document provides a detailed assessment of the current transport arrangements and scope for improvement across the service areas detailed within the scope, culminating in a series of recommendations for improvement. Prior to the transport review being undertaken £690,000 of savings had already been highlighted by service managers, spread across financial years 2014 / 2015 and 2015 / 2016. The further recommendations provided by Edge identifies an estimated £900,000 of additional savings, considered by the review to be achievable by 2016 / 2017. The review document also provides both an assessment of the existing transport related savings plans identified by the Authority and a high level roadmap for savings and process improvements.
Relevant Issues and Options
13. As outlined above, agreement of the Vale of Glamorgan Transport Review document (and the subsequent recommendations of the Transport Savings Steering Group) by Corporate Management Team has provided the Authority with a suite of service improvement and cost reduction recommendations. Accompanying these recommendations is a breakdown of the additional revenue savings advised as achievable if the recommendations are implemented in full. The details below refer to several of the key recommendations described in the report.
14. In general, the review was complimentary of the staff and services provided by the Authority in relation to its transport and related services outlined within the scope. Assessment of the management of individual services relating to transport was found to range from adequate to excellent. However, concern was expressed in the report regarding the current fragmentation of transport arrangements within the authority.
15. The review provided critical guidance relating to the current management and operation of both fleet management and garage services, including the requirement for improved management controls relating to the motor vehicle workshop, in order to improve productivity and efficiency and to enhance control over parts and stock management. Increased use of available technologies within the garage was recommended in order to improve both customer and management information. A lack of key integrations between fleet management and fuel reporting systems meant that managers were forced to rely upon unnecessarily complex and repetitive spreadsheets to manage a number of the key processes. The report highlighted the need for a fully integrated Fleet Management Information Technology (FMIT) system if a co-ordinated approach to fleet management is to be achieved. Whilst the section does benefit from a comprehensive fleet management and vehicle maintenance IT system (Tranman), it was felt that this was not being used to its full potential.
16. A recommendation to review the current operating processes and competencies of both fleet management and administration was made within the report, in order to ensure that both administrators and managers were able to efficiently prioritise and manage workloads. This recommendation included the development of personal development programmes to include technical competency and customer awareness. In addition, an inability to identify current driver competency and a general lack of information regarding vehicle accidents decreased the potential for departments to effectively manage fleet driving initiatives. The current process of devolving licence and insurance checks to service managers was also criticised, with the view that not all managers were currently aware of the correct checks required.
17. The report recognised the efforts made to rollout the â€œTrackYouâ€ Vehicle Telemetry system, and acknowledged the potential savings available if the resulting tracking data is used effectively to monitor and increase vehicle utilisation. Following the implementation of the Tracker technology, the review recommended that a robust analysis and challenge process be undertaken to establish the true utilisation of the fleet. The review assumed a reduction in fleet numbers in the region of 25 vehicles in order to realise a saving in the region of £170k per annum in replacement and maintenance costs. The review acknowledged that these savings would only likely be realised if vehicle utilisation was taken on board by the authority as a cross-departmental project. The current lack of centralised transport resources was deemed a barrier to the effective realisation of such a project.
18. The review recognised that the effective implementation of a management information system as outlined above, coupled with a move towards a specific time scheduling system for vehicle maintenance would lead to the gradual reduction of both fleet size and technical staff headcount, via improvements to operational efficiency and productivity. Benchmarking data indicates the potential for reallocation and / or removal of underutilised vehicles from the fleet, in conjunction with a review of the current vehicle replacement programme and fleet disposal arrangements, plus central management of plant purchase and maintenance by the fleet team and market testing of fuel purchase arrangements; to ensure that maximum value is being achieved via these processes.
19. It was recognised during the review that a prompt claim of the Bus Service Support Grant was required to ensure a rebate of fuel duty for certain transport services provided by the authority, namely Section 19 Small Bus Permit services provided to specific vulnerable passenger groups via 13 specific vehicles. Setting up a claims process would enable a claim to be made on a reoccurring basis in future. The claim value for 2013 / 2014 was £13,760.78 and this has since been paid into the Council's accounts and a framework has been introduced to ensure that future claims can be made.
20. An overarching criticism of current transport arrangements referred to the review author's opinion that service managers acted in isolation regarding transport arrangements, with varying degrees of co-ordination and communication between departments when arranging similar transport provision.
21. In providing examples of this fragmentation, the review referred to several key instances. Approximately £45,000 of vehicle hire spend was identified as not being routed via the fleet management section. This indicated that increased communication to staff is required to ensure that vehicle hire is directed through the appropriate channels and that all financial and licensing checks are achieved. Lack of hire co-ordination was identified as impacting upon the effectiveness of vehicle sharing arrangements, increasing the cost of journeys made by staff.
22. Provision of home to school transport for mainstream pupils is currently managed within the Development Services Directorate, separated both from the management of transport for those users with additional learning needs (managed within the centralised education service) and from the management of transport for post 16 students (managed as a distinct entity within the finance department). The management and arrangement of social services transport was again identified as being fragmented via small individual teams within the Social Services directorate.
23. Recommendations for education transport considered the implementation of a holistic IT system in conjunction with both the mainstream, ALN and post-16 transport services to ensure that all education transport arrangements can be managed via a central resource. The requirement for a centrally maintained electronic supplier framework for the provision of passenger transport arrangements was also identified via the review. It was felt that this would actively encourage competition at a local level, with a view to simplifying the contracting process for potential suppliers and ensuring compliance of allocation of contracts and aggregated spend. Related to this, the potential development of a programme to re-tender all existing contracts within the next 12 months (using the contract break clause where necessary) was also recommended by the review. The setup of such processes would also provide direct benefit to the provision of transport arrangements within Social Services. Similarly, enhancements to the systems, supplier and administration processes contained within Education have the potential to benefit transport services provided by the Community Transport team.
24. Work related travel undertaken by Council staff amounted to over 1.25 million miles during financial year 2012 / 2013 and resulted in mileage claims paid of approximately £761,000. As an area of significant spend for the Council, the review called for an evaluation of the opportunities for cost reduction via alternative transport provision (for example the adoption of pool cars). The report recognised that changes were currently being made to reduce the current spend on mileage (via a review of the current mileage claim rate and essential car user allowance and increased promotion of the use of multi-media devices to allow remote meetings). However, the report commented that such changes would need to be supplemented with alternative delivery options for staff transport if effective and sustained change to current spend was to be achieved. The adoption of a postcode to postcode mileage checking system was also recommended, in order to effectively ensure that mileage claims represented an accurate claim for the actual distance travelled.
25. The review concludes that no single team or service is able to achieve a holistic view of transport decisions being made across the authority. Each instance of these separations was assessed as being a missed opportunity to both maximise the efficient use of current resources and utilise the scale of the organisation to further drive down costs. In order to achieve this holistic approach to transport management, the report concludes with the key recommendation that a central integrated transport unit (ITU) is setup in order to transform the current management of transport arrangements, positively change the relationship between client and provider and effectively adjust levels of autonomy and control.
26. Upon review of the finalised report, the Transport Savings Steering Group recognised the potential value of a centralised integrated transport unit, particularly when attempting to meet the service requirements of individual departments. However, the costs of setting up such a unit were deemed to be prohibitive (an additional £80k per annum), with particular reference to the annualised cost of employing a dedicated operational manager to operate the ITU.
27. The Transport Savings Steering Group however recognised the benefits of co-ordinating several aspects of transport management. The group therefore, after agreeing the recommendation of a garage and fleet improvement programme, proposed the setting up of an expanded fleet function, incorporating management of vehicle utilisation and grey fleet travel, as recommended by the review. Similarly, the benefits of a co-ordinated approach to client and customer transport were recognised by the Steering Group. To this end, the group discussed the potential transfer of additional learning needs, post-16 and social services transport management and administration functions to the existing Transport function within Development Services, effectively splitting certain elements of fleet management between passenger and other transport. Further work is now required to quantify the adjustments required to ensure that the proposal is viable.
Resource Implications (Financial and Employment)
28. The creation of the diagnostic review and the accompanying resource profile has provided the Council with a documented series of objectives regarding information management. However, the Council requires a co-ordinated and timely approach to the implementation of the accepted recommendations if it is to achieve the savings and service improvements identified within the required time periods. A revised indication of the savings identified of £1,590,000 can be found at Appendix 2. These savings have been included in the current Medium Term Financial Plan.
29. Adoption of the implementation approach outlined above requires the allocation of resources to ensure that the planning phases of the project lead to implementation of the agreed recommendations. It is suggested that the Senior Business Improvement Partner acts as Programme Manager for the implementation programme, with the Director of Visible Services and Housing acting as programme sponsor.
30. In order to assess the resource implications of implementing the recommendations emerging via the review, each of the advised recommendations have been grouped under one of six project themes, with each theme sharing several co-dependencies. The following broad project themes have been identified, namely;
· Garage and Fleet Improvement
· Vehicle Telemetry and Utilisation
· Driver / Staff Travel (including Grey Fleet)
· Education, Social Services and Community Transport Arrangements
· Transport Procurement
· Integrated Transport Unit
31. A summary of the recommendations, grouped via relevant themes can be found via the Programme Recommendations Summary document which is attached at Appendix 3.
32. Grouping of the recommendations into six distinct project themes enables the potential for each collection of recommendations to be run as a transport savings project, collectively forming a transport savings programme.
33. Utilising the preferred project management methodology of the Authority (Prince2), each of the six individual projects will require the allocation of a project manager tasked with ensuring that the implementation of each agreed recommendation achieves best value for the authority, and the project managers will be required to report to the central Transport Savings Steering Board. The programme manager will work with individual project managers to setup reporting mechanisms to this central programme Board.
34. A draft programme governance structure for the implementation of the agreed recommendations is shown at Appendix 4.
35. After initial analysis, it is assumed that four of the six projects (Vehicle Telemetry, Driver / Staff Travel, Education, Social Services and Community Transport Arrangement) can be undertaken using existing resources with the Authority. Upon consideration, two of the six projects identified (Garage and Fleet Improvement, Transport Procurement) are likely to require additional expert resource if the recommendations contained within the report are to be implemented effectively.
36. The steering group is of the view that gaps in specialist expertise relating to garage and fleet improvement could potentially hamper attempts to improve the current service to its full potential. Similarly, it has also been identified that the authority lacks specialist transport procurement expertise relating to firstly the purchase, maintenance and disposal of vehicles over their useful life and secondly, the development of cost effective transport contract arrangements via electronic tendering frameworks. It is therefore recommended that expert advice is procured on a short term basis in order to ensure the recommendations relating to garage / fleet improvement and vehicle procurement / contractual arrangements can be fully implemented. This would enable the two project streams to be supported in the implementation of the accepted recommendations of the review. Details of this are being considered and will be reported back to Cabinet after the Scrutiny process.
37. A proposed project timeframe for implementation of the recommendations can be found in the draft project plan attached at Appendix 5.
38. It is proposed that the final report to Cabinet detailing the views of Scrutiny, will also provide information on the additional costs of the expert advice required and how this should be funded.
Sustainability and Climate Change Implications
39. There are no direct sustainability and climate change implications associated with this report. However, any attempts to improve the efficiency of the both the fleet services and current transport procurements arrangements will have a positive impact on the Council’s future carbon emissions.
Legal Implications (to Include Human Rights Implications)
40. None directly attributable to the report.
Crime and Disorder Implications
41. There are no specific crime and disorder implications associated with this report.
Equal Opportunities Implications (to include Welsh Language issues)
42. The implementation programme will require the project sponsor to assess any possible impacts on equality prior to recommendations being progressed.
43. Requirement to make financial savings links directly to the current draft Medium Term Financial Plan (2014/15 to 2017/18).
Policy Framework and Budget
44. This report is a matter for Executive decision by Cabinet.
Consultation (including Ward Member Consultation)
45. Individual ward members have not been consulted as the report affects all wards. As part of the review process the trade union secretaries were invited to a meeting where the scope of the project was outlined. The trade unions have recently been advised of the broad outcome of the review and will be consulted in more detail when the final review document is agreed by Cabinet on conclusion of the Scrutiny process.
Relevant Scrutiny Committee
46. Corporate Resources is lead Scrutiny Committee.
James Rees, Senior Business Improvement Partner
Accountant - Building and Visible Services
Legal - Committee Reports
Director of Development Services
Head of Finance
Head of Business Management and Innovation
Head of Strategic Planning and Performance
Miles Punter - Director of Visible Services and Housing