Agenda Item No.
VALE OF GLAMORGAN COUNCIL
CABINET: 22ND SEPTEMBER, 2014
REFERENCE FROM SCRUTINY COMMITTEE (CORPORATE RESOURCES): 23RD JULY, 2014
283 REGIONALISING REGULATORY SERVICES PROJECT (DDS) -
The Chairman advised that the purpose of the Special Meeting was to consider a draft Cabinet report on the proposal to create a shared Regulatory Services function with Bridgend and Cardiff Councils.
The Committee was asked to bear in mind the fact that members of staff potentially affected by the proposals had a direct personal interest in the issues to be considered. As such, and following advice from the Monitoring Officer, it was inappropriate for staff to speak at the meeting. The Scrutiny Committee also had no role in considering specific staff-related issues. However, staff could attend the meeting to hear the debate and if they had any generic service issues, they had been able to contact their Trade Union representatives for such issues to be raised at the meeting.
Trade Unions had been offered the opportunity to make representations to the Committee on generic service issues. These questions and responses from Council Officers were tabled at the meeting.
Members of the public (not employed or related to an employee of the Regulatory Services) who may have wished to address the Committee on the item had been requested to contact the Democratic and Scrutiny Services Officer by Friday, 18th July, 2014. No such requests to speak had been received.
In terms of the matter before the Committee, the remit of the Committee was to consider the proposal in terms of its impact on the delivery of Regulatory Services in the Vale. The Scrutiny Committee (Corporate Resources), as the lead Committee, would consider the corporate implications of the proposal, including the Council’s budgetary situation.
As lead Scrutiny Committee, any comments made at this meeting would be noted and subsequently, encapsulated in a report to Cabinet and Full Council. This process was happening in each of the three Councils and the comments from Scrutiny Committees in each Council would be appended to the Cabinet report.
Staff engagement events were scheduled for later this month and throughout August. The outputs from these would also be built into the Cabinet report.
It was proposed that Cabinet would receive the report in September, with the report then being forwarded to a meeting of the Full Council.
In July 2013, the Cabinets of Cardiff, Bridgend and the Vale of Glamorgan Councils received a report which proposed that a single shared service be created, comprising the Environmental Health, Trading Standards and licensing functions of each Council under a single management structure.
The Councils Scrutiny Committee (Housing and Public Protection) had considered the proposals at a special meeting the previous evening and had subsequently recommended the following to the Scrutiny Committee (Corporate Resources) as the lead scrutiny committee and the Cabinet for consideration:
â€œ(1) T H A T the proposal to create a Shared Regulatory Service between Bridgend, Cardiff and the Vale of Glamorgan Councils based on the â€˜Collaborative and Change’ Model be endorsed.
(2) T H A T Council be requested to consider the establishment of a Joint Scrutiny Committee (i.e. of the constituent Authorities) to be responsible for scrutiny of the Shared Service and that, should the Shared Service be approved by all three constituent Authorities, Joint Scrutiny arrangements be commenced as soon as possible.
(3) T H A T further work be undertaken on the Flexible and Mobile Working Arrangements that could apply to staff of the Joint Service and to drawing up appropriate protocols and procedures governing such (page 89 of the Atkins Report refers).
(4) T H A T clarity be provided regarding the ways in which members of the public who do not have access to digitalised means of communication can interact with the Shared Service.
(5) T H A T the role of the Director to whom the Chief Officer of the Shared Service would report be set out within the governance arrangements.
(6) T H A T, in addition to the risks of the Joint Service identified at page 55 and 56 of the Atkins Report, the following be also added:
Failure to achieve culture change and the need for a plan to mitigate against such a risk
Reasons for recommendations
(1-6) To provide Cabinet with the views of this Committee for consideration when receiving the proposals to create the shared service.â€
Since July 2013, detailed work had been undertaken on developing the proposals for the shared Regulatory Service. A report would be submitted to the Cabinet of each of the Local Authorities in September 2014, seeking approval to create the shared service. A draft copy of the intended Cabinet report had been included as Appendix 1.
Funding had been secured from the Welsh Government’s Regional Collaboration Fund (RCF) to develop proposals for the project. Part of the funding was used to support the development of the project. W.S. Atkins Ltd (Atkins) were appointed to produce a Target Operating Model (TOM), supporting Business Case and Implementation Plan for the Regionalised Regulatory Service, a copy of which was attached at Appendix A to the report.
As set out in Appendix 1, it was recommended that a formal collaboration be entered into between the three local authorities, with an integrated service operating under a single management structure (this was described as the â€˜Collaborate and Change’ option). It was considered that this option provided the best opportunity to reduce costs and maintain a resilient service. The business case for adopting this model was set out in Appendix A. To ensure that the proposals met the changing circumstances in each Council since the work was completed, Committee were also requested to refer to Appendix B to the report which set out the most up to date analysis.
The Financial, Human Resources and Legal implications were contained in the draft Cabinet report, along with the proposed governance arrangements.
The report was being presented to Scrutiny Committees in each local authority prior to its consideration by Cabinet, in order to allow Cabinet to take any comments or recommendations into account when making its decision. The comments and recommendations of each local authority’s scrutiny function would be collated into the final Cabinet report and presented in full to the Cabinet of each local authority.
With the permission of the Committee, the Leader referred to the report under consideration which had been submitted to this scrutiny committee and to the scrutiny committee Housing and Public Protection for pre Cabinet scrutiny who had considered the matter the previous evening. He also referred to similar arrangements taking place at Bridgend and Cardiff Councils. He made reference to the savings required to be found by the Council over the next three years as unprecedented, as was the period of austerity faced by local government in Wales in general for the foreseeable future. It was anticipated the Council would experience a 4.5% reduction in its budget settlement received from the Welsh Government for the next financial year and indeed, the likely budget shortfall for the Council over the next three years was in the region of £32m. He expected that Social Services and Education service would be largely protected and therefore 60 % of the cuts would need to be found from the remaining Council services, some of which were statutory/ regulatory in its provision. Accordingly, he was concerned of the impact of such cuts and the resulting capability of such services to retain service resilience over this period. His attention then turned to the collaborative proposals in front of the Scrutiny Committee for consideration of which he considered addressed concerns relating to service resilience and would provide greater accountability to the public. The Council’s Regulatory Services would be required to find savings circa £430k which by the scale of reduction would in fact call in to question existing and future service resilience if not addressed. The project and the preferred option 4 (Change and Collaboration) would address service resilience issues and its work had been supported by the Welsh Government with funding for the projects development provided through its Regional Collaborative Fund in the sum of £250,000 for each of the last, current and next financial years.
His attention then turned to comments / representations made at the previous evening’s meeting of the Scrutiny Committee (Housing and Public Protection) regarding delay issues in the project timescales. He reminded the Committee that Atkins had been commissioned to produce a TOM, supporting business case and implementation plan on the Regulatory Services collaboration and had been appointed through a formal procurement exercise and had been requested to give an independent evaluation of the collaboration. He stated that Atkins had in fact completed their work on time, however, the progress on the collaboration had slowed due to changes in Chief Executives and the Cabinet and Leader of Cardiff Council and also the publication of the Williams Report which had implications for collaborative projects. However, in his view the Williams Report did not resolve any collaboration issues for the Council and therefore the Council would continue to collaborate on projects which were meaningful with its partners. The implementation plan in principle identified that this Council would be the host authority albeit the project could only proceed with the agreement of this Council and Bridgend and Cardiff Councils. The Councils recognised Trade Unions had been provided a copy of the Atkins report and the draft Cabinet report on 11th July and could not have been provided sooner as initially the report had only been a draft document and the subsequent delays as indicated above had meant that Atkins had been required to revisit the contents and update information to bring it up to date including staffing information, the details of which was set out in the supplementary report of Atkins. If the proposed option was approved, a Joint Committee would be established to oversee the joint service augmented by the proposal to establish a joint scrutiny committee.
The Director of Development Services, together with other officers, outlined the overall report and highlighted some of the Financial, Human Resources and Legal implications set out therein.
The Director of Development Services alluded to the 10 recommendations contained in the draft Cabinet report. He referred to the project having been granted funding of £250,000 by the Welsh Government from the Regional Collaboration Fund on the basis of £250,000 per year for three years. He referred to the progressing of various activities in accordance with the three local authorities’ decisions of July 2013 as set out in paragraph 6 of the draft Cabinet report.
The Atkins Report was contained in Appendix A to the draft Cabinet report and outlined proposals in four main areas:
· The Business Case for developing a shared service (page 22)
· A proposed Target Operating Model for the new service (page 57)
· The proposed governance arrangements for the new service (page 65)
· An implementation plan for progressing the work towards the shared service (page 95).
Appendix B to the draft Cabinet report constituted a supplement to the Atkins Report and reflected amendments made to the proposed Target Operating Model, which had been adapted to more appropriate suit the Councils’ positions, including an updated assessment of the costs, savings and Human Resources implications (including a revised structure chart) for the project. A three-year Business Plan would be created to ensure a detailed operational and financial basis was established for the shared service. This Plan would consider the potential for further savings to be generated as opportunities arose and as the Medium Term Financial strategies of the three Councils developed.
As set out on page 7 of the draft Cabinet report, various options had been considered and the preferred option identified was â€˜Collaborate and Change’. The financial benefits of the preferred option were primarily associated with:
· reduced headcount (resulting from harmonised working practices and consolidation of the management structure)
· further reductions in employment costs (arising from a shift in the balance of tasks performed by professional officers vs. technical officers)
· significant increases in income as a result of exploiting new sources of revenue and increasing the yield from existing sources.
The vision for the operating model involved there being three service areas complimented by a central administrative function as follows:
· Neighbourhood Services - activities relating to domestic premises or that had an impact on local communities
· Commercial Services - activities relating to business premises (generally where national standards applied)
· Enterprise and Specialist Services - existing or potential income generating services and / or discrete specialism.
· Administration - administration and support activities and services.
The proposed governance arrangements were contained in paragraphs 26 - 30 of the draft Cabinet report and included a Joint Committee model with two Elected Members nominated from each of the three Councils and a host (employing) authority. Cabinet in July 2013 had approved the recommendation that, should the shadow Joint Committee recommend the governance model that required a host (employing) authority, that the Business Case subsequently be developed on the basis that the Vale of Glamorgan would be the host (employing) authority. Further analysis by Atkins and the Project Team of the merits of each Council performing the role of host had subsequently been undertaken. All Councils had expressed the willingness to undertake the role and had the resources required to manage the project. Taking into account the various factors involved, the Vale of Glamorgan Council had been recommended as offering a balance of the required factors and, therefore, was the proposed host authority. In referring to paragraph 41 of the draft report, he indicated that it would be necessary following agreement of all three Councils to proceed, to establish and to appoint to the Chief Office post for the joint service with the expectation to oversee in conjunction with other relevant officers the transfer of staff to the new service by April, 2015.
The Director of Development Services confirmed that individual Licensing Committees would continue to exist within a shared service.
In terms of the financial implications, the Head of Finance alluded to paragraphs 46 - 72 of the draft Cabinet report. He referred to a number of factors including:
· The Council’s existing net budget relating to Regulatory Services totalled £1.6m.
· It was proposed to use the current population figures of the three Councils based on WG data as an initial basis to apportion direct / indirect costs.
· Based on the above apportionment arrangements for allocating direct costs, contributions to the host authority indirect costs and income streams, the Council’s contribution was £1.348m.
· Existing income deriving from existing services would continue to be collected and allocated to each respective Council.
· The additional work necessary to achieve an additional £315,000 saving in 2014/15.
· The specific operational savings to be realised for the Vale of Glamorgan Council (i.e. excluding implementation costs) of approximately £257,000 for 2015/16, £300,000 for 2016/17 and total accumulative ongoing savings of approximately £316,000. This was subject to the assumptions built into the Business Case on costs and income generation. He pointed out that it should be noted that further savings from the shared service were highly likely to be required in the coming years. As far as implementation costs were concerned, the figure of £285,000 in 2015/16 would be met from existing reserves.
· There would also be a â€˜one-off’ figure for the Vale of Glamorgan Council of approximately £180,000 in terms of employment protection (a protection for staff which the other two authorities did not have).
· By its very nature, the project contained a number of assumptions and variables, which were set out in paragraph 71 of the draft Cabinet report.
The Head of Human Resources summarised the human resources and employment issues as set out in paragraphs 73 - 86 of the draft Cabinet report. He referred to the proposals as representing a complex Managing Change Project and should be viewed over a 4 stage process. Stage 1 had commenced in September / October 2013 with meetings between staff and Atkins representatives. He acknowledged that there has been a lag between Stage 1 and Stage 2 for the reasons stated by the Leader. Stage 2 was the current â€˜pre-Cabinet’ engagement arrangements with staff and Trade Unions. The consultation process would continue through the report’s progression to Cabinet and Council and, in particular, would build in reference to comments and views received from staff and Trade Unions. However, he indicated there was the potential for a further 14 month period of consultation. He confirmed that, should the Council become host authority, this would involve a â€˜TUPE-like’ transfer of staff. It was envisaged that this would take place from November 2014 through to March 2015 and would need to be managed by Cardiff and Bridgend Councils (in terms of outgoing staff) and the Vale of Glamorgan Council (incoming staff). It would be important to progress matters quickly following TUPE in order to implement the proposed new operating model.
He alluded to three specific aspects of the change process, viz:
· The numbers of staff in the existing, and revised, structures. There were currently 204 FTE equivalents, a figure which would reduce to 178 FTE equivalents.
· The changing balance between professional and technical staff.
· Changes regarding working arrangements.
He confirmed that every effort would be made to mitigate any potential redundancies. The reduction of 26 FTE alluded to above would partly be offset by continuing the policy to date of managing vacancies. The assimilation process for staff would need to be clear and transparent. A significant amount of work would need to be undertaken in terms of developing Job Descriptions and Person Specifications, with the posts being required to go through the relevant Job Evaluation process.
The Operational Manager (Legal Services) summarised the legal implications as set out in paragraphs 88 - 94 of the draft Cabinet report and specifically referred to the enabling legislation under which the proposals had been progressed and to create a joint service. The Joint Committee model provided that the Council would delegate its functions relating to Regulatory Services to the Joint Committee, subject to the caveat that the functions of a Licensing Authority had to be delivered within the respective Authority. As such, and as alluded to earlier in the meeting, separate Licensing Committees would continue to exist.
Should the proposals be approved, it would be necessary for the three Councils to conclude a formal agreement, sometimes referred to as a joint working agreement.
Information governance, management and security issues were covered in paragraphs 100 - 103 of the draft Cabinet report and she referred to the necessity for compliance with the Data Protection Act 1988 and the requirement to appoint a Compliance Information Commissioners SIRO.
The Chairman invited Mr. P. Carter, UNISON Branch Secretary, to speak and reminded Mr. Carter that the questions that had been received from the Trade Unions and staff had been circulated prior to the meeting.
Mr. Carter expressed the view that, although he acknowledged that their comments had been circulated prior to the meeting; the staff who were not members of Trade Unions had been â€œdenied a voiceâ€. (N.B. those comments had, in fact, been included in the information tabled). He indicated that the Trade Unions had been trying to obtain a copy of the Atkins Report for the past seven months and had tried to obtain a copy under the provisions of the Freedom of Information Act. Attempts had been made to convene an emergency meeting of the Joint Consultative Forum to discuss the matter.
Mr. Carter acknowledged that he had been offered an opportunity to view but not have, the report some time ago but had only been given a copy of the report a few days prior to the Committee meeting. He also referred to the number of questions that had been circulated prior to the meeting and said that there would have been many more questions if the Atkins report had been available earlier.
Mr. Carter alluded to a number of matters, including:
· There would be instances of voluntary retirement for the staff. This would be a matter for the Trade Unions to be consulted upon.
· He referred to the historical E-Coli outbreak in the Bridgend area and the future resilience of the service to cope in the event of another outbreak.
· Discrepancies in the total number of staff affected by the proposals i.e.280 in 2013 against the current 168 and the disappearance of BCO posts from the staff establishment.
· The Atkins report included Job Descriptions for the senior posts, but did not include such information for other staff.
· The proposals represented a reduction in front-line staff, which were responsible for protecting people and questioned why a reduction of back office staff in other directorates had not been considered first.
· The proposals, if approved, would place a heavy burden on staff, who had not received a pay rise for many years.
· The Trade Unions would like to have more time to consider the Atkins report.
· There were concerns with TUPE.
· The Committee were requested to defer consideration of the report in order that the Trade Unions could undertake meaningful consultation.
· He referred to the staff having submitted a collective grievance.
· 75% of staff would be unable to attend the staff meeting proposed for the forthcoming Friday, as they already had client appointments to attend to.
· He referenced the Atkins report and the necessity for increased mobile working and intimated entitlement for essential user allowance for staff that fell under these requirements.
The Chairman invited questions from Members of the Committee.
A Member, in referring to TUPE arrangements, enquired as to whether future staff arrangements including any remodelling exercise had been considered particularly, in the event of the Council becoming the host authority. On a separate unrelated matter, he also queried the variation in projected income levels of the proposed joint service.
As far as the TUPE process was concerned, the Head of Human Resources alluded to the work already undertaken and to advice having been sought regarding the best way of handling such a complex process. He indicated that a remodelling process would commence April 2015; with the view to assimilating staff transferring into this Council as part of the change process and the associated risks were covered in the legal agreement.
The Head of Finance clarified the position in regard to projected income levels and indicated that for the period 2015/16 the figures reflected a six month period given that the new service would have not fully bedded in. The figures for the remaining financial years reflected a full year’s income.
A Member referred to the initial aspirations for engagement with stakeholders which had clearly raised expectations however, it appeared that a hiatus of several months had occurred and feared that the affected staff would blame the Council. He also referred to the implementation plan and related work group streams and considered that this was an opportunity to involve the trade unions in these activities.
A Member referred to the WG current stance in regard to the Williams Report and understood their emphasis regarding mergers. He also understood the pressure the current administration was under to balance the Budget. However, he expressed concern that the existing service would be adversely affected and referred to the support provided by the officers within this service area in supporting Elected Members when dealing with ward related issues and sought an assurance that the current service level would be maintained. He also felt that the staff restructuring exercise which would result in a change of status from professional to technical was clearly a cause for concern of those staff affected and intimated that the Committee would need to be assured that a move to change the status of posts was not without justification. His attention then turned to the establishment of a joint scrutiny committee and he was unclear from the report how this dovetailed in to the Councils existing governance arrangements.
In responding to the various point raised by Members and Unison, the Leader and the Head of Human Resources reiterated their earlier comments that the Council was unable to release the Atkins report to the Trade Unions because, initially, the report was in draft. When available, the Trade Unions were sent an â€˜in confidence’ report on 11th July, which was prior to the Members of the Council having received a copy. They both reminded the Committee that the non-Union staff comments had, indeed, been included in the information tabled.
The Leader stressed that the consultation process was ongoing and would continue. He reminded Members that the current report was, in fact, a draft Cabinet report and he did not accept that the service would be â€˜decimated’, but considered that it would be more resilient as a result of the proposed merger. In referring to the point regarding the issues of BCO posts he indicated that these had been removed from the structure as part of the review to bring information up to date since the original work had been undertaken.
The Head of Human Resources referred to the matter regarding Unison’s request for an emergency meeting of the Joint Consultative Forum of which he was aware of. The request had been put to the Change Forum for consideration, who subsequently decided that the convening of an emergency meeting of the Joint Consultative Forum was inappropriate. It was also his understanding that the comments / questions tabled represented those of Unison only and not the Trade Unions collectively. He also referred to the reduction of FTE posts and clarified the position by providing up to date information and referred to an overall reduction of 13%. He also felt that Mr Carter’s reference to a collective grievance having been lodged by staff as inappropriate, as the matter was confidential to those individual employees. In terms of Unison’s request for a copy of the report under the auspices of the Freedom of Information Act, he acknowledged that this request had been declined for the stated reasons above. The decision to decline Unison’s request had been subsequently endorsed by the Information Commissioner’s Office following Unison’s appeal to the same. As for the issue relating to the availability of job descriptions and person specifications for posts relating to the staff structure for the joint service, these would be developed as early as possible and in consultation with staff.
A Member indicated that he was broadly supportive of the proposals, but echoed the concerns already raised by other Members of the Committee particularly, regarding any impact of the proposals which would potentially lead to a service reduction. He also queried the methodology relating to the procurement of IT systems and alluded to the poor track record of public sector organisations in this area. He sought an assurance that any tender exercise had sufficient quality assurance to ensure that any hardware / software procured would be fit for purpose and future proofed. In response, the Support Manager (Applications) ICT Services acknowledged the points raised and alluded to an options appraisal exercise that would need to be undertaken which would in turn inform the necessary requirements and the tender specification and tender exercise. He referred to the potential implementation period and timescales which were set out on page 102 and 190 of the Atkins report.
The Chairman referred to communication and marketing arrangements for the new joint service and enquired how this would be conveyed to staff, the business sector and the public. He felt that it was important to ensure that the message to the above was business as usual and indicated that it was a credit to staff that service levels had been maintained through this challenging period. The Director of Development Services indicated that this was an important aspect moving forward with the proposals albeit, no specifics had been agreed as the three Councils had not yet formally agreed to form a joint service. The branding of the new service would require further consideration in the coming months.
Councillor Powell who spoke with the permission of the Committee and referred to the draft Cabinet report associated appendices. He considered the implications contained in these documents were far reaching and felt that Members should be given more time to consider the proposals and felt that the matter be deferred to a further meeting of the Committee. He also felt that this would allow staff and trade unions more time to consider the contents of the documents. He also referred to licence fees and suggested that these may need to be reduced in light of the outcome of the legal case against Cardiff Council in relation to taxi licensing overcharging. He also felt that insufficient consideration had been given to reduction of staff numbers in non-public facing services such as legal, HR and Payroll. In referring to stakeholder implications he wondered if a consultation exercise would be held with license holders regarding the proposals. He questioned whether the Committee had been given sufficient time to consider to all the various issues to allow them to be informed sufficiently to make recommendations on the proposals for the Cabinet’s consideration.
The Leader in response referred the Member to his earlier comments relating to the viable option, the very comprehensive report in front of the Committee for consideration, the clarification provided relating to the Williams Report and that the WG had accepted the business rationale for forming a Joint Service. He also reminded the Member that staff from other directorates were outside the scope of this report. To do nothing was not an option, as the Regulatory division would still be required to find efficiency savings as part of the ongoing budget review, which in all likelihood impair service resilience due to the level of savings required. This situation would impact on staff, stakeholders and the public and the proposal were the only way forward. He also saw no reason why the proposals would affect current income from fees. Harmonisation could see fees increase / reduce, but indicated that a review of fees would need to take place at point. Current licence holders would be unaffected by the proposals.
General discussion ensued with Members reiterating points in relation to the following:
· Sharing of costs based on population.
· Equality regarding the make of the joint scrutiny committee and the need to ensure the chairmanship was rotated between councils.
· The necessity to weight up savings against risks.
· Concerns regarding IT procurement.
· To take advantage of lessons learned/ best practice within local government where similar exercises had been undertaken in the UK.
Having considered the recommendations of the Scrutiny Committee (Housing and Public Protection) of 22nd July, 2014 it was
(1) T H A T the recommendations of the Scrutiny Committee (Housing and Public Protection) of 22nd July, 2014 be endorsed and referred to Cabinet for further consideration.
(2) T H A T the inclusion of trade union representation on the nine work streams working groups be recommended to Cabinet for consideration.
(3) T H A T the Cabinet consider making use of exemplar / best practice in respect of those local authorities that had already implemented a shared service for regulatory activities i.e. the case studies identified in Appendix G of the Atkins report with particular focus on IT systems.
(4) T H A T a Joint Scrutiny Committee be established as soon as practicable following the three Councils agreement to create a Joint Regulatory Service.
Reason for recommendations
(1-4) To relay the views of both Scrutiny Committees to the Cabinet.
Attached as Appendices -
(i) Extract of Minutes of Scrutiny Committee (Housing and Public Protection): 22nd July, 2014 (Min. No. 280 refers)
(ii) Covering Report to Scrutiny Committees (Housing and Public Protection): 22nd July, 2014 and (Corporate Resources): 23rd July, 2014 [To avoid duplication the Appendices to the report are attached as Appendices to the Cabinet Report of 22nd September, 2014.]