PAPER D

RESOURCES SELECT COMMITTEE – 2 AUGUST 2004

PROCUREMENT OF GRAPHIC DESIGN

REPORT OF THE PORTFOLIO HOLDER FOR RESOURCES

REASON FOR SELECT COMMITTEE CONSIDERATION

At previous meetings of the Committee, Members considered the issue of print procurement and whether the Council was procuring its printing requirements in the most economic, efficient and effective manner (the ‘3 Es’ or value for money). Having made recommendations for improvements in that issue, the Committee then requested that a similar exercise be undertaken in respect of the Council’s graphic design requirements. This report therefore provides some initial analysis of the scale of those requirements, the balance between in-house and out-sourced provision, and as a consequence, the potential scope for further analysis or improvement.

ACTION REQUIRED BY SELECT COMMITTEE

To consider the information provided in this report concerning the way in which the Council meets its graphic design needs.

To determine what further enquiries, if any, to request from the Portfolio Holder for Resources

BACKGROUND

Like many Council activities today there is a “mixed economy” in the Council meeting its

graphic design requirements. As is often the case too, the balance between in-house provision and out-sourced procurement has more to do with historical practice than it does any rational analysis of the Council’s overall needs. It would be fair to say perhaps that decisions to procure externally are largely made on the grounds of capacity (whether the in-house resource is insufficient to do the work) and capability (whether the in-house resource is capable of doing the work).

Initially, this study has been concerned with identifying how much graphic design the Council appears to need. This has been achieved by conducting a survey (with the help of service representatives) of graphic design procured during 2003-2004 and by discussion with staff who are directly involved in graphic design. The following tables represent the findings of the study so far.

TABLE 1 Outsourced Graphic Design by Service

Service	2003-04 Expenditure £
Planning (including AONB)	6,190	4
Tourism	54,206	5
Wight Leisure	6,635	2
Social Services	16,435	3
Community Development	7,238
Engineering (excl Coastal management)	2,856
Coastal Management	27,000	1
Total	£ 120,560
NB. Schools are not included in this spend analysis Expenditure by Education and Social Services on recruitment CD Roms/Videos are also excluded
1 Coastal Management is an estimated annual average for the 3 years 2002-2005, 80-90% of which is rechargeable to the EC. 2 Wight Leisure figure includes an estimate of the design element of some printing and advertising costs. 3 Social Services figure assumes around 50% of print and design costs is design. 4 AONB Management Plan represents £4,980 of this figure, 75% of which is funded by the Countryside Agency. 5 Approximately £22,000 of this sum was for non-recurring expenditure. Also see para 3.4 below for further explanation.

TABLE 2 In-house Graphic Design Provision

Service Area	Estimated Annual Cost £	Staffing fte
Publications Unit	45,940	1.55
Print Unit	10,170	0.5
Education Centre	20,720	0.75
ICT Software Development	12,470	0.35
Arts & Development and Theatres	6,620	0.56
Museums	24,410	1.0	1
Wight Leisure	10,900	0.65
TOTAL	£131,230	5.36
1 This post was made redundant during the last budget round.

The above tables illustrate the “mixed economy” provision that exists within the Council with approximately £121,000 being procured from outside, and the in-house provision estimated to cost £131,000.

It is not surprising perhaps to see that the services with the greatest need are those which featured in the earlier study on printing. Tourism and Leisure are clearly customer-facing (even more so than others) and have a need to project an image to their customers. The figure for Tourism represents the level of spending with design companies but, is in fact nearly all proof production and is not therefore purely graphic design.

The need for other Council services to present a client-focused image has also been growing over recent years, and it is therefore not surprising to see that they also feature.

As far as in-house provision is concerned (see Table 2 above) the largest resource sits within the Council’s Policy and Communications Team – ie the Publications Unit. This is a corporate resource which, subject to its capacity, can and does handle requests from all Council directorates. In a similar way, the Print Unit also undertakes some graphic design and again can be seen as a corporate resource.

There is, however, some graphic design activity being undertaken within directorates which is in the main dedicated to the service itself. Examples include some resource at the Education Centre, some within the Arts Development and Theatres team and in Wight Leisure. (Table 2 gives a breakdown of the in-house graphic design resource as identified during the survey).

Perhaps worthy of particular note is that until recently, the Museums Service directly employed a graphic designer (and his full year cost is included in Table 2). This post was made redundant during the last budget round - a decision that with hindsight does seem perverse. The service no longer has access to a dedicated designer and is now obliged (if corporate resources cannot accommodate) to go to external suppliers at inevitably higher cost.

Table 2 also shows the estimated resource which is being used within the Software Development Team. Clearly, this is a relatively recent development which represents the design acumen needed for the Council’s web-sites. Tables 1 and 2 however exclude the investment that both Education and Social Services directorates have made in CD-Rom based recruitment materials – both of which would have included an element of creative design. Neither do these tables include in school requirements.

According to those who are expert in the profession of graphic design, on an item by item comparison, the in-house cost of graphic design is significantly lower than externally sourced. On one item used as an example, the in-house cost has been estimated at half that of the likely external price. According to the experts the ratio might be as much as 3 or 4 times - indicating that there is considerable scope for achieving cost savings based on the figures quoted at Table 1.

Members are asked to consider what further analysis they would like to request as a way of developing the following options:

(i) maintaining the status quo of a mixed economy;

(ii) implementing a protocol similar to that employed in the printing issue;

(iii) considering a more appropriate in-house/outsourced balance;

(iv) considering whether graphic design resources should be centralised.

[Members should note, however, that at present the Publications Unit within the Corporate Policy and Communications Team does not have the capacity to manage a centralised procurement process as envisaged in options (ii) and (iv) above]

RELEVANT PLANS, POLICIES, STRATEGIES AND PERFORMANCE INDICATORS.

Service Plans which include teams which provide in-house graphic design resources.

The Council’s policy on print procurement.

CONSULTATION PROCESS

Heads of Service through nominated representatives have been asked to provide information in the form of a questionnaire. The report has been shared with those who manage graphic design teams.

FINANCIAL, LEGAL, CRIME AND DISORDER IMPLICATIONS

The Council has a duty under the Local Government Act 1999 to achieve Best Value regardless of whether the services are provided “in-house” or externally. The aim of this report is to identify any opportunities in achieving better value for money when procuring graphic design.

APPENDICES ATTACHED

There are no appendices to this report.

BACKGROUND PAPERS

Reports to this Committee on the Procurement of printing

Contact Point : Bob Streets, Compliance and Risk Manager, F extension number 823622

Email to. [email protected]

REG BARRY

Portfolio Holder for Resources