Resources Select Committee Minutes 07-04-05

69. MINUTES

The minutes of the meeting held on 3 March 2005 were confirmed.

70. DECLARATIONS OF INTEREST

Mr R G Mazillius declared a personal interest in Minute 73 – Use of Consultants - as his son was a Director of a company that provided services to the Council.

71. FORWARD PLAN

The Head of Select Committee and Review Team reminded members of the items of relevance which were contained in the Forward Plan for the period March – June 2005 as the April – July 2005 Forward Plan had not yet been released. Members asked if the Portfolio Holder could confirm that St Mary’s Road Car Park, Cowes was not in the Forward Plan for April 2005 and asked if there was any indication when the Executive would discuss the item.

The Portfolio Holder advised that the item was not in the Forward Plan at the present time and he was unsure as to when it would be discussed by the Executive.

72. OFFICE ACCOMMODATION RATIONALISATION PHASE III

The background to the Accommodation Review was given with an update of what had happened to date.

Members asked for the current situation with regard to Floor 4 as the works did not appear to be in the Accommodation Review. There was some question as to where the funding for the works was coming from, why Electoral Services being moved in the middle of the election process and disabled access to Committee Rooms 1 and 2.

Because of the works being undertaken access for the disabled within County Hall had been highlighted and a group had been formed to look at those issues. The works on Floor 4 were costing in the region of £8,000 - £10,000 and were to be paid for from the Chief Executive Officer’s budget. The Portfolio Holder for Resources indicated that Electoral Services needed more room at election time and the area would be utilised for this purpose. The Select Committee believed they should be kept updated of works being undertaken as it affected their ability to meet with members of the public. Members understood that the Council had a Diversity Action Plan in place which should cover access for the disabled.

The Financial Services Manager apologised to members that the information that had been presented to the last Select Committee meeting was open to misinterpretation. He told members there was no overspend on the budget to move staff to Enterprise House. A large element of the expenditure detailed had been committed by senior officers to ICT infrastructure prior to the decision to move staff to Enterprise House. This was in accordance with approved budgets as contained within the Member Approved Accommodation Review which was currently showing a projected surplus of £800,000 from the rationalisation of accommodation, even after allowing for the levels of the ICT infrastructure investment. The ICT investment took advantage of an opportunity to improve the Council’s ICT infrastructure, represented value for money and would benefit the Island for some years.

Members had been advised that a fair proportion of the fibre optic network could be attributed to Enterprise House, the original quote for that had been £75,000. Members asked what the actual costs attributed to establishing Enterprise House as a fully operational council facility had been as links had also been provided for St Mary’s Hospital, the Supporting People Team and AVT. The Portfolio Holder questioned why such a breakdown was required as he believed that this enabled partnering with the Primary Care Trust and the NHS for the benefit of the Island Community.

The Select Committee sought clarification of the figures included in the capital balance sheet for the accommodation moves. It was advised that some of the expenditure and receipts were actuals with others being estimates. Additionally members asked why the tenders for Westridge were so much higher than anticipated and told that these were being looked at to see where savings could be made.

ACTION TO BE TAKEN BY

The actual costs attributed to establishing Enterprise House as a fully operational Council facility be reworked to include a proportion of the cost for the Corporate infrastructure so that an accurate cost comparison could be made between employees working in Enterprise House compared to other Council offices.

73. USE OF CONSULTANTS

Concern had previously been expressed with regard to the number of consultants being taken on by the Council and the public perception of their use. Discussions had been held with key staff on how consultants were selected and appointed. The main reason given for using consultants was due to the Council not having the in-house skills. There were also occasions when the work required was of a temporary nature and the appointment of a full time member of staff would not be cost effective. The majority of work was also connected with delivering the Council’s Capital Programme. Standing Orders as to Contracts were currently being reviewed and it was suggested that a specific paragraph could be included requiring that those procuring consultancy services costing over a certain amount set out in the record of their decision why it was more cost effective to procure the expertise externally, rather than internally.

Members asked that if Architects and Information Technology consultants were used then any estimates they provided should be very close in price to tenders received. If that was not the case there was a need to clarify who was responsible for the discrepancy and if either the market was not being taken into account or the figures supplied were very wrong. The Head of Legal and Democratic Services stated that if the outcome was not what was expected then a question should be asked if we had employed the right person and asked the right questions.

The Select Committee understood that the Council had to use consultants, but they believed the issue was where items were not delivered on budget. As an example members were aware that the cost of converting Westridge was estimated at £460,000 but the tenders received were far in excess of that was that estimate prepared in-house or externally. The first feasibility study had been done in-house and was then moved on to an external consultant.

Members noted that Internal Audit had an item on its workplan to undertake a review of processes connected with the use of consultants. It was believed that this should focus on those providing services related to design and construction works.

RECOMMENDATION TO FULL COUNCIL :

Contract to Standing Orders be revised to include a paragraph requiring those officers procuring consultancy services (over £5,000) to state in the record of their decision why it was more cost effective to procure that expertise externally, rather than internally.

ACTION TO BE TAKEN BY THE CHIEF INTERNAL AUDITOR :

That Internal Audit when undertaking its review of the appointment of consultants focus on those providing services related to design and construction.

74. OUTSIDE BODIES

(Mr M J Cunningham declared a personal interest in the following item as he was a trustee of Homestart).

(Mrs B Lawson declared a personal interest in the following item as she was the Vice Chairman of the Citizens Advice Bureau).

The Head of Legal and Democratic Services reminded members that the Standards Committee had asked that a review of outside bodies be undertaken. A small Working Group was established and various issues were looked at. The Chairman of the Standards Committee was supportive of the report and had suggested 3 minor alterations.

The Select Committee was advised that if the Council were providing funding to an outside body then an audit trail was needed, but the burden for that should not be on the member a paper trail should be available for inspection. The duty of the member was to the outside body.

RECOMMENDATION TO THE EXECUTIVE :

(a) An information sheet be compiled on what the Council expects of an outside body wishing to have a Council representative/nominee and other ways in which the council can assist outside bodies to attract volunteers.

(b) Accessible guidance and training is provided to elected members on roles and responsibilities when serving on an outside body and in particular a training session to be held as part of the induction process after the Council elections.

(c) To establish other ways of enabling outside bodies to identify selected members and/or council employees to management/trustee/director posts (effectively a clearing house).

(d) A simple due diligence exercise be undertaken before any appointment is made to include requiring evidence of :

(i) Insurance backed indemnity

(ii) Up to date audited accounts

(iii) Availability of advice

(iv) External regulation (for example Charity Commission registration)

(v) Job description for member as advisor, representative, appointment, trustee, company office holder

(vi) Provide copies of constitution articles of association or equivalent

(e) That appointments should only be made to bodies whose purposes further the council’s strategic objectives.

(f) Each body with an Isle of Wight Council nominated member should also have a nominated officer contact, to liaise with and that officer will also support and advise the member.

(g) That appointments to outside bodies only be made following application of the following criteria :

(i) Where existence of the body is of benefit to the Council in the delivery of strategic objectives, and

(ii) The sustainability or good management of the body is significantly enhanced by the Council nominating an elected member, or

(iii) Where membership is a statutory requirement, or

(iv) Council funding is involved.

(h) That current arrangements whereby appointments are made following a general invitation to members, and if more than one member expresses an interest, a recommendation will be sought from the relevant Select Committee.

75. PRINT UNIT REVIEW

The Chairman welcomed Mr D Butler, a consultant from the British Printing Industries Federation, who had been engaged to undertake a review of the Council’s Print Unit.

The Head of Corporate Policy and Communications advised members that there were 5 members of staff currently working in the Print Unit. They were required to operate on a full cost recovery basis but there had been difficulties in achieving those costs with falling copier volumes and Litho printing becoming less competitive an increase in charges by 29% on the copying side and 10% on all other work would be required. Members were told that double shift working was the norm within the printing industry.

Three potential options had been identified which included the retention of an internal service, retention of internal copy service and externalisation of litho printing and externalisation of all print and copy needs. A report had been presented to the Informal Executive and it was recommended that a formal market testing exercise should be undertaken which would assess the financial and operational implications of full or partial externalisation. It was anticipated that such an exercise would take 2 – 3 months to complete and involve two stages. The first would be to invite outline expressions of interest followed by a formal tendering process. There was also a suggestion that because of the potential integration with the PCT and NHS Trust a joint approach for print and copy procurement could be made.

The Head of Corporate Policy and Communications told Members a report would be brought back to the Resources Select Committee with the results of the market testing exercise for their discussion.

Mr Butler indicated that although the Print Unit was small it was several small businesses in one department and was typical of Local Authority Units. Competition in the litho market was very strong and he believed the Council should offer to the market what it wanted and let the supplier offer their wares. The prospect of supplying a local authority’s printing requirements was an attractive business proposition.

The Portfolio Holder believed that if the service was externalised the Council would have to advertise in the European Journal. He indicated that the market testing exercise should be undertaken and looked at with the full knowledge of what the Council was faced with although he favoured keeping printing in-house.

Members asked Mr Butler if the terms of reference for the review included the viability of the Print Unit or its closure and what options would he suggest to make the resource financially viable.

Mr Butler advised that his brief had been to assess the Print Unit. He would make sure that they had the opportunity to do all the Council’s printing work they were capable of doing and also go out to the market and get work in.

With regard to the litho equipment members asked why it had been left to deteriorate so much when there was £80,000 in the renewals fund. Whilst there was money in the budget no request had been made for renewals although the Print Unit Manager had asked to spend money on one of the presses but was told to wait until after the review had been undertaken.

During the financial year 2001/02 £25,000 had been taken from the Print Unit renewals fund and when the Post Room was reconstructed another £20,000 was taken from the fund. Up to 3 years ago the process of producing copying was done by the Print Unit then the responsibility and profitability was then transferred to procurement. The Print Unit charged 3p per copy for photocopying whereas the freestanding machines within County Hall were charging 4p – 5p per copy.

A previous market testing exercise had been undertaken at which the NHS had been asked for quotes and whilst they had come back with significantly lower prices, as they were a subsidised service, they had not been asked to quote for the authorities work. Members found it difficult to understand how the NHS printing could be so much cheaper than the Council’s.

The Print Unit was viewed as a service and was highly regarded as such. It was a vital link in the delivery of council work being completed speedily and accurately. Members were concerned that the Print Unit had had two in depth reviews with a view to closing it down or downsizing and this had a detrimental effect on staff morale. A note from one member of staff gave an outline of the pressures they were having to work under. The equipment within the Print Unit was old and was kept running due to the technical skills of the staff.

Members believed the Print Unit was a valuable asset and the Council should invest money in it and believed that £250,000 was not an unreasonable amount to upgrade the equipment. If printing was to be done outside of the authority it was envisaged that prices would keep rising and the Council would have to pay. Members questioned what would happen to confidentiality if printing were to be externalised.

A UNISON representative advised the Select Committee that to externalise would be a disaster for the authority. The Print Unit had been one member of staff down for at least 4 years. A small amount of investment now could maintain the service in-house and he believed it would be premature to rush down the market testing route.

The Print Unit Manager indicated that the photocopier contract still had 18 months to run and it appeared inappropriate to dispose of the litho equipment when that was still paying its way. If printing was externalised what would happen to the support the Council gave to local businesses at present if the cost of a job was under £1,000 it was only circulated to Island businesses.

ACTION TO BE TAKEN BYTHE PORTFOLIO HOLDER FOR RESOURCES :

(i) The Portfolio Holder informs the Chief Executive Officer that the Select Committee considers the Print Unit is a Corporate Service to the organisation rather than an Individual Business Unit.

(ii) The Print Unit be retained as an internal service.

(iii) A full comprehensive market testing exercise be undertaken before deciding which of the three options is the most favourable.

(iv) A full report to be brought back to the Select Committee within three months.

76. MEMBERS ICT

The Head of Organisational Development advised the Select Committee that it would be inappropriate for members to buy redundant ICT equipment when that opportunity was not open to the public. All equipment would be recovered shortly before the election and any transfer of personal data would be undertaken at that point.

It was intended to meet with each member after the May 2005 elections to find out what their ICT requirements would be and provide appropriate equipment as a result of that. There was currently £20,000 in the budget to supply ICT equipment to all 48 members.

77. GAGS/E-GOVERNMENT FINANCE

The Head of Organisational Development reminded members that they had asked for the budget that had been set for the Great Access to Great Services (GAGS) programme. Expenditure to date was £612k on ICT Operations, £950k on Enabling Projects and £400k on BPR/e-government. It was estimated that the authority would need to spend an additional £20m - £30m over the next ten years in order to meet its strategic objectives.

The GAGS Programme Board had decided that the most appropriate way forward was to create an enabling organisation capable of supporting organisational change rather than trying to drive change directly as had previously been the case.

There was some discussion with regard to partnering and it was believed that would take at least 18 months to engage a partner.

78. WORKFORCE INFORMATION

At it meeting on 3 March 2005 the Select Committee had asked for a report on sickness absence. Stress appeared to be an increasing problem and the Head of Human Resources told members that a confidential counselling service was available to staff. It was suggested that a notice be put on the intranet advising staff that this service was available.

67% (3,250) of Council staff had had at least one spell of sickness absence during the last year. Reports were regularly produced for line managers for any employee who had a pattern of sickness absence and a return to work interview was held.

It was noted that the Council were out of the bottom quartile for Women into Management for the first time.

ACTION TO BE TAKEN BY THE HEAD OF HUMAN RESOURCES :

That appropriate information regarding the confidential counselling service for staff be provided on the Council’s intranet.

79. MEMBERS’ QUESTION TIME

Mrs B Lawson asked why the members’ conference expenses were overspent.

CHAIRMAN