PAPER B1

 

Purpose : For Decision

 

                        REPORT TO CABINET

 

Date :              11 OCTOBER 2005

 

Title :               STRATEGIC PARTNER - APPOINTMENT OF CHANGE AGENT

 

REPORT OF THE LEADER OF THE COUNCIL

 

IMPLEMENTATION DATE: 21 October 2005

 

 

 


PURPOSE

 

1.                  To determine the appointment of an external change agent to investigate the potential for, and to facilitate the development of, a strategic partnership.

 

BACKGROUND

 

Objective

 

2.                  The emerging Aim High plan will, in order to deliver a manifesto commitment, include the development of a comprehensive business plan evaluating the potential for a strategic partnership to deliver step change in the quality and efficiency of a range of corporate and public facing services.

 

3.                  In the event that the business case shows benefits can be delivered through a strategic partner (a concept which embraces a wide range of variations), a partner will be procured.

 

4.                  The new service delivery structure adopted by the Cabinet on 30 August 2005 recognises that the capacity to deliver, in the required timescales, the development of a business case and, if necessary, to procure a strategic partner does not exist in house.

 

5.                  An evaluation of successful strategic partnering exercises in other authorities show that most, if not all, have looked to external advisors to assist with the development of both business case and procurement.

 

6.                  Appendix 1 shows the brief developed to invite proposals for consultancy advice in developing the business case – and in any subsequent procurement.

 

Procurement Process

 

7.                  Appendix 2 sets out a summary of the procurement process – which was conducted in accordance with the EU rules which determine negotiated procurement processes.

 


8.                  In brief, 22 proposals were received, which were analysed and reduced to a long list of 6. Further submissions were sought from the 6 long listed candidates and a short list of 3 put forward to a further evaluation process – a ”beauty parade” interview in front of elected members and officers on 28 September.

 

9.                  The reason for involving a large number of elected members of the majority group (rather than just the Cabinet) in the interview stage was to ensure that there would be widespread ownership of the process – and of the award of the contract to the successful proposer.

 

10.             Evaluation at the two preliminary stages was by officers, with a group of members providing challenge and validation. Each stage involved an assessment of the quality of written proposals submitted.

 

11.             Evaluation of proposals at the interviews stage was more subjective. Although criteria for evaluation were agreed, the task of the assessing group was to judge the individual qualities, including track record and presentation, of each of the three candidates.

 

12.             A final evaluation process is currently being undertaken. The member group will evaluate the interview process of 28 September and will make a recommendation to the Cabinet.  The member group will address two questions.  Firstly, to consider whether the brief set out in Appendix 1 remains the preferred way of delivering the outcome.  Secondly, to consider whether the evaluation process resulted in a clear outcome identifying a preferred change agent.

 

13.             As is usual in public reports concerning procurement processes yet to reach a conclusion, the proposers will not be identified, and referred to as A, B and C.

 

14.             References will need to be taken up in respect of at least the successful candidate and appointment must be subject to contractual terms being finalised.

 

STRATEGIC CONTEXT

 

15.             The procurement of an external advisor to enable rapid evaluation, and if desirable procurement, of a strategic partner is an essential part of the delivery of Aim High, when adopted.

 

CONSULTATION

 

16.             Consultation on this procurement is part of consultation on Aim High – phases of which (with staff and unions) have already been completed. In particular consultation was undertaken with staff prior to adoption of revised service delivery structures on 28 August.  The outcome of that consultation was reported to the Cabinet – and Unison spoke at the meeting.

 

FINANCIAL/BUDGET IMPLICATIONS

 

17.             Due to the variety of proposals being made, it is difficult to predict with any certainty, what the final cost of consultants might be.  Typically, if the project to engage a strategic partner proceeds, then the cost will be significant, since the Council will require both these consultants and indeed other expert advice. A similar project at another Council required input from external sources costing £1.5 million. This can be considered in the range of ‘normal’ for what the Council is seeking to achieve.

 

18.             One way of managing this risk of uncertainty around cost is to break the project down into phases so that there are natural break points as we progress, allowing us to both validate the recommendations that consultants are making and to decide whether to extend their brief to the next stage.

 

19.             If the Council proceeds with the first part of the consultants’ work – a phase which could be described as ‘feasibility and scoping’ – the cost to the Council could be limited to £70,000. Making further progress to the next decision point (ie developing an outline business case) might cost a further £100,000 but there is no need for a decision to be made on that until the completion of the first phase.

 

LEGAL IMPLICATIONS

 

20.             The tendering process is prescribed under EU rules – which have been adhered to. Expenditure on exploring alternative ways of delivering services is ancillary to the substantive functions under consideration, and is pursuit of the duty to deliver best value services under the 1999 Local Government Act – or alternatively can be seen to be pursuing the economic, social and environmental wellbeing of the Island.

 

21.             It is a feature of the negotiated tendering process that the specification being procured can change during the procurement process, as the procuring and/or proposing parties refine their ideas as to what is best suited to deliver the outcomes being sought, or because factors external to the procurement process change the desired outcome.

 

OPTIONS

 

22.             There are three main options:

 

(i)                 Appoint proposer C, for all or some of the specification set out in the brief at Appendix 1 – subject to references and contract.

 

(ii)               Eliminate proposer A, and undertake further assessment of B & C to ensure a clearer outcome from the evaluation process.

 

(iii)             Revisit the procurement brief, and the evaluation process to date, and undertake a further negotiation with proposers B and C, in the light of that development – postponing appointment until after an assessment of further submissions submitted in the light of any amendments to the brief. Possible amendments to the brief could include reducing the amount of consultancy input and seeking a secondment or temporary appointment to support the development of in house resources.

 

(iv)             Not to pursue with the procurement.


EVALUATION/RISK MANAGEMENT

 

23.             Evaluation of the options needs to weigh a number of factors:

 

·                    Timeframe

 

A significant reason for seeking external assistance is to ensure rapid preparation evaluation of the business case – and to commence any subsequent procurement. Any option involving delay should be seen as bringing an avoidable risk to the desired outcomes.

 

·                    Specification/Brief

 

The specification emerged using internal analysis, knowledge of similar exercises elsewhere, and a soft market test (to assess what external expertise was available).

 

In parallel to the procurement exercise set out in this report, further work was being undertaken to develop and adopt Aim High, to visit and assess the experience of other authorities, and to implement the new service delivery structures adopted on 30 August.

 

It is critically important that the brief which will form, in turn, the contractual specification is the right one. Although speed is of the essence, proceeding with a brief/specification which is not the right one will involve assuming avoidable risk.

 

Put simply, expenditure on pursuing the wrong brief is likely to be wasted, at least in part. Time can also be lost in this manner.

 

·                    Confidence/Capacity

 

Producing, evaluating and delivering a business case for a strategic partner will be a difficult task. The externally procured change agent must not only have the technical competence and experience, but also have the confidence of strategic and political decision makers within the organisation.

 

The three short listed candidates have been assessed as having the technical expertise and experience to deliver the brief. The interview stage assessed two candidates as having similar ability to gain the necessary trust and confidence.

 

The purpose of the interview stage of the process was designed to test the extent to which the candidates could gain the trust and confidence of the decision makers within the organisation.

 

The successful candidate must not only be positively assessed (as having the ability to gain the confidence of the majority of decision makers) but also on a more negative basis (as not being likely to fail to gain, or lose, the confidence of a minority of decision makers).

The risk of loss of confidence in the change agent, even by a minority of the organisation, is the risk of damage to the delivery of the long term objectives – of assessing and delivering new ways of delivering improved services. Experience elsewhere suggests that such loss of confidence results in substantial delay and additional cost.

 

24.             Each of the short listed candidates suggested a mechanism for balancing the risks, which could b incorporated into a revision of the brief.

 

            The methodologies all proposed phasing the work. Each proposal varied in how the work might be phased – but each included an initial feasibility stage, lasting between 6 and 12 weeks.

 

            The purpose of the feasibility stage is to assess in high level terms, whether there is any scope at all for a strategic partner to assist more rapid delivery of service improvement.

 

            Subsequent phases, if the feasibility study confirms they are desirable, will produce and asses outline and full business cases. The final phase is procurement of a partner.

 

            Awarding the contract for with clear break points – and assessment criteria for success at each stage - would allow an early start, in phase assessment of the quality of delivery by the appointed change agent and their ability to undertake subsequent phases, and further development of the specification for subsequent phases.

 

            The cost of the first phase is unlikely to exceed £70,000.

 

25.      The additional validation of the interview stage of the procurement process, by the member group established for that purpose throughout the procurement process, to be reported to the cabinet meeting, is an assessment of the sufficiency of that process. Only if further assessment is required to be undertaken should there be delay in making an appointment.

 

 

RECOMMENDATIONS

 

It is recommended that, in the light of the recommendation of the members panel

 

(i)            subject to contract, a change agent is appointed to deliver a phased programme, starting with a feasibility study

 

(ii)          clear success criteria are developed to assess the delivery of each phase of the programme

 

(iii)        during, and in the light of the feasibility study, a specification is drawn up for further phases of work.

 

BACKGROUND PAPERS

 

Proposals and assessments (will be subject to partial exemption under Sch 12A Local Government Act 1972).

 

Contact Point : Bob Streets, Telephone: 823203 Email: [email protected]

 

MR MIKE FISHER

Chief Executive

 

CLLR ANDY SUTTON

Leader of the Council

 


APPENDIX 1

 

EXPRESSIONS OF INTEREST

and/or

INVITATION TO SUBMIT OUTLINE PROPOSALS

 

for

 

MANAGEMENT CONSULTANCY SERVICES IN RELATION TO

THE DEVELOPMENT AND PROCUREMENT OF A STRATEGIC PARTNERSHIP TO PROVIDE SUPPORT SERVICES TO THE COUNCIL

 

 

1.                  Introduction

 

The Isle of Wight Council is a Unitary Authority with 48 elected members and approximately 5500 employees. The Council is currently embarking upon an ambitious agenda of change with the aim of further modernising its governance arrangements and improving the services to the public it serves. Coupled with a strong drive to achieve genuine value for money and efficiency throughout, we are keen to further explore the potential scope for the Council to engage with a Strategic Partner to deliver a range of support services.

 

2.                  Current situation

 

A number of strategic initiatives are already being considered and variously pursued by the Council. The following are amongst the most significant projects (or potential projects) presently “in the frame”:-

 

·        Integration of Adult Services with the local Health Service Trusts. This potentially includes appropriate/common support service functions.

·        Efforts to transform the Council as a more customer centred organisation. This is underpinned by various business process re-engineering activities to bring about more effective front office/back office operations and supported by the development of a robust Customer Relationship Management (CRM) capability.

·        A possible Private Finance Initiative (PFI) for our highways network. 

 

In addition, the Council, in common with all local authorities, is striving to achieve a number of stretch targets in relation to:-

 

·        The (Gershon) Efficiency Review

·        Implementing e-Government

·        Comprehensive Performance Assessment. (The Council was given a “Fair” rating during the 2004 CPA round; it is actively working to improve on this in the next assessment that is due to take place in 2006).

 

Also, the local elections in May this year resulted in a significant change in overall political control of the Council. The new Administration has an ambitious change agenda and many new policies are being pursued. A number of innovative changes to the constitutional and governance arrangements have already been implemented and plans for a proposed organisational restructure have recently been announced. 

 

The Council’s newly stated aim is “To be regarded as an excellent council in securing the provision of high quality local services for local people”, and the ‘2020 Vision’ is to be “A progressive island built on economic success, high standards and aspirations, and a better quality of life for all”. The Council’s key priorities have been refocused as follows:-

 

·        Economic development and regeneration

·        Healthier communities and older people

·        Safer communities

·        Children and young people

 

The Island itself

 

Located in the south of England about four miles from the mainland, the Isle of Wight covers an area of 147 square miles (38100 hectares) and its coastline is 57 miles long. The Island is a predominantly rural area with the principal town of Newport at its centre and a number of other towns each playing a role in the economy of the Island. The other key towns are Ryde, Cowes, East Cowes, Sandown, Shanklin, Ventnor and Freshwater. Approximately 50% of the Island is designated an Area of Outstanding Natural Beauty.

The Island has a population of approximately 133,000 people. Demographically, this features an above average proportion of older residents (approximately one quarter being of retirement age), whilst the proportion of residents from ethnic minority groups is very low (about 1.3%).  

The principal sectors of employment on the Isle of Wight are wholesale, retail, hotels and catering (31%); public services, education and health (29%); and manufacturing (17%). Tourism plays an important part in the Island’s economy, with a total of about 2.7million visitors each year.

 

Further information about the Island generally is available on our website http://www.iwight.com

 

“The Brief”

 

Clearly there is a significant programme of change underway. The ever-increasing demands faced by the Council and the expectations of it mean that incremental progression alone is unlikely to fully deliver success. So almost inevitably change has to be transformational. Helping us identify the best way of achieving that in practice is where you as a consultancy can deliver what we are looking for.

 

The Terms of Reference for the Commission are:

 

Appropriate consultancy support to enable the Council and its partners to:

 

·                    Evaluate whether or not a Strategic Partnership can deliver improvements in the efficiency, effectiveness and economy of its operations against seeking to achieve the changes purely in-house;

·                    Identify which support and direct services could be delivered through such a partnership;

·                    Evaluate the various options for implementing a Strategic Partnership.

 

Then, dependent on the decision taken at the feasibility stage:

 

·                     Procure a strategic partner, including:

-                     going to the market

-                     briefing potential suppliers

-                     evaluating bids

-                     appointing a preferred supplier

-                     negotiating a contract

 

·                    Preparation for and transition of services to the partnership

·                    During all stages of the initiative to communicate effectively with all of its staff and stakeholders.

 

The chosen consultants will be required to work collaboratively with the Council at all times and seek to optimise knowledge and competence transfer to the Council’s staff

 

Essentially we would consider there to be four critical factors for success:-

 

·        We must have confidence in your ability to help us identify the most appropriate solution for the Island

·        Any proposals must facilitate an effective knowledge transfer, thereby ensuring the necessary skills could be embedded in our organisation after any consultancy assignment has finished

·        The over-riding objective is to successfully implement the most appropriate solution 

·        Your proposal must be competitive, but its quality will form a large part of the evaluation.

 

In addition,

 

·        You must demonstrate that your proposal will include the nomination of a dedicated individual who will lead the consultancy assignment and be available to the client, ‘on site’ for a significant proportion of each week, for the duration of the implementation programme

·        There is an expectation that the project will utilize the experience of an elected member from another council with experience in a project of this nature. This arrangement could be set up on your behalf by the Isle of Wight Council if required.

 

Expressions of Interest/Outline Proposals

 

If you are interested in the possibility of working with the Council in this connection, we would like to hear from you. Please submit your outline proposals in writing to M J A Fisher, Chief Executive Officer, Isle of Wight Council, County Hall, Isle of Wight Council, Newport, Isle of Wight, PO30 1UD to arrive no later than 12 noon Friday, 9, September 2005.

 

In doing so, you should clearly state the following information:-

 

·        Your company details and relevant background information

·        Your specific experience and capability to meet our requirements

·        Examples of similar work with other local authorities or public sector clients

·        Any commercial or other ties that might inhibit your total independence as a consultancy

·        Outline proposals as to how you would intend to approach the work

·        Likely results and realistic outcomes

·        The basis of your fees and provisional costings.

 

 

 


                                                                                                APPENDIX 2

 

 

STRATEGIC PARTNERING/ CHANGE MANAGEMENT CONSULTANT

 

SELECTION PROCESS

 

 

2 August                   Advertisement placed in Official Journal of the European Union (OJEU) requesting proposals to provide consultancy support to the Council

 

9 September                       Deadline for submission of proposals – 22 responses received

 

9-11 September     Evaluation of bids by officers

 

12 September          Officers met to longlist candidates. Decision taken to seek further clarification from longlisted candidates

 

15 September          Member panel met to validate recommended longlist

 

21September                       Deadline for clarification to be received. All six longlisted candidates submitted a response.

 

21-22 September    Officers consider responses

 

22 September          Member Panel decide shortlisting of three candidates      

 

28 September          Formal presentation of proposals by each shortlisted candidate to majority group

 

11 October              Cabinet decision to appoint preferred bidder.