SUMMARY/PURPOSE
1.
To receive the feasibility study into a strategic
partnership for central services commissioned by the Cabinet on 11 October, and
to determine whether to proceed with the development of a business case.
BACKGROUND
2.
Cabinet members will recall that the Council had
commissioned PA Consulting Ltd to carry out a feasibility study into the
potential benefits of strategic partnerships.
The results of that study in the form of a report are now available and
are attached as an Appendix to this covering report.
STRATEGIC CONTEXT
3.
The proposal to consider the potential of a strategic partnership
is set out in the Council’s ‘Aim High’ plan as being one of the significant
projects to deliver the Council’s change agenda. At this point in time, the
Council is in the process of considering options and that is what the
feasibility study is intended to do. Aim High states that ‘Strategic
Partnerships will only be entered into if there is a viable business case for
doing so’ and it is vital that a decision of such magnitude is supported by a
well reasoned rationale.
CONSULTATION
4.
Opportunities for consultation have been given to all
members and to all managers within the Council at two seminar events since the
consultants’ report became available. Through Aim High events, the concept of a
strategic partnership has received wide consultation and staff and trades
unions have had their opportunities to express their views.
5.
It would be fair to say that the proposal does not yet
enjoy universal support, perhaps because of the acknowledged risks associated
with fundamentally changing the way in which the Council delivers services.
There is widespread enthusiasm for improving the quality and efficiency of back
office services, and the interface with the public.
FINANCIAL/BUDGET
IMPLICATIONS
6.
The Council is taking a pragmatic approach to
controlling the cost of exploring the partnership option. The feasibility stage
which is now complete, has cost the Council £34,190 including expenses. The
next phase of work which is necessary to deliver an Outline Business Case by
the end of March is estimated to cost £72,000 (including expenses estimated at
10%), a figure which is slightly more than that quoted by PA Consulting as part
of the procurement exercise.
7.
As highlighted in the Cabinet report of 11 October,
2005, members should be conscious of the potential cost associated with
securing a strategic partnership. That report quoted an estimate of £1.5
million in terms of securing external support. Both the feasibility stage and
the Outline business case stages should be seen as cost effective ways of ways
of mitigating the risk that the Council commits itself to a very expensive
course without thoroughly examining its options. The development of a business
case, as proposed, will set out the costs and benefits of a partnership, and
continue the identification and control of risk.
LEGAL
IMPLICATIONS
8.
There are no legal implications associated with this
decision except that the Council has a duty to achieve Best Value in its
procurement and in the delivery of
services. The rigorous examination of the strategic partnership option by means
of a feasibility study and development of a business case are important steps
in the process of securing value for money.
9.
The Council does need to be cognisant of the
cumulative value of work awarded to PA Consulting. Further work beyond any
being proposed in this report will need to be subject to a more robust award
process.
OPTIONS
10.
Option 1 - Accept the findings of the
feasibility report and commission PA Consulting to carry out further work to
deliver an Outline Business Case by March 31 at a cost of £72,000 including
expenses; or
Option
2 - Accept the findings of the report and develop a business case for a
strategic partnership by means other than using PA consultants; or
Option
3 – Decide to take no further action in response to the feasibility
report.
EVALUATION/RISK
MANAGEMENT
11.
The feasibility report was intended to be a way of
quickly assessing the partnership option. In a sense the question it asked was:
are there any particular obstacles which preclude the Council from pursuing its
proposals to engage a strategic partner? The report indicates that the answer
to that question is ‘no’ which effectively means that the Council should
continue to the Outline Business Case stage.
12.
As mentioned above, the Council is adopting a risk
mitigation strategy by considering the partnership option in stages. This means
that the risk of making the wrong decision is being controlled in the most
effective way possible. In recommending Option 1, the Council is also seeking
to use expertise that does not readily exist internally, and also a resource
which improves the capacity of the Council temporarily. The alternative
potentially puts progress at risk because of distracting priorities and limited
capacity. The cabinet, on 11 October, has already identified PA (as a result of
a procurement exercise) as competent, best value providers to develop the
business case.
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13.
RECOMMENDATIONS
i.
To receive and accept the feasibility study
ii.
To commission PA Consulting to lead the development
of an outline business case
for the development of a strategic partnership, for completion by 31 March
2006. |
BACKGROUND
PAPERS
14. Procurement files held by the Compliance
& Risk Manager
APPENDICES
15. Appendix
A - Potential Strategic Partnership for Support Services – PA Consulting Ltd.
Contact
Point : Bob Streets, Compliance &
Risk Manager. (
823622, email: [email protected]
|
MR
JOHN LAWSON Assistant
Chief Executive |
COUNCILLOR
JILL WOOD Cabinet
Member for Resources, Audit, an Efficient Council and Customer Champion |