To receive the above report.

Ben Smith, Head of Highways and Transport, introduced the report to Members and highlighted the following main points:

Ø  A paper had gone to Cabinet in June 2016 where Cabinet endorsed and approved agreement in principle for soft market testing.

Ø  The team had received bids back for three lots:

o   Lot one: highways management and maintenance, including winter service, street cleansing and projects.

o   Lot two: traffic management and ancillary services, including traffic signal maintenance.

o   Lot three: Highway and transport professional services, including highways development control and flood risk management.

Ø  Other areas within the department were already outsourced.

Ø  Key conditions relating to in house staff at Tinkers Lane Depot and planning staff were included in the lots.

Ø  Lot one was recommended to be offered to Volkers.

Ø  Volkers  had been procured in West Berkshire and Camden on similar work.

Ø  Lot three had been recommended to be offered to Project Centre

Ø  Project Centre were a small to medium sized business that worked with local authorities.

Ø  Lot two had received a bid from Siemans but, it was costly and was not what the team were looking for so the recommendation related to lot two was to not award and do further work on the contract.

Ø  Awards would deliver £90k of savings and then further savings would be made through the restructure of in house residual functions.

Ø  Volkers had their head offices in Hertfordshire but, they would use the council’s offices to operate the contract from.

Ø  Only one bid per lot was received. They would still provide good value for money as for street cleaning, that could be provided for less that the Borough currently paid. The team were unable to compare against other bidders as there were no other bidders but, it was still possible to see where the council would make savings.

Ø  The Head of Highways and Transport confirmed the contracts went out to the whole of Europe.

Ø  By contracting services out, although only initially saving £90k, would give the opportunity to realign the service to create further savings.

Ø  Some of the councils contracts were coming to an end so would need to go out to tender to replace current contracts.

Ø  Amey contract ended in March 2017 and also, the flexible elements of the contract had moved on so there was resistance from current contractor to continue to work in the same way.

Ø  Fixed pricing had been used and companies were reluctant to bid on fixed pricing contracts.

Ø  The specifications of each bid set out the challenges and risks if a job was not completed or carried out well. The council would also use key performance measures to measure success of a contract.

Ø  The retained highways and transport team would be charged with maintaining the contracts and dealing with customers and complaints. They would make sure the contracts delivered.

Ø  The waste contractor was outsourced and was delivering the council’s core values with a 93% satisfaction rating among residents to that would continue.

Ø  Very little would change in terms of process how residents and Ward Councillors would contact the council to report faults or request things like zebra crossings. But, the person to be contacted would likely be the main change. Anything like a crossing be installed would follow the same designs as currently used. The design and build would be done in the same place which was not the case currently so that would be a positive change as it would streamline things and make them more efficient.

Ø  Through process mapping, the jobs managed behind the scenes would follow clear and transparent processes.

Ø  The council were already working with main contractors so that would continue with Volkers. Volkers might then sub-contract work out but, the team had met those sub-contractors and due diligence had been done.

Ø  Break clauses would be built into contracts as a normal process.

Ø  Bu outsourcing, there would be staff resilience if someone in the team goes sick or on holiday. Also, with staff being TUPE’d across, those members of staff would have greater opportunities to develop their careers within a larger organisation.

Ø  Paragraph 4.1 explained that years one and two were fixed prices and year three was RPI linked.

Ø  The contracts were for five years with a two year extension if the council was happy with the performance.

Cllr Beer stated there was a backlog of surveys of trees on highways, if the backlog addressed, it would not cost £190k in the future, it would only cost that much in the first year. Cllr Beer wanted that clarified and confirmed.

v  Action – Head of Highways and Transport to circulate the Vires to the Panel.

v  Action – Head of Highways and Transport to clarify cost of ongoing tree surveys on highways after the first year for Cllr Beer.

RESOLVED UNANIMOUSLY: That the Highways, Transport and Environment Overview and Scrutiny Panel endorses the recommendations to Cabinet that:

i.              Volker Highways Ltd is awarded the contract to provide Lot 1 – Highways Management & Maintenance for a period of five years with the option of an extension for two more ears subject to satisfactory performance each year.

ii.            Lot 2 – Traffic Management and ancillary services is deferred pending further review of required services, budgets and value for money.

iii.           Project Centre Ltd is awarded the contract to provide Lot 3 – Highway & Transport Professional Services for a period of five years with the option of an extension for two more years subject to satisfactory performance each year.

iv.           The Strategic Director of Operations and Customer Services is authorised to complete the appointment process in accordance with RBWM Contract Rules in consultation with the Head of Legal Services and Lead Member for Highways and Transport.

v.            The Strategic Director of Operations and Customer Services is authorised to review and restructure the remaining Highways & Transport service to support the new operating model, subject to approval from Employment Panel in January 2017. To be developed in consultation with the Lead Member for Highways and transport and the Head of Human Resources.

vi.           Cabinet consider the option of awarding the tree inspection work? (optional within the Lot 1 contract), to Volker Highways Ltd as part of the contract award.