Agenda item

(To receive a report by Sophie Reeve (Chief Commercial Officer) and Andrew McLean (Chief Commissioning Officer) which updates the Overview and Scrutiny Management Board on the Corporate Support Services Re-commissioning. The report and views of the Board will be presented to the Executive on 2^nd October 2018.

NOTE: Appendix 1 to Appendix A to this report contains exempt information under Paragraph 3 of Part 1 of Schedule 12A of the Local Government Act 1972, and discussion of this information could result in exclusion of the press and public)

The Chief Commercial Officer invited the Overview and Scrutiny Management Board (OSMB) to consider a report on the Corporate Support Services Re-commissioning ahead of the recommendations being presented to the Executive on the 2^nd October 2018.

It was noted that a review had been undertaken to consider possible alternative commissioning approaches to the existing Serco contract, which had included an assessment of the Serco contract extension proposal, along with a consideration of how the Council's corporate centre could be more effective in supporting staff and front-line services. The report also detailed the due diligence and assurance work that had been carried out on the potential Payroll/HR Admin Service and ERP system solution with Hoople, along with undertaking market engagement with potential ICT suppliers.

The Board were referred to Appendix A of the report, which included the report and recommendations that would be put forward to the Executive, as follows:

That the Executive;

i.        Approves the entering into a contract extension with Serco for a period of two years, with effect from 1st April 2020 to 31st March 2022 to include the following services:

·         Information Management Technology

·         Payroll

·         HR Administration

·         Customer Service Centre (CSC)

·         Exchequer Services and Adult Care Finance.

ii.        Approves the insourcing of the following services into the Council, with effect from the 1st April 2019;

·         Mosaic technical development support

·         Freedom of Information , Complaints and Information Governance (including Subject Access Requests) administration

·         Agresso (also known as Business World On) System Administration (People Management).

iii.        Delegates to the Chief Executive in consultation with the Leader of the Council and Executive Councillor for Community Safety and People Management authority to take all decisions relating to the future commissioning or provision of Professional People Management services to the Council and to schools

iv.        Delegates to the Chief Executive authority to determine the final terms of the extension and insourcing referred to in paragraphs 1 and 2 above and approve the form and the entering into of all contractual and other documentation necessary to give effect to the said extension and insourcing in consultation with the Leader of the Council.

The Board were given information on the reviews and options available:

·    Separate arrangements for ICT

·    Separate arrangements for Payroll/ HR/ Administration and ERP (Agresso)

·    Customer Service Centre

·    Professional People Management Services

·    Exchequer and Adult Care Finance 

Questions and comments from members and officers included the following:

• In response to a question, officers clarified that competencies were measured through contract management, and that a strengthened client relationship was needed when moving forward.
• It was highlighted that Serco's payroll performance against KPI's was strong. 
• The Chief Commercial Officer reassured the Board that Serco now had a payroll KPI failure rate of 0.3%, compared with 1.1% previously.
• The Chief Commercial Officer agreed to share the previous KPI performance figures with the Board so that the progress could be monitored.
• There was a need for the Council to invest in ICT infrastructure.  An officer ICT Board would be established in October, chaired by the Chief Executive.  A draft ICT strategy would be developed before the end of 2018.
• In response to a question, it was clarified that a large majority of late or incorrect payroll payments had been rectified within the same month.
• The Chief Executive felt that the Fire Brigade payroll systems were not sustainable and work would be carried out to change these.
• Officers explained that many of the problems with Agresso related to the way it had been set up, with some responsibility resting with the client side.

·         Officers explained that Agresso had not worked to its full potential due to way the Council had originally configured it. And that, as a result, a number of workarounds were necessary.

• It was noted that a member of staff within the Council had now been allocated responsibility and ownership of Agresso.
• The Council's 1,000 payroll codes had been reduced by 200, and work was in hand to possibly reduce them by a further 170.  Most county councils operated with around 500 payroll codes.  Some of these issues could be addressed by reviewing the Council's pay strategy and rationalising some of the terms and conditions.  
• It was hoped that bringing the people management function in-house would result in a core strategic capability being returned to the Council; clarify responsibilities and roles and be cost effective.
• Members were concerned about Serco's ability to manage Fire and Rescue Payroll due to errors made in the existing contract.
• Members were informed that the Fire Brigade's Union had been invited to be consulted about the contract extension and assured that the necessary work was being undertaken to ensure previous issues were resolved.

Overall, the Board felt reassured that the review had involved thorough investigation, and that Serco were dedicated to resolving issues.

The Board agreed two specific comments to the Executive:

·         Fire and Rescue Payroll – There were some reservations expressed about the performance of the existing contractor on Fire and Rescue payroll, as the previous contractor had not created a high error rate. Fire and Rescue services operated under national conditions of service, and retained firefighters were not unique to Lincolnshire. 

·         Effective Partnership Working – The Board was advised that Serco's payroll error rate estimated from June data was 0.3%, which equated to about 14 individuals in that month.  An equal number of errors were attributable to the information provided by managers at the County Council, which might be incomplete or late.  Together this compared well against the national average of just over 1%. The Board agreed that the Council needed to become an effective partner with the contractor.     

Members unanimously agreed to support the recommendations to the Executive as set out in the report.

RESOLVED:

1. That the recommendations to the Executive, as set out above, be supported

2. That the specific comments, as set out above, be put forward to the Executive for consideration