Agenda item

(To receive a report by the Executive Director – Resources which seeks approval for a mix of new commissioning arrangements as part of the future model of delivery of Corporate Support Services including HR Administration, Payroll, Exchequer, Adult Care Finance and the Customer Service Centre)

1.    That the future services design and sourcing approach be approved as follows:

a)    The entering into of a shared service arrangement with Hoople Limited for the delivery of HR Administration and Payroll to the Council and to schools;

b)    The outsourcing of the operation of the Customer Service Centre services to external suppliers;

c)    That the Council retains responsibility for digital transformation and the technology that supports it using a mixed model for resourcing transformation with a combination of in-house resource and external expertise secured as and when required;

d)    The insourcing of the Adult Social Care and Exchequer services.

2.    That the carrying out of the necessary procurement processes to secure the services of external suppliers referred to in 1b and 1c above, be approved.

3.    That authority be delegated to the Executive Director – Resources, in consultation with the Leader of the Council, and for 1b and 1c above with the Executive Councillor for Children’s Services, Community Safety and Procurement, and for 1b above with the Executive Councillor for People Management and Corporate Property, to take all necessary decisions and steps to progress the new commissioning arrangements referred to in paragraph 1 above and to progress the procurements referred to in paragraph 2 above, up to and including the award of contracts.

The Executive received a report which outlined options for the delivery of support services following the expiration of the Corporate Support Services Contract with Serco at the end of March 2024, and which could not be extended.  This contract included the provision of IMT Services (previously dealt with by Executive on 4 May 2022), Finance Services, HR Administration and Payroll and the Customer Service Centre.  Approval was sought for the mix of new commissioning arrangements as part of the future model of delivery and authority to commence procurement for the proposed outsourced service.

It was highlighted that the model of multi-stream contracts being let to prime providers so that a single outsourcing company (e.g. Serco) was responsible for a wide range of services had fallen out of favour with both providers and local authorities, due to a reduction in possible savings as the public sector has become more efficient.  As such, a mix of outsourcing and in-sourcing of services had been proposed.

The Overview and Scrutiny Management Board considered this report at its meeting held on 26 May 2022.

HR Administration and Payroll

The proposed approach was to enter into a shared service arrangement with Hoople Limited.  The Council was one of three shareholders of Hoople which was a Teckal company employing around 500 staff.  The Council’s payroll was complex and Hoople were experienced in delivering Council, schools and NHS payroll, although not Fire and Rescue. 

The Chairman of the Overview and Scrutiny Management Board presented the comments of the Board and it was reported that the Board accepted the arrangement that insourcing of this service would be too challenging and noted that Hoople did have experienced staff and therefore supported this aspect of the model.

During discussion by the Executive, the following was highlighted:

·       This report was welcomed.  However, it was commented that particular regard should be given to the complexities generated by the Fire and Rescue payroll.  It was highlighted that it was understood that Hoople would be looking to national providers to assist with this aspect of payroll.  The Executive was also advised that the payroll testing for Fire and Rescue was currently going well.

·       Concerns were raised regarding the increase in the level of payroll work and assurance was sought that Hoople would be able to manage the increasing workload.  Officers advised that they were confident that this would be managed, and the due diligence that was carried out successfully in 2018 would be updated and repeated following the decision of the Executive, to provide the necessary assurance to proceed.

·       It was important to note that any staff that TUPE’d across to Hoople would be able to continue to work in Lincoln.  It was confirmed that engagement with Serco staff, Hoople and HR officers would be taking place in the coming weeks.

Customer Service Centre (CSC) and Digital Transformation

The preferred option was to outsource the CSC as a single operational service, with the key technology selected and owned by the Council and where the responsibility for reducing the calls into the CSC would also sit with the Council.  It was noted that there would be a need to buy in some transformation expertise and capacity, however, this would be on a case-by-case basis.

The Chairman of the Overview and Scrutiny Management Board presented the comments of the Board which had noted that this was a key element, and that the CSC was critical to the smooth running of the Council, and therefore it was important to have a smooth transfer to the new operator.  The Board would welcome more information in relation to the nine operators who had expressed an interest.  The Board also considered it important that the Council retained control of the key technology.  In response to the request for information on the nine operators who had expressed an interest, it was noted that these had been generated as a result of market engagement, and it was likely that this number would reduce significantly, with references taken up for 3 – 4 of the operators.  It was noted that this engagement would help in shaping the procurement.

Adult Care Finance and Exchequer

The recommended option was to insource the Adult Care Finance and Exchequer Services, as this would enable the Council to respond effectively to the challenges that were expected.

The Chairman of the Overview and Scrutiny Management Board presented the comments of the Board which had noted that the Adult Social Care reforms would be central to these discussions.  The Executive was advised that the Board would monitor this on an ongoing basis.

During discussion by the Executive, the following was noted:

·       It was clarified that it was not expected that the new commissioning arrangements would make a material difference to costs.

·       Assurance was sought that work was being undertaken to ensure that there was also a digital offer, and the Executive was advised that work was underway with Digital colleagues to ensure that people were able to help themselves.

·       In terms of how the IT services would be modernised, it was noted that there would be an update to the telephony system, which would be discussed with members in the coming months.  It was also planned for better use of the website to be made to ensure that people were able to use the most effective platforms for their needs.

·       The Executive was advised that a programme director had been appointed to implement the approved commissioning recommendations and part of that role was to develop a communications programme.  There would be substantial engagement with LCC and Serco staff, and it would be ensured that this information was presented to staff in an accessible way.  Meetings were being held regularly between Hoople and Serco, and it was expected that these would continue for the next two years.

·       The Chief Executive advised that she intended to write to all staff to keep them informed of progress.

·       It was queried what the next steps would be, and officers advised that they had started to prepare for the implementation of the decision, and a timeline had been prepared.  The first stage would be the tender for the CSC and it was hoped this would be done in late summer/early autumn. Work had also commenced on market engagement and a commercial package would be put together.  Work was also in the early stages of developing the client arrangements within the Council, and discussions would commence with Hoople in relation to the agreement that would be put in place between the Council and Hoople.  Work would also commence shortly on developing the specifications for those IT services which would be outsourced.  Discussion would also take place with Serco regarding the phasing of the in-sourcing.  A complete overview of the programme would be put together.

RESOLVED

1.    That the future services design and sourcing approach be approved as follows:

a)    The entering into of a shared service arrangement with Hoople Limited for the delivery of HR Administration and Payroll to the Council and to schools;

b)    The outsourcing of the operation of the Customer Service Centre services to external suppliers;

c)    That the Council retains responsibility for digital transformation and the technology that supports it using a mixed model for resourcing transformation with a combination of in-house resource and external expertise secured as and when required;

d)    The insourcing of the Adult Social Care and Exchequer services.

2.    That the carrying out of the necessary procurement processes to secure the services of external suppliers referred to in 1b and 1c above, be approved.

3.    That authority be delegated to the Executive Director – Resources, in consultation with the Leader of the Council, and for 1b and 1c above with the Executive Councillor for Children’s Services, Community Safety and Procurement, and for 1b above with the Executive Councillor for People Management and Corporate Property, to take all necessary decisions and steps to progress the new commissioning arrangements referred to in paragraph 1 above and to progress the procurements referred to in paragraph 2 above, up to and including the award of contracts.