Notice of Cabinet meeting

Transcription

1 Notice of Cabinet meeting Wednesday 17 December 2014 at 10.30am HMS Phoebe Committee Room Town Hall, Bournemouth Cabinet Member Portfolio area of responsibility Councillor John Beesley Leader of the Council, Resources and Chair Councillor Nicola Greene Deputy Leader of the Council, Education & Children s Services and Vice-Chair Councillor Blair Crawford Adult Social Care Councillor Anne Filer Corporate Efficiency Councillor Michael Filer Transport, Cleansing and Waste Councillor Mike Greene Corporate Policy & Strategy Councillor Jane Kelly Partnerships, Regeneration and Public Health Councillor Robert Lawton Housing Councillor David Smith Planning and Environment Councillor Lawrence Williams Tourism, Leisure and Culture All Members of the Cabinet are summoned to attend this meeting to consider the items of business set out on the agenda at pages 4-5 below. The Public, press and any Councillor are welcome to attend this meeting. For further information please contact: Karen Tompkins, Senior Democratic Services Officer, Legal and Democratic, Town Hall, Bourne Avenue, Bournemouth BH2 6DY. Tel: karen.tompkins@bournemouth.gov.uk. Councillors Call-in to Overview and Scrutiny Panels - The record of decisions made at this meeting will be published by Friday 19 December Councillors may require items set out in Section II of the record of decisions to be called-in to the relevant Overview and Scrutiny Panel. The deadline for receiving call-in requests is 5pm on Tuesday 30 December 2014.

2 Public involvement The Cabinet welcomes members of the public to contribute to the meeting: 1 by asking to speak on an agenda item or a community issue as a Deputation ; or 2 by asking a public question - any member of the public whose name appears on the Electoral Roll for Bournemouth - which includes a person under the age of 16 years living in Bournemouth and who is escorted by a qualifying adult; or 3 by presenting a petition in relation to items on the agenda. A request to speak as a deputation, ask a question or present a petition must be sent in writing or to Karen Tompkins at the address shown on page 1 by no later than am on Tuesday 16 December Further information is available on the Council s web site as follows: Deputations: peakingatacouncilmeeting.aspx Public questions: ublicquestions.aspx Petitions: resentingapetition.aspx A loop system for hearing impairment is provided in the meeting room. There is disabled access to the building. Councillors and visitors with particular needs should inform the Council by contacting Karen Tompkins using the contact details shown on page 1 - before arriving at the meeting. This agenda together with records of decisions and reports are available on the Council s web site at A copy of this document may be available on request in alternative formats. For information on translating documents into another language visit the Council s website: 2

3 Audio recording and filming Please be aware that under the Local Authorities (Executive Arrangements) (Meetings and Access to Information) (England) Regulations 2012 this Cabinet meeting may be audio recorded or filmed for live or subsequent broadcast by members of the public or representatives of the media. At the start of the meeting the Chair will make an announcement to confirm if all or part of the meeting may be audio recorded or filmed. The layout of the venue means that the Council cannot guarantee a seat/location that is not within the coverage area images and sound of any broadcasting or audio recording equipment. By entering the meeting room and using the public seating area you are consenting to being filmed or recorded and to the possible use of those images and sound recordings through the media and/or public and commercial outlets. If you have any queries regarding this please contact the Democratic Services Officer at the meeting. Any persons intending to audio record or film this meeting are: 1 Requested not to film the public gallery. 2 Asked to respect requests from other members of the public to cease recording when they speak for example when they are presenting a deputation or petition or asking a question. 3 Reminded of the Common Law Duty of Confidentiality. You could place yourself at risk of being sued by another private individual if you disclose confidential personal information about such persons in meetings. 3

4 Agenda Items to be considered while the meeting is open to the public 1 Apologies 2 Declarations of interest Members are asked to declare any disclosable pecuniary interests at the meeting, under Rule 5 as set out below: Declarations of Interest by Members and Officers a. It is the responsibility of every Councillor to declare, at the relevant stage of a meeting, any disclosable pecuniary interest in any item under consideration as required by the Localism Act 2011 or in any event by the time the item of the business is reached. Members are also asked to state fully the nature of the interest(s), which will be recorded in the record of decisions. If any member has a query on any particular matter, please contact the Democratic Services Officer in advance of the meeting. 3 Confirmation of Minutes To confirm the minutes of the meeting held on 12 November Public items a Public Questions The Democratic Services Officer will report on any public questions received by the notice deadline. b Deputations The Democratic Services Officer will report on any deputation requests received by the notice deadline. c Petitions The Democratic Services Officer will report on any petitions received by the notice deadline. 4

5 5 Minutes from the Local Development Framework Steering Group 15 December 2014 to be circulated at 5. 6 Adoption of Reviewed Statement of Community Involvement circulated at 6. 7 Core Service Transformation Phase 2 Adult Social Care - Local Authority Trading Company LATC - circulated at 7. 8 Building Maintenance Operations New Ways of Working circulated at 8. 9 Test of Assurance circulated at Monthly Budget Monitoring Report to 31 October 2014 circulated at Changes to Cabinet Forward Plan Cabinet is asked to note the latest changes to the Forward Plan as agreed by the Leader of the Council. The latest Forward Plan can be found at the link below: /TheCabinet.aspx 12 Any other business - not being a key decision - of which notice has been received before the meeting and by reason of special circumstances, which shall be specified in the record of decisions, the Chair is of the opinion that the items should be considered as a matter of urgency. 5

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7 Cabinet/Full Council 6 Report Subject Meeting date 17 th December 2014 Cabinet Portfolio Corporate Lead Adoption of Reviewed Statement of Community Involvement Councillor David Smith - Planning and Environment Bill Cotton, Executive Director, Environment and Economy Service Director Status Classification Mike Holmes, Service Director, Planning, Transport and Regulation Public For decision Key Decision Impacts on Key Policy Framework Report author Executive summary Recommendations Yes Yes Malcolm Hodges Senior Planning Officer malcolm.hodges@bournemouth.gov.uk To seek approval for the revised Statement of Community Involvement attached as Appendix 1. The Cabinet is recommended to: 1 Recommend to Full Council that the revised Statement of Community Involvement be adopted Reasons for recommendations To enable the Council to continue to meet its obligation to have an up to date Statement of Community Involvement. The adoption of an revised Statement of Community Involvement will further Council priorities as expressed in the Corporate Plan 2014/15 Ambition 2020, in particular priorities under the headings of An Active Community.

8 Background detail 1 The Planning and Compulsory Purchase Act 2004 requires Local Planning authorities to prepare a Statement of Community Involvement (SCI). This sets out how and when interested parties are to be engaged when preparing development plans. The existing SCI for Bournemouth was adopted in December Since the adoption of the existing SCI there have been changes in regulations and government guidance which have implications for what is required in the production of planning policy documents. For example, the adopted SCI commits Bournemouth Council to consultation at various plan preparation stages which no longer exist in the regulations. 3 Current regulations are generally simpler and less prescriptive. The existing SCI provides insufficient flexibility and could potentially impose significant consultation costs upon the Council. It was recognised that there was a need to review the current SCI without compromising our commitment to involving the public and other stakeholders on planning issues. Therefore an updated draft SCI was prepared taking the current regulations into account. 4 Current regulations are no longer specific on what Local Planning Authorities are obliged to do when revising their SCIs. However it was considered reasonable to undertake appropriate public consultation on this proposed revision of the document. At its meeting on 23 rd July 2014 Cabinet agreed the content of the draft revised SCI and authorised a six week period of public consultation. Consultation 5 A period of public consultation on the revised SCI was carried out between 1 st August and 15 th September The consultation resulted in one representation from the Woodland Trust which has resulted in one amendment to the draft SCI. The details of the representation and our response to the points raised are attached at Appendix 2. Aside from this proposed amendment, the remainder of contents of the document remains as previously agreed by Cabinet on the 23 rd July The original SCI was the subject of public consultation as required by planning regulations at that time. In addition it was the subject of a public examination by an independent Inspector. The changes in planning regulation means a further public examination in respect of the revised SCI is not now required prior to adoption. 2

9 Options 7 Under the Planning and Compulsory Purchase Act 2004 Local Planning Authorities must have a Statement of Community Involvement in place. The only alternative option would be to continue to use the current outdated version of the SCI. For the reasons outlined in paragraphs 2 and 3 this option was rejected. Summary of financial/resource implications 8 Reviewing the SCI will enable consultation arrangements to be tailored more effectively to the needs of the Local Development Scheme in line with the new streamlined planning system. A failure to do so could impose a greater cost upon the Council by continuing to commit to unnecessary consultation stages and requirements. Summary of legal implications 9 Under the Planning and Compulsory Purchase Act 2004 Local Planning Authorities must have a Statement of Community Involvement in place. The review of the SCI will bring it into line with current planning regulations. Summary of human resources implications 10 Community involvement is a requirement in the production of local planning documents and is essential in making these documents robust. The increased flexibility in the regulations and the updated SCI should allow for more cost effective community involvement without compromising the quality of consultation. Summary of environmental impact 11 The Environmental Checklist has been completed for the SCI. The SCI relates to setting out how and when stakeholders and the public will be involved in the production of local planning documents in Bournemouth. The SCI itself should have no environmental impacts. Summary of equalities and diversity impact 12 An Equality Impact Needs Assessment Screening has been completed. No adverse impacts in terms of equalities were identified. 3

10 Summary of risk assessment 13 The consultation and involvement methods and stages in the existing adopted SCI are based on regulations that have since been superseded. Local Planning Authorities must produce their policy documents based on the detail in its adopted SCI. Not adopting an updated SCI has potential financial implications and possible consequences for the soundness of documents produced as part of the Bournemouth Local Plan. Background papers Adopted Statement of Community Involvement Plan/SCI/SCI.aspx Planning and Compulsory Purchase Act Appendix 1 Revised Statement of Community Involvement Appendix 2 Statement of Community Involvement Consultation Response Table 4

11 Appendix 1 Statement of Community Involvement November

12 Planning Policy Team Planning, Transport and Regulation Services Directorate Bournemouth Borough Council St Stephen s Road Bournemouth BH2 6EA Telephone: planning.policy@bournemouth.gov.uk Internet: This information can be made available in large print or audio format and can be translated into other languages. Please contact the Planning Policy Section for further information if required. 6

13 Contents 1 INTRODUCTION - What is the Statement of Community Involvement? 5 - Bournemouth Local Plan Current Context 5 - Bournemouth 2026 Trust 6 - The Local Development Scheme 6 - Duty to Co-operate 7 2 DOCUMENTS SUBJECT TO PUBLIC CONSULTATION - Local Plans 8 - Supplementary Planning Documents 8 - Neighbourhood Plans 8 - Sustainability Appraisal and Strategic Environmental Assessment 8 - Community Infrastructure Levy 9 3 WHO WILL BE INVOLVED - Specific Consultation Bodies 10 - General Consultation Bodies 10 - Individual Members of the Community and Businesses 10 - Seldom Heard Groups 11 4 POSSIBLE METHODS OF COMMUNITY INVOLVEMENT 12 5 WHEN CONSULTATION TAKES PLACE IN THE PRODUCTION OF LOCAL PLAN DOCUMENTS 14 6 WHEN CONSULTATION TAKES PLACE IN THE PRODUCTION OF SUPPLEMENTARY PLANNING DOCUMENTS 16 7 INVOLVEMENT IN PLANNING APPLICATIONS - How we publicise planning applications 17 - Pre-submission discussion 17 - Amended Plans 18 - Weekly List 18 7

14 - Additional Advice 18 - How Decisions on Planning Applications are made 18 - How to Find Decisions on Planning Applications 19 - What Happens when an Appeal is received 19 - Prior Approval Applications 21 - Improving Consultation on Planning Applications 21 Appendix A Specific Consultation Bodies Appendix B Glossary of Terms 8

15 1. Introduction What is the Statement of Community Involvement? 1.1 The main purpose of the Statement of Community Involvement (SCI) is to set out how the community, businesses and other organisations with an interest in the development of the Borough can engage with the planning system. 1.2 Bournemouth Borough Council is the Local Planning Authority (LPA) for the area, and as such is responsible for producing planning policy documents and determining planning applications. This document therefore considers the procedures and methods that will be used to consult when preparing new Local Plan documents, Supplementary Planning Documents (SPDs) and when processing planning applications. 1.3 This document will replace the Statement of Community Involvement that was adopted by the Council in December This is considered necessary as there have been several changes to the Planning Legislation since that time. 1.4 The changes mean that: The minimum legal requirements for consultation on Local Plan documents and in the determination of planning applications have been updated in order to encourage more efficient production of plans and processing applications. This means that the SCI from January 2006 no longer reflects the new stages of plan preparation or requirements for consulting on planning applications. The SCI no longer has the same status under national planning regulations. The Council is therefore able to adopt its own SCI without it being submitted to the Secretary of State for independent examination. 1.5 The requirement for the Council to produce an SCI is contained in section 18 (Part 2) of the Planning and Compulsory Purchase Act Bournemouth Local Plan Current Context 1.6 At the time of the adoption of the 2006 SCI the approach to the production of local planning documents was the Local Development Framework system. This was to consist of a portfolio of Development Plan Documents (DPDs) and Supplementary Planning Documents (SPDs) which would provide local planning policies and advice against which planning proposals would be considered. 1.7 The National Planning Policy Framework (NPPF) subsequently indicated that LPAs should produce a Local Plan for their areas which can be reviewed in whole or in part to allow for a flexible response to changing circumstances. Revised Local Plan Regulations reflected this change. 1.8 In Bournemouth significant progress had already been made in the process of replacing the policies in the Bournemouth District Wide Local (2002) when this change in approach was instigated. The Core Strategy and the Bournemouth Town Centre Area Action Plan were at an advanced stage in their production and the Affordable Housing DPD was already adopted. 9

16 1.9 The Core Strategy and Bournemouth Town Centre AAP were subsequently adopted under the banner of the Bournemouth Local Plan and it is intended that work will continue on the remaining documents to completely replace the policies in the 2002 Bournemouth District Wide Local Plan. Taken together these documents will comprise the Bournemouth Local Plan along with any supporting Supplementary Planning Documents. Bournemouth 2026 Trust 1.10 Bournemouth 2026 Trust (formerly known as the Bournemouth 2026 Partnership) works with the voluntary and community sector, public sector and private sector organisations to consult on what they want Bournemouth to be like in the future and agree a shared vision and action plans. Part of this work is to encourage all members to ensure that their strategies and plans work towards achieving the vision. The other part of this work is to bring people together to work on projects that advance the aims and improve life for the communities of Bournemouth to achieve its long term vision of a thriving town that is fun, safe, healthy and green Bournemouth 2026 Trust has 4 Golden Threads running through all its plans and activities: Community influencing decisions Tackling Inequalities Earth Charter/Sustainability Prevention 1.12 Bournemouth 2026 has previously produced a Sustainable Community Strategy and in 2013 the Trust consulted on a Community Vision for The LPA has taken the vision of Bournemouth 2026 into account when producing planning policy documents and will continue to do so into the future. The Local Development Scheme 1.13 The Local Development Scheme (LDS) sets out the programme for the management of the Local Plan. It is a public statement identifying the timetable for the production of Local Plan documents over a rolling 3-year period and is reviewed annually. It is the starting point for the community and stakeholders to find out more about which future planning policies will apply to a particular place or issue and their status 1.14 It is not intended to go into the details of the current LDS for Bournemouth in this document as the LDS will change over time following annual updates. The current Local Development Scheme is available to view on the Council s website Plan/LDS/LDS.aspx. 10

17 Duty to Co-operate 1.15 Section 110 of the Localism Act 2011 sets out a duty to co-operate for local planning authorities, County Councils and other bodies with statutory functions to co-operate with each other. Co-operation includes constructive and active engagement as part of an ongoing process to maximise effective working on the preparation of local planning documents The Council has, for a number of years, worked in partnership with other local planning authorities and partnership organisations when producing planning documents. It is intended that this approach will continue and that the Council will meet fully its obligations under the Duty to Co-operate The list of Duty to Co-operate prescribed bodies are specified in The Town and Country Planning (Local Planning) (England) Regulations 2012 (as amended). 11

18 2. Documents subject to Public Consultation Local Plans 2.1 Local Plan documents set out the planning strategy, policies and proposals for a Local Planning Authority area. These documents are prepared with involvement from the community, stakeholders and bodies specified by regulation. They must be examined by an Independent Inspector and found sound before they can be adopted by the Council. 2.2 The current context with regard to Local Plan document production is outlined in paragraphs 1.6 to 1.9 of this document. Supplementary Planning Documents 2.3 Supplementary Planning documents (SPDs) are non-statutory documents intended to expand upon the policies and proposals the Local Plan documents. They can be area or issue based. SPDs are not the subject of an independent examination, but undergo public consultation and are adopted by receiving the endorsement of the elected members of the Council. 2.4 Current examples of SPDs in Bournemouth include the Affordable Housing SPD and the South East Dorset Transport Contributions Scheme 2. Neighbourhood Plans 2.5 The Localism Act 2011 introduced the provision for communities to draw up their own Neighbourhood Plans. These plans can set planning policy to guide future development in the local area. However they must be in conformity with national policy and well Local Plans that have been adopted by the Council. Neighbourhood Plans are subject to independent Examination and a local referendum. 2.6 The Neighbourhood Planning (General) Regulations 2012 set out the minimum requirements for consultation and publicity at key stages with those living or working in the neighbourhood area or with those who may have an interest in or are likely to be affected by the proposals. 2.6 It is for the Neighbourhood Planning body to decide who to consult given the scope and nature of the proposals they are developing. Neighbourhood plans do not need to comply with this SCI but it would be a useful starting point to help guide the work to be done Sustainability Appraisal and Strategic Environmental Assessment 2.7 Sustainability Appraisal (SA) is a method designed to help planning authorities contribute to the aim of achieving sustainable development in preparing plans and policies. It is a mandatory requirement under the Planning and Compulsory Purchase Act 2004 for local authorities to undertake SA of documents making up 12

19 their Local Plan. An SA report will therefore be produced and consulted upon alongside each Local Plan document that the Council publishes. The process of SA fully incorporates the requirements of Strategic Environmental Assessment (SEA) in relation to plans and programmes, as required under the European SEA Directive (2001/42/EC) and the Environmental Assessment of Plans and Programmes Regulations Community Infrastructure Levy 2.8 The Community Infrastructure Levy (CIL) is a new levy that local authorities can charge on developments in their area. CIL income can be used to fund additional infrastructure required to support new development including roads, schools, green spaces and community facilities. CIL will represent a fundamental change from the current system of developer contributions through Section 106 (S106) planning obligations, which can be complex and time consuming. While S106 will still be used for site specific measures required to make a development acceptable, the introduction of CIL means that the use of S106 will be limited. 2.9 The Council s proposals for CIL in Bournemouth will be subject to consultation and Independent Examination. The requirements for consultation are contained in the Community Infrastructure Levy Regulations 2010 (as amended). 13

20 3. Who will be Involved 3.1 The Town and Country Planning (Local Planning) (England) Regulations 2012 set out the legal requirements for consultation and public participation in respect of local planning documents. It is our intention to meet, and where possible exceed, the requirements of the regulations. Specific Consultation Bodies 3.2 The regulations specify that we must consult the specific consultation bodies if it is considered that the body will be affected by what is proposed to be covered in a Local Plan. The specific consultation bodies are specified in the regulations and include organisations such as the Environment Agency, the Highway Agency and English Heritage. The current list if these bodies is contained in Appendix A. General Consultation Bodies 3.3 In addition to the Specific Consultation Bodies we will also consult with General Consultation Bodies to seek their views. The Regulations indicate General Consultation Bodies should include: Voluntary bodies some or all of whose activities benefit any part of Bournemouth; Bodies which represent the interests of different racial, ethnic, or national groups in Bournemouth; Bodies which represent the interests of different religious groups in Bournemouth; Bodies which represent the interests of disabled persons in Bournemouth; and Bodies which represent the interests of persons carrying on business in Bournemouth. Over the years the we have compiled a comprehensive database of groups and organisations which continues to evolve as more groups request to be added and some, who no longer wish to be involved, are removed The particular General Consultation Bodies that the Planning Authority will consult with will be dependent on the subject matter of the document and if the body has expressed an interest in the subject. Certain groups and organisations have specialist knowledge or technical expertise with regard to particular subject areas (e.g. bus and taxi companies on the subject of transport). We will use our knowledge of the local groups and organisations to select those which are most appropriate. Individual Members of the Community and Businesses 3.5 We will also consult with individual members of the community who are not members of local groups or organisations. Anyone who wishes to become involved can request that his/her name be added to the consultation database. 14

21 Seldom Heard Groups 3.6 It is recognised that some sectors of the community may be more difficult to engage in the participation process. Examples of these seldom heard groups include disabled people, elderly people, young people and recent arrivals to the town. The Council will actively seek to engage with these groups in order to ensure they can make a contribution to planning the future of Bournemouth. 3.7 The Council maintains an extensive consultation database which is used during the production of planning policy documents. The database includes the contact details of many organisations and individuals representing the seldom heard groups. However the Council is happy to add new contacts to the database and is keen to receive updated information when organisations or individuals details change. 15

22 4. Possible Methods of Community Involvement 4.1 There are several potential methods of community involvement. These will vary in how they reach people and in terms of resource requirements. A range of involvement methods is set out below. The list is not intended to be definitive and additional methods may be used where appropriate. Alternative methods, suggested by the Community/Stakeholders, will also be considered. 4.2 The type of methods employed will be tailored to suit the subject area of each document/type of planning application, and the resources available to us. It is recognised that some groups in the community are in a better position to participate than others, and that to be successful community involvement should be inclusive. Therefore it is important to ensure that hard to reach groups (e.g. disabled people, ethnic minority groups, young people) are engaged in the process. We will seek to use the range of methods available to enable all sections of the community to contribute to the Local Plan process in a meaningful way. 4.3 The Statement of Community Involvement must also recognise the limits of our resources and attempts to make most effective use of the resources available. However where the need arises for more focused, resource intensive, methods then we will, subject to the availability of resources, seek to utilise these methods in conjunction with local groups and stakeholders. The inclusion of these potential methods in the SCI should not, therefore, be considered as an undertaking that all methods will be available on demand during the production of each document produced. 4.4 Potential methods of community consultation and involvement include: 1) Documents available at Council Offices and other appropriate places (e.g. libraries) in the Borough during consultation periods (minimum requirement); 2) Correspondence with Statutory Bodies (minimum requirement); 3) Website increasingly used by public and professionals, cost effective and user friendly for most people. Potential to reach large numbers of people but does require internet access so not suitable for everyone. Can be used concurrently as a source of providing information as well as seeking feedback. (Note: internet access available at public libraries). 4) Local Media (e.g. Daily Echo, BH Life, Bournemouth Advertiser etc.) cost effective and user friendly. Potential to reach large numbers of people. The Bournemouth Journal is the Council s own publication and is widely distributed; 5) Social Media (e.g. Facebook, Twitter etc.) potentially effective way of engaging some hard to reach groups (e.g. young people); 6) Leaflet Distribution potentially expensive in terms of printing and distribution costs but can produce good feedback if well written and targeted; 7) Public exhibition/display good for communicating information if locations and times are carefully selected but can be resource intensive; 8) Written/ correspondence can give good feedback if focused on key questions; 9) One to one meetings with selected stakeholders/organisations, and special interest groups dealing with marginalised sections of the 16

23 community resource intensive but can be useful way of involving key groups on specific issues; 10) Focus Groups/Workshops participants are selected depending on the policy issue to provide feedback on public concerns. Potentially resource intensive but can provide useful feedback if appropriate participants are selected; 11) Area Forums resource intensive but open way for people to be included in the debate on policy issues. Some members of the community are more comfortable than others with this type of forum for expressing views. Can be particularly useful when discussing topics which fall wholly within a local area; 12) Steering Group The Council has a Steering Group is already in place which oversees and advises on the production of the documents and policies making up the Local Plan along with other associated documents. The meetings of the Steering Group are open to attendance by members of the Public. Dates of forthcoming Steering Group meetings are available on the Council s website, at the Town Hall and at local libraries. 17

24 5. When consultation takes place in the production of Local Plan documents 5.1 There are three stages of Local Plan production where the Regulations require some form some form of Consultation/Community Involvement: 1. Preparation of a Local Plan - Regulation 18: Requires that certain Specific and General Consultation Bodies see section 3 are invited to make representations about what a Local Plan ought to contain. 2. Publication of a Local Plan - Regulation 19: Copies of a proposed Local Plan and associated documents are made available for inspection for 6 weeks. The Council invites interested parties (in addition to the specific and general consultation bodies) to make formal representations at this stage. This stage of consultation involves communities, businesses, Parish Councils, developers and other interested parties. This is effectively the final stage when formal representations can be made to the Council. 3. Submission of a Local Plan to the Secretary of State -Regulation 22: The proposed Local Plan and associated documents is submitted to the Secretary of State for examination. An Independent Inspector is subsequently appointed to examine the soundness of the plan. The Council provides the Independent Inspector with the formal representations made at the previous stages. At this stage, the Council cannot consider new formal representations, although opportunities exist for additional statements to be made to the Inspector to elaborate on representations previously made. 5.2 The Council considers that the regulatory stages outlined above may not always allow sufficient participation in the production of planning policy documents to fully examine the issues and potential options available. Therefore the Council would wish to retain the option of inserting an additional stage into the process after Regulation 18. This would allow for a period of public consultation to get feedback on the issues identified and likely preferred options for addressing these issues. 5.3 The following table gives an indication of the main stages in the production of a Local Plan document and outlines where involvement opportunities are available. 18

25 Regulatory Stage No regulation Regulation 18 No regulation Regulation 19 Regulation 22 Main Local Plan Production Stages What is involved Evidence Gathering Notification of appropriate bodies and persons that a Local Plan document is being prepared and seek their views on what the document should contain. Consultation on draft document examining Issues and potential options. Consultation on the Local Plan document that the Council intends to submit to the Secretary of State. Regulations require a minimum consultation period of 6 weeks. Submission of the proposed Local Plan document to the Secretary of State along with the Sustainability Appraisal, supporting evidence documents and copies of all representations to the Local Plan. Who is involved Selected stakeholders, groups, or organisations Specific Consultation Bodies. Appropriate General Consultation Bodies. Selected local residents and businesses. Specific Consultation Bodies Appropriate General Consultation Bodies Local residents and businesses. Specific Consultation Bodies General Consultation Bodies Local residents and businesses. This is not a consultation stage. Notification of the submission of the Local Plan to the Secretary of State is given to Specific and General Consultation Bodies previously consulted in the Local Plan s production and others who request to be notified. Possible Involvement Methods (see paragraph 4.4) 8, 9, 12. 3,8. 1, 2, 3, 4, 5, 8, 12. 1, 2, 3,4, 5, 7, 8, 9, 10, 11, 12. 1,2,3,8. Regulation 24 Regulation 26 Public examination of the Local Plan by an independently appointed Inspector. The Inspector will consider the issues raised by representations and determine whether the plan is legally compliant and meets the tests of soundness namely: Positively Prepared Justified Effective Consistent with National Policy Adoption of the Local Plan by the Council All those who made representations Others who may wish to attend the examination sessions All those who made representations or who requested to be notified of the adoption. 1,2,3,8. 1,2,3,8. 19

26 6 When consultation takes place in the production of Supplementary Planning Documents 6.1 Supplementary Planning Documents are intended to expand upon and/or provide further details in respect of policies in Local Plan documents. They are not subject to an Independent Examination but are produced with community involvement and are subject to a period of formal public participation. 6.2 Regulations do not now give specific requirements on who should be informed during the production process. This allows for more effective targeted consultation to be carried out taking the subject matter of the SPD into account. However representations are welcome from anyone who wishes to comment on a particular SPD. 6.3 The following table gives an indication of who is involved at each stage and possible methods of involvement that may be employed. Regulatory Stage No Regulation Regulation 12 Regulation 14 Main Supplementary Planning Document Production Stages Possible Involvement What is involved Who is involved Methods (see paragraph 4.4) Evidence gathering and Selected stakeholders, groups, 8, 9, 12. preparation of draft SPD. and organisations. The nature and extent of early community involvement on an individual SPD will be tailored to the subject area or the geographical area covered by the document. Formal public participation on SPD for a period of not less than 4 weeks. Adoption Any individual, group or organisation can comment on any SPD proposed at this stage. Consideration will be given to the subject or geographical area covered by the document when deciding where to direct specific methods such as contact by or letter. Persons who request notification of the adoption of the SPD are informed and the adopted document made available. 1,3,4,8, 12. 1,3,8. 20

27 7 Involvement in Planning Applications 7.1 Required standards of publicity and consultation for planning applications, listed building and conservation area consent are set out in government legislation. We have met and exceeded these standards for many years and will continue to do so in the future. The degree to which the required standards are exceeded in the future will be largely dependent on available resources. The following paragraphs show how we currently meet and exceed our obligations and are followed by details of how we intend that these standards will continue to be exceeded in the future. How we publicise planning applications 7.2 We publicise planning applications in accordance with statutory requirements (currently the Town and Country Planning (Development Management Procedure) (England) Order 2010; Circular 15/92: Publicity for Planning Applications; and the Planning (Listed Buildings and Conservation Areas) Act Planning legislation and Government guidance can be updated. If the advice and requirements on publicity in these Acts and Circulars is updated or superseded then we will update our practices accordingly. 7.3 It is our practice for all types of development to post a site notice in a prominent position outside the site of the proposed development and sometimes in the road at the rear so that all properties that adjoin the site are notified. At large sites, or on sites where local residents in more than one road may be affected, more than one notice will normally be posted. The notice will briefly describe the proposal, and will specify a date by which representations should be made (usually a minimum of 21 days from the posting of the notice). All representations should be made in writing (to Planning and Transport, Town Hall Annexe, St Stephens Road, Bournemouth BH2 6EA) or by to planning@bournemouth.gov.uk, quoting the site of the proposed development and the application number and include the name and address of the person or organisation making comment. There is also an on-line comment form facility on the website for people to use to make representations on planning applications. 7.4 Current applications are available to view on the Council s website ( where their progress can be tracked..application details may also be viewed via computer terminals at the Council s Customer Services Centre, St Stephen s Road, Bournemouth, BH2 6EB between 9.00am and 4.30pm Monday to Thursday and 9.00am to 4.00pm Friday. Appointments are not necessary to view plans electronically using the computer terminals. However customers who wish to view a paper copy can only do so by contacting the Customer Services Centre (telephone or planning@bournemouth.gov.uk) to make an appointment. Pre-submission discussion 7.5 Applicants are encouraged to engage in pre-application negotiation with us. This has a number of potential benefits including that a proposal may be modified to make it potentially more acceptable when it is formally submitted. It should make the application process speedier and more certain and help to reduce instances of submission of wholly unacceptable proposals. A note explaining this process and the charges that are made to different kinds of pre-application advice is included on the Council s website. 21

28 7.6 A Validation Requirements and Guidance Planning Advice Note setting out the information required to aid the submission of complete applications is available via the Council s website. Amended Plans 7.6 There are instances where an application is submitted without pre-application advice or where further modification is necessary to make the proposal acceptable. If sufficient time is available in the application process an amended plan may be submitted. 7.7 Where the details of an application are amended, and it is felt that the changes are substantial in terms of their adverse effect upon neighbours a new site notice will be posted pointing this out. The publicity period may be shorter than that given in the application originally. Amended plans are normally notified on a site notice of a different colour to the original. There is no legal requirement to undertake this additional publicity and so in this area we have exceeded and will continue to exceed the statutory requirement. Weekly List 7.8 We circulate a weekly list of planning applications to local press and media as well as local groups and societies who have requested to be included on the circulation list. The weekly list of planning applications is made available on the Council web site ( Additional Advice 7.9 The Council has produced a series of How to leaflets on various aspects of planning in Bournemouth. Two of these, How to Comment on a Planning Application and How to Apply to Speak at a Planning Board Meeting, give helpful information and advice on how to get involved in the consideration of particular proposals. Both leaflets are available free of charge from us or may be downloaded free from the website. Two further advice leaflets on the Freedom of Information Act and the Data Protection Act are also available from the Council Offices. How Decisions on Planning Applications are made 7.10 The Planning Board, which comprises elected Councillors, has a duty to decide planning and other development related applications. However it makes relatively few decisions on applications as most are delegated to the Head of Planning, Transport and Regulation. Currently around 90% of applications are determined under the scheme of delegation. The criteria for deciding which applications should be considered by Planning Board are available on the Council website and printed copies can be made available on request All comments made on planning applications are taken into account and are summarised in the delegated report or in the report presented to the Planning Board. If a particular application is to be considered by the Planning Board then interested parties can request to speak at the meeting which is known as a deputation. Advice on how to request a deputation is outlined in a leaflet, which is referred to in paragraph 7.9, and on the Council website. 22

29 7.12 The Council website contains details of the dates of the Planning Board meetings, as well as the agendas of items taken to the meetings and the minutes of the meetings. How to Find Decisions on Planning Applications 7.13 Where interested parties have made representations by letter, we will acknowledge the receipt of the letter, and inform the parties in writing of the decision on the application, provided the person making the representation encloses two stamped addressed envelopes with their letter. Alternatively the interested party may look on the Council s website to find and view the Decision Notice or telephone the Customer Services Centre ( ) to find out the decision on a particular application Details of the decisions made on applications both by the Planning Board and under powers delegated by the Planning Board to Officers are available on the Council s website. The website also includes information on past applications back to Planning applications submitted or decided after 1st August 2005 can be viewed online. Planning applications can be searched either by street name, postcode, date submitted, or application number. The search facility enables application forms, drawings, and decision notices to be viewed and downloaded subject to copyright conditions. What Happens when an Appeal is Received 7.15 Applicants have the right to appeal to the Secretary of State if an application is refused, if the applicant considers a condition attached to an approval is unreasonable, or if an application is not decided within the statutory period allowed for consideration by the Local Planning Authority. There is also a right to appeal against the serving of an enforcement notice or if we do not issue a Lawful Development Certificate for a proposed or existing use When an appeal is received all persons/organisations who have made written representations in respect of the planning application are informed that an appeal has been lodged. Copies of the representation sent to us when the planning application was being considered are passed to the Planning Inspectorate and so it is not necessary for interested parties to re-state their views unless there is something they wish to add to their representation. In addition the occupants of neighbouring properties in the immediate locality of the appeal site will be informed in writing of the appeal whether or not they made representations in respect of the case at appeal. The Case Officer will make a judgement on how wide this additional notification should be Further information on appeals and the Planning Inspectorate can be found at: 23

30 7.18 The following chart gives a general indication of the planning application process. Pre-Submission Advice - Applicant and Planning Officer KEY Optional Applicant Community Consultation/Involvement Application Submitted & Registered Publicity by the Council Amended Scheme Deputation to Planning Case Officer Assessment and Recommendation Planning Board Decision Decision Delegated to Head of Planning Application Approved Application Refused Application Approved Appeal Made Against Refusal Appeal Publicity by Council Appeal Considered by Independent Inspector Appeal Allowed Appeal Dismissed * Mandatory for some major infrastructure applications 24

31 Prior Approval Applications 7.19 This type of application is received for an increasing range of proposals specified in planning regulations. These proposals are in principle permitted development but the developer must submit an application to the Council for consideration whether the prior approval of the Council is required for the development. The types of development subject to the prior approval process include telecommunication equipment, agricultural buildings, some changes of use and extensions to residential properties Once an application is received the Council has a specific period of time in which to grant or refuse prior approval. This period of time is specified in planning regulations for each type of development. If the relevant period of time expires before a decision is made by the Council then the application is approved Local notification of most types of prior approval development proposals are made by way of notices posted at the site. For residential extensions proposed under this process neighbouring properties are notified by way of letter. Improving Consultation on Planning Applications 7.22 For a number of years the Council has exceeded statutory requirements for consulting the community on planning applications. It is our aim to continue to improve the quality of consultation balanced against the limited resources available to us The previous SCI encouraged applicants and developers to undertake preapplication community involvement on their proposals. Currently this type of consultation is only mandatory for some major infrastructure applications. However we consider this to be good practice for all applications and will, therefore, continue to encourage applicants and developers to undertake early consultation although we cannot require this is done unless national planning regulations change One method we intend to examine for improving community consultation and the quality of development is the use of Planning Performance Agreements (PPAs) mainly for larger proposals. PPAs are a framework for local authorities and applicants to agree how development proposals should be managed through the planning process. They are a useful tool of good development management and are appropriate for those who require ongoing advice on complex proposals There are a number of benefits in using PPAs which include: Reduced risk and increased certainty Early identification of issues Improved partnership working 7.26 Planning performance agreements can provide an ideal opportunity for identifying the preferred approach to community engagement, including the identification of the communities to involve, the process of engagement and the best approach to incorporating their views We also intend to investigate whether the information contained on planning application site notices can be improved. An example of a potential improvement could be the inclusion of QR matrix barcodes on site notices to provide a convenient way to access information on the individual development proposals through smart 25

32 phones and the internet. However any potential changes we consider would need to be cost effective and make a tangible improvement to community engagement In addition It is our intention to improve and consolidate information on ancient woodland and aged or veteran trees. Once completed this will give a more comprehensive picture of these natural features and allow for appropriate additional consultation to be undertaken, for example, with the Woodland Trust. 26

33 Appendix A - Specific Consultation Bodies Coal Authority Environment Agency Historic Buildings and Monuments Commission for England (known as English Heritage) Marine Management Organisation Natural England Network Rail Highways Agency A relevant authority in or adjoining the LPA (including Parish Councils and Police Authorities) Electronic communications code systems operators Primary Care Trust established under section 18 of the National Health Service Act 2006 or continued in existence by virtue of that section; Electricity providers Gas providers Sewerage undertakers Water undertakers Homes and Communities Agency 28

34 Appendix B - Glossary of Terms Area Action Plan Authority Monitoring Report Core Strategy Local Development Scheme National Planning Policy Framework AAPs focus upon implementation in areas of change pressure and regeneration. They provide an important mechanism for ensuring development of an appropriate, scale, mix and quality for these areas. Form part of the Bournemouth Local Plan. An annual report which includes an assessment of the implementation and effectiveness of the programme of Local Plan documents detailed in the Local Development Scheme. A planning document setting out the vision, spatial strategy and core policies for the development of Bournemouth. Forms part of the Bournemouth Local Plan. Document setting out the programme for preparing the Local Plan documents over a rolling three year period. The NPPF sets out the government s planning policies and how these are expected to be applied across the country. National Planning Policy Guidance Proposals Map Web-based resource giving national planning practice guidance. A map illustrating all the policies and proposals in the statutory Local Plan documents. Statement of Community Involvement Document setting out how the Council intends to achieve continuous community involvement in the preparation of the Local Plan documents. Strategic Environmental Assessment An assessment of the environmental impacts of the policies and proposals contained within the Local Development Framework. Required under the European Directive 2001/42/EC. Supplementary Planning Document Sustainability Appraisal Non-statutory documents intended to expand upon the policies and proposals in Local Plan documents. Not subject to independent examination. An assessment of the social, economic, and environmental impacts of the policies and proposals contained within Local Plan documents. 29

35 30

36 Appendix 2 Statement of Community Involvement Consultation Response Table Respondent Comment Local Authority response Proposed Amendment to document The Woodland Trust Paragraph 3.3 The Woodland Trust would like to be added to the General Consultation bodies listed. Paragraph 7.22 Improving Consultation on planning applications In order to improve consultation on planning applications, we would like the SCI to commit to consulting the Woodland Trust on any planning application that affects the irreplaceable habitat of ancient woodland. The National Policy Planning Framework clearly states: planning permission should be refused for development resulting in the loss or deterioration of irreplaceable habitats, including ancient woodland and the loss of aged or veteran trees found outside ancient woodland " (DCLG, March 2012, para 118). The Woodland Trust therefore needs to be informed of these development cases. Other SCIs have incorporated this provision to consult the Woodland Trust on ancient woodland cases, such as Swindon Borough Council SCI (March 2013) and South Staffordshire District Council (Oct 2013). Paragraph 3.3 The Woodland Trust is already included as a consultee on our database as a General Consultation Body. Paragraph 7.22 The Council has in-house arboricultural and landscape expertise within the Planning, Transportation and Regulation Services Directorate. The team are involved in the assessment of planning proposals involving or affecting ancient woodland and aged or veteran trees within Bournemouth. However we are happy to receive additional, timely comments from the Woodland Trust on proposals affecting these trees and woodland. Work is currently underway (which will take some time to complete) to produce a map layer which will seek to comprehensively identify ancient woodland and aged or veteran trees within the borough. The completion of the mapping will enable the Woodland Trust to be consulted as part of the registration process of relevant applications. Add additional paragraph to Improving Consultation on Planning Applications section to say 7.28 In addition It is our intention to improve and consolidate information on ancient woodland and aged or veteran trees. Once completed this will give a more comprehensive picture of these natural features and allow for appropriate additional consultation to be undertaken, for example, with the Woodland Trust 31

37 Cabinet 7 Report Subject Core Service Transformation Phase 2 Adult Social Care Local Authority Trading Company (LATC) Meeting date 17 December 2014 Cabinet Portfolio Corporate Lead Cllr Blair Crawford, Portfolio Holder Adult Social Care Jane Portman, Executive Director, Adults and Children Service Director Status Classification Key Decision Impacts on Key Policy Framework Report author Executive summary Andy Sharp, Service Director, Adult Social Care Public For decision Yes No Andy Sharp, Service Director Adult Social Care andy.sharp@bournemouth.gov.uk In April 2014 Cabinet considered the findings of Core Service Transformation Phase 2 for Adult Social Care. As part of this report, Cabinet approved in principle the move to delivery of directly provided services through a Local Authority Trading Company (LATC). An LATC is a company limited by shares and 100% owned by a Council. It is registered with Companies House and has to follow all statutory obligations of a limited company. Cabinet agreed to consider two potential models of LATC before reaching a final decision on the exact construction of the company. The two models considered following April Cabinet related to the creation of a Bournemouth Borough Council LATC dealing with services currently provided by Adult Social Care by our own Council and a Pan Dorset LATC encompassing services provided by Bournemouth, Poole and Dorset County. We have now completed Full Business Cases (FBCs) for both models of company and have conducted an evaluation of the two models. This report sets out the approach undertaken to evaluate 1

38 Recommendations Reasons for recommendations the proposed models of LATC delivery and the recommendation of the evaluation panel for approval by Cabinet. 1. Cabinet approve the Full Business Case for the Pan Dorset model of LATC for delivery of directly provided Adult Social Care Services. 2. Cabinet delegate authority to the Portfolio Holder for Adult Social Care in consultation with the Executive Director Adults and children s Services to make minor amendments to the business case following further discussions with Dorset County Council and Borough of Poole. The recommendation is given following a full and comprehensive assessment of the two models of delivery, which have been considered in line with the requirements of Cabinet as set out at their meeting in April The recommended model of delivery across the Pan Dorset area provides an exciting opportunity to enhance our service offer and gives the best possible solution for the Council in terms of maintaining service quality, ensuring value for money through efficiency and potential market growth for Adult Social Care services in Bournemouth. Background detail 1. In April 2014 Cabinet considered the findings of Core Service Transformation Phase 2 for Adult Social Care. As part of this report consideration was given to the future of our directly provided in-house social care services in the form of an Options Appraisal into the potential future delivery models. 2. The key drivers in commissioning the appraisal were: Unprecedented financial and demographic challenges on top of its existing service challenges Constraints from being able to be as flexible, adaptable and efficient as their independent sector counterparts Limitations on Council services which are unable to trade and generate income above cost recovery Ongoing savings requirements which impact on the sustainability of current in-house provision The impact of Self Directed Support (SDS) needing to be managed positively to allow customers the ability to access council run services through Direct Payments, which is not legal if the services are run as part of the council 2

39 3. The following four options were appraised as part of the Cabinet report in April 2014: Outsourcing of provision to the independent sector Continuing with current in-house provision Creating a new start-up Community Interest Company (Social Enterprise) Create a Local Authority Trading Company (LATC) 4. Each option was assessed against evaluation criteria which took account of four key issues: Quality Acceptability to Stakeholders Governance and Flexibility Cost 5. Cabinet approved in principle the move to delivery of directly provided services through a Local Authority Trading Company (LATC). An LATC is a company limited by shares and 100% owned by a Council. It is registered with Companies House and has to follow all statutory obligations of a limited company. An LATC will be Teckal compliant and therefore have teckal exemption. This is a piece of European Union case law allowing Councils to transfer services into externally managed entities without having to follow competitive tendering rules and procedures. 6. To qualify for Teckal exemption, the Company has to be under the control and influence of an Authority, this is achieved by the authority owning 100% of the shares in the company and having a strong governance structure to direct its operation. 7. The Company must also deliver services that were provided while in the direct control of the Council and must be in the same economic arena, in this case the provision of social care. Currently the Company must have at least 90% of its income derived from the provision of services to the Council, however this figure is due to be reduced by EU legislation to 80% at the time of externalisation. 8. Cabinet agreed to consider two potential models of LATC before reaching a final decision on the exact construction of the company. The two models to be considered related to the creation of a Bournemouth Borough Council LATC dealing with services currently provided by Adult Social Care by our own Council and a Pan Dorset LATC encompassing services provided by Bournemouth, Poole and Dorset County. 3

40 9. Within the implementation of the outcomes from CST Cabinet agreed a range of activities to prepare our services for entry into an LATC, be that a Bournemouth only or a Pan Dorset arrangement. To facilitate this we have already reshaped our day opportunities services to focus upon complex needs in relation to Learning Disability and Dementia, whilst moving towards a throughput move on model for other client groups. The throughput model takes account of the need for building based services for a reducing cohort of older people and a growing need for community based alternatives supported by a building hub to enable customers to access mainstream services. As a result of this reshaping we have rationalised our building bases of operation and reduced staffing structures whilst maintaining and enhancing services to customers. 10. The Provider Services that we are proposing to transfer into the LATC are therefore: Accommodation Services this includes 4 residential settings and 2 support teams namely April Court and Wallfield Residential Homes for people with Learning Disabilities; Leven House a residential home for people with mental health and addictions, our Broadwaters Rehabilitation Centre; Community Support Team and Shared Lives. Day Opportunities this includes 4 day centres across the borough for older people and working age adults with disabilities; Choices a service which works with customers in a community based setting as an alternative to building based day services and the Kitchen and Allotment Projects which enable customers to access paid employment in the longer term. Mental Health Services this encompasses First Point, a one stop shop based in Winton specialising in Health and Well-Being services which range from self referral gateway counselling, computer groups to more specific mental health support groups and First Point Plus, based at the Malvern Centre, a service which aims to develop from the successes and identified need of First Point by providing a more specific range of additional services from independent, charity, community interest and local business. We will combine delivery of Day Opportunities and the provision of Support Time and Recovery (STaR) services, this will increase throughput and drive more integrated ways of working within the community. The Bournemouth STaR model works well and is highly regarded by neighbouring authorities. The service is delivering real outcomes for people and reduces the reliance on services. Employment Opportunities the support offered to customers with disabilities through the Community Employment Team. 4

41 11. The total value of the services to transfer to the LATC from a Bournemouth perspective equates to 8.7M with a staffing compliment of 262 FTE. The staffing transfer arrangements for the model provide for the maintenance of existing terms and conditions for staff although the LATC will retain the right to employ new staff on terms, which are appropriate for the market. A Pan Dorset LATC will be significantly larger than the Bournemouth only model and would have a financial value of approximately 37.5M and a staffing contingent of approximately 1,400 staff. 12. The recommendation agreed by Cabinet in April 2014 required the production of Full Business Cases for the two potential models of LATC, Bournemouth only and Pan Dorset. An external company with experience in the field of LATC development was commissioned to complete this work and the outcomes have now been evaluated. The purpose of the evaluation has been to assess the two options to identify the model that should be recommended to Cabinet for approval. The evaluation for the two Business Cases has been conducted utilising an assessment tool to score and rank the two models in relation to the key priorities of: Strategic Fit Service Delivery Financial Position Implementation Consultation 13. Further consultation with partners, staff and customers will be required to support the implementation of the LATC. However as part of the development of the proposals contained within this report engagement and consultation has already take place to help shape the direction. In addition to this colleagues at Dorset County Council and the Borough of Poole will continue to consult with their customers and affected staff. 14. From a customer perspective we have developed an Assembly of customers, carers and interested members of the public to act as a reference group to support change and service development. An engagement event for the assembly which was attended by some 65 people provided an opportunity for feedback on the principles of our revised vision and direction for adult social care including the LATC. 15. Members have been engaged through the Overview & Scrutiny Task and finish arrangements with a series of workshops held during the development of the initial CST report in April. 5

42 In addition the Portfolio Holder and the Deputy Leader have led discussions following the development of the Full Business Cases for both potential models of delivery as part of the evaluation process leading to the recommendation of the preferred option to Cabinet within this report. Options 16. We have considered two potential models of delivery for the LATC, these being a Bournemouth Borough Council arms length organisation and a Pan Dorset arrangement with the Borough of Poole and Dorset County Council. The following provides an overview of the relative risks and benefits of the preferred option compared to the Bournemouth only model: Pan Dorset LATC Benefits Ability to trade and generate income - The LATC is able to pursue new business opportunity and income streams beyond the baseline services, which contributes to its sustainability Service Quality - The LATC builds on existing service quality and continuously improves the service experience to customers Customer - The LATC is able to deliver services to more people in need of social care support, including customers in receipt of a direct payment, customers who are private funders and informal carers Workforce Quality - The LATC retains and builds on the existing asset of experienced, committed and welltrained staff Organisational Performance - The creation of an LATC results in driving overall organisational performance through greater entrepreneurship Innovation - The LATC stimulates entrepreneurship within the organisation and workforce in terms of service offering to customers and commissioners Risks Governance Bournemouth Members would not be able to exercise total strategic control over the LATC Staff recruitment Service expansion could be hampered by workforce recruitment Set up arrangements Delivery of the joint model presents a greater challenge from a logistical perspective, which could delay implementation Strategic differential Due to differential service structures and priorities it may be challenging to developed a shared strategy Financial and growth The Council is considering further expansion into residential markets the shared LATC would not be required to take this business and profits from their operation would be shared with partners Growth limit In order to maintain teckal compliance the LATC will only be able to trade 20% of its value (circa 7.5M) 6

43 Pan Dorset LATC Benefits Cultural - The LATC as an externalised trading company creates a new culture based on greater autonomy, accountability and quicker decision - making. Reputation The use of this model will be the first in the Country and as such will generate significant national attention Reputation - The LATC is able to become a provider of choice for end users, carers and commissioners and the employer of choice within the recruitment market place Risks The Provider of Last Resort - The Council has a statutory duty to provide care when the assessed needs are critical and substantial. The LATC can help ensure that the Council can meet that obligation by being contracted to provide expert management and service provision when private sector providers fail in the level of quality delivered or leave the market altogether The Care Act - As the implementation of the provisions of the Care Act proceeds, the LATC provides the opportunity to support this Financial The use of the LATC is anticipated to produce an annual surplus for reinvestment into the Council Commissioning the use of the LATC will secure services not currently available in the market and should stimulate market change Geographical restriction the Pan Dorset LATC would have the size and scale to potentially expand into other geographical areas, which would potentially increase profitability Health markets In the Pan Dorset model the area of operation for the company is coterminous with the CCG and this presents an opportunity to bid for health contracts as a direct single entity 7

44 *Text in italics varies from the Bournemouth only LATC model 17. Following consideration of the two proposed models the evaluation panel recommend to Cabinet that we adopt the Pan Dorset arrangement for the delivery of the LATC with the Borough of Poole and Dorset County Council. This model of delivery provides an exciting opportunity to work in partnership linked to the Better Together programme. As a Pan Dorset LATC the organisation will have the size and scale that will allow it to grow its service offer maintaining high quality service delivery and supporting expansion and growth into the self funder market. Risks identified within the assessment as detailed above will be addressed through a comprehensive implementation plan to be developed in the coming weeks and building on the existing risk register as expressed at point In order to ensure that partner local authorities are able to manage the delivery of the services within the LATC there will be an Executive Stakeholder Group (ESG) which will act as the strategic decision making body. The membership of the ESG is Executive Members from the local authorities and the split of membership is linked to the size of the stake in the company for each partner. Based on this the ESG will be constructed as follows: Authority Budget Scale (M) Members (ESG) Dorset CC 25.4 (69.58%) 5 Bournemouth 8.7 (23.84%) 3 Poole 2.4 (6.58%) 2 Total 36.5 (100%) 10 Some of the decisions taken by the ESG will be based on the majority position but there will be a series of reserved items for which a unanimous consensus would be required. These reserved matters would be: Approval of the strategic direction for the LATC Changes to the constitution of the partnership Changes in Terms and Conditions of staff New partners joining the company Sale of shares Other items considered by the ESG will be based upon a majority decision making basis, which due to the voting right split would mean that minority board members would run the risk of not being able to successfully influence the final decision in the way that they would if the services were directly controlled by the Council. 8

45 There is not a list of unreserved items within the business case as these will relate to the wider running of the LATC, but for example as an indication of the areas that would be covered the decisions may address: Approval of the Business Plan Ad hoc Business Cases as an amendment to the Business Plan Reprovision of finance lease equipment Creation of new infrastructure support posts Creation of branding and marketing material for new services 19. In order to further develop the arrangements for the ESG, which will include consideration of the final arrangements for the Chair of the Group (currently identified as a paid independent role for illustrative purposes within the FBC) a workshop of the Elected Members that will represent the three Local Authorities is planned for January This workshop will also consider mechanisms for recruitment to key roles in the LATC and branding for the new organisation. Summary of finance and resourcing implications 20. Within the report to Cabinet in April 2014 an indicative savings figure of 250,000 has been allocated to the delivery of the LATC in the first year of operation. However potential income from trading had not been defined at that time and as a result this figure was indicative of the direction of travel. The information contained within the Full Business Case demonstrates a phased implementation of changes to create income through trading, which provides a financial gain to the partners within the LATC. 21. An area of further consideration relates to the implementation costs for the LATC. These are currently still to be defined following the decisions taken by the three Local Authorities and will also be considered at the ESG workshop to be held in January. From a Bournemouth perspective, the proposed start date of July 2015 for the new organisation does mean that the CST savings profile within the Medium Term Financial Plan (MTFP) have needed to be revised in the short term as the original intention had been to generate a full year effect for 2015/16, which will not be possible. However it is important to note that the anticipated financial benefits beyond year 2 of the LATC increase at a rate, which exceeds those originally assumed in the MTFP. 9

46 22. The share of the profits delivered through the LATC will be based upon the proportion of stake in the business so for Bournemouth the share would be 23.8%. The proposals within the Full Business Case suggest a net financial gain as follows: Total LATC Annual Profit or (Loss) Bournemouth share of Profit or (Loss) Year 1 550, ,091 Year 2 1,316, ,252 Year 3 2,108, ,835 Year 4 3,089, ,395 Year 5 4,038, ,275 Summary of legal implications 23. The legal implications are set out in detail in various sections of the attached Business Case. They have been considered during the development of the Business Case and ongoing legal advice and input will be provided during implementation to ensure all legal requirements are met and implications considered at each stage of the process. The Council has the legal powers to enter into the arrangements proposed in the recommendations of the Report, subject to a requirement for Cabinet to approve a business case. It is able to trade services through the mechanism of a Local Authority Trading Company, and the governance arrangements proposed are in accordance with the requirements of the legislation. 24. Detailed legal advice will be provided to ensure the Council s interests are protected in regard to the contractual arrangements with the proposed Company for the delivery of adult social care services, and in addition will be provided to ensure the governance arrangements proposed take into account the legal requirements relating to the local government legal framework and the Companies Act Summary of human resources implications 25. The FTEs equates to approximately 400 members of staff on either full-time or part-time contracts. The current staff numbers of FTEs will TUPE transfer into the company within the implementation phase of setting up the LATC. All staff will transfer over with the same current terms and conditions, this includes, pay rates, sickness policies and pension rights. New staff will be appointed on terms and conditions as recommended to the ESG by the Management Board of the LATC to reflect market rates and demand. 10

47 26. The LATC will be applying for admitted body status into the Local Government Pension Scheme (LGPS). The company will follow autoenrolment regulations, as applicable to a new company 27. N/A Summary of environmental impact Summary of equalities and diversity impact 28. An Equalities Impact Needs Assessment has been completed in relation to the proposals outlined within the April report in respect of all aspects of Core Service Transformation. In addition a further assessment in relation to the specific implications of the proposals related to the LATC has been undertaken and this is attached as appendix B to this report. As an outcome of the assessment it is clear that the proposals contained within the Full Business are supportive of our requirements in respect of equality and diversity. Summary of risk assessment 29. Having considered the risks associated with this decision the level of risk has been identified as medium following the application of actions to mitigate high risk areas as expressed within the risk register for the project. The risk register is to be owned by the Service Director, Adult Social Care and will be subject to regular review and update. 30. High risk areas associated with the project include: Teckal exemption cannot be achieved/maintained Project delay impacting upon costs and staffing availability Impact upon other Council priorities Background papers Cabinet Report, Adult Social Care Cores Service Transformation Phase 2, April 2014 Appendices Appendix A -Full Business Case Appendix B Equality Impact Needs Assessment 11

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49 Pan Dorset Local Authority Trading Company Business Case [December 2014] Version rd December 2014

50 Table of contents 1 Executive summary.3 2 Introduction Key Assumptions Pan Dorset LATC how will it look Pan Dorset LATC Governance Pan Dorset Five year business plan 38 7 Additional Income Opportunities Benefits of One Pan Dorset LATC Risks of Joint Ownership and their Management Implementation 58 Pan Dorset LATC Business Case Page 2 of 61

51 1 Executive summary 1.1 Introduction and Background This high-level business case is designed to provide an overview and some detail of the: Benefits and advantages of a Pan Dorset PDL (PDL) Recommended governance structure for the three authorities A financial overview of the company s forecast performance including Board and management structures Risks and potential disadvantages Timescales and additional costs of implementation The Pan Dorset PDL (PDL) involves Dorset County Council (DCC), Bournemouth Borough Council (BBC) and Borough of Poole (BoP) transferring nominated in-house provider services into a jointly owned PDL. All three authorities have commissioned and will have received options appraisals and detailed business cases on their respective individual LATCs. These commissioned reports have recommended that the PDL model is the most appropriate vehicle for the future of their services and so the three authorities through the Better Together Programme have commissioned this high level business case to analyse the opportunity of a jointly-owned LATC and to then recommend a way forward. 2.2 Drivers for creating a Pan Dorset LATC There are a number of drivers that are either individual to each authority or common in relation to their geographical and demographic situation. These drivers include: - Better Care Fund and integration - Better Together Programme - Improved service quality for individuals - Maximising available resources e.g. operational workforces and facilities - Scale of savings and efficiencies - Scale of additional income opportunity - Scale of new business opportunity - Go it alone disadvantages (e.g. Competition between individual LATCs). - Developing Seamless service pathways across Dorset 1.2 Benefits of One Pan Dorset LATC This section summarises the benefits, other than financial, that accrue from the PDL. Meeting the Better Together Agenda The leaflet Better Together Integrated health and Social Care (included in the appendices) states the objectives of this initiative for the authorities of Bournemouth, Dorset and Poole are: Improved health and care for residents A more seamless service for people who access health and social care in the Dorset area Pan Dorset LATC Business Case Page 3 of 61

52 Greater efficiencies and better value for money One of the initiatives described in the leaflet is Local Authority Trading Company The Pan Dorset LATC is the best and only opportunity that the three local authorities will have to meet the above objectives and initiatives in a totally coordinated manner. The merging of three sets of social care services into one entity with one set of professional managers under the strategic control of the three authorities is an unprecedented opportunity. The website Dorsetforyou - includes the following aspirations: Our aim is to overcome the existing cultural and financial barriers that can get in the way of delivering coordinated care and support to the people and communities that we serve It is difficult not to agree that the Pan Dorset LATC will go a long way in helping meet those aspirations and so achieve the objectives included in Transformational Challenge Award Once established, the joint LATC will then become an exemplar for other services in the three authorities, encouraging new and joined-up thinking across the different directorates and services. Reputational Benefits There are benefits accruing from the PDL that are not readily measurable and not necessarily immediately visible and they include the following: The very high profile that this venture will have in both the region and nationally. The PDL will be the very first jointly owned LATC in the UK in the field of adult social care. All three authorities will be seen as pioneering and innovative for joining in this project. This will enhance the reputation of each of the authorities and raise the profile of the Dorset partnership in central government and other regions The consequences of not creating the PDL, this may appear a negative approach to adopt, but if the PDL is not taken up, the three authorities involved will still have to decide the future of their services. It is extremely likely that at least one if not two single LATCs would be the result of not establishing the PDL. We would then see two single LATCs competing in the same towns for the same customers and same staff. This situation would potentially lead to one winner and one loser, Income Generation The PDL can be more ambitious in the levels of private income it can generate without breaching the Teckal exemption rules. At the time of externalisation the Pan Dorset LATC will be able to derive 20% of its income away from the three local authorities, for example within the private payer market. Having a combined income from the three local authorities of circa 36.5 million per year means that the PDL can seek to generate 9.13 million per year without breaking the Teckal exemption rules. This is significantly higher than the income potential of individual LATCs, as the table below illustrates. Pan Dorset LATC Business Case Page 4 of 61

53 LATC Local Authority Income p.a. M Maximum Private Income p.a. M Pan Dorset LATC Dorset LATC Bournemouth LATC Poole LATC This high exemption ceiling means that the PDL can look ambitiously at the private market without having to limit its targets due to the Teckal exemption limits. Both Bournemouth and Poole have large potential demand from which they can attract new self-funder income, but as single LATCs Teckal would limit them because their respective Council contract values do not provide sufficient headroom to really penetrate the market. Adding Dorset County Council s contract value of 25m pa into the joint PDL allows an additional 5m of self-funder income to be earned without breaking Teckal rules. Efficiency and economies of scale The PDL will be able to achieve greater efficiencies and economies of scale as a result of the following: Income contributions from three authorities mean that a number of costs associated with the PDL are effectively spread. This includes the costs associated with the Pan Dorset PDL such as the Executive management team and costs of governance. Rationalisation within certain management tiers for example Heads of Service. This is a post implementation restructure based on the amalgamation of job roles that, on transfer into the PDL, were separate to each transferring service. The outcome of this rationalisation does not mean that staff are lost, rather it offers the PDL the opportunity to redesign its management capacity to support new areas of the business for example the management of services for private payers. Consolidation of services within certain geographical areas. Particularly where the three local authority services share a close proximity and service type. For example where day centres within a proximity support the same client group with similar services it is possible to consolidate the service within one day centre and utilise the other day services to provide a different range of service to a different client group. This, therefore, enables the PDL to diversify its product range and support the local authorities in meeting different demands. This may have particular scope with expanding LD day support with transition clients. Service and Financial Critical Mass The term critical mass is used to describe the size that any organisation must reach to be able to withstand the threats and risks faced by a commercial organisation. In our view the PDL will reach that critical mass and some of the benefits accruing from that are: Ability to withstand shortfalls in additional income over time Pan Dorset LATC Business Case Page 5 of 61

54 Sufficient staff numbers for more effective manpower planning General perception of financial security enhanced leading to easier recruitment Market penetration easier with high profile brand and reputation The nature, size and geographical spread of the new PDL will benefit each of the partner services in the following ways: The size of the new PDL will make the additional income targets transferred from the single Bournemouth LATC less risky as there is a greater financial foundation behind the plans. Poole s two day centres will not be working in isolation, and their high quality, complex services can be provided to other non-residents of Poole. Dorset s reablement services and day services in Christchurch will be able to offer services to the elderly in neighbouring high density urban areas of Poole and Bournemouth. Pathways to Care A PDL will be able to offer a single point of access and coordinated support activity across the three local authority areas, supporting the Better Together strategic approach to service delivery 1. All professionals seeking to refer into the PDL will be able to contact one organisation regardless of the geographical boundaries that exist. This is a significant benefit particularly to G.Ps, Acute Hospitals and health providers whose services may cut across different local authorities. Other benefits include: Workforce Recruitment All three local authorities recognise the challenges in recruiting suitable front line care staff. This is the effect of the wider recruitment market and the well-documented specific shortfalls in the number of people attracted to employment within social care services. As a result the ability to recruit and retain staff is of paramount importance to the future delivery of services and the realisation of new opportunities described earlier in this business case. Operating as a PDL offers the opportunity to coordinate recruitment campaigns and allocate resources to attract staff within a much wider pool, than could be achieved by individual PDLs. Moreover the PDL mitigates the real risk associated with separate LATCs competing for the same staff within the same recruitment pool. Overall therefore the PDL offers a much stronger chance of recruiting support staff than would be the case with individual trading companies for each local authority. Market Position As a circa 38 million business with over 1,400 staff and services across, Bournemouth Dorset and Poole, the PDL will enjoy a significant market position 1 Better Together Business Plan ( ) page 18 Table 1 Programme and Project Descriptions Pan Dorset LATC Business Case Page 6 of 61

55 within the independent sector. The scale of this trading entity offers clear opportunity as described in Section 7, to generate significant new income and effectively compete for business. Whilst there are established provider markets in many of the local authority areas, there are very few able to offer a one -stop shop to social care across the whole county of Dorset. This should be seen as an exciting and major opportunity for the PDL. In contrast this potential is severely limited and extremely difficult to achieve with separate LATCs for each authority. Of note also is the market position that the PDL will have on a regional basis. That is, the PDL will also have the real opportunity to penetrate new markets within different neighbouring counties based on its range of more specialised product. The decision to penetrate new markets will be part of the strategic planning process and decision making of the PDL. The ability to plan in this manner, however, really comes from the scale and market significance of a PDL rather than as an individual LATC. 1.3 Assumptions The assumptions adopted and used in the individual business cases for all three authorities have been kept and used in the PDL business case. These assumptions include the following broad subjects: Staff terms and conditions these will not change. All staff will TUPE over on their existing Terms and Conditions (Ts & Cs), including pension rights, holiday entitlements and sick pay policies. New employees in new services will be recruited on appropriate rates as decided by the PDL Procurement and organisation of back office support functions Bournemouth Borough Council s service requirements for their TUPE ed staff and services will be supported by Mouchel as they are now, and Dorset s will continue to be provided by their own in-house corporate services. It has been assumed that Poole s requirements will be provided by Dorset services. There is an assumption that by the end of year 3 the PDL will have reviewed its support service provision. Property arrangements all buildings used and occupied by the services will be leased to the PDL by the individual authorities or their nominated vehicles. No assets of any significant value will be transferred to the PDL Finance Assumptions The financial assumptions detailed in the individual business cases have been adopted in the PDL. As a high level review the financial results are a consolidation of the individual BCs, with revisions for the following areas: o Reduction in costs through geographical efficiencies o Redesign of the executive team o o Reduced executive and governance costs Increase in administration costs due to differing support service provision Commissioning Assumptions no additional commissioning assumptions have been adopted for the PDL. However it is recognised that over time the nature of the PDL will allow the individual commissioning authorities to have a Pan Dorset LATC Business Case Page 7 of 61

56 more joined-up approach to service demand through services being delivered without worrying about artificial boundaries. Integration with the local health sector will become a significant factor in the development of new services in the region. Although this effect has not been included in any of the financial forecasts. 1.4 How will the Pan Dorset LATC look? The new PDL will not be a small organisation, with a turnover of over 38m and over 1,400 staff it will be a major employer in the region and touch many peoples lives through their care provision and employment. Pan Dorset LATC Full Time Equivalent Staff Numbers FTE Nos on Authority Transfer Bournemouth Borough Council Dorset County Council Borough of Poole Total FTEs in Pan Dorset LATC 1, The actual number of staff who will be TUPE ing over is more likely to be over 1,400 as many of the above posts are filled by two, or sometimes three part-time staff. The services that the above establishment provides are broadly analysed below, showing which authority is transferring what services The table includes services that have been in scope for the individual LATC business cases and have now been amalgamated into the PDL. Summary of the scope of services Service Category DCC BBC BoP Day Services Residential care and supported housing Employment, Enterprise and Training Reablement Shared Lives Community Support X The above services occupy over 50 separate buildings and locations across Bournemouth Dorset and Poole. The details of the locations and buildings are held in the individual LATC business cases. Pan Dorset LATC Business Case Page 8 of 61

57 The PDL has an additional income target of 6.9m in year 5, (see section 7 for details) and this high level of non-council income is a result of the three authorities joining together which has increased the Teckal exemption threshold to 9.13m (i.e. 20% of the total Council contract values). The affect of the income can be seen below in the profit and loss forecast for the first 5 years of trading. Pan Dorset LATC Profit and Loss Account for the First Five years Description Year 1 Year 2 Year 3 Year 4 Year 5 Income Dorset CC Contract 25,772,058 25,644,474 25,324,875 25,198,566 25,135,412 Bournemouth BC Contract 9,346,153 9,346,153 9,252,691 9,159,229 9,065,768 Borough of Poole Contract 2,491,242 2,332,747 2,405,280 2,360,061 2,365,432 Other Income 910,476 2,353,887 4,580,389 5,966,011 7,403,511 Total Income 38,519,929 39,677,260 41,563,234 42,683,868 43,970,123 Expenditure Staff Costs 30,636,194 31,472,523 33,295,510 34,490,446 35,821,251 Rent for Properties 1,160,000 1,160,000 1,160,000 1,160,000 1,160,000 Supplies & Services 4,943,174 4,904,561 4,904,561 4,904,561 4,904,561 Total Service Expenditure 36,739,368 37,537,084 39,360,071 40,555,007 41,885,812 Contribution to Group 1,780,561 2,140,176 2,203,163 2,128,861 2,084,311 Exec Man & Board Costs 247, , , , ,075 Audit, Insurance, legal 137, , , , ,500 Marketing, Finance Support 148, , , , ,800 CSS Support Services 600, , , , ,000 Total H.O. Function 1,133,500 1,350,375 1,350,375 1,150,375 1,150,375 Support Svs % of Income 2.94% 3.40% 3.25% 2.70% 2.62% Profit before Int & Depr 647, , , , ,936 Deprec'n 5% pa 11,000 11,000 11,000 11,000 11,000 Net Profit before Tax 636, , , , ,936 Corp Tax rcble/(payable) (3,007) (9,241) (18,553) (27,046) (31,080) Annual Profit or (Loss) 633, , , , ,856 Retained Profits/(Losses) 633,055 1,402,615 2,225,850 3,166,290 4,058,147 Full details of the financial forecasts including balance sheets can be found in section 6. As part of the business case analysis, each Council must be able to value the net financial benefit that any project generates for a Council. This business case is no different and below is the Value for Money comparison that has been performed to illustrate how much benefit the PDL will generate as a whole to the combined Councils. We have then calculated the share for each partner Council, as per the recommended partnership arrangements (see section 5 below), and compared each Council s share of the joint benefit with its individual LATC benefit as calculated in the single LATC business cases. Pan Dorset LATC Business Case Page 9 of 61

58 Description Pan Dorset LATC Value for Money Comparison 5 Years Receipts 5 Years Contract Spend 5 Years Budgets no Change Cost of current In-House Services 181,477,031 Cost of Contracts to 3 Authorities from the LATC 185,200,141 Income to Council from Charges to LATC Re- Corporate Support Services 2,600,000 Fixed Assets Purchased (Desks etc.,) 220,000 Property Rental Income 5,800,000 Dividends available to three authorities 4,058,147 Income and earnings available to 3 authorities (12,678,147) Net Cost of Contract 172,521,994 (172,521,994) Saving on all 5 year Budgets 8,955,038 Share of Net Benefit to each Authority Sgle LATC Joint Share Incr in Benefit Bournemouth Borough Council 828,014 1,154, ,510 Dorset County Council 6,855,129 7,568, ,173 Borough of Poole 232, ,212 Total net benefit 7,683,143 8,955,038 1,271,895 Overall the three contributing Councils enjoy an additional 1.2m of financial benefit by establishing the PDL, which is then shared out in the agreed proportions, which are based on the relative values the current budgets for the services that have been brought into the PDL. See section 5 for more details. The table below gives a summary of how benefits and profits are shared between the three authorities. Analysis of Budget Input to PDL and Members on ESG Authority Gross Members on % of Total Budget ESG m % Dorset County Council % 5 Bournemouth B Council % 3 Borough of Poole % % 10 How will the PDL govern itself internally? Arrangements for PDL Internal Governance It is recommended that the PDL has an Executive Board independent of the Council and made up of the following positions: Independent Chair this could be a local individual with good links to the public sector who understands the world of local authorities and the health sector who would bring a high level of knowledge of the services and the Pan Dorset LATC Business Case Page 10 of 61

59 social care landscape Managing Director the combination of care services experience and successful and substantial commercial experience will be essential. An ability to work in a transformation role will be an essential as part of the MD s role will be to push through the cultural and commercial change that the services need. Finance Director with a strong commercial background and experience of managing a company of 30m+ turnover SMEs would be ideal. Business Development Director with a strong service / commercial background and experience of delivering business growth targets within a company of 30m+ turnover in the social care arena will be essential. This role will be recruited to towards the end of the 1 st year of trading Non-Executive Directors with skills that fill major gaps on the Board, such as legal and marketing, these would be selected from local candidates/applicants The PDL will have a turnover of over 38m in its first year and will touch the lives of thousands of residents in the Dorset area. This organisation will be a very high profile company locally and nationally, as the first jointly owned social care LATC in the UK. The selection of the executive team will be crucial in the success of the PDL, and the individuals with the skill sets and experience needed may only be available from a national recruitment process. We recommend that there are no Members from any Council on the Executive Board. If there are members on the Board, in our view this distorts the commissioner/provider relationship with the PDL and creates potential for significant conflicts of interests for any Members on the PDL Board. It also creates legal responsibilities that Member and Officers may not want to take on. This is further complicated by having three authorities from which the members could be selected, raising questions over representation etc. for each authority. The PDL Executive Board would meet officially once every month and would deal with all aspects of the management of the PDL. The table below outlines the total cost of employing the executive posts that we have outlined above. The full cost of employment includes: Salary Pension contributions at the current LGPS level 13% National Insurance contributions of the PDL 11% Cost of support costs such as mobile phone, travelling expenses and some admin support 5% The above additions apply to the 3 executive director posts. The base salaries that we have recommended are: Managing Director of 40m company circa 100,000 Finance Director of 40m newly established company circa 80,000 Business Development Director of new market entrant - circa 75,000 We have scheduled the Business Development Director and manager and the marketing team to be recruited at the beginning of the second year. The Independent Chair costs have been forecast at 500 per month plus 100 expenses, the Non-Executive Directors are paid expenses only at 100 per month. They would be expected to attend one formal Company Board meeting per month. Pan Dorset LATC Business Case Page 11 of 61

60 These terms are similar to other roles that we have helped develop in earlier LATCs. The recruitment of these posts will be through the Executive Shareholder Group and the costs will be split between the three authorities. Pan Dorset LATC Board, Executive and External Service Costs Summary Posts Nos Additional Costs Board Chair Person New 1 7,200 Managing Director New 1 130,200 Finance & Commercial Director New 1 105,000 Business Development Director New 1 91,875 Non Executive Directors New 4 4,800 Total Board Costs 339,075 Management Finance Manager New 3 148,800 Marketing Team New 2 75,000 Business Development Mgr New 1 50, ,800 External Services purchased Insurance Premiums New 70,000 Bank Charges New 7,500 External Audit New 40,000 Legal Advice New 20, ,500 Total HO and Business Support function ,375 The funding of all the executive posts will be in the same proportions as the profit share, whereas the costs of the additional management resource 273k and external purchase 137.5k will be financed out of efficiency savings and additional income contributions. The share of the costs of the executive team are shown below: Pan Dorset PDL Share of Executive Costs Authority % Share Share of Cost Bournemouth Borough Council 23.90% 81,039 Dorset County Council 69.78% 236,607 Borough of Poole 6.32% 21,431 Total FTEs in Pan Dorset LATC % 339,075 The PDL will be a company limited by shares and 100% owned by 3 Councils. It will Pan Dorset LATC Business Case Page 12 of 61

61 be registered with Companies House and has to follow all statutory obligations of a limited company and will have the following key characteristics: Teckal Compliance It will be Teckal compliant and therefore have teckal exemption. This is a piece of European Union case law allowing Councils to transfer services into externally managed entities without having to follow competitive tendering rules and procedures. Able to trade The PDL will be able to trade in the open market and charge for those services that currently, as an in-house provider, it cannot do. This ability will allow the PDL to market and sell its services to customers including SDS Direct payment holders, and private payers. The PDL will also be able to sell services to residents of other authorities and other public bodies including the NHS and CCGs Independent of the Councils (Operationally) Whilst the councils will have 100% ownership, the PDL will have an Executive Board as described in detail in section 4.3. This Board will have a legal responsibility to act in the best interest of the Company, but will be guided strategically by Pan Dorset Executive Shareholder Group as described in Section 5. The Executive Board and management team will follow its own internal governance processes rather than having to follow Council-wide processes and procedures. This will speed up decision-making processes, allowing the PDL to react quickly to market changes and service user demands Rebate Surpluses and benefits back to the council As 100% shareholder, the Councils have total control over the treatment and destination of all surpluses generated by the PDL. This could mean deciding to invest in additional new PDL services, or rebating the surpluses back to each authority for the delivery of existing Council services. The decision-making process and the rules governing the distribution and sharing of surpluses are detailed in section 5. A contractual / commercial relationship for the provision of care services In order to protect the Councils current high-level of quality in service delivery in all areas, there will be supply contracts with the PDL for all the social care services the company will provide. These contracts will be specifically drafted for each authority and will have negotiated quality requirements and Key performance Indicators (KPIs) that will need to be met on a monthly basis. Use of current corporate services This includes services such as ICT, HR and Financial Transactions processing. The PDL will need to maintain the current support services that the individual directorates currently enjoy, to ensure that services are provided as they are now. There will need to be put in place a service contract between the current support service providers - Mouchel for BBC and Dorset CC s own corporate services and the PDL. The provision of support to the Poole services could be delivered by either Mouchel or Dorset CC corporate services. 1.5 How will the Pan Dorset LATC be governed? Effective governance is an essential component in creating the PDL in order to ensure the requirements of the Teckal Exemption are satisfied, for example the need for all three councils to demonstrate that they exert control and influence over the PDL. Pan Dorset LATC Business Case Page 13 of 61

62 There is also a requirement to achieve a balance between the Councils strategic control and influence whilst still enabling the Directors of the PDL to have operational responsibility for delivering their strategic objectives. If this balance is broken, the outcome is either a company that is so hide-bound by council decision-making that it becomes a shadow directorate or a company that is uncontrolled and therefore failing to meet Teckal exemption requirements, and so open to challenge and potential closure. The structure recommended to meet the above objectives is described below: The PDL will report quarterly to the Executive Shareholder Group (ESG) whose role will be to exert the control and influence described as necessary in the above paragraph. This role of influence and control will be fulfilled in the quarterly meetings by: Reviewing the PDL s performance in quarterly held meetings where the executive of the PDL will report on: o o o Service and Quality performance matched against contractually agreed service levels, using Key Performance Indicators (KPIs) as a summary guide Financial results against signed-off business plans Review of future service developments and opportunities Reviewing and ratifying the annual five-year business plan to be presented by the executive team every November/December in line with authority budget setting timetables Receiving and assessing any additional ad-hoc requests The ESG would hold 10 members, plus 2 advisors from each authority (typically the Director of Adult social care and one finance representative), making a total of 16 possible attendees. The Chair would be selected from one of the members and that position would have the casting vote in a tied vote. The chairmanship would rotate between the authorities on an annual basis and the hosting of the meetings and any admin support would also rotate annually or bi-annually. The table below details the service budgets committed by each authority and the resulting membership to the ESG Analysis of Budget Input to PDL and Members on ESG Authority Gross Members on % of Total Budget ESG m % Dorset County Council % 5 Bournemouth B Council % 3 Borough of Poole % % 10 This structure means that for majority decisions there is an opportunity for a wellargued decision to win the vote with the Chair s casting vote. It is envisaged that the future decisions on the PDL business plans and results will be made on sound business lines and not on history. Pan Dorset LATC Business Case Page 14 of 61

63 The above majority voting structure will apply to the majority of decisions to be made by the ESG; however, there are certain subjects and decisions that are termed reserved matters that protect minority partners in the PDL. Reserved matters are those subjects where a unanimous decision is needed if a vote is required. A unanimous vote means that one member of the ESG can effectively prevent a decision from going through, even though 9 out of 10 members have voted yes. Reserved matters are typically subjects that are fundamental to the partners and the constitution of the joint PDL. The following list is a preliminary list that will be developed during implementation: Changes in the constitution of the partnership Changes in Terms and Conditions of staff New Partners joining the PDL Sale of Shares Strategic Direction of the Services and Company It is also recognised that these ESG meetings will be properly constituted and managed in a similar way to other Council bodies, so there will be administrative rules and protocols to follow. A Shareholders Agreement would also be put in place to restrict and control what shareholders and Directors can do on behalf of the PDL. As there are three shareholders, the aims of this agreement are: To manage and govern the relationships between the shareholders, including decision-making and voting rights To restrict the abilities and authorities of the PDL Directors, so that the Councils and Members are satisfied that the assets and employees of the Company are adequately protected The relationships and voting powers of the shareholder representatives have been recommended in detail in section 5.2. This Shareholders Agreement is also necessary to define and regulate voting rights because it has been recommended that the voting rights will not be directly reflected in the shareholdings of each Council. It is recommended that all three councils have the same nominal number of shares in the PDL. This is because it is much easier and simpler to amend the Shareholders Agreement for a change in profit share and voting rights than it is to change the number of shares owned by each council to reflect the new voting rights. The Shareholders Agreement will also deal with the unlikely possibility of the PDL being sold for a capital sum to a private provider. For the restricting of Directors actions and powers we recommend the following limited authorities and restrictions are placed on executive Directors: Pan Dorset LATC Business Case Page 15 of 61

64 Directors will be authorised to act and deliver the outcomes as defined by the latest Business Plan for the PDL that has been ratified and agreed by the ESG Directors cannot give themselves any form of payment or benefit outside that agreed in the ratified Business Plans Directors cannot commit the Company to any form of loan agreement without express agreement from the ESG. Directors cannot remove any other directors without the agreement of the ESG Directors cannot pay themselves a bonus or any form of pay increase The ESG is a vital part of the PDL plan as it ensures that the three partner Councils do not lose their control of the performance and direction of the Company that they have jointly created. 1.6 Risks of Joint Ownership and their Management There are inevitably risks associated with a project of this size that spans across three authorities and 50+ locations. The key issue is identifying possible risks that are insurmountable or commonly known as deal breakers. Senior Officers and experienced consultants in the field of LATC implementation have a view that the only deal breakers could be in the constitution decision-making of the PDL. This would be caused by an inability to agree on terms. Managing risks in Implementation The single biggest risk for the implementation stage sits around any technical changes to the ICT and network communications that would be needed to allow the PDL to function efficiently. By their nature these costs are difficult to identify and cost until the project is under way. If there are technical issues that can be solved, but only at a very high cost, the pragmatic solution is to look to the PDL to find work-arounds that mitigate the issue. Managing risks the PDL post implementation. Other potential disadvantages Each authority will lose immediate and direct control of its services in the PDL as opposed to controlling its own single LATC. By its nature the LATC model means that Councils lose management control of their services anyway, but that is seen as one of the benefits. Unfair profit sharing is a possibility if the agreed ratio calculation becomes inappropriate. The remedy would be to revise the ratio calculation, and that would be a reserved matter and so need a unanimous vote on the ESG. Double running of support services is a potential danger to the smooth and efficient running of the PDL. This situation is unavoidable for the short term, so it could be an issue that will cost all three authorities through a lack of efficiency savings and additional administration costs. These costs will not last forever, as these support services will be integrated into one provider after 3 years. The immediate objective of this will be increased process efficiencies and reduced costs of administration. Legal challenges from the market may be more likely as the PDL will be very high profile within the region and will significant market influence. Pan Dorset LATC Business Case Page 16 of 61

65 1.7 Conclusion The conclusion of this Business Case is that the PDL is a unique opportunity for the three authorities to partner up in a jointly owned company that will benefit the finances and services of all three authorities through synergy and cooperation. The PDL will be much greater than the sum of its parts and this opportunity will never present itself again. 1.8 Next Steps Implementation High level timeline and milestones Based on the respective Councils approving the business case in December 2014 there will be three key go live milestones. These are as follows: 1. The PDL will go live on the 1 st July 2015 and receive the transfer of DCC provider services, staff and properties. 2. On 1 st July 2015 the PDL will receive the transfer of BBC provider services, staff and properties. 3. On 1 st October 2015 the PDL will receive the transfer of BoP provider services, staff and properties. The milestones described above in effect create a semi-phased approach to the complete go live of the PDL. Phasing of go live is necessary as a result of the different stages of readiness the three local authorities will be at. For example in November 2014 DCC began the implementation process for a single PDL. This has enabled work to proceed in advance of PDL implementation. Therefore by 1 st July 2015 DCC will be in a position to go live. BBC has started preliminary background work on the implementation with an aspiration of going live in July BoP, following approval of the business case, will be in a position to begin implementation from January As a result their go live date is later. The go live timescales also recognise the risks inherent in the implementation process. Council Officers have not implemented an LATC before, nor dealt with the complexity associated with a PDL and therefore there is a risk that the resource requirements are underestimated in time and financial terms. To mitigate this risk, experienced implementation consultants are informing council corporate teams of the implications and requirements of the process, and could be involved in the actual implementation itself. Pan Dorset LATC Business Case Page 17 of 61

66 2 Introduction 2.1 The purpose and background of the Business Case This high-level business case is designed to provide an overview and some detail of the: Benefits and advantages of a Pan Dorset LATC (PDL) Recommended governance structure for the three authorities a financial overview of the company s forecast performance including Board and management structures Risks and potential disadvantages Timescales and additional costs of implementation The Pan Dorset LATC (PDL) involves Dorset County Council (DCC), Bournemouth Borough Council (BBC) and Borough of Poole (BoP) transferring nominated in-house provider services into a jointly owned LATC. All three authorities have commissioned and received options appraisals and detailed business cases on their respective individual LATCs. These commissioned reports have recommended that the LATC model is the most appropriate vehicle for the future of their services and so the three authorities through the Better Together Programme have commissioned this high level business case to analyse the opportunity of a jointly-owned LATC and to then recommend a way forward. 2.2 Drivers for creating a Pan Dorset LATC There are a number of drivers that are either individual to each authority or common in relation to their geographical and demographic situation. These drivers include: - Better Care Fund and integration - Better Together Programme - Improved service quality for individuals - Maximising available resources e.g. operational workforces and facilities - Scale of savings and efficiencies - Scale of additional income opportunity - Scale of new business opportunity - Go it alone disadvantages (e.g. Competition between individual PDLs). - Seamless service pathways across Dorset Better Together Programme The three authorities are following this programme and recognise the inherent benefits in working in an integrated way across the region. Maximising resources At the moment the three workforces are operating within artificially drawn boundaries. This leads to inefficiencies with the possibility of staff from different authorities working within yards of each other, when in a coordinated world, only one employee would be able to complete both assignments within the same journey. This is only one example of efficiencies being driven coordinated working Scale of savings All three authorities are facing unprecedented savings requirements over the short and medium term. They wish to continue to provide high quality services that can Pan Dorset LATC Business Case Page 18 of 61

67 be sustained over the longer term. All opportunities to achieve savings must be fully explored, and all individual options appraisals for these services concluded that the PDL model was effective in generating and providing savings to their respective authorities. It can be safely assumed that individual savings potential will not be lost if amalgamated across the three sets of services. Scale of Additional Income opportunities The PDL model develops the legal ability to sell social care services at a surplus to those members of the general public who need some form of social care and who may be ineligible for support from their local council. Using this model allows profitable services to help subsidise other services within the same company and to increase the level of service provided. A joint LATC will avoid duplication of service and allow all residents to avail themselves of all the services within the joint company. Scale of new business opportunity Covering a larger geographical area and serving a greater number of potential clients will increase the potential market for services to be provided by the PDL. An increased market can only offer greater new service opportunities, covering both urban and rural needs. "Go-it Alone" disadvantages As establishing an LATC is a primary objective for two of the authorities in the group of three, there is a possibility that if the PDL is not established across the region then there may be services competing with each other as single LATCs. Not only will this result in the loss of all the benefits of economy of scale and integration listed above, it will also result in the following: Duplication of new service development as the single LATCs look to meet the same market demand with a new service provision Increased competition at the high quality end of the care market, potentially threatening margins and increasing the risk of reducing prices through lower quality provision Increased competition for quality staff to start new service offers, potentially risking higher costs to attract new recruits Undue attention paid to PDL competitors, distracting the management team from improvements from the inside. Pan Dorset LATC Business Case Page 19 of 61

68 3. Key Assumptions 3.1 Key Assumptions the business case is built upon. Financial The assumptions adopted and used in the individual business cases for all three authorities have been kept and used in the PDL business case. These assumptions include the following broad subjects: Staff terms and conditions these will not change. All staff will TUPE over on their existing Terms and Conditions (Ts & Cs), including pension rights, holiday entitlements and sick pay policies. This will mean that the PDL will have three sets of similar but ultimately different Ts & Cs to manage. There will be a process to harmonise Ts & Cs over the first three years. New employees in new services will be recruited on appropriate rates as decided by the PDL Procurement and organisation of back office support functions the provision of support services as identified in the individual Business Cases for Dorset and Bournemouth will be kept. So, Bournemouth s service requirements will be supported by Mouchel as they are now, and Dorset s will continue to be provided by their own in-house corporate services. It has been assumed that Poole s requirements will be provided by Dorset services. There is an assumption that by the end of year 3 the PDL will have reviewed its support service provision. Property transfer arrangements and heads of terms with the PDL all buildings used and occupied by the services will be leased to the PDL by the individual authorities or their nominated vehicles. No assets of any significant value will be transferred to the PDL Finance Assumptions The financial assumptions detailed in the individual business cases have been adopted in the PDL. As a high level review the financial results are a consolidation of the individual BCs, with revisions for the following areas: o Reduction in costs through geographical efficiencies o Redesign of the executive team o o Reduced executive and governance costs Increase in administration costs due to differing support service provision Commissioning Assumptions no additional commissioning assumptions have been adopted for the PDL. However it is recognised that over time the nature of the PDL will allow the individual commissioning authorities to have a more joined-up approach to service demand through services being delivered without worrying about artificial boundaries. Integration with the local health sector will become a significant factor in the development of new services in the region. Although this effect has not been included in any of the financial forecasts. Pan Dorset LATC Business Case Page 20 of 61

69 (Detailed set of assumptions were included within the appendices of the single business cases) Implementation Timetable The implementation of a single LATC takes 9-12 months, as our previous experience of 5 successful implementations has shown. Dorset CC members recently signed-off the implementation of their LATC to go-live date 1 st July 2015, giving themselves 9 months to implement from 1 st November Bournemouth Borough Council members will be reviewing their single LATC business case and the Pan Dorset LATC business case at the same time in mid- December. Our recommended go-live date for either Bournemouth s single LATC or the transfer of its staff and services into the PDL is 1 st July Background development work is already is train Borough of Poole s review timetable is similar to Bournemouth s with a decision to be made in December 2014, however we would recommend that the integration into the PDL takes place 5 months later than Bournemouth s services, so we are looking at a go-live date for Poole of 1 st November We envisage that the Pan Dorset LATC will be set up with its agreed governance structure from 1 st July 2015 so that the three sets of staff can be TUPE ed as per the implementation timetables outlined above. Pan Dorset LATC Business Case Page 21 of 61

70 4. Pan Dorset LATC how will it look? 4.1 What is an LATC? An LATC is a company limited by shares and 100% owned by a Council. It is registered with Companies House and has to follow all statutory obligations of a limited company. The PDL will have the following key characteristics: Teckal Compliance It will be Teckal compliant and therefore have teckal exemption. This is a piece of European Union case law allowing Councils to transfer services into externally managed entities without having to follow competitive tendering rules and procedures. To qualify for Teckal exemption, the Company has to be under the control and influence of an Authority, in this case the three authorities. This is achieved by each authority owning the same number of share totalling 100% and having a strong governance structure as detailed in section 5 of this business case. The Company must also provide services that were provided while inside the Authorities and must be in the same economic arena, in this case the provision of social care The Company must have at least 90% of its income derived from the provision of services to the Council, i.e. the three authorities. This figure is due to be reduced by EU legislation to 80% at the time of externalisation. Once services have been externalised, there is legal debate as to whether Teckal still applies, and there is at least one trading LATC whose stated ambition is to have 50% of its income from outside its shareholder Council contract Able to trade The PDL will be able to trade in the open market and charge for those services that currently, as an in-house provider, it cannot do. This ability will allow the PDL to market and sell its services to customers including SDS Direct payment holders, and private payers. The PDL will also be able to sell services to residents of other authorities and other public bodies including the NHS and CCGs Independent of the Council (Operationally) Whilst the council will have 100% ownership, the PDL will have an Executive Board as described in detail in section 4.3. This Board will have a legal responsibility to act in the best interest of the PDL, but will be guided strategically by Pan Dorset Executive Shareholder Group as described in Section 5. The Executive Board and management team will follow its own internal governance processes rather than having to follow Council-wide processes and procedures. This will speed up decision-making processes, allowing the PDL to react quickly to market changes and service user demands Rebate Surpluses and benefits back to the council As 100% shareholder, the Councils have total control over the treatment and destination of all surpluses generated by the PDL. This could mean deciding to invest in additional new PDL services, or rebating the surpluses back to each authority for the delivery of existing Council services. The decision-making process and the rules governing the distribution and sharing of surpluses are detailed in section 5. Pan Dorset LATC Business Case Page 22 of 61

71 4.1.5 A contractual / commercial relationship for the provision of care services In order to protect the Councils current high-level of quality in service delivery in all areas, there will be supply contracts with the PDL for all the social care services the company will provide. These contracts will be specifically drafted for each authority and will have negotiated quality requirements and Key performance Indicators (KPIs) that will need to be met on a monthly basis. These contracts could have financial penalties included to ensure that the three authorities receive best value for the services it receives Use of current corporate services This includes services such as ICT, HR and Financial Transactions processing. The PDL will need to maintain the current support services that the individual directorates currently enjoy, to ensure that services are provided as they are now. There will need to be put in place a service contract between the current support service providers - Mouchel for BBC and Dorset CC s own corporate services and the PDL, where the PDL agree and define the range of services and service levels that the providers should deliver. The provision of support to the Poole services could be delivered by either Mouchel or Dorset, the final decision will be made on practical and technical factors during the implementation stage. Just as in the service contract described above, this contract should allow the PDL to receive good value for money and high quality services from both providers. 4.2 What are the generic benefits of the LATC? The benefits of establishing a single LATC are listed below and relate to service users, staff, the Council and other stakeholders including residents who currently do not deal with any local authority service at all in the social care arena. Service Quality The LATC builds on existing service quality and continuously improves the service experience to customers through quality assurance programmes, for example service excellence assurance models. Customer The LATC is able to deliver services to more people in need of social care support, including customers in receipt of a direct payment, customers who are private funders and informal carers of people in need of social care support. Whilst at the same time the LATC creates more customer choice in the market place for services. Councils currently cannot sell their services to private individuals who wish to purchase some care provision. Workforce Quality - The LATC retains and builds on the existing asset of experienced, committed and well-trained staff. For example working towards and achieving nationally recognised accreditations, such as the Investors in People Award, enhance the development of the workforce including boosting leadership skills and management effectiveness Organisational Performance The creation of an LATC results in driving overall organisational performance through commercialisation. This includes improvements in workforce practices, patterns and management. This translates into greater overall efficiency savings set out in Section 7. Innovation - The LATC stimulates entrepreneurship within the organisation and workforce in terms of service offerings to customers and commissioners for example the design of services that encourage Pan Dorset LATC Business Case Page 23 of 61

72 independence, enable greater focus on prevention and avoidance of high cost long - term provision. Cultural The LATC as an externalised trading company, creates a new culture based on greater autonomy, accountability and quicker decision - making. It shapes a whole new identity based on quality provision, which encourages workforce pride in the new company and a sense of a vested interest in its future success. In effect it creates the ethos of the public sector environment with the commerciality of the independent sector. Business Sustainability and Diversification The LATC is able to pursue new business opportunity and income streams beyond the baseline services, which contributes to its sustainability. For example, bidding for new business and penetrating new health and social care markets. This applies especially to the market serving NHS discharge and intermediate care. Reputation The LATC is able to become a provider of choice for end users, carers and commissioners and the employer of choice within the recruitment market place, for example being in the Times 100 Best Companies to Work For. (This happened to Sandwell Community Trust) Council retention of control and flow back of the benefits. The legal structure of the PDL means that the Council partners retain control of the company and as a result benefit from the success of its trading activity. This includes flow back of benefits associated with efficiency savings and income growth. The Provider of Last Resort The Councils have a statutory duty to provide care when the assessed needs are critical and substantial. The PDL can help ensure that the three Councils can meet that obligation by being contracted to provide expert management and service provision when private sector providers fail in the level of quality delivered or leave the market altogether. Partnerships The PDL is able to support local third sector organisations through partnership working. The Care Act as the implementation of the provisions of the Care Act proceeds, the PDL provides the opportunity to support this. For example shaping service offers to respond to people with personal budgets and supporting the provision of preventative services. 4.2 How will the PDL Operate Internally? Arrangements for PDL Internal Governance It is recommended that the PDL has an Executive Board independent of the Council and made up of the following positions: Independent Chair this could be a local individual with good links to the public sector who understands the world of local authorities and the health sector who would bring a high level of knowledge of the services and the social care landscape Managing Director the combination of care services experience and successful and substantial commercial experience will be essential. An Pan Dorset LATC Business Case Page 24 of 61

73 ability to work in a transformation role will be an essential as part of the MD s role will be to push through the cultural and commercial change that the services need. A Job Description can be found in the Appendix B Finance Director with a strong commercial background and experience of managing a company of 30m+ turnover SMEs would be ideal. This role will support the cultural shift and encouraging commercial thinking and experience in new start-up or transformational organisations will be essential. Business Development Director with a strong service / commercial background and experience of delivering business growth targets within a company of 30m+ turnover in the social care arena will be essential. This role will be recruited to towards the end of the 1 st year of trading Non-Executive Directors with skills that fill major gaps on the Board, such as legal and marketing, these would be selected from local candidates/applicants The PDL will have a turnover of over 38m in its first year and will touch the lives of thousands of residents in the Dorset area. This organisation will be a very high profile company locally and nationally, as the first jointly owned social care LATC in the UK. The selection of the executive team will be crucial in the success of the PDL, and the individuals with the skill sets and experience needed may only be available from a national recruitment process. We recommend that there are no Members from any Council on the Executive Board. If there are members on the Board, in our view this distorts the commissioner/provider relationship with the PDL and creates potential for significant conflicts of interests for any Members on the PDL Board. It also creates legal responsibilities that Member and Officers may not want to take on. This is further complicated by having three authorities from which the members could be selected, raising questions over representation etc. for each authority. Because the governance mechanisms for this PDL are so important we have devoted a whole section (5) in the business case that recommends to The Councils the appropriate governance mechanisms and structures. The PDL Executive Board would meet officially once every month and would deal with all aspects of the management of the PDL. The executive team of Managing Director, Financial Director, and Business Development Director would be expected to meet on a very regular basis, as one of the significant advantages for this type of organisation is its small size relative to Councils, enabling the executives to be based in the same building and so working together formally and informally on a day-to-day basis. The key areas of responsibility for each executive post include the following: Managing Director Business strategy and planning; operational performance: culture change; interface and reporting with Councils/Shareholders Financial Director - responsibilities would cover Finance; I.T; Property; Procurement; commercial contracts. Business Development Director New income generation; bids and tenders; marketing and sales; development partnerships; website. Senior Operational managers- there are 4 experienced senior operational managers who will be TUPEing over into the PDL from their respective councils. These senior managers will report to the Board via the MD and be directly responsible for the quality and delivery of the care provided to all service users. Pan Dorset LATC Business Case Page 25 of 61

74 Managing Director Financial Director Business Development Director Finance Managers Operational Managers Business Development Manager Business Support Marketing The table below outlines the total cost of employing the executive posts that we have outlined above. The full cost of employment includes: Salary Pension contributions at the current LGPS level 13% National Insurance contributions of the PDL 11% Cost of support costs such as mobile phone, travelling expenses and some admin support 5% The above additions apply to the 3 executive director posts. We have included salary costs that we feel would be attractive to the right calibre of applicant, taking into account the attraction of working in the Dorset area and the size and nature of the newly established business. Inevitably the market and candidate availability will dictate the salaries actually to be paid in order to recruit the right executives. Our estimates are based on very recent experience in Buckinghamshire where the MD was recruited for a 9m PDL. This experience leads us to recommend that the posts be advertised at 20% less than the maximum quoted below, to gauge the attractiveness of the job role, the working environment and the area. This then allows the posts to be re-advertised at higher rates if there is little interest from the right calibre of applicant. The base salaries that we have recommended are: Managing Director of 40m company circa 100,000 Finance Director of 40m newly established company circa 80,000 Business Development Director of new market entrant - circa 75,000 We have scheduled the Business Development Director and manager and the marketing team to be recruited at the beginning of the second year as the PDL will need a year s trading to understand its own services, decide where its staff recruitment will come from and to analyse the care market in the area. Pan Dorset LATC Business Case Page 26 of 61

75 The Independent Chair costs have been forecast at 500 per month plus 100 expenses, the Non-Executive Directors are paid expenses only at 100 per month. They would be expected to attend one formal Company Board meeting per month. These terms are similar to other roles that we have helped develop in earlier PDLs. The recruitment of these posts will be through the Executive Shareholder Group and the costs will be split between the three authorities. Pan Dorset LATC Board, Executive and External Service Costs Summary Posts Nos Additional Costs Board Chair Person New 1 7,200 Managing Director New 1 130,200 Finance & Commercial Director New 1 105,000 Business Development Director New 1 91,875 Non Executive Directors New 4 4,800 Total Board Costs 339,075 Management Finance Manager New 3 148,800 Marketing Team New 2 75,000 Business Development Mgr New 1 50, ,800 External Services purchased Insurance Premiums New 70,000 Bank Charges New 7,500 External Audit New 40,000 Legal Advice New 20, ,500 Total HO and Business Support function ,375 In designing the above executive team and structure, we have not simply consolidated the costs of the Dorset and Bournemouth and Poole PDLs in their single PDL business cases, but designed and shaped the team on the size and the nature of the organisation. This has allowed us to reduce the costs of business development and marketing as we feel it is not necessary to double these costs when there are two sets of services. On the other hand we have increased the costs of insurance and external audit fees as the company is significantly bigger. The funding of all the executive posts will be in the same proportions as the profit share, whereas the costs of the additional management resource 273k and external purchase 137.5k will be financed out of efficiency savings and additional income contributions. The share of the costs of the executive team are shown below: Pan Dorset LATC Business Case Page 27 of 61

76 Pan Dorset PDL Share of Executive Costs Authority % Share Share of Cost Bournemouth Borough Council 23.90% 81,039 Dorset County Council 69.78% 236,607 Borough of Poole 6.32% 21,431 Total FTEs in Pan Dorset LATC % 339, Organisation of operational services The table below summarises the services that have been in scope for the individual PDL business cases and have now been amalgamated into the PDL. Summary of the scope of services Service Category DCC BBC BoP Day Services Residential care and supported housing Employment, Enterprise and Training Reablement Shared Lives Community Support X (Detailed scope of services to be included within the appendices of the business case) There is a similar scope of services within DCC, BCC and BoP (day services and employment services only). As a result there is the opportunity to: Organise along common service lines; Integrate service delivery where services are closely aligned geographically or in terms of a service pathways, such as reablement; Achieve service efficiencies for example where the same levels of operational management overlap within a similar geographic area. We recommend that services area organised within the PDL along service lines in order to: Maximise integration of services and staff Ensure a common and consistent approach to managing performance. Establish single management reporting lines for each service area, headed up by an Operational Service Manager for each. Provide the platform for the expansion of existing services Provide the framework for developing new service offerings Pan Dorset LATC Business Case Page 28 of 61

77 Proposed configuration of operational services Operational Services Day Services Accommodation Based Services Reablement Services Employment, Enterprise and Training Community Support and Shared Lives Although we have recommended that the services are managed on a service type basis, we are asking the PDL to ensure that it allows management to look at delivery on a locality level so that staff in the same locality can be switched services to maximise capacity and outputs and avoid additional temporary and agency staffing costs Staffing of operational services The following table gives the details of the current budgeted establishment numbers for the services that are in scope for the PDL across the three authorities Pan Dorset LATC Full Time Equivalent Staff Numbers FTE Nos on Authority Transfer Bournemouth Borough Council Dorset County Council Borough of Poole Total FTEs in Pan Dorset LATC 1, The actual number of staff who will be TUPE ing over is more likely to be over 1,400 as many of these posts are filled by two, or sometimes three part-time staff. The new PDL will not be a small organisation, with a turnover of over 40m and over 1,400 staff it will be a major employer in the region and touch many peoples lives through their care provision. As the new organisation gets to grips with its new position in the market, the service managers will be tasked with identifying areas of overlap and duplication that can be eliminated, freeing up capacity that can be utilised on expanding other services in the PDL that will be generating net contributions to the organisation Arrangements for PDL Support Services The PDL will start from go-live with the current services providers, as detailed below. This means that it will have two sets of back-office services from Dorset CC and Mouchel through Bournemouth BC. This is not a sustainable position in the medium to long term and there will be an opportunity to harmonise these services within 3 Pan Dorset LATC Business Case Page 29 of 61

78 years. Dorset CC will be providing all support services from within their existing corporate services structure, to the staff and locations that are transferring, the services provided will include: HR including payroll ICT hardware, networks and software Financial transaction processing Bournemouth BC will be providing the above services to their transferred staff through their support services partner Mouchel. Borough of Poole would appraise the options for the provision of support services, and select the solution accordingly Arrangements for Property Utilisation The three authorities will not be transferring any land or building assets to the new PDL. All the buildings used or occupied by the services in scope will be leased to the PDL by the relevant owner authorities. A list of properties is held in the appendices attached to this Business Case, the buildings and properties used are located all over the County. The leases will be linked to the service contracts, so if services are re-located or transferred, the leases on the buildings that have been freed up will be terminated. The authorities as the landlords will have the responsibility and the budget for major repairs and maintenance. One of the identified benefits of the PDL and the integration of three sets of services is the opportunity to consolidate delivery of services into certain buildings, freeing up less frequently used properties for either a change of use or for sale and subsequent capital receipt. Pan Dorset LATC Business Case Page 30 of 61

79 5. Pan Dorset LATC Governance Effective governance is an essential component in creating the PDL in order to ensure the requirements of the Teckal Exemption are satisfied, for example the need for all three councils to demonstrate that they exert control and influence over the PDL. There is also a requirement to achieve a balance between the Councils strategic control and influence and still enabling the Directors of the PDL to have operational responsibility for delivering their strategic objectives. If this balance is broken, the outcome is either a company that is so hide-bound by council decision-making that it becomes a shadow directorate or a company that is uncontrolled and therefore failing to meet Teckal exemption requirements, and so open to challenge and potential closure. It is anticipated that the PDL will have a structure and relationship to the Councils as set out in the following sections. 5.1 The Pan-Dorset LATC and the Councils The design of the PDL will reflect a number of key relationships, governance and contractual arrangements for the Councils and the new company. There are four main relationships that the three Councils will have with the Company: 1) As the 100% shareholder with monitoring arrangements via the Executive Shareholder Group. 2) As individual authority commissioners with a contract/s for service delivery by the PDL 3) As contract holders for delivering business support services to the PDL. 4) As operational partners with the PDL in the delivery of strategically important services that form part of the Councils access pathway including integration and social independence The above relationships are fundamentally the same as with any single LATC as the first three have to be in place to provide a legally acceptable framework and governance mechanism for the legally registered company and the service contracts. The fourth relationship may actually become simpler to manage and develop because the PDL will offer one destination and one contact point for potential partners and all referrals/enquiries, irrespective of the location and nature of the service request or query. It is recommended that the PDL have a structure and relationship to the Councils as set out in the diagram below. Pan Dorset LATC Business Case Page 31 of 61

80 The recommended structure is based on single LATC structures that have been established with LATCs in: Northamptonshire Buckinghamshire Aberdeen Scottish Borders (in implementation) It involves the creation of two companies (a service delivery company and a support function company) managed by the same Board. The support function company ensures the LATC has the most VAT efficient structure and does not carry a VAT liability in the provision of Care Quality Commission (CQC) registered services. This is required because services regulated by CQC are VAT exempt meaning the Company would incur VAT on support costs of those regulated services but would be unable to reclaim the exempt VAT thereby incurring an additional cost. The support company holds the contractual relationships with the three commissioning Councils, as well as all the property leases and support service SLAs with the two providing Councils. The care company will employ all the care staff and will be registered with CQC as the provider, and will provide all the care requirements to service users, and invoice the support company for that care provision. These two companies will be in a VAT Group which creates a simple structure for VAT, allowing the support company to hold all the VAT relationships with suppliers and customers. This structure helps to avoid increasing the cost of unclaimable input VAT by several hundred thousand pounds. Pan Dorset LATC Business Case Page 32 of 61

81 The two companies would always be managed as one, in effect; there would be a seamless relationship between the two companies, managed by one Board The structure also allows new businesses or existing services to be created as separate companies under a group company structure. The underlying nature of the two sets of contracts will be determined during the implementation stage where conditions and deliverables will be agreed with the various parties. Any services provided by the Council to the Company have to be provided at a commercial rate in order to avoid issues of State Aid. 5.2 Three Councils Members and the PDL The Executive Shareholder Group (ESG) This section will: 1) Describe the nature and duties of the ESG 2) The recommended structure of the ESG including representation from all three Councils including the voting rights and protocols for decisions on the PDL 1) The Nature and Duties of the Executive Shareholder Group The ESG will exert influence and control over the PDL on behalf of the three partner Councils, this role has to be fulfilled to comply with the Teckal exemption. More importantly this group will be representing the three authorities short term and strategic requirements for adult social care from these services and will have delegated powers from their respective authorities to make decisions on their behalf. This role of influence and control will be fulfilled in quarterly meetings by: Reviewing the PDL s performance in quarterly held meetings where the executive of the PDL will report on: o o o Service and Quality performance matched against contractually agreed service levels, using Key Performance Indicators (KPIs) as a summary guide Financial results against signed-off business plans Review of future service developments and opportunities Reviewing and ratifying the annual five-year business plan to be presented by the executive team every November/December in line with authority budget setting timetables Receiving and assessing any additional ad-hoc requests 2) The recommended structure of the Executive Shareholder Group The structure and composition of the ESG as described below has been designed and agreed through a process that included: Workshop with Officers of all three authorities, including legal, commissioning and provider representation Meeting with the directors of all three adult social care services with officers to agree the structure in light of their own Council requirements Independent legal review of the recommended structure to ensure that all agreed recommendations would stand up to legal scrutiny In the above process there were several important factors that had to be recognised Pan Dorset LATC Business Case Page 33 of 61

82 and taken into account in the design of the structure: The size of the services being transferred into PDL from each of the authorities, it was agreed that the 2014/15 gross budget for the services in scope from each authority would be a reasonable measure. This would represent the stake that each authority would have in the PDL The structure needs to be flexible over time so that if authorities commit additional services to the PDL, thus increasing their stake in the PDL, then the voting structure would need to change to reflect that The voting rights of all three authorities would be reflected in the composition of the ESG and not in the number of shares held in the PDL. Therefore the shareholding of all three authorities would be equal The voting structure had to allow for debate and decisions to be made with a real opportunity to constructively win hearts and minds of the group. This could only be achieved by not having a majority that could never be overturned Certain fundamental decisions could only be decided on a unanimous vote, thus allowing any one member to have the veto on that decision. All the subjects in this area are called reserved matters and will be described and detailed below. The size of the group needs to be manageable in terms of the number of attendees and advisors. It was generally agreed that by keeping the attendee numbers relatively low, the following would be achieved: o o o Accumulated knowledge and history of the services and the PDL Continuity of attendance by Members Efficient use of meeting time and decision-making With above factors taken into account the workshop and the Directors meeting, attended by legal representation designed the following structure for discussion, debate and recommendation by members of the three local authorities: The ESG would hold 10 members, plus 2 advisors from each authority (typically the Director of Adult social care and one finance representative), making a total of 16 possible attendees. The Chair would be selected from one of the members and that position would have the casting vote in a tied vote. The chairmanship would rotate between the authorities on an annual basis and the hosting of the meetings and any admin support would also rotate annually or bi-annually. The table below details the service budgets committed by each authority and the resulting membership to the ESG Analysis of Budget Input to PDL and Members on ESG Authority Gross Members on % of Total Budget ESG m % Dorset County Council % 5 Bournemouth B Council % 3 Borough of Poole % % 10 Pan Dorset LATC Business Case Page 34 of 61

83 This structure means that for majority decisions there is an opportunity for a wellargued decision to win the vote with the Chair s casting vote. It is envisaged that the future decisions on the PDL business plans and results will be made on sound business lines and not on history. Without question, this structure will need a brave and historical decision so that the future of all these services can be in the hands of sound, business professionals who understand the commissioning needs not only of their council owners but also understand the potential market opportunities available to the PDL. The above majority voting structure will apply to the majority of decisions to be made by the ESG, however, there are certain subjects and decisions that are termed reserved matters referred to above that protect minority partners in the PDL. Reserved matters are those subjects where a unanimous decision is needed if a vote is required. A unanimous vote means that one member of the ESG can effectively prevent a decision from going through, even though 9 out of 10 members have voted yes. Reserved matters are typically subjects that are fundamental to the partners and the constitution of the joint PDL. The following list is a preliminary list that will be developed during implementation: Changes in the constitution of the partnership Changes in Terms and Conditions of staff New Partners joining the PDL Sale of Shares Strategic Direction of the Services and Company It is also recognised that these ESG meetings will be properly constituted and managed in a similar way to other Council bodies, so there will be the following administrative rules and protocols to follow: Required notice period of meetings Pre-published agendas and papers Clerked minutes and actions Protocols for substitutes and quorum rules Exit strategies need to be available to any one of the three councils. The details need not be determined in this paper, but the basic principle will be that the two remaining shareholders will have pre-emptive rights which will give either or both of them the right to buy the shares of the exiting council at a value to be calculated at the time of exit. If neither of the remaining councils wish to buy the shares, the exiting council will then be free to dispose of its shares within the limits of the Teckal exemption rules. 5.3 Shareholder Agreement The Shareholder Agreement is a legal document allowing the shareholders, in this instance, the three Councils, to restrict what shareholders and Directors can do on behalf of the PDL. As there are three shareholders, the aims of this agreement are: To manage and govern the relationships between the shareholders, including decision-making and voting rights To restrict the abilities and authorities of the PDL Directors, so that the Pan Dorset LATC Business Case Page 35 of 61

84 Council and Members are satisfied that the assets and employees of the Company are adequately protected The relationships and voting powers of the shareholder representatives have been recommended in detail in the above section 5.2. This Shareholders Agreement is also necessary to define and regulate voting rights because it has been agreed that the voting rights will not be directly reflected in the shareholdings of each Council. It is recommended that all three councils have the same nominal number of shares in the PDL. This is because it is much easier and simpler to amend the Shareholders Agreement for a change in profit share and voting rights than it is to change the number of shares owned by each council to reflect the new voting rights. The Shareholders Agreement will also deal with the unlikely possibility of the PDL being sold for a capital sum to a private provider. For the restricting of Directors actions and powers we recommend the following limited authorities and restrictions are placed on executive Directors: Directors will be authorised to act and deliver the outcomes as defined by the latest Business Plan for the PDL that has been ratified and agreed by the ESG Directors cannot give themselves any form of payment or benefit outside that agreed in the ratified Business Plans Directors cannot commit the Company to any form of loan agreement without express agreement from the ESG. Directors cannot remove any other directors without the agreement of the ESG Directors cannot pay themselves a bonus or any form of pay increase The above restrictions are in no way unusual or restrictive and we would not expect them to limit any recruitment process for any executive director. 5.4 Other Contractual Relationships with the Pan Dorset PDL 1) Contractual relationship for the provision of services by the PDL to the councils This is where council commissioners of adult services monitor on a monthly basis contractual performance of the PDL. This allows continual scrutiny of service delivery levels and gives commissioners significant ability to fully understand their commissioned services and the factors that affect performance Each council will have its own supplier contract with the PDL that will specify and regulate on the following areas: Detailed specifications and descriptions of the services provided Quality of delivery of services Outcomes and outputs expected of the services Contractual and legal aspects of the contract It may be decided that the commissioners from all three councils meet monthly with the senior operational managers to discuss the provision of service across all the Pan Dorset LATC Business Case Page 36 of 61

85 locations so that a more strategic view of the whole of service delivery can be seen. This could help in the re-design of services and delivery. 2) Contractual relationship for the provision of support services by the councils to the PDL This is where Dorset County Council (DCC) and Bournemouth Borough Council (BBC) are the providers of business support services to the PDL including: HR providing transactional processing, payroll and advice ICT providing all hardware, networks and software on an on-going basis including daily support Financial Transaction Processing providing systems and processing for purchase orders, purchase invoices, payments, sales invoicing and receipts. In this arrangement, the DCC infrastructure will support ex DCC employees, services and locations. BBC, through its existing contract with Mouchel will provide the same to its employees etc. In order to protect both parties there will be contracts and service level agreements (SLAs) in place that will: Specify the services to be provided Detail the performance levels to be provided Contain contractual and legal aspects including poor performance penalties Pan Dorset LATC Business Case Page 37 of 61

86 6. Pan Dorset Five year high level business plan Methodology used in developing the High Level Business Case The fundamental design of the financial results included in the high-level business case is a consolidation of the financial results in the Dorset single LATC business case and the results from the Bournemouth single LATC business case. Adding in the values for BoP further enhances the consolidated results. These values include service budgets, potential savings and additional income opportunities. Assumed additional costs and savings that occur as a result of the new PDL have then revised the consolidated values. The one area that is not covered in the single LATC business cases is the subject of profit share and how it is distributed out to the three authorities, this question is dealt with in section If required, the single LATC business cases can be made available for reference Financial Assumptions included in the Business Case As in the section on methodology above the financial assumptions used in the single LATC business cases have been carried over into this high-level business case, the major assumptions have been described in section 3 above and all individual LATC assumptions are available in the appendices. Below are the headline assumptions contained in single LATC business cases that will not change in the Pan Dorset PDL high-level business case: Buildings used and occupied by all services will be leased from their respective councils. No assets will be transferred to the PDL All TUPEed staff will keep their current terms and conditions of employment The three authorities will transfer their respective pension funds for their staff as fully funded. If there are pension deficits to be paid for, these can still be made by the PDL on top of their required pension contributions to keep their new fund fully provided for. Current pension provision will be continued through admitted body status into the LGPS No redundancies or staff reductions have been included in the efficiency savings It is recognised that some assumptions such as depreciation rates may differ in the single LATC models and will need to be harmonised if the PDL is implemented, however it has been assumed that this harmonisation will not have a significant effect on the financial results of the PDL. One area where the single LATC assumptions were significantly different was that of the provision of support services to the PDL. This is a significant issue and so has been dealt with separately below Support Service Provision The single LATC business cases have the following assumptions in relation to support services: Dorset CC will be providing all support services from within their existing corporate services structure, these services will include: Pan Dorset LATC Business Case Page 38 of 61

87 HR including payroll ICT hardware, networks and software Financial transaction processing Bournemouth BC will be providing the above services to their single LATC through their support services partner Mouchel. Borough of Poole would look to either BBC or DCC to be their provider of support services for their 60+ staff. We do not see the need for BoP to provide their won support services because the number of staff involved and the complexity of service required are relatively low. It is the intention that the support services will be harmonised after between 18 months and 2 years by following all relevant procurement rules. We have estimated that process will cost an additional 100k Summary of Financial Results This section contains the forecast profit and loss account and the balance sheet for the Pan Dorset LATC for the first five years of trading. The Profit and Loss Forecast (P/L) is where the elements of cost efficiencies, new management costs and additional income all come together to show how the company will perform in the market and still deliver the cost savings required by the three Councils. We have produced a full set of financial results that include balance sheets, a value for money comparison, extracts from which are below: Pan Dorset LATC Profit and Loss Account for the First Five years Description Year 1 Year 2 Year 3 Year 4 Year 5 Income Dorset CC Contract 25,772,058 25,644,474 25,324,875 25,198,566 25,135,412 Bournemouth BC Contract 9,346,153 9,346,153 9,252,691 9,159,229 9,065,768 Borough of Poole Contract 2,491,242 2,332,747 2,405,280 2,360,061 2,365,432 Other Income 910,476 2,353,887 4,580,389 5,966,011 7,403,511 Total Income 38,519,929 39,677,260 41,563,234 42,683,868 43,970,123 Expenditure Staff Costs 30,636,194 31,472,523 33,295,510 34,490,446 35,821,251 Rent for Properties 1,160,000 1,160,000 1,160,000 1,160,000 1,160,000 Supplies & Services 4,943,174 4,904,561 4,904,561 4,904,561 4,904,561 Total Service Expenditure 36,739,368 37,537,084 39,360,071 40,555,007 41,885,812 Contribution to Group 1,780,561 2,140,176 2,203,163 2,128,861 2,084,311 Exec Man & Board Costs 247, , , , ,075 Audit, Insurance, legal 137, , , , ,500 Marketing, Finance Support 148, , , , ,800 CSS Support Services 600, , , , ,000 Total H.O. Function 1,133,500 1,350,375 1,350,375 1,150,375 1,150,375 Support Svs % of Income 2.94% 3.40% 3.25% 2.70% 2.62% Profit before Int & Depr 647, , , , ,936 Deprec'n 5% pa 11,000 11,000 11,000 11,000 11,000 Pan Dorset LATC Business Case Page 39 of 61

88 Net Profit before Tax 636, , , , ,936 Corp Tax rcble/(payable) (3,007) (9,241) (18,553) (27,046) (31,080) Annual Profit or (Loss) 633, , , , ,856 Retained Profits/(Losses) 633,055 1,402,615 2,225,850 3,166,290 4,058,147 The above table shows how the PDL is performing financially, with a profit of 4.0m after 5 years, which could contribute to the three Councils savings requirements. This is the real benefit of the Councils being in control in that all the profits, whatever the value, are directly under their control. If the Councils (as the purchasers) pushed the block contract price (Contract income in the above table) of the PDL s services down to the bare minimum, they would enjoy a reduced contract price, but (as the Shareholders) they would not have a high-retained profit available to it. In the table above the contract prices for all three authorities have been reduced from year 3 onwards so that some of the efficiency gains are translated into a reduced contract price for services. At the end of year 5 the company has built up its reserves in the form of retained profit to 4.0m, as shown in the Balance Sheet table below. This retained profit would be available for rebating to the three Councils in their profit sharing ratios, shown in the section below or for re-investment in additional services. Both the reduced contract price and the retained surplus represent savings to any of the three Councils. A key dynamic in this financial analysis is that the more net profit the Company s new services can generate, the more savings or reinvestment are available to the three partner Councils: Pan Dorset LATC Balance Sheets for the First 5 years Description Year 1 Year 2 Year 3 Year 4 Year 5 Net Fixed Assets 209, , , , ,000 Debtors 78, , , , ,849 Bank account 3,153,454 3,908,743 4,734,274 5,685,637 6,592,774 Current assets 3,232,340 4,037,776 4,928,695 5,925,826 6,863,623 Supplier Creditors (313,718) (310,659) (310,659) (310,659) (310,659) Creditors VAT (1,755,354) (1,774,483) (1,794,153) (1,805,156) (1,813,249) Creditors Income Tax & NI (736,008) (738,578) (766,279) (792,475) (815,287) Corp Tax debtor/(creditor) (3,007) (9,241) (18,553) (27,046) (31,080) Current Liabilities (2,808,086) (2,832,961) (2,889,645) (2,935,335) (2,970,276) Total Net Assets 633,255 1,402,815 2,226,050 3,166,490 4,058,347 Capital and Reserves Share Capital Retained Profit/(Loss) 633,055 1,402,615 2,225,850 3,166,290 4,058,147 Shareholders' Funds 633,255 1,402,815 2,226,050 3,166,490 4,058,347 Pan Dorset LATC Business Case Page 40 of 61

89 6.1.4 Profit Share Model for the shareholders, BBC, DCC and BoP The profit share model as described below has been designed and agreed through a process that included: Workshop with Officers of all three authorities, including legal, commissioning and provider representation Meeting with the directors of all three adult social care services with officers to agree the structure in light of their own Council requirements Independent legal review of the recommended structure to ensure that all agreed recommendations would stand up to legal scrutiny In the above process there were several important factors that had to be recognised and taken into account in the design of the profit share mechanism: The size of the services being transferred into PDL from each of the authorities, it was agreed that the 2014/15 gross budget for the services in scope from each authority would be a reasonable measure. This would represent the stake that each authority would have in the PDL at the outset The structure needs to be flexible over time so that if authorities commit additional services to the PDL, thus increasing their stake in the PDL, then the profit share would need to change to reflect that Below is a table that shows the relative size and share of the budgets that are being transferred into the PDL, and these have been used to agree the profit share percentages as shown. Analysis of Budget Input to PDL and Members on ESG Authority Gross Members on % of Total Budget ESG m % Dorset County Council % 5 Bournemouth B Council % 3 Borough of Poole % % 10 The above proportions will be recalculated on an annual basis as part of the business plan process and it is suggested that no change to the proportions will take place unless the change is over 250k. This allows the management to focus on the day-to-day management of the services and not worry about small changes in activity. The above profit share proportions will be applied to surpluses after all costs and taxes have been accounted for, in other words, net retained profit. All surpluses are directly affected by contract price reductions, which reduce the cost of services to each Council, and it has been agreed that to guarantee contract savings to each council, the contract prices charged by the PDL will reduce by 1% each year. This ensures that: The PDL focuses on efficiencies and additional income so that it can provide the contract price reduction to partner councils Partner councils receive their required reduced costs for their budget savings before the net surplus is shared out Pan Dorset LATC Business Case Page 41 of 61

90 The above profit share proportions and processes would apply to any losses sustained by the PDL. In other words, each partner will share the losses in the same way that they share the surpluses Value for Money Comparison This section deals with the financial effect the PDL could have on the Councils financial position in relation to adult social care. The next table holds the value for money calculation that illustrates how much net benefit the Councils would enjoy if the PDL were adopted. This calculation measures the financial benefit by comparing the cost of the services if nothing changed over the next five years with the net cost the Councils would pay to the PDL for providing those same services. Description Pan Dorset LATC Value for Money Comparison 5 Years Receipts 5 Years Contract Spend 5 Years Budgets no Change Cost of current In-House Services 181,477,031 Cost of Contracts to 3 Authorities from the LATC 185,200,141 Income to Council from Charges to LATC Re- Corporate Support Services 2,600,000 Fixed Assets Purchased (Desks etc.) 220,000 Property Rental Income 5,800,000 Dividends available to three authorities 4,058,147 Income and earnings available to 3 authorities (12,678,147) Net Cost of Contract 172,521,994 (172,521,994) Saving on all 5 year Budgets 8,955,038 Share of Net Benefit to each Authority Sgle LATC Joint Share Incr in Benefit Bournemouth Borough Council 828,014 1,154, ,510 Dorset County Council 6,855,129 7,568, ,173 Borough of Poole 232, ,212 Total net benefit 7,683,143 8,955,038 1,271,895 As referred to before, as the 100% shareholders of the PDL, the Councils have total control over the destiny of the accumulated profits and could ask them to be transferred back to them to financially support other areas of social care or the wider Council requirements. The model above has assumed that the Councils have not taken any retained surpluses out of the PDL. The table below shows that the Councils are saving 8.9m between them by establishing and commissioning the PDL to provide its services and to sell additional services to SDS clients and other self-funders in the wider Dorset areas including Bournemouth and Poole. The shares for each of the partner authorities of the benefits accruing over the first five years of trading from the PDL have been shown at the bottom of the table. The results in the table show that each of the Authorities has increased its benefits value over the 5 years from the establishment of the PDL. In other Pan Dorset LATC Business Case Page 42 of 61

91 words, between the three authorities the Pan Dorset LATC will generate 1.2m more of savings/better value than if it is not done and the individual authorities go it alone with single LATCs. This is a compelling financial argument in favour of the Pan Dorset LATC, especially in these times of severe austerity and budget restrictions imposed on all Councils. The benefits accruing to each individual authority through the PDL are shown in the last column of the above table. Pan Dorset LATC Business Case Page 43 of 61

92 7 Additional Income Opportunities for the Pan Dorset LATC 7.1 Summary of new income opportunities A Pan- Dorset LATC will be able to generate substantial additional income of up to 9.13 million per year by the fifth year of trading. This figure is the maximum that the PDL can earn from non-council contracts without breaking the Teckal exemption rules. The main source of this income will derive from individual customers who want to or have to purchase services privately. That is, they either do not meet the local authority eligibility criteria or have made a choice to purchase privately. Private purchasers will pre dominantly be people over the age of 65, living in the more affluent areas of the county. Other client groups such as people with a learning disability or physical disability are mostly local authority funded as they normally have insufficient capital or income of their own. In these cases it is more likely that direct payment of social care personal budgets will be made in order to choose how support needs are to be met. Across the county of Dorset it is estimated that in 2015 there will be 140,000 people aged 65 and over unable to manage at least one self-care activity or domestic task. 2 Approximately 53% of these people are assumed to be private payers, based on the regional profile of social care service for the South West of England 3. As a result we estimate an older people self -payer market of 75,000 in 2015, rising to 83,000 by The PDL will aim to secure between 1% and 3% of this market by year five of trading. The development of this size of customer base will occur incrementally over the first four years of trading. This is because the PDL will need to time to increase its staffing resources and build capacity within operational services. The estimated proportion of customers sourced within each local authority area will be proportionate to the overall populations of older people in Poole, Bournemouth and Dorset. The chart below sets this out as a percentage of the total over 65 population. Source of Self Payers by Local Authority Area PBC 18% BBC 19% DCC 63% The table below illustrates how the additional income from new and existing services builds up over the first five years of trading. We have given the PDL a year in which 2 Projecting Older People Population Information System (POPPI): accessed 19/10/15. 3 Care of Elderly People UK Market Survey 2012/13 (Laing and Buisson 2013) page 214. Self -Funded Social Care for Older People (PSSRU Paper 2007); Projection Expenditure Page 23. People Who Pay for Care Quantitative and Qualitative Analysis of Self Funder in Social Care (Oxford Brooks University January 2011) Pan Dorset LATC Business Case Page 44 of 61

93 to set itself ready for developing new income streams and we expect years four and five to show significant increases in revenue generation. We have assumed a net profit of 9% on additional service income. Analysis of Non- Local Authority Turnover from New Services New or Existing Services Year 1 Year 2 Year 3 Year 4 Year 5 Existing services 788, , , , ,610 New services 0 1,150,000 3,234,375 4,617,780 6,055,280 Total 788,863 1,953,725 4,132,985 5,516,390 6,953, New Income Generation Opportunities There are two phases of income generation that are open for the Pan Dorset LATC to develop over the first five years of trading. These are as follows: 1. First phase income, which seeks to increase income generated by a number of services and facilities formerly provided within local authorities, for example sale of meals to people attending day services. There will also be the opportunity to sell transferring social care services to private payers, something existing in - house services are unable to do being part of local authorities. 2. Second phase income, which seeks to introduce into the private market place new social care products delivered by the PDL. There are two products identified for the purposes of this business case which are seen as viable for development as a result of the demographic and needs based context described above. These services are a Regaining Independence Service and a Specialist Dementia Support Service First Phase Income Generation Opportunities Each local authority operates a number of transferring services that generate income. Income is derived principally from catering and rental of rooms and facilities in Day centres. Within the Pan Dorset LATC this income generation will continue. In addition, maximising the sale of current capacity within certain operational services can generate other income, for example day service and residential care placements. The table below sets out a combined income of 4.25 million over five years that will be generated from the transfer of existing services into a Pan Dorset LATC. For the first three years of trading income increases incrementally as existing capacity is maximised. After year three, any further income growth will come from additional service delivery. Analysis of Non- Local Authority Turnover Service Area Income Year 1 Year 2 Year 3 Year 4 Year 5 Residential Care Placements 6,000 12,000 24,000 24,000 24,000 Day Services Placement 15,625 31,250 62,500 62,500 62,500 Pan Dorset LATC Business Case Page 45 of 61

94 Home Care provision 17,500 35,100 70,200 70,200 70,200 Meals and Catering Services 676, , , , ,010 Rental Income from Day centres 35,100 37,000 38,900 38,900 38,900 Total 750, , , , , Second phase income generation opportunities Two new products are recommended for development by the PDL. The rationale derives from engagement with staff teams from existing provider services, our direct experience in managing LATCs and from market research and analysis of key demographic data from the Office of National Statistics (ONS), which highlight gaps in the private market for services that can support people to regain their independence and services that specialise in supporting people with dementia. In summary these services are as follows: a.) A Regaining Independence Service (RIS) This service will be designed to provide short term, outcome focussed support to maximise a person s ability to live independently in his or her own home. It is recommended that this service operationally align with the existing reablement services and potentially intermediate residential care services. We see an opportunity for the PDL to provide extended forms of reablement or short term support that for example continue on a private basis after the initial statutory local authority 6- week package has ended. b.) A Specialist Dementia Support Service This service will provide specialist dementia support to people living in their own homes, so that their functional abilities are maintained for as long as possible. It is recommended that where possible this service share an operational relationship with existing or proposed dementia facilities. For example this specialist support service could operate as a spoke out of existing facilities acting as a hub in terms of management, staffing and operational delivery to customers in the community New Income Projections There are a number of assumptions built into the projected income from the two new products described above. These assumptions are as follows: Pan Dorset LATC Business Case Page 46 of 61

95 24% of the total target market will be people with dementia. This prevalence is an average based on Office of National Statistics projections for people over 65 years of age 4 76% of the total target market will be people joining the Regaining Independence Service. The price point for both services is based upon an hourly rate. This hourly rate is set at 20 per hour (plus VAT). 60% of contracted staff hours will be contact time with customers. 40% will be non-contact time that covers for example staff-travel and back office activity the cost of which is built into the hourly rate. The non-contact time is anticipated to be higher within the rural areas of Dorset and balanced overall with activity that takes places with more densely populated areas. An 8% profit margin is built into the hourly rate. Sales to private customers will increase at an incremental level each year of trading from 25% in year 1; 50% in year 2; 75% in year 3; 100% in years 4&5. Customers will purchase an average number of hours based on the specifications of each service. For the Regaining Independence Service the specification assumes an average of 80 hours per person. This represents a short-term service (up to 10 - weeks) aimed at maximising independence. The Specialist Dementia Support Service assumes an average of 390 hours per person. This represents an intensive support intervention of 15 hours per week over a 6-month period. Service costs will predominantly relate to front line staff, based on a maximum annual requirement, plus a training premium to meet the requirements of each service. The recruitment of the total establishment will be incremental reflecting the growth of a customer base over the first five years of trading. Taking into account the assumptions, the table below sets out the anticipated turnover in year five, based on a market share target of between 1% and 3%. Market Share Regaining Independence Income (Millions) Dementia Support Service Income (Millions) Total (Millions) 1% % % The most recent relevant source of UK data is Dementia UK: A report into the prevalence and cost of dementia prepared by the Personal Social Services Research Unit (PSSRU) at the London School of Economics and the Institute of Psychiatry at King s College London, for the Alzheimer s Society, Pan Dorset LATC Business Case Page 47 of 61

96 The staging of new income generation is outlined in the Table below and is reflected in the PDL s financial performance in section 6: Analysis of Non- Local Authority Turnover from New Services Service Area Income Year 1 Year 2 Year 3 Year 4 Year 5 Regaining Independence 450,000 1,265,625 1,687,500 2,250,000 Residential dementia unit 305, ,280 Dementia Support Services 700,000 1,968,750 2,625,000 3,500,000 Total 0 1,150,000 3,234,375 4,617,780 6,055,280 The ambition of the forecast new sales reflect the synergies and opportunities that exist for the joint owned company, as opposed to two or three single competing companies all providing the same services to the same people Critical Success Factors for realising the income generating potential of a Pan Dorset LATC. In order to realise this new income, there are a number of critical success factors that need to be addressed by the PDL, as part of its business strategy, over the first five years of trading. These factors are as follows: Financial investment Investment will be needed to build a private payer customer base. The level of investment will be higher in the first two to three years because of the need for example to raise awareness of the PDL brand and product range, attract new staff resources and develop the internal business infrastructure to support a private payer customer base. Financial resource therefore to support pan - Dorset marketing and recruitment campaigns is of paramount importance to the success of new business. In addition the PDL will need to consider the effect of upfront operational costs, for example the need to have staff in situ for induction and training prior to the delivery of the new services to customers. Relationship with Private Customers The purpose of a customer relationship will be to acquire new customers, as well as retain and derive more revenue from existing ones. The nature of the PDL business will require the development of individual and personalised customer relationships in order to succeed. Such relationships need to be based on the creation of bespoke packages of support that precisely fit the needs of the customer. They are also reliant on the regular follow up and survey of customer experience; transparency of terms and conditions of service and customer expectations being met. A regular communication flow with customers will also be needed that creates a sense of being part of a quality brand. Such communication includes for example the creation of a customer newsletter that promotes the PDL, showcasing it products and new offers. To support this type of customer relationship we recommend that the PDL consider establishing a one-stop shop infrastructure for customers. Key features and selling points of a one- stop shop include: Ease of contact for all customers, for example the creation of a single PDL telephone number and website. There is also the potential for example to Pan Dorset LATC Business Case Page 48 of 61

97 direct customers from DCC, BBC and BoP to the PDL via the My Life My Care web portal. A holistic assessment as well as information, advice and guidance for customers who would benefit from a broader range of PDL services. The provision of bespoke person centred support focussed on the individual customer and / or family and delivered by high quality front line staff. PDL services available to people along the scale of acuity (for example low, moderate, substantial and critical needs) The ability to adapt the service offer to respond to new health and social care developments including the introduction of personal health budgets. This could also include adding into the one stop shop other new products and features such as telehealth, telecare and small aids to daily living. Channels to the Private Payer Market Effective channels to market will be needed to create awareness of PDL products and enable customers to purchase. A number of channels have been identified that require development and on-going cultivation. These include the following: Channels into acute hospitals at the point at which it is determined that a person will require social care support on discharge but is not eligible for local authority funding. We are aware from dialogue with acute hospitals that opportunities exist to support the discharge process of self paying customers through offering responsive care services that enables a person to return home and increase levels of independence. Maximising the use of the Pan Dorset Portal My Life My Care provides a crucial channel to private payers searching for care services from a trusted provider. It is recommended that this portal has a clear link to a PDL website which needs to have a level of both sophistication and simplicity enabling the customer to easily navigate the product range and make immediate contact for enquires or purchases. Over the first five years of trading the PDL should consider the potential of e shopping as an enhancement to this channel to market, which is becoming an essential component for many private sector providers. Knowledge, networks and relationships built upon at a locality level to create additional channels to market. We are aware of other LATCs who have developed a strong network of relationships with local services including G.P.s, retail outlets and community groups. Where this has happened sales of services have experienced a marked increase. Perceived Added Value of Pan Dorset LATC Services The PDL will be part of the independent sector market and therefore exposed to competition from other care providers. In order to develop a position within the market place and successfully build the target customer base it is essential that the added value marketed by the Pan Dorset LATC becomes a compelling reason for people to purchase services. The required added value messages can be summarised as follows: The PDL is a trusted provider backed by all three local authorities. In our experience of working with focus groups of private customers this is of Pan Dorset LATC Business Case Page 49 of 61

98 primary importance when considering the purchase of social care services. This becomes even more important for example where families are purchasing services on behalf of a loved one and want the assurance they will be cared for by a trusted operator. The PDL maintains the values and ethos of public sector provision whilst having the responsiveness of the private sector. This means it will be driven by supporting the best interests of the customers it serves rather than exclusively being driven by profit motives. At the same time the PDL will need to be able to develop the levels of customer service associated with best practice in the private sector. This will include ensuring that the customer has access to quality services in a timely and responsive manner. The PDL is a provider of quality services built upon a skilled and qualified workforce. Defining standards of quality and best practice needs to be at the heart of any PDL market development. Regulatory compliance will only satisfy national minimum standards (for example CQC standards). Therefore internal quality assurance systems will need to be designed to ensure all service offers conform to recognised standards of best practice. Not only will this reinforce the trusted provider status of the organisation but also it will be a significant selling point related to the PDL brand. The PDL s new products are completely different to long-term generic service provision, which is typified by, for example, domiciliary care. Instead the PDL will offer short term outcome focussed alternatives, seeking to maximise independence rather maintain dependency. The products will also contribute to avoiding or slowing down the need for high cost services such as residential care. In order to develop a successful business the PDL has to astutely deliver this message to its target customers. Development partnerships Realising the potential of new services will include developing the right strategic partnerships. This is particularly so where the PDL may seek to enhance its product offerings. For example it may wish to consider enhancing its regaining independence service to include other key service offers. This could include developing relationships with providers of Telecare, Telehealth and Community Equipment. Furthermore the engagement with health partners may provide the PDL with a key strategic business opportunity for example to develop an integrated health and social care product offering to private customers. This would greatly enhance both regaining independence and specialist dementia services whilst developing the uniqueness of private payer services. PDL Workforce The ability to recruit staff with the required values and abilities is the lifeblood of new business opportunities. Over the course of the first five years of trading the PDL will need to recruit, induct and train a new staff workforce so as to meet the projected growth in support hours purchased. This will need to involve a Dorset wide recruitment campaign promoting the PDL as an employer of choice within the local market with attractive terms and conditions of service. As the potential to enhance service offers is realised (for example health related services) the PDL may consider the recruitment of multi skilled staff teams that include physiotherapists, occupational therapists, nutritionists and nurses. Pan Dorset LATC Business Case Page 50 of 61

99 The recruitment of a significant number of full time equivalent staff will have an effect on both overhead costs and management structure. As described above, this will require a level of financial investment at the outset plus addressing identified breakpoints for example in-line management reporting ratios. Pan Dorset LATC Business Case Page 51 of 61

100 8 Benefits and advantages of a Pan Dorset LATC Meeting the Better Together Agenda The leaflet Better Together Integrated health and Social Care (included in the appendices) states the objectives of this initiative for the authorities of Bournemouth, Dorset and Poole are: Improved health and care for residents A more seamless service for people who access health and social care in the Dorset area Greater efficiencies and better value for money One of the initiatives described in the leaflet is Local Authority Trading Company The Pan Dorset LATC is the best and only opportunity that the three local authorities will have to meet the above objectives and initiatives in a totally coordinated manner. The merging of three sets of social care services into one entity with one set of professional managers under the strategic control of the three authorities is an unprecedented opportunity. The website Dorsetforyou - includes the following aspirations: Our aim is to overcome the existing cultural and financial barriers that can get in the way of delivering coordinated care and support to the people and communities that we serve It is difficult not to agree that the Pan Dorset LATC will go a long way in helping meet those aspirations and so achieve the objectives included in Transformational Challenge Award Once established, the joint PDL will then become an exemplar for other services in the three authorities, encouraging new and joined-up thinking across the different directorates and services. Reputational Benefits There are benefits accruing from the PDL that are not readily measurable and not necessarily immediately visible and they include the following: The very high profile that this venture will have in both the region and nationally. The PDL will be the very first jointly owned PDL in the UK in the field of adult social care. All three authorities will be seen as pioneering and innovative for joining in this project. This will enhance the reputation of each of the authorities and raise the profile of the Dorset partnership in central government and other regions The consequences of not creating the PDL, this may appear a negative approach to adopt, but if the PDL is not taken up, the three authorities involved will still have to decide the future of their services. It is extremely likely that at least one if not two single PDLs would be the result of not establishing the PDL. We would then see two single PDLs competing in the same towns for the same customers and same staff. This situation would potentially lead to one winner and one loser, Pan Dorset LATC Business Case Page 52 of 61

101 Service and Financial Critical Mass The term critical mass is used to describe the size that any organisation must reach to be able to withstand the threats and risks faced by a commercial organisation. In our view the PDL will reach that critical mass and some of the benefits accruing from that are: Ability to withstand shortfalls in additional income over time Sufficient staff numbers for more effective manpower planning General perception of financial security enhanced leading to easier recruitment Market penetration easier with high profile brand and reputation The nature, size and geographical spread of the new PDL will benefit each of the partner services in the following ways: The size of the new PDL will make the additional income targets of the single Bournemouth LATC less risky as there is a greater financial foundation behind the plans. Poole s two day centres will not be working in isolation, and their high quality, complex services can be provided to other non-residents of Poole. Dorset s reablement services and day services in Christchurch will be able to offer services to the elderly in neighbouring high density urban areas of Poole and Bournemouth. Pathways to Care A PDL will be able to offer a single point of access and coordinated support activity across the three local authority areas, supporting the Better Together strategic approach to service delivery 5. All professionals seeking to refer into the PDL will be able to contact one organisation regardless of the geographical boundaries that exist. This is a significant benefit particularly to G.Ps, Acute Hospitals and health providers whose services may cut across different local authorities. An example to illustrate the benefits of the PDL is Reablement services. Currently both the Royal Bournemouth Hospital and Poole General Hospital serve people living in each local authority area. Discharge planning for patients with social care needs, therefore has to consider which Reablement team (Dorset CC, Bournemouth BC or Poole BC) will need referring to, each with a differing admin process and pathway to navigate. From a Reablement provider perspective, each Reablement service will allocate separate staffing resources to support referrals from these hospitals. A PDL will facilitate the move to a single assessment, referral and intermediate care delivery pathway, whereby one organisation will be providing Reablement. Therefore the fragmentation highlighted above can be removed and in turn resources used more effectively and efficiently across health and social care. Income Generation The PDL can be more ambitious in the levels of private income it can generate without breaching the Teckal exemption rules. At the time of externalisation the Pan 5 Better Together Business Plan ( ) page 18 Table 1 Programme and Project Descriptions Pan Dorset LATC Business Case Page 53 of 61

102 Dorset LATC will be able to derive 20% of its income away from the three local authorities, for example within the private payer market. Having a combined income from the three local authorities of circa 36.5 million per year means that the PDL can seek to generate 9.13 million per year without breaking the Teckal exemption rules. This is significantly higher than the income potential of individual LATCs, as the table below illustrates. LATC Local Authority Income p.a M Maximum Private Income p.a M Pan Dorset LATC Dorset LATC Bournemouth LATC Poole LATC This high exemption ceiling means that the PDL can look ambitiously at the private market without having to limit its targets due to the Teckal exemption limits. Both Bournemouth and Poole have large potential demand from which they can attract new self-funder income, but as single LATCs they would be limited by Teckal because their respective Council contract values do not provide sufficient headroom to really penetrate the market. Adding Dorset County Council s contract value of 25m pa into the joint LATC allows an additional 5m of self-funder income to be earned without breaking Teckal rules. Efficiency and economies of scale The PDL will be able to achieve greater efficiencies and economies of scale as a result of the following: Income contributions from three authorities mean that a number of costs associated with the PDL are effectively spread. This includes the costs associated with the Pan Dorset LATC such as the Executive management team and costs of governance. Rationalisation within certain management tiers for example Heads of Service. This is a post implementation restructure based on the amalgamation of job roles that, on transfer into the PDL, were separate to each transferring service. The outcome of this rationalisation does not mean that staff are lost, rather it offers the PDL the opportunity to redesign its management capacity to support new areas of the business for example the management of services for private payers. Consolidation of services within certain geographical areas. Particularly where the three local authority services share a close proximity and service type. For example where day centres within a proximity support the same client group with similar services it is possible to consolidate the service within one day centre and utilise the other day services to provide a different range of service to a different client group. This, therefore, enables the PDL to diversify its product range and support the local authorities in meeting different demands. This may have particular scope with expanding LD day support with transition clients. Pan Dorset LATC Business Case Page 54 of 61

103 Workforce Recruitment All three local authorities recognise the challenges in recruiting suitable front line care staff. This is the effect of the wider recruitment market and the well-documented specific shortfalls in the number of people attracted to employment within social care services. As a result the ability to recruit and retain staff is of paramount importance to the future delivery of services and the realisation of new opportunities described earlier in this business case. Operating as a PDL offers the opportunity to coordinate recruitment campaigns and allocate resources to attract staff within a much wider pool, than could be achieved by individual LATCs. Moreover the PDL mitigates the real risk associated with separate LATCs competing for the same staff within the same recruitment pool. Overall therefore the PDL offers a much stronger chance of recruiting support staff than would be the case with individual trading companies for each local authority. Market Position As a 36.6 million business with over 1,400 staff and services across, Bournemouth Dorset and Poole, the PDL will enjoy a significant market position within the independent sector. The scale of this trading entity offers clear opportunity as described in Section 7, to generate significant new income and effectively compete for business. Whilst there are established provider markets in many of the local authority areas, there are very few able to position, so as to offer a one -stop shop to social care across the whole county of Dorset. This should be seen as an exciting and major opportunity for PDL strategic business development over the first five years of trading. In contrast this potential is severely limited and extremely difficult to achieve with separate LATCs for each authority. Of note also is the market position that the PDL will have on a regional basis. That is, the PDL will also have the real opportunity to penetrate new markets within different counties based on its range of more specialised product. An example of this can be seen from Essex Cares LATC, which over the first three years of trading was successful in developing Reablement services outside of Essex. This included securing a county wide contract for the delivery of services to West Sussex County Council. The decision to penetrate new markets will be part of the strategic planning process and decision making of the PDL over and above opportunity presented within Bournemouth Dorset, and Poole. The ability to plan in this manner, however, really comes from the scale and market significance of a PDL rather than an individual LATC. Pan Dorset LATC Business Case Page 55 of 61

104 9 Risks and disadvantages of joint ownership and their management 9.1 Identifying and managing risks in Implementation The single biggest risk for the implementation stage sits around any technical changes to the ICT and network communications that would be needed to allow the PDL to function efficiently. By their nature these costs are difficult to identify and cost until the project is under way. If there are technical issues that can be solved, but only at a very high cost, the pragmatic solution is to look to the PDL to find work-arounds that mitigate the issue. The problem with this type of solution is that in the long run they lead to inefficiencies which is exactly what the PDL is designed to eradicate. These unavoidable inefficiencies can then lead to reduced savings and profit, which can only be remedied by some form of investment, which may be out of the financial reach of the PDL so the three councils, would be asked to help find or fund a solution. 9.2 Managing risks the PDL post implementation. Other potential disadvantages Each authority will lose immediate and direct control of its services in the PDL as opposed to controlling its own single LATC. By its nature the LATC model means that Councils lose management control of their services, but that is seen as one of the benefits. Having to share control of the joint LATC means that priorities and initiatives from other authorities will become part of the decision-making and this may take precedence over other individual policies etc. Unfair profit sharing is a possibility if the agreed ratio calculation becomes inappropriate. The remedy would be to revise the ratio calculation, and that would be a reserved matter and so need a unanimous vote on the ESG. Double running of support services is a potential danger to the smooth and efficient running of the PDL. This situation is unavoidable for the short term, so it could be an issue that will cost all three authorities through a lack of efficiency savings and additional administration costs. These costs will not last forever, as these support services will be integrated into one provider after 3 years. The immediate objective of this will be increased process efficiencies and reduced costs of administration. The future required migration of services into one system is the solution to the double running of support services. This migration project will be difficult and timeconsuming on management time and potentially specialist support and help. Three differing sets of terms and conditions of employment will be the problem facing the HR teams supporting the company. These will only be harmonised over the medium to long term and will cause some management and employment issues. Legal challenges from the market may be more likely as the PDL will be very high profile within the region. Pan Dorset LATC Business Case Page 56 of 61

105 9.3 Exit strategy Transition of PDL services into the independent market This illustrates how the PDL is not a destination for the services, but a potential transition situation. If the PDL were a great success financially, then there would be a possibility of a cash purchase from the private market Breaching the conditions of the Teckal Exemption This only applies if the Councils want to re-award their service contracts without going to a tender process. The ambition of the PDL would be to become efficient enough to be able to win the contracts without the Teckal exemption Failure of the PDL to deliver the proposed business plan The above reason is only one of several that relate to one or more partners wanting to leave the agreed structure. The most typical reasons for exit would be: Additional savings need by an authority over and above those available through the PDL Possible sale to another provider with capital receipts and guaranteed savings available as part of the sale price Forecast savings not being achieved, leaving the market as the only cheaper but less palatable alternative Inequality of profit-share that cannot be agreed by the three authorities Change in political sentiment These few reasons highlight the need to have exit facilities in the shareholders agreement has been agreed in principle. Pan Dorset LATC Business Case Page 57 of 61

106 10. Implementation 10.1 High level timeline and milestones Based on the respective Councils approving the business case in December 2014 there will be three key go live milestones. These are as follows: 4. The PDL will go live on the 1 st July 2015 and receive the transfer of DCC provider services, staff and properties. 5. On 1 st July 2015 the PDL will receive the transfer of BBC provider services, staff and properties. 6. On 1 st October 2015 the PDL will receive the transfer of BoP provider services, staff and properties. The milestones described above in effect create a semi-phased approach to the complete go live of the PDL. Phasing of go live is necessary as a result of the different stages of readiness the three local authorities will be at. For example in November 2014 DCC began the implementation process for a single LATC. This has enabled work to proceed in advance of PDL implementation. Therefore by 1 st July 2015 DCC will be in a position to go live. BoP, following approval of the business case, will be in a position to begin implementation from January As a result their go live date is later. The go live timescales also recognise the risks inherent in the implementation process. Council Officers have not implemented an LATC before, nor the complexity associated with a PDL and therefore there is a risk that the resource requirements are underestimated in time and financial terms. To mitigate this risk, experienced implementation consultants are informing council corporate teams of the implications and requirements of the process, and could be involved in the actual implementation itself Structure of implementation Implementation will be underpinned by the following work streams: Future State - includes developing the operating model, service design and governance Commercial and Legal - includes statutory registration, establishing service specifications and the tax & cost implications Systems and Infrastructure - establishing and implementing the approach to finance, operations, property and HR Communications and marketing - engaging key stakeholders and ensuring effective communication with staff & service users Benefits realisation - developing business plans and reporting so that benefits can be measured and achieved Each of the above workstreams will at some point involve the creation of Chinese walls, which will prevent any conflicts of interest occurring in the negotiation and delivery stages of the implementation. As an example, commissioning officers who will manage the future service contract for cannot act on behalf of the PDL in the drafting of service contract. Pan Dorset LATC Business Case Page 58 of 61

107 10.3 Implementation roadmap Key stages of implementation will involve both activities common to the three local authorities and individual to each. Common activities will include for example establishing the Executive Shareholder Group, deciding the company name and appointing the PDL board. Individual activity under taken by each local authority includes property leases, support service SLAs and the TUPE transfer of staff into the PDL. The table below sets out each common and individual milestone and timings, leading to the phased go live dates of July and October Programme management Implementation will involve a complex programme of work involving a number of Council Directorates. This will involve the utilisation of a programme and project management approach with a dedicated project manager and dedicated personnel from each of the identified Directorates as follows: Finance HR IT Legal Contracts and Procurement Property Communications Provider Services The Programme will be overseen by an experienced consultancy. An indicative project resource plan has been developed and this should be firmed-up as part of the mobilisation phase. Strong sponsorship of this programme will be important to ensure that council resources are available to deliver the required outcomes and outputs on time. Pan Dorset LATC Business Case Page 59 of 61

108 It is expected that the Programme will have a governance structure that drives the programme forward and is able to make decisions, support the mitigation of risks and issues and approve any change requirements as the Programme continues to be delivered Stakeholder engagement Stakeholder engagement is critical to the success of the PDL. Ensuring operational staff, service users and carers and trade unions are engaged with and support the PDL not only lends itself to an easier transition but also to a more successful organisation. At the Business Case stage the views of a number of key stakeholders has been considered. These include the leads of corporate services as well as a range of staff tiers within provider services Change management A clear change management strategy will be designed at the beginning of the implementation phase. Service areas should feel engaged with the process and operational managers need to have ownership of the programme. Articulating clear goals and delivery plan as well leadership from above are critical success factors. Communication activities with service users and carers will involve regular briefings and opportunities for service users and carers to voice any concerns. As part of this process Corporate Communication will implement a detailed communications plan. The PDL executive team will play a key role in moving the culture of the new organisation through change management and their recruitment and appointment are essential elements in this process Post go-live The new organisation is not expected to begin new trading immediately. Services and staff will need time to grow accustomed to their new identity and relationship to the Councils. At post go-live the PDL may wish to consider the potential for future income generation in terms of business planning and measuring additional capacity requirements. This timeline has been assumed in the financial case for the PDL. As outlined above the recruitment and appointment of PDL executive managers is not a straightforward process. We therefore recommend that once the new executives are in post there is an agreed hand-over period of one or two months between any interim or implementation management and the new executive team. This hand-over period will be designed to deliver the following: History and background on the Business Case Cultural change expectations Detailed knowledge of systems and structures Introduction of new team to staff and service users Pan Dorset LATC Business Case Page 60 of 61

109 The above outcomes are designed to prevent the new executives from re-inventing the wheel and wasting valuable time trying to understand system processes and procedures. Pan Dorset LATC Business Case Page 61 of 61

110

111 Appendix B Equality Impact Needs Assessment The Diversity Promise Making it Happen! Title of Policy/Service/Project Service Unit ADULT SOCIAL CARE PROVIDER SERVICES CORE SERVICE TRANSFORMATION (CST) PHASE 2 Workstream: Provider Services and Day Opportunities/ Establishing a Local Authority Trading Company ADULT SOCIAL CARE Lead Responsible Officer and Job Title Members of the Assessment Team: Andy Sharp (Service Director) and Jenni Collis-Heavens (Service Manager) Drafted by Jenni Collis- Heavens, Anja Ford, Michael Twigg, Karen Churchill, Susan Legg, Lorraine Taylor, Nik Ethridge, Margaret Parker, Gail Haywood, Julie Fellows, Denise Harris, Lindsay Divall, Mel Blanch Date assessment completed: October 2014 Version Control

112 About the Policy/Service/Project: What type of policy/service/project is this? (delete as appropriate) Change Transformation Programme What are the aims/objectives of the policy/service/project? (please include here all expected outcomes) Provider Core Service Transformation Core Service Transformation for Provider Services is part of a programme of reviews across Bournemouth Borough Council during 2012/13 and 2013/14 linked to the Transformation, Efficiency and Change (TEC) programme. The programme is aiming to achieve a vision for service delivery which meets peoples needs and has long term stability and sustainability. This includes: delivering services in the most effective and appropriate way pursuing new business opportunities and income streams beyond the current services achieving better outcomes for Customers and Carers delivering services to more people in need of social care support, including customers in receipt of direct payment, customers who are private funders and informal carers of people in need of social care support increasing efficiency in the operation of our services increasing community connections and reducing service dependencies ensuring more people can live ordinary lives, supporting the national personalisation agenda increasing opportunity to access voluntary/paid work Changes in legislation at a national level have placed an increasing emphasis for adult social care services to operate in ways which support people to retain their independence and live full, active lives as part of the local community. In instances where people do require interaction with statutory services such as adult social care, the emphasis should be on the customer being able to exercise choice and control over the services that they receive and for agencies involved in working with them, the main driver for intervention should be to support the individuals recovery to independence. 2

113 Developments in treatment and intervention in the medical sector have led to populations living longer. However, although people are living longer there is clear evidence that these additional years are not necessarily healthy years and the level of health and social care interventions for people in the older age group are higher. Demographic changes in Bournemouth mean that there is the potential for a significant increase in the numbers of people accessing social care and health services in the years to come. This is largely due to increases in the aging population but we are also anticipating an increase in demand for services to support people with disabilities and mental health issues The proportion of the English population meeting the criteria for one common mental disorder increased from 15.5% in 1993 to 17.6% in During this period, women (19.7%) were more likely than men (12.5%) to have a common mental disorder. 24% of people with a common mental disorder were receiving treatment for an emotional or mental problem, mostly in the form of medication. In 2009/10, where a diagnosis was included for those who spent time in hospital, schizophrenia accounted for the most bed days which was nearly double that of the second most common diagnosis, mood affective disorders (Key facts and trends in Mental Health 2011, Mental Health Foundation). This increase in demand is clearly taking place alongside a reduction in the resources available to support people through social care and health services. National data suggests that if demand and current spend continue on the same trajectory then we would need to double our investment in care services by The current spend on Adult Social Care is approximately 35% of the whole Council spend on services. ONS population projections suggest that the number of people aged 85 and over will rise from 1.8m in 2008 to 3.3m in Clearly on a local level the amount of investment suggested above is not an option and over the course of the next three to four years the amount of money available to provide services will reduce further. Managing demographic demand is therefore a key issue which will be addressed through all aspects of this CST. Local Authority Trading Company for Provide Services The proposals for this workstream are: Our proposal for change: To move to the use of a Local Authority Trading Company for Adult Social Care Provider Services This includes: Day Opportunity Services for older people and people with disabilities Accommodation Services Employment Services 3

114 Support time and Recovery Services Home Care Enablement Services Broadwaters Care and Support Centre (rehabilitation Service for older people) How can we deliver this? Set up a Pan Dorset or Bournemouth only Local Authority Trading Company, creating a new culture of greater autonomy, accountability and quicker decision-making Pursue new business opportunities and income streams beyond the current services Deliver services to more people in need of social care support, including customers in receipt of direct payment, customers who are private funders and informal carers of people in need of social care support Increase community connections and reduce service dependencies Increase opportunity to access voluntary/paid work Increase efficiency in the operation of our existing services Review existing staff and management structures across Provider Services Identify more opportunities for volunteers to take an active role in supporting people and services Implement the vision through strong engagement with staff, service users, providers and partners Are there any associated services, policies or procedures? Yes If Yes, please list below: Adult Social Care policies and procedures Better Together Programme Customer procedures Local Account Equality for All Corporate Quality Objectives Joint Health and Well-being Strategy Integrated Passenger Transport Unit List the main people, or groups of people, that this project is designed to benefit and any other stakeholders involved? Service users, parents and carers (as stakeholders) including people on direct payments and people who self fund their support- increasing access to personalised services, better supported Council (to enhance customer satisfaction and create efficiencies) 4

115 Staff and management (long term employment) Other Council staff Transport, Catering/Cleaning (Mouchel), Property Services, Customer (First Point Plus) Partner agencies (Health/Independent/Third Sector Service Providers, Department of Work and Pensions) Self Advocacy Services (Bournemouth People First) General public increasing access to personalised service Will this project impact on any other organisation, statutory, voluntary or community and their clients/service users? Service Users and carers Health (partners with Adult Social Care) Independent Service Providers (including tutors) Third Sector partners (BHLive, Alzheimers Society, Mencap, Mind, Bournemouth People First, Sure Trust, Rethink, BCHA etc) Voluntary organisations and Volunteers Borough of Poole, Dorset County Council and other local authorities currently purchasing services from Bournemouth Borough Council Provider Services Consultation, Monitoring and Research Consultation: What involvement/consultation has been done in relation to this (or a similar) policy/service/project and what are the results? There have been 4 recent engagement events relating to the remodelling proposals for day opportunities and the proposal to establish a Local Authority Trading Company for Provider Services. No formal consultation in relation to this project has been carried out yet. 5

116 If you have not carried out any consultation, or if you need to carry out further consultation, who will you be consulting with and by what methods? Following approval by Cabinet, the implementation of the LATC will require a variety of consultation approaches. The decision of a Pan Dorset or a Bournemouth only LATC will have an impact on the stakeholders and the consultation and engagement methods employed and may be adjusted accordingly. Stakeholders include: Service Users Parents/Carers Self Advocacy Services Departmental Staff/ Employees of Bournemouth Borough Council Volunteers Councillors Partner Agencies The following consultation and engagement methods are likely to be employed: Questionnaires 1-1 Meetings Group Sessions (Specific Working Groups and Generic Sessions) Informal Drop Ins Telephone conversations Examples of engagement with partners and other Council functions are: 1:1 meetings, queries, presentations and meetings. Monitoring and Research: 6

117 What data, research and other evidence or information is available which is relevant to this EINA? The Council commissioned detailed research relating to the viability of a Local Authority Trading Company from Care and Health Solutions, who have submitted a business case noting their findings and recommendations. As part of the process we researched service models applied within other comparable councils in England. A summary of this research is currently being drafted. Use of volunteers - example: The Stable Family Home Trust The Stable Family Home Trust (SFHT) is a Registered Charity that supports people with a learning disability to lead ordinary lives with some extraordinary moments near Ringwood. The charity supports over 100 service users and makes effective use of 45 regular volunteers Care Bill and Care Bill Impact Assessments Better Together RIPFA research MOSAIC data Age Concern report January 2013 Later life in the United Kingdom Changes to the eligibility criteria and the White Paper (to be implemented 2015) With an ageing population, there is an essential need to develop services that have a preventative ethos, in order to avoid the cost of social care delivery from possibly spiralling out of control. The 1998 White Paper: Modernising Social Services; highlighted the government s aim to create a shift in the culture of care provision:...put a new emphasis on helping people achieve and maintain independence wherever possible to improve their health and social functioning rather than just "keeping them going" No Health without Mental Health Best Value, CLG (2011) aimed to make it clear that councils should consider overall value including social value when considering service provision. So it plays to the long-term strengths of voluntary and community groups and small businesses. Under the Duty of Best Value, therefore, authorities should consider overall value, including economic, environmental and social value, when reviewing service provision. As a concept, social value is about seeking to maximise the additional benefit that can be created by procuring or commissioning goods and services, above and beyond the benefit of merely the goods and services themselves. Employment Support for People with Disabilities _final.pdf Valuing People 7

118 Valuing People Now Winterbourne View DoH Review and Response Building Dementia Friendly Communities Alzheimer s Society Think Local Act Personal better lives through more choice and control over the support they use Caring for Our Future White Paper Social Care institute for Excellence Is there any service user/employee monitoring data available and relevant to this policy/service/project? What does it show in relation to equality groups? Provider services currently support approx older people and people with disabilities to live full and active lives. In September 2013 younger adults day opportunities embarked on a quality assurance audit carried out by Enham as an independent provider. The audit asked a number of questions relating to the building, the staff, the activities, friendships, transport and feeling safe. Younger Adults Day Opportunities Quality Assurance Data (Sep2013) Total Number accessing surveys 316 Total Number of completed questionnaires 160 Happy with Service 93% Unhappy With the Service 3% Don t know 0% No answer 4% 8

119 Current number of people accessing services: Day Opportunities Service Total Client No. on Register Total No. Session accessed per Service per week Northbourne Connect Wallisdown Heights Connect First Point Connect Boscombe Connect Kitchen Project Allotment Project 4 8 Total Accommodation Services Service Client No s April Court 17 long term 10 respite Wallfield 11 long term 16 respite Shared Lives 40 Leven House 20 Community Support Team 84 9

120 Broadwaters (29short term beds) Other Service Client No s Support Time and Recovery Team 36 Community Employment Service long term 21 short term Home Care Enablement CQC Reports for registered services: April Court Wallfield Shared Lives Broadwaters Homecare Enablement Services MOSAIC data provides information about how different groups of people access information Age Concern have released a report in January 2013 Later life in the United Kingdom which shows: Of year olds 85% have access to the internet year olds 55% Over 75 year olds 26% Research indicates that 15% of older people have used the internet to contact a Local Authority Service User and Carer Surveys demonstrate that 59.9% of Service Users and 46% of Carers are either extremely or very happy about the services they receive. This data has not been disaggregated to particular groups. Demographics of older people in the area show: our increasingly elderly population, (80+ age group increasing from 7.1% of the population now to a projected 9.6% in Note that the national trend is a predicted increase from 4.8% to 7.6%. Bournemouth already has one of the highest percentages of people 80+) Financial information salaries Relevant HR information: 10

121 Number of employees Length of service Gender Ethnicity Disability 599 Fte Male Female M% F% % 8.68% Age groups Under Over 65 Av. Age M Av. Age F 2% 12.52% 23.04% 33.06% 27.71% 1.67% Sexual orientation Bisexual Gay/Lesbian Heterosexual Prefer not to say Unknown 0.17% 3.84% 56.93% 12.85% 26.21% Religious Belief Prefer not to say Agnostic Atheist Buddhism Christianity Islam None Unknown Contract Term 2) 11.85% 2.5% 2.67% 0.67% 39.4% 0.67% 13.36% 25.38% Fixed> Fixed Full Time Part Time Permanent 3mths <3mths 2.67% 0.00% 44.74% 55.26% 97.33% Adu lt Soci al Car e staf f prof ile (De c 201 Which of the Council s Equality Objectives does this policy/service/project support? Equality for All: 1. We will make our workforce more reflective of our local community. The adult social care workforce extends beyond employees of the Council. We contract with care agencies and providers who engage a diverse workforce and we also contract with third sector organisations who engage volunteers from a range of service user groups for example, Bournemouth People First, people with a learning disability. 11

122 This data demonstrates that the wider workforce (including Council workers) supporting the community with Adult Social Care services, broadly reflects the ethnic make-up of the population of Bournemouth. 2. We will provide service with fairness, dignity and respect and ensure access is based on need. For Adult Social Care the access to services is currently based on eligibility and an assessment of financial eligibility. The Care Bill changes access criteria in a number of ways. The eligibility criteria will be national, whereas there is currently local discretion. This enables people to move more easily from area to area and be clear about what their entitlements are. There will be a duty to treat Carers in the same way as we treat service users and the Local Authority will be expected to ensure that everyone has access to relevant support and 12

123 information (including financial advice relating to social care) whether they are eligible for services or not. All provider services will have clear operational protocols detailing their remit and their processes to ensure consistent and fair provision of services. Our proposals are a method of enabling this to happen within the limited resources available to the Council. 3. We will improve people s feeling of safety and reduce the fear of anti-social behaviour. In relation to safety, this is a performance indicator for Adult Social Care. We measure how safe people feel through the service user surveys that are undertaken annually. Whilst these proposals do not tackle safety directly (and bearing in mind that we do have a Safeguarding Adults duty) by joining up services across the Council around prevention activities and increasing awareness of staff and ultimately the general public then this should support this objective. 4. We will reduce the isolation felt by older and disabled people. We are proposing a service delivery model that supports people to achieve outcomes in ways that strengthens community connections and natural self sustaining support structures to reduce isolation. Furthermore the proposed Local Authority Trading Company will be accessible to a wider audience including people who self fund their care and people on direct payments, giving people more services they can access and reducing the likelihood of social isolation. Access to information, development of web based solutions, development of social media responses and digital solutions will support this approach and these will be considered in our strategies going forward. 5. We will get more people involved in influencing decisions at the Council. We have started to develop our service user forum which will be a vehicle for getting people more engaged with the decision making within Adult Social Care. In addition to this each service (within Provider Services)will support the running of service user steering groups, involving service users in the day to day running of the service and any business planning. 6. We will improve the life chances of young people in Bournemouth. 13

124 Whilst this may not have a direct impact on young people, by being able to access information over the web, and use of social media, they will be able to find out relevant information about services to support them and others. We may also be able to spark interest in young people to take up careers in social care and offer placement and volunteering opportunities within our directly provided social care services. 7. We will use our community leadership role to influence the advancement of equality including among our partners. We always support and initiate advancements of equality in the delivery of any of our services working in partnership with other local authorities, private business, third sector partner and the community as a whole. If there is a lack of information, what further information do you need to carry out the assessment and how are you going to gather this? Final decisions about which services will form part of the LATC, and if this will be the Bournemouth only model or a PAN Dorset model will not be made until December This assessment will need to reviewed in line with these decisions. Assessing the Impact Age Actual or potential benefit The move to greater entrepreneur ship and more community based services will provide more opportunities for improved integration with the wider local community and decrease service dependencies. A LATC will have greater autonomies to respond to the market in relation to service need and pricing, which will translate into quicker responses to emerging issues and opportunities. Actual or potential negative outcome How a LATC operates may not be understood and result in people worrying about their future support and impact negatively on their health and well-being. It may also result in people disengaging from services provided by the LATC. Change can be difficult or unsettling for people potentially leading to a deterioration of health and well-being. Training and Development Opportunities for staff working 14

125 Actual or potential benefit The LATC will be able to procure more innovative staff training and development opportunities ensuring that staff are highly motivated and able to deliver very specialised services, thus providing better outcomes for people. Implementing a more supported approach to personalisation e.g. maximising individual potential utilising peoples skills and abilities, will reduce the risk of carer breakdown and achieve better outcomes for people. Improving transitions and access to a cluster of autonomous services will raise aspirations and decrease service dependencies. A LATC will offer greater fluidity between the services it owns, therefore improve transitions and access to the right level of support for clients. The services offered by the LATC will provide clients with an outcomes based approach and move towards disengaging with services wherever possible (e.g. community engagement, access to voluntary and paid work). Actual or potential negative outcome in the LATC will have to be developed, which may result in a less well trained work force and a loss of quality during this time. The agreed terms and conditions for staff who work within the LATC may be different to their current terms and conditions e.g. lower pay, no or limited access to the local government pension scheme, this will impact on the employees overall quality of life now and in the future. Particularly as finding alternative employment may be more difficult due to their age. Changes to terms and conditions may result in staff seeking alternative employment impacting on the continuity of care provided to service users who are reliant on someone who knows them well. Proposed timescales for implementation may not allow for proper engagement e.g. too long: causing anxiety and stress leading to disengagement, too short: not enough time to participate due to nature of disability or availability during timeframe. Reduction/removal of barriers and social stigma through a service that is open to all (paid for by the council or by the person direct) rather than just people eligible for a service. 15

126 Actual or potential benefit Actual or potential negative outcome Disability A LATC will allow for earlier intervention outside the current eligibility criteria thus preventing an early deterioration and need for a more costly long term service. A LATC will be able to offer social care services to more people including people who self fund and people on direct payments, giving people greater choice and decreasing the likelihood of social isolation. Having a central point for a number of directly provided social care services will make it easier for people to navigate and access the support they need. Will allow younger people (pre 18) to access support avoiding long term service dependencies and supporting transitions from children to adult services. Will allow younger people to access the rehabilitation services offered through Broadwaters aiding their recovery e.g. people recovering from stroke. The move to greater entrepreneur ship and more community based services will provide more opportunities for improved integration with the wider local community and decrease service dependencies. A LATC will have greater autonomies to respond to the market in relation to service need and pricing, which will How a LATC operates may not be understood and result in people worrying about their future support and impact negatively on their health and well-being. It may also result in people disengaging from services provided by the LATC. Change can be difficult or unsettling for service users 16

127 Actual or potential benefit translate into quicker responses to emerging issues and opportunities. The LATC will be able to procure more innovative staff training and development opportunities ensuring that staff are highly motivated and able to deliver very specialised services, thus providing better outcomes for people. Implementing a more supported approach to personalisation e.g. maximising individual potential utilising peoples skills and abilities, will reduce the risk of carer breakdown and achieve better outcomes for people. Improving transitions and access to a cluster of autonomous services will raise aspirations and decrease service dependencies. A LATC will offer greater fluidity between the services it owns, therefore improve transitions and access to the right level of support for clients. The services offered by the LATC will provide clients with an outcomes based approach and move towards disengaging with services wherever possible (e.g. community engagement, access to voluntary and paid work). Reduction/removal of barriers and social stigma through Actual or potential negative outcome potentially leading to a deterioration of health and wellbeing. Training and Development Opportunities for staff working in the LATC will have to be developed, which may result in a less well trained work force and a loss of quality during this time. The agreed terms and conditions for staff who work within the LATC may be different to their current terms and conditions e.g. lower pay, no or limited access to the local government pension scheme, this will impact on the employees overall quality of life now and in the future. Particular as finding alternative employment may be more difficult due to their disability. Changes to terms and conditions may result in staff seeking alternative employment impacting on the continuity of care provided to service users who are reliant on someone who knows them well. Proposed timescales for implementation may not allow for proper engagement e.g. too long: causing anxiety and stress leading to disengagement, too short: not enough time to participate due to nature of disability or availability during timeframe. There may be limitation in the range of community services and facilities available for use, e.g. due to limited access for people with disabilities. 17

128 Actual or potential benefit a service that is open to all (paid for by the council and procured independently) rather than just people eligible for a service. A LATC will allow for earlier intervention outside the current eligibility criteria thus preventing an early deterioration and need for a more costly long term service. Actual or potential negative outcome There may be limitation in the availability of accessible changing places and toilets. Staff who may have specific needs relating to their disability may be impacted on by the need to work more flexibly. Gender A LATC will be able to offer social care services to more people including people who self fund and people on direct payments, giving people greater choice and decreasing the likelihood of social isolation. Having a central point for a number of directly provided social care services will make it easier for people to navigate and access the support they need. Staff who may have specific needs relating to their disability may benefit from having greater flexibility to move between services and the hours worked. Through our engagement and consultation process we will be able to identify individual issues addressing them will have positive impact for the wider group. The year old age group working for the Council is predominantly female. Working within the LATC may require changes to working practice and new skills, and therefore this must be taken into account. 18

129 Actual or potential benefit Actual or potential negative outcome Gender reassignment Pregnancy and Maternity Marriage and Civil Partnership This group of people may be isolated through their identity. Through our engagement and consultation process we will be able to identify individual issues addressing them will have positive impact for the wider group. There are no specific notable negative outcomes other than outlined above for this group. There are no specific notable positive or negative outcomes other than outlined above for this group. There are no specific notable positive or negative outcomes other than outlined above for this group. Race Through our engagement and consultation process we will be able to identify individual issues addressing them will have positive impact for the wider group. In addition, online resources may enable translations. Information about services and the proposed changes may not be understood in the format it is provided in thus preventing people from engaging in the process. Religion or Belief Sexual Orientation There are no specific notable positive outcomes other than outlined above for this group. There are no specific notable positive or negative outcomes other than outlined above for this group. Any other factor/ groups e.g. socioeconomic status/carers etc Implementing a more supported approach to personalisation will reduce the risk of carer breakdown and achieve better outcomes for people. The LATC will continue to co-produce how services are Proposed timescales for implementation may not allow for proper engagement e.g. too long: causing anxiety and stress leading to disengagement, too short: not enough time to participate due to nature of disability or availability during timeframe. 19

130 Actual or potential benefit Actual or potential negative outcome developed and delivered, leading to better outcomes for people. The LATC will increase volunteering opportunities and support the councils commissioning objectives to increase community capabilities. Recognising that new technology can be a cost to people, there will be support to get access to information at contact points around the Borough, particularly at libraries. There are no specific notable positive or negative outcomes impacting on human rights however, the proposals support Article 8, the right to respect for private and family life, home and correspondence. The right to private life is the right to physical and psychological BIHR (British Institute of Human Rights) integrity. This gives the individual the right to form and maintain relationships, develop family relationships and to ongoing contact if their family splits up. For public services the BIHR delineates several areas of significance, which are relevant to this CST: Human Rights Promotion of dignity Prohibition of discrimination/ promotion of equality Participation Brutality Consideration of humans rights when resources are an issue Consideration of humans rights when drafting blanket policies Consideration of humans rights within the choice of contracted services Consideration of humans rights through the implementation of fair procedures 20

131 Stop - Any policy which shows actual or potential unlawful discrimination must be stopped, removed or changed. None identified at this time. Action Plan Issue identified Action required to reduce impact Timescale Responsible officer How a LATC operates may not be understood and result in people worrying about their future support and impact negatively on their health and well-being. Plan and implement appropriate engagement and consultation with all stakeholders April 2015 Jenni Collis-Heavens Anja Ford Provider Services Managers Which Business Plan does this action link to e.g. Service Equality Action Plan/Team Plan ASC CST Phase 2 Cabinet report due Oct14/Dec14 Service Plan Change can be difficult or unsettling for people potentially leading to a deterioration of health and well-being. As above April 2015 Jenni Collis-Heavens Anja Ford Provider Services Managers ASC CST Phase 2 Cabinet report due Oct14/Dec14 Service Plan 21

132 Training and Development Opportunities for staff working in the LATC will have to be developed, which may result in a less well trained work force and a loss of quality during this time. Prepare a training plan for Provider Services including costings and procurement options. Prior to LATC being established (date tbc) Jenni Collis-Heavens Anja Ford Provider Services Managers ASC CST Phase 2 Cabinet report due Oct14/Dec14 Service Plan Proposed timescales for implementation may not allow for proper engagement Seek peoples views during initial consultation and review implementation timescales in line with findings March 2015 Jenni Collis-Heavens Anja Ford Provider Services Managers ASC CST Phase 2 Cabinet report due Oct14/Dec14 Service Plan Changes to employees contracted terms and conditions may result in staff seeking alternative employment impacting on the continuity of care provided to service users who are reliant on someone who knows them well. It may also have disproportionate negative effect on employees who are older and/or have a disability as alternative employment options may be limited. Work with the Council to establish suitable safeguards to employees contracted terms on conditions following transfer to the LATC. Prior to LATC being established (date tbc) Jenni Collis-Heavens Anja Ford Andy Sharp ASC CST Phase 2 Cabinet report due Oct14/Dec14 Service Plan 22

133 Information about the proposed changes may not be understood in the format it is provided thus preventing people from engaging in the process. Ensure information is provided in the most appropriate format. Such as Easy Read and translations for documented information and hearing loops, suitable venues for group meetings and opportunity to have information explained in one to one meetings and small groups as needed. Immediate and ongoing Jenni Collis-Heavens Anja Ford Provider Services Managers Marilyn Richards Laura Fenemore ASC CST Phase 2 Cabinet report due Oct14/Dec14 Service Plan There may be limitation in the range of community services and facilities available for use, e.g. due to limited access for people with disabilities. Work with Partners such as other Council Departments (commissioning, building control, parks etc), private companies and the third sector to develop community capacity where limitations are identified Ongoing Jenni Heavens-Collis Anja Ford Provider Services Managers Equality Duties Manager ASC CST Phase 2 Cabinet report due Oct14/Dec14 Service Plan There may be limitation in the availability of accessible changing places and toilets. Work in Partnership with Bournemouth People First to identify current availability and potential shortfalls. Develop a strategic approach to increase available resources if needed March 2015 Anja Ford Provider Services Managers Equality Duties Manager ASC CST Phase 2 Cabinet report due Oct14/Dec14 Service Plan Staff who may have specific needs relating to their disability may be impacted on by the need to work more flexibly. Identify specific disability related needs as part of staff consultation and ensure these are taken into consideration Prior to LATC being established (date tbc) Jenni Collis-Heavens Anja Ford Provider Services Managers ASC CST Phase 2 Cabinet report due Oct14/Dec14 Service Plan 23

134 Final decisions about which services will form part of the LATC, and if this will be the Bournemouth only model or a PAN Dorset model will not be made until December This may impact on the scope of this Equality Impact Needs Assessment. This assessment will need to reviewed in line with these decisions. January 2015 Andy Sharp Jenni Collis-Heavens Anja Ford Provider Services Managers ASC CST Phase 2 Cabinet report due Oct14/Dec14 Service Plan 24

135 Cabinet 8 Report Subject Building Maintenance Operations New Ways of Working Meeting date 17 December 2014 Cabinet Portfolio Corporate Lead Service Director Status Classification Key Decision Impacts on Key Policy Framework Report author Executive summary Councillor Robert Lawton, Portfolio Holder for Housing Bill Cotton, Executive Director, Environment & Economy Gary Josey, Service Director, Housing, Parks & Bereavement Services Public For decision Yes No Simon Ludgate, Head of Housing Technical Services and Building Maintenance simon.ludgate@bournemouth.gov.uk Paul Freeman, Head of Business Development paul.freeman@bournemouth.gov.uk To achieve greater service quality for our customers who use the Council s building and maintenance operation, reduce operational and financial risk, improve efficiency and enable expansion into the private sector approval is sought to purchase and implement an integrated electronic solution. This will enable the building and maintenance operation to introduce full mobile working, planning, job costing, materials reordering, stock control and management information into service delivery.

136 Recommendations That Cabinet: 1. Considers and approves the Full Business Case for the implementation of electronic mobile working, planning, job costing, materials reordering, stock control and management information for building and maintenance operations, as attached at Appendix 1 to this paper. 2. Approves the purchase and implementation of an integrated electronic solution as set out in Option 1 of this paper and attached Business Case. 3. Approves prudential borrowing of 985k through Public Works Loan Board for a period of five years to implement Option 1 of this paper and attached Business Case. Reasons for recommendations The In-house building operation has an annual turnover of 7 million which represents over 40,000 jobs carried out each year. Turnover and the number of jobs have increased over time as the operation takes on more work. This will continue to increase as opportunities for operating in the private sector develop. However there is a significant reliance on manual processes, paper based systems and ad hoc solutions, which are inadequate for a business of this size creating operational and financial risks. Even if the business is maintained at its current level an integrated electronic solution is needed; to secure the longterm sustainability of the Council s building and maintenance operations This will ensure that the business can deliver a service of greater quality to existing and future customers in the most efficient and cost effective way. Environmental benefits will be achieved through the reduction of travelling and use of paper. The recommended option 1 will add a number of additional modules to extend the functionality of existing ICT systems by employing partnered suppliers who have delivered this solution elsewhere, using off the shelf software. Using a proven integrated ICT system avoids the high risk in selecting software from unconnected suppliers. 2

137 The cumulative net benefits of the proposal are estimated to amount to 1.9m over the first four financial years of operation, more than sufficient to repay the initial capital costs of 985k over that time period. A significant benefit will be in the improved management information which will reduce operational and financial risk. The proposed project meets the following priorities in the Council s Corporate Plan: EC1 Becoming a 24/7 council. EC2 Developing our workforce. EC3 Managing sound finances. EC4 Making the best use of our assets. EC5 Working in partnership. IE3 Promoting sustainable travel. IE4 Improving the quality of Bournemouth s built environment. TE4 Playing our part in a thriving conurbation. Background detail 1. The in-house building operation has grown from employing ten staff 15 years ago to over 130 staff now. The service undertakes building maintenance and major refurbishment works for Council housing, Council public buildings and schools, carrying out in excess of 40,000 jobs per year, 25,000 of these being responsive repairs, with an annual turnover is 7 million. 2. There is a reliance on manual processes, paper based systems and ad hoc solutions which have a significant effect on the business operation and service delivery to our customers. Existing electronic processes and systems are functioning in their current use, however on their own they are no longer fit for purpose for the size and scale of business. If combined with the additional ICT modules proposed in this project they will create an up to date fit for purpose ICT system for the future. 3. The proposed project builds on a wider investment of 400k in business as usual system upgrades that are being undertaken and are already budgeted for, mainly as HRA client costs. These provide a platform for this proposed project as part of a step change in the way that the Council runs and manages its building and maintenance operations. 4. The Council s Business Improvement Team completed a review of the operational processes in September 2014 and concluded that the current paper based system was high risk and that an integrated electronic solution would deliver significant benefits. 3

138 Consultation 5. The Portfolio Holder for Housing and Service Director for Housing, Parks & Bereavement Services have been consulted on the high level concept, feasibility of the project and solution need. Both appreciated that although implementation costs were high, for the service to continue to be successful investment would be needed and this project would give the ability to expand into the private sector. 6. The Head of Strategic ICT has been consulted on ICT strategy and gave guidance on project/programme management and project delivery. His team worked with Mouchel to agree project options, costs and a high level delivery plan. 7. The Head of Strategic of Strategic Procurement has been consulted and confirmed that there are no procurement issues relating to the preferred option. 8. Mouchel undertook the feasibility study for this project and identified the project options, costs, benefits and high level delivery plan. 9. The Finance team has been consulted on the capital and revenue project financing implications and prepared the financial tables. 10. Legal services have been consulted on the procurement and legal implications of the project. 11. Users of similar systems have been consulted; Sanctuary Group Housing in Worcester, the largest housing provider nationally, and Alliance Homes Housing Association in Portishead. Options Option 1 - To implement a fully integrated electronic system. 12. This is the preferred option which will introduce a comprehensive fully integrated ICT system providing mobile working, planning, job costing, materials reordering, stock control and give reliable up to date management information. 13. The project will integrate a number of additional software modules to extend the functionality of existing systems by using off the shelf software from partnered suppliers who have delivered this solution elsewhere. 14. Using a proven integrated system which interfaces modules with each other and with building suppliers avoids the high risk in selecting software from unconnected suppliers. 4

139 15. A series of business as usual upgrades to existing systems are taking place, primarily through the Housing Revenue Account. These upgrades will enable the proposed integrated electronic system to be implemented. 16. The advantage of this option is that it creates a fit for purpose, fully integrated ICT system that improves building operational efficiency in the most cost effective way. This will create a sound, sustainable and reliable basis on which services can continue to be successfully provided to our customers and enable the business to expand. Operational and financial risks will be significantly reduced and environmental benefit gained. 17. Due to the size of the programme an implementation period of approximately 13 months will be necessary before the benefits start to be realised. Option 2 - To implement a non-integrated electronic system. 18. This option would use non-integrated ICT software packages to achieve the same requirements as option 1. However benefits achieved would need to match those detailed for the preferred option for this to be a viable alternative. 19. A significant disadvantage of this option is the integration of different supplier s software and the need to write bespoke interfaces. These can be expensive to achieve and may not be entirely compatible. As a result there is an increased risk and ongoing system maintenance costs will be higher. 20. Using different software packages may result in separate management information reports being required for each package. This adds cost and reduces functionality from that achieved through a fully integrated system. 21. The preferred option uses job scheduling software provided by a market leader in this field. Choosing alternative software may result in a lower quality product. Option 3 - Implement a less comprehensive solution or implement the project in phases to spread the cost 22. This option reduces the specification or extends the implementation period. The benefits achieved at the end of the project would need to match those set out in the preferred option. 23. Core modules of the system must be implemented for the system to function and therefore cannot be removed from the project specification. By their nature these core modules make up a higher proportion of the overall project cost. 5

140 24. The other modules are lower cost but significantly improve efficiency of the core modules and add considerable benefit to the overall project. While removing these modules would reduce the project cost this would be outweighed by a greater reduction in the benefits. 25. Extending the programme to spread the cost over a number of years has been considered. While there would be a lower capital sum required in each year the implementation cost overall would be higher, project benefits would not be received until for a longer period and the return on investment would take longer. 26. The delay could restrict the Council building company s ability to expand into the private sector during the longer implementation period. Option 4 - Do nothing 27. Although this option avoids large capital expenditure for a business of this size the reliance on manual processes, paper based systems and ad hoc solutions is unsustainable. 28. The ability of the service to expand would also be severely restricted. If the Council s building company attempts to expand into the private sector with the current system it could lose customer confidence with the consequential damage to reputation. Summary of finance and resourcing implications 29. The capital cost of the preferred Option 1 is estimated to be 985k, excluding contingency of 10%. It is anticipated this will be spent over the 2014/15 and 2015/16 financial years. The costs have been prepared in conjunction with colleagues in Mouchel and Strategic ICT and have been robustly challenged by housing staff during the preparation of this business case. 30. The business case is predicated on the system generating significant efficiencies. This will enable the Building Maintenance service to carry out significantly more work for the same resources and allow freed up resources to be used in winning new business as part of the Council s commercialisation agenda. 31. The financial assessment section of the business case illustrates the revenue costs and benefits that have been projected from the implementation of the integrated electronic system. The ongoing costs associated with the system include licence fees and software updates as well as some additional hardware costs that will arise as part of the planned growth of the business. 32. The cumulative net benefits, through increased capacity and changes to back office functions, amount to 1.9m over the first four financial years, 6

141 more than sufficient to repay the initial capital costs of 985k over that time period. 33. Based on the most prudent assumption, in which there is no external growth of the business, there could still be operating and administrative efficiencies which would allow workforce savings of 215k per annum, or 1.075m over five years, which is in excess of the 985k initial capital costs. 34. The capital costs of the preferred option will be funded by prudential borrowing. The costs of borrowing 985k over five years at the current Public Works Loan Board rate of 2.5% would be 1.047m including interest costs. The expected financial benefit achieved through efficiency savings generated by the project over the same period is 1.9m. 35. For prudential borrowing there is sufficient headroom to borrow these funds within the Council s treasury management strategy and prudential indicators. The loan would be repaid from the departmental benefits gained as a result of the implementation of the system. The repayment charges would therefore become a departmental responsibility. Summary of legal implications 36. The procurement process and contractual arrangements required to implement the proposal will be considered by, and subject to the advice of, the Council's legal team in liaison with the Strategic Procurement team. This will ensure the legal requirements are complied with and the implications in regard to the Council's company structure are taken into account throughout the process. 37. The Council has the relevant legal powers to make the decision recommended by this Report, and Cabinet is the relevant decision making body as set out in the Council's constitution. Summary of human resources implications 38. The introduction of mobile working and move to an electronic based system requires a change to working practices, policies and procedures. Therefore the project delivery includes a change management element that will assist staff in the transition from paper to electronic systems. Summary of environmental impact 39. An environmental impact checklist has been completed. This project will have a positive impact on the environment. 40. The use of paper will be significantly reduced, travel distances and van stocks will be optimised and visits to merchants reduced. Reduced travelling 7

142 minimises wear and tear on vehicles and fuel consumption, vehicle routeing reduces CO2 emissions and traffic congestion. Summary of equalities and diversity impact 41. An analysis of the impact of the proposal on people with different characteristics has been carried out. There will be no adverse impact as a result of implementing this project. Staff not familiar with ICT may have concerns about using mobile working devices. A plan will be in place to ensure all staff are supported through the implementation stage and this will be available on an ongoing basis. Summary of risk assessment 42. A risk assessment for the project has been completed. 43. Estimates on benefits have been prudently prepared and are considered to be realistic. 44. The project budget has been prepared on a prudent basis and allows for an experienced full time project manager who will manage and control costs. 45. The project has a dependency on business as usual upgrades being completed. Work to carry out the business as usual upgrades is in progress and these are not anticipated to delay the project. 46. Authorisation for the new Council owned building company to use ICT systems licensed to the Council has to be established. Building company staff will use ICT systems under ICT licences granted to the Council. The current view is that since the building company will be undertaking a large element of its work for the Council this can be considered mutual trading and essentially an extension of the Council. If this view differs the building company may need to purchase its own licences. Background papers None Appendices Executive Gateway report submitted for the meeting on 3 December 2014 Building Maintenance Operations New Ways of Working 8

143 Business Case Programme / Project Name: Building Maintenance Operations New Ways of Working (Project Hub number) Date: 20 November 2014 Service Unit(s): Housing, Parks & Bereavement Services Prepared by: Simon Ludgate & Tom Wilkinson Project Manager: TBA Project number: N/K Document Type: BC Document version: 12 Approval Role Name Approval Date Project Owner (PO) Paul Freeman 06 Nov 14 Executive Director (ED) Bill Cotton 07 Nov 14 Portfolio Holder (PH) Cllr Robert Lawton 10 Nov 14 Portfolio holder s comment I have discussed the operational processes with Building Maintenance senior managers and share their concerns that for the new building company to trade successfully in the private sector the current paper based system will limit this ability. I therefore recommend the proposed investment in ICT to bring the operation in line with other similar organisations and particularly those that will be in direct competition with the new Council owned building company. Background programme and project information Does this Project link to existing Projects/Programme? If yes, please give details and project number, if known. Has this funding request already been approved as part of the Capital Programme/HRA? If yes, please give further details. Board decision required. A FBC was presented to Gateway on 28 th February 2014 to set up a council owned building company. Feasibility funding allocated of 35,000. Approval for 985k funding (before contingency) from capital funds. Business Case comments from Finance and PPMO Name Position Comments Tom Wilkinson Group Accountant, Finance Matt Rabbitt Manager, PPMO

144 BUSINESS CASE Building Maintenance Operations New Ways of Working page 2 of 23 Other Elected Members, Officers and Subject Matter Experts consulted, e.g. Legal, Procurement, HR, Risk, Strategic IT Name Position Date Nick Palmer Head of Strategic ICT 22 July 2014 Ken Wilson Head of Projects Bournemouth, Mouchel 02 Sept 2014 Cllr Robert Lawton Portfolio Holder For Housing 02 Sept 2014 Gary Josey Service Director Housing, Parks & Bereavement Services 02 Sept 2014 Bill Cotton Executive Director Environment & Economy 09 Sept 2014 Ian Milner Acting Executive Director Finance 16 Oct 2014 Hugh Lambourne Bournemouth Group Commercial Development Manager 16 Oct 2014 Tom Wilkinson Group Accountant Finance 05 Nov 14 Document revision history Version Author Changes Date 1 Neil Walker Draft version for discussion 02 Sept Simon Ludgate Updated draft version 08 Sept Neil Walker Updated draft version for discussion 09 Sept Neil Walker Updated draft version for discussion 11 Sept Simon Ludgate Tracked changes 02 Oct Simon Ludgate Significant rewrite of some sections 17 Oct Simon Ludgate Updated 28 Oct Tom Wilkinson Updated financial information 05 Nov 14 9 Paul Freeman Updated 06 Nov Paul Freeman Updated 12 Nov Paul Freeman Incorporated further feedback 13 Nov Paul Freeman Incorporated CMT feedback 20 Nov 14 2

145 BUSINESS CASE Building Maintenance Operations New Ways of Working page 3 of Executive Summary Proposed project 1.1 Approval is sought to purchase and implement integrated electronic solutions to enable full mobile working, planning, job costing, materials reordering, stock control and management information for building and maintenance operations. 1.2 The In-house building operation already has an annual turnover of 7 million through the building maintenance and major refurbishment work it does for Council housing, Council public buildings and schools. This represents over 40,000 jobs carried out each year with 25,000 of these being responsive repairs. Turnover and the number of jobs have increased over time as the operation takes on more work and this will continue to increase as opportunities for operating in the private sector develop. 1.3 However while work undertaken for clients has increased in scope and volume the back office functions, processes, systems and support in delivering this work are unsustainable. For a business of this current scale and size there are major dependencies on manual processes, paper based systems and ad hoc solutions resulting in reduced resilience and a finite ability for this to continue. 1.4 An integrated electronic solution is therefore needed to secure the long-term sustainability of the Council s building and maintenance operations and ensure that the business can deliver a service of greater quality to existing and future customers in the most efficient and cost effective way. An integrated system to that proposed provides an effective joined up solution which encompasses every aspect vital to delivering the service. 1.5 Exchanging information electronically creates the ability to issue jobs to the workforce on a job by job basis increasing flexibility and optimising travelling times. The proposed system is able to control van stocks electronically, optimising materials held on vans, and includes automatic ordering and re-stocking. Details of labour and materials used on jobs can be captured electronically and uploaded into a job costing system. This virtually eliminates data entry requirements and paperwork. The benefits of the proposal are reduced vehicle travelling times, more efficient use of labour and resources and the provision of essential up to date management information on service productivity. 1.6 The capital cost of the proposal is estimated to be 985k, excluding a contingency sum of 10%, and it is anticipated that this will be spent over the 2014/15 and 2015/16 financial years. 1.7 The cumulative net benefits amount to 1.9m over the first four financial years, more than sufficient to repay the initial capital costs of 985k over that time period. 1.8 The present reliance on manual processes, paper based systems and ad hoc solutions have a significant effect on the business such as a: Reduction in the number of jobs that operatives could complete each day. Reduction in accessible information for operatives to work effectively. Limit in the ability to analyse the costs of jobs. Limit in effective management of stock held in vehicles and the supply of materials. 3

146 BUSINESS CASE Building Maintenance Operations New Ways of Working page 4 of 23 Lack of ability to capture accurate time and attendance information, including analysis of productive and non-productive time. Limit in up to date and detailed management information, which further limits early intervention in any areas of concern. Restriction in expansion of business and opportunities to operate in the private sector. 1.9 The Council s Business Improvement Team completed a review of the operational processes in September This was to assess whether the current paper based system was fit for purpose for the existing operation and for when the new building company commences trading in the private sector. This review concluded that: A mobile working solution would deliver significant benefits due to the high volume of jobs being processed circa 25,000 responsive jobs per year. The existing paper based system was high risk For the existing operation to remain successful and for the new company to have the ability to expand commercially it is essential ICT systems are upgraded to levels commensurate with other organisations and competitors. A review of other similar providers indicates: The applications and software packages used need to be fit for purpose in terms of the scale and scope of operation being undertaken. There are high risks when choosing packages from different suppliers that need complicated interfaces. A solution from a single supplier is the most desired option. A systematic approach is needed to optimise business processes to achieve efficient results and support mobile working. That an adequate, dedicated technical and business resource is allocated to the project. That adequate project management is essential for delivering the project This BC proposes an investment primarily in commercial-off-the-shelf (COTS) software, built and delivered by third party vendors who are experts in the areas this BC addresses. The software integrates with the Northgate and Opti-time systems currently used by the Council establishing a fully integrated electronic solution. The use of COTS software provides some of the following strengths and benefits: COTS software has higher reliability when compared to custom built software due to its proven use by other organisations. COTS software comes with systems documentation and it is therefore easily maintained. COTS software is of higher quality because specialists within the industry have invested years developing it. COTS software is provided at a reduced cost compared to custom built software of the same standard. The BC project delivery schedule is reduced because the basic functionality exists already The key components of the BC project are: Job costing (Northgate Contractor Module), Management reporting (Northgate Contractor Module). This software is also essential for integrating the Kirona mobile solution with the existing Northgate system. 4

147 BUSINESS CASE Building Maintenance Operations New Ways of Working page 5 of 23 Mobile working (Kirona Job Manager). Integration linking Northgate s Housing system with Northgate s Contractors Module, the Xmbrace DRS system (Opti-time) and Kirona. Larger planned works scheduling (Xmbrace Pro Planner). Stock automation (Northgate Contractor Module and QR-coding) including integration with key building material suppliers. Mobile devices (SMARTphones/Tablets) to enable the workforce to receive jobs in the field in real time. Mobile device management solution (aligned with Council ICT Strategy) for ongoing support and trouble shooting. Finance interface with Oracle Fusion (two-way). Data loading of territory addresses. Project Management, Governance and Change Management Proposed project mobilisation programmed to commence January 2015 with estimated completion January Feasibility not required as this has already been undertaken. Which Council corporate priority actions does the proposed project meet? EC1 Becoming a 24/7 council. EC2 Developing our workforce. EC3 Managing sound finances. EC4 Making the best use of our assets. EC5 Working in partnership. IE3 Promoting sustainable travel. IE4 Improving the quality of Bournemouth s built environment. TE4 Playing our part in a thriving conurbation. What support is required from other Services? ICT (see Section 6, proposed project resource ) Strategic ICT Legal Services to set up contracts Finance Services (2 hours per week until March 2016) Key benefits from the project will: Enable job planning to be undertaken in real time with more flexibility and efficiency. Use the full functionality of the Xmbrace DRS (Opti-time) job scheduling software. Mobile working enables Opti-time software to work in a live environment optimising travel transferring jobs between the workforce to send the nearest appropriate tradesperson. 5

148 BUSINESS CASE Building Maintenance Operations New Ways of Working page 6 of 23 Enable carried out on site to be captured in real time electronically and uploaded into a job costing system. Enable the new council owned building company to expand commercially. Improve job costing accuracy, reduce time in pricing and back office staff costs leading to more accurate and faster billing which are critical to trading. Job costing is essential to provide detailed management information in order to manage an efficient operation and invoice accurately. Significantly improve cost management, more accurate day to day monitoring and monthly accounts. Improve productivity due to real time operation and more efficient scheduling of the workforce. Scheduling planners are able to redeploy urgent works more efficiently without the need to telephone operatives. Jobs are issued one at a time so the sequence in which jobs are carried out will be controlled centrally reducing the potential for missed appointments and operatives choosing the order in which work is carried out. It is anticipated this will lead to a 15% increase in productivity, equating to c 4k / year per responsive repairs operative. Improve customer service through more efficient response times for urgent calls, quicker re-routing of the closest operative, rapid delivery of work instruction in the field. Real time notification of when works are completed instantly updating the back office enabling customer satisfaction surveys to be undertaken immediately afterwards. Reduce overtime working. Enable larger planned works to be programmed more efficiently than can currently be achieved using the paper based system. This will optimise workflow for works such as kitchens, bathrooms and empty properties and is anticipated to achieve a 7.5% increase in productivity. This will be of a considerable benefit for use on larger external commercial contracts. Although this software is not a core module essential for mobile working the benefits achieved with Pro Planner set against its additional implementation cost are high, making it good value for money. Provide visibility of staff work schedules and therefore the ability to integrate staff from different teams to work on the same project. This will create flexibility and more efficient use of the workforce. Enable the Xmbrace DRS system to minimise the travel distances between jobs, reducing traffic congestion, fuel and wear and tear of the vehicle, thus reducing cost and CO2 emissions. Enable the workforce to start work at their first scheduled appointment rather than travelling to the depot to collect their work schedule. Enable the optimisation of van stocks increasing the completion of jobs on the first visit. Van stocks will be standardised and controlled centrally. Van restocking at the merchants will be scheduled centrally rather being carried out on an ad hoc basis eliminating multiple visits to merchant. Quick Response (QR) coding will enable materials to be logged on and off van stocks electronically in real time and will update the centralised job costing system. Reduce the use of paper and the potential for lost job records and therefore income. Administrative costs in handling vast volumes of paperwork and its storage will be reduced. The section undertakes in the region of 25,000 responsive repairs a year 6

149 BUSINESS CASE Building Maintenance Operations New Ways of Working page 7 of 23 where paper job records need to be filed and/or scanned into an EDRMS system. The workforce will no longer be required to collect and return paperwork to the office during busy times thus increasing their productivity. Improve performance management leading to a higher percentage of jobs completed within repair priority times and on first visit. Detailed analysis of mobile worker activity will be available to all relevant managers and supervisors in real time. Give enhanced ability to manage staff performance and address training needs. More efficient management of absences, timesheets, vehicle records, health & safety, risk assessments and warning messages in real time. Transfer staff focus from handling paper and filing to active monitoring and processing of information leading to a more efficient, reliable, accountable and accurate service. Overall Project Risk Rating Top 5 Project Risks Financial benefits set out in the BC not achieved. Implementation costs exceed approved budget. Current ICT Network infrastructure is not adequate to support full functionality of the system. BBC and ICT resources insufficient to complete programme within project timescale. Insufficient resources allocated to manage the system post go live date. Gross Risk Rating High High High High High Mitigating Actions Robust project management and cost control. The financial benefits have been prepared on a prudent basis using empirical evidence and considered to be realistic. Revised policies and procedures will be in place and monitored to ensure benefits are achieved. The project allows for an experienced full time project manager to be employed who will deliver robust project management and cost control. Costs have been prepared prudently and include a 10% contingency against all costs. The current network meets the specification required by ICT suppliers. The project manager will provide early warning if either the BBC or ICT resources will not be sufficient to complete the project on time. This enables management to take the appropriate corrective action. Allocate sufficient resources as set out in the BC. Minimum 2 full time BBC resources to support day-to-day operation of the system 7

150 BUSINESS CASE Building Maintenance Operations New Ways of Working page 8 of 23 Capital Costs Year 2014/ /16 Total Equipment 21,574 43,801 65,375 Internal Staff 13,200 26,800 40,000 Project Management 66, , ,000 Software Build 118, , ,300 Implementation 18,612 37,788 56,400 Fees 78, , ,385 Other 7,524 15,276 22,800 Sub-Total 325, , ,260 32,514 66,012 98,526 TOTAL COSTS 357, ,137 1,083, Feasibility Funding In Scope Not Required. Deliverables Not Required. Out of Scope Not Required. Timeframe (start and end date) Not Required. 8

151 BUSINESS CASE Building Maintenance Operations New Ways of Working page 9 of Project Options Appraisal Option 1: Implement Proposed Project (Preferred Option) In Scope Project Management and Governance. Change Management. Purchase and integrate the following applications: Northgate Contractors Module. Kirona mobile working. Xmbrace Pro Planner (planned maintenance). QR Coding (stock control reader). Mobile devices (SMARTphones). Mobile device management solution (mobile ICT support). Finance interface with Oracle Fusion (two-way). Integration with key building material suppliers. Data loading. Expected Cashable Benefits ( k) 2,366k - between 2015/16 and 2018/19 Expected Non Cashable Benefits Improved management information. Improved customer satisfaction. Improved health and safety control. Faster response times. More marketable service. More reliable service. Improved staff morale. Improved accuracy and accessibility of records. Improved operative and unit performance. Improved customer service. Improved profitability. Lone working facility. Improved communication with staff. Elimination of manual business processes. Elimination of paperwork. Reduced requirement for paper file storage. Reduced CO2 emissions and carbon footprint. Reduced traffic congestion. Out of Scope Business as usual ICT software or equipment. Expected Financial Cost ( k) 985k capital cost during 2014/15 and 2015/16 468k revenue cost (including 10% contingency) between 2015/16 and 2018/19 High Level Breakdown of Costs See Table A (Capital Costs) and Table B (Ongoing Costs and Benefits in Section 5, Financial Assessment 9

152 BUSINESS CASE Building Maintenance Operations New Ways of Working page 10 of 23 Deliverables A mobile working solution for building activities, primarily planned and responsive repairs. Full utilisation of existing Xmbrace DRS scheduling system (Opti-time). Job costing automation. Stock control automation / supplier fulfilment. Time and attendance data capture. Management information. Finance system integration (with Oracle Fusion). Timeline (inc key milestones) Mobilisation: January 2015 Rollout: January 2016 Overall Project Risk Rating Top 5 Project Risks Financial benefits set out in the BC not achieved. Implementation costs exceed approved budget. Current ICT Network infrastructure is not adequate to support full functionality of the system. BBC and ICT resources insufficient to complete programme within project timescale. Insufficient resources allocated to manage the system post go live date. Gross Risk Rating High High High High High Mitigating Actions Robust project management and cost control. The financial benefits have been prepared on a prudent basis using empirical evidence and considered to be realistic. Revised policies and procedures will be in place and monitored to ensure benefits are achieved. The project allows for an experienced full time project manager to be employed who will deliver robust project management and cost control. Costs have been prepared prudently and include a 10% contingency against all costs. The current network meets the specification required by ICT suppliers. The project manager will provide early warning if either the BBC or ICT resources will not be sufficient to complete the project on time. This enables management to take the appropriate corrective action. Allocate sufficient resources as set out in the BC. Minimum 2 full time BBC resources to support day-to-day operation of the system 10

153 BUSINESS CASE Building Maintenance Operations New Ways of Working page 11 of 23 Option 2: Use alternative software to achieve deliverables. This option is rejected. The option seeks to deploy a non-integrated ICT system based on available COTS software then integrate it with existing systems. The benefits achieved would need to match those detailed for the preferred option for this to be a viable alternative (see risks). Implementation and ongoing maintenance costs will be greater than option 1. In Scope Project Management and Governance Change Management Alternative COTS mobile working and scheduler supplier Alternative COTS job costing system Alternative COTS planned maintenance system Custom development and integration of separate COTS application software Stock control reader Mobile devices (SMARTphones) Mobile device management solution (mobile ICT support) Finance interface with Oracle Fusion(two-way) Integration with key building material suppliers Data loading Expected Cashable Benefits ( k) Analysis not undertaken Expected Non Cashable Benefits Improved management information. Improved customer satisfaction. Improved Health & Safety control. Faster response times. More marketable service. More reliable service. Improved staff morale. Improved accuracy and accessibility of records. Improved operative and unit performance. Improved customer service. Improved profitability. Lone working facility. Improved communication with staff. Elimination of manual business processes. Elimination of paperwork. Reduced requirement for paper file storage. Reduced CO2 emissions and carbon footprint. Reduced traffic congestion. Out of Scope Business as usual ICT software or equipment. Expected Financial Cost ( k) Unknown High Level Breakdown of Costs Unknown 11

154 BUSINESS CASE Building Maintenance Operations New Ways of Working page 12 of 23 Deliverables A mobile working solution for building activities primarily planned and responsive repairs. Utilisation of Xmbrace DRS scheduling system (Optitime). Job costing automation. Management information. Finance system integration (with Oracle Fusion). Timeline (inc key milestones) N/A Overall Project Risk Rating Top 5 Project Risks Not fully integrated system. This proposal will require multiple interfaces between different supplier s COTS software. This causes numerous issues regarding compatibility, reliability and increased cost through custom development and testing. Software upgrades require interfaces to be amended with cooperation of all suppliers involved. This increases time, cost and complication when upgrading each piece of software. There are numerous issues regarding compatibility, reliability and increased cost through custom development and testing. The workforce scheduling system is unlikely to be the Xmbrace DRS system (Opti-time). Xmbrace DRS is the market leader and currently in use by the Council. Changing this system would require substantial investment in new software, retraining staff and potentially working with software delivering reduced scheduling functionality. Reports may not be able to be run as a single system. When reports are produced from different systems they will need to be reconciled adding considerable cost. Implementation costs exceed budget. Gross Risk Rating High High High High High Mitigating Actions Procure integrated COTS solution from single vendor requiring minimal custom interfaces. Procure integrated COTS solution from single vendor requiring minimal custom interfaces. Train staff on new system. May require manual workarounds and more robust administration processes. Robust Project Management and cost control. 12

155 BUSINESS CASE Building Maintenance Operations New Ways of Working page 13 of 23 Option 3: Implement a less comprehensive solution, or implement the project in phases to spread the cost This option is rejected. The option seeks to extend the project timeline to spread the cost of the solution over an extended period but this in turn will increase cost. The option is rejected for the following reasons: The proposed project is critical to the success of the new building company trading in the private sector. Extending the project timeline would delay the ability of the new building company to generate new revenue and additional profit. Extending the project timeline would mean the key benefits would not be realised until the final functionality release is implemented, thereby extending the period that the benefits are able to off-set against the implementation costs. Return on Investment would take longer than achieved by Option 1. Key roles, such as project management, would be required for the duration of the extended project increasing costs. Expertise acquired for initial releases may be lost later as the project extends past Option 1 s timeline. There are additional risks and costs associated with changing staff, retaining knowledge management, etc. There will be an increase in software licensing procurement costs. In Scope Project Management and Governance. Change Management. Purchase and integrate the following applications: Northgate Contractors Module. Kirona mobile working. Xmbrace Pro Planner (planned maintenance). QR Coding (stock control reader). Mobile devices (SMARTphones). Mobile device management solution (mobile ICT support). Finance interface with Oracle Fusion (two-way). Integration with key building material suppliers. Data loading. Expected Cashable Benefits ( k) Analysis not undertaken Out of Scope Business as usual ICT software or equipment. Expected Financial Cost ( k) Unknown 13

156 BUSINESS CASE Building Maintenance Operations New Ways of Working page 14 of 23 Expected Non Cashable Benefits Improved management information. Improved customer satisfaction. Improved Health & Safety control. Faster response times. More marketable service. More reliable service. Improved staff morale. Improved accuracy and accessibility of records. Improved operative and unit performance. Improved customer service. Improved profitability. Lone working facility. Improved communication with staff. Elimination of manual business processes. Elimination of paperwork. Reduced requirement for paper file storage. Reduced CO2 emissions and carbon footprint. Reduced traffic congestion. Deliverables A mobile working solution for building activities primarily planned and responsive repairs. Full utilisation of existing Xmbrace DRS scheduling system (Opti-time). Job costing automation. Stock control automation / supplier fulfilment. Time and attendance data capture. Management information. Finance system integration (with Oracle Fusion). High Level Breakdown of Costs Unknown Timeline (inc key milestones) months Overall Project Risk Rating Top 5 Project Risks Financial benefits set out in the BC not achieved. Delay in ability of new building company to generate profit Budget will need to be increased from Option 1 due to extended implementation programme period. Gross Risk Rating High Mitigating Actions Robust project management and cost control. The financial benefits have been prepared on a prudent basis using empirical evidence and considered to be realistic. Revised policies and procedures will be in place and monitored to ensure benefits are achieved. High Implement Option 1. High Robust Project Management and cost control. Unable to fully mitigate increased costs due to extended implementation period. 14

157 BUSINESS CASE Building Maintenance Operations New Ways of Working page 15 of 23 Current ICT Network infrastructure is not adequate to support full functionality of the system BBC and ICT resources insufficient to complete programme within project timescale High High The current network meets the specification required by ICT suppliers. Project Management of BBC and ICT resources, with sufficient notice given to assign resources to the programme. Option 4: Do Nothing This option is rejected. The option proposes that no action is taken. The existing manual paper based processes with minimal ICT automation, is not fit for purpose to meet current needs and would significantly restrict the council s ability to expand its commercial building activities. In Scope N/A Expected Cashable Benefits ( k) None Expected Non Cashable Benefits N/A Deliverables None Out of Scope N/A Expected Financial Cost ( k) None High Level Breakdown of Costs N/A Timeline (inc key milestones) N/A Overall Project Risk Rating Top 5 Project Risks Existing ways of working are primarily manual and paper based, are subject to errors and omissions and not fit for purpose. Current systems will not support expansion of the council owned building company. Health & Safety Loss of income Loss of reputation Gross Risk Rating High High High High High 15 Mitigating Actions Implement a fully integrated mobile working, job costing and stock control system. Option 1 Implement a fully integrated mobile working, job costing and stock control system. Implement an ICT system able to covey health and safety information and improved lone working cover. Implement a fully integrated mobile working, job costing and stock control system. Implement a fully integrated mobile working, job costing and stock control system.

158 BUSINESS CASE Building Maintenance Operations New Ways of Working page 16 of Strategic Alignment and Benefits Strategic Alignment for Preferred Option Corporate Priorities and Actions met An efficient council EC1 Becoming a 24/7 council EC2 Developing our workforce EC3 Managing sound finances EC4 Making the best use of our assets EC5 Working in partnership An improving environment IE3 Promoting sustainable travel IE4 Improving the quality of Bournemouth s built environment Project Deliverables A mobile working solution for building activities primarily planned and responsive repairs Full utilisation of Xmbrace DRS scheduling system (Opti-time) Job costing system Finance integration with Oracle Fusion Improved management information Accurate records Improved performance Improved customer service Improved profitability Stock control Improved health & safety Lone working facility Integration with key building materials suppliers Improved communication with staff Elimination of paperwork Reduced storage of files Reduced travelling and wear and tear on vehicles Improved staff morale A mobile working solution for building activities primarily planned and responsive repairs Full utilisation of Xmbrace DRS scheduling system (Opti-time) Finance integration with Oracle Fusion Improved management information Accurate records Improved performance Improved customer service Stock control Improved health & safety Lone working facility Integration with key building materials suppliers Improved communication with staff Elimination of paperwork Reduced storage of files Reduced travelling and wear and tear on vehicles Reduced CO2 emissions and carbon footprint. Reduced traffic congestion 16

159 BUSINESS CASE Building Maintenance Operations New Ways of Working page 17 of 23 Corporate Priorities and Actions met A thriving economy TE4 Playing our part in a thriving conurbation Project Deliverables A mobile working solution for building activities primarily planned and responsive repairs Providing an efficient service to local businesses. Full utilisation of Xmbrace DRS scheduling system (Opti-time) Job costing system Finance integration with Oracle Fusion Improved management information Accurate records Improved performance Improved customer service Improved profitability Stock control Improved health & safety Lone working facility Integration with key building materials suppliers Improved communication with staff Elimination of paperwork Reduced traffic congestion Benefits for Preferred Option Benefits Improvements in Responsive Repairs Operative productivity How Benefits are Measured? 15% increase = 1 additional job per day Baseline 5 responsive repair jobs Benefit Measurement Target 6 responsive repair jobs Reduce fuel and mileage expenditure through smarter routing of Responsive Repairs Operative 15% Saving = 13.5 miles per day (per vehicle) 90 miles (average) per day 76.5 miles (average) per day Improvements in Planned Works/Repairs Operative productivity 7.5% increase = 3,000 p.a. per Operative Extra productive time (0.5 hour per day / 2.5 hours per week) Stock Management Time saved on reduced travel to merchants and stock checking 2 hours saving per operative per week Administration Staff Full-time equivalents (FTE) 11 FTE 8 FTE 17

160 BUSINESS CASE Building Maintenance Operations New Ways of Working page 18 of Financial Assessment 5.1 The proposed project builds on the wider investment in business as usual system upgrades that are regularly undertaken. These upgrades ensure the most current versions of existing software are in place for both the building and maintenance operation, and those client functions in the Housing Revenue Account which have already been built into the HRA business plan. The existing planned upgrades are already budgeted for and will cost 400k, which are mainly HRA client costs. These provide a platform for this proposed project as part of a step change in the way that the Council runs and manages its building and maintenance operations. 5.2 The capital cost for this project is estimated to be 985k, excluding contingency of 10%, and it is anticipated that this will be spent over the 2014/15 and 2015/16 financial years. This is summarised in Table A below. The costs have been prepared in conjunction with colleagues in Mouchel and Strategic ICT and have been robustly challenged by housing staff during the preparation of this business case. Table A Capital Costs Year 2014/ /16 Total Equipment 21,574 43,801 65,375 Internal Staff 13,200 26,800 40,000 Project Management 66, , ,000 Software Build 118, , ,300 Implementation 18,612 37,788 56,400 Fees 78, , ,385 Other 7,524 15,276 22,800 Sub-Total 325, , ,260 32,514 66,012 98,526 TOTAL COSTS 357, ,137 1,083, The business case is predicated on the new system generating significant efficiencies which will enable the Building Maintenance service to carry out significantly more work for the same resources and allow freed up resources to be deployed in winning new business as part of the Council s commercialisation agenda. 5.4 Table B illustrates the revenue costs and benefits that have been projected from the implementation of the new system. The ongoing costs associated with the system include licence fees and software updates as well as some additional hardware costs that will arise as part of the planned growth of the business. 5.5 The benefits arise from the efficiencies anticipated following the implementation of the system and are focused in the areas of improved operative efficiency from better allocation of work meaning that more chargeable work can be completed per employee; there are back office administrative efficiencies; reduction in vehicle mileage because of better route planning and allocation of jobs; more efficient stock management and better debt collection from the automation of the systems. 18

161 BUSINESS CASE Building Maintenance Operations New Ways of Working page 19 of 23 Table B Revenue Costs and Benefits Ongoing Costs Year 2015/ / / /19 Equipment ,394 39,521 Internal Staff External Resource 14,950 15,000 15,000 15,000 Fees 47,406 47,867 47,169 71,374 Other 25,525 24,800 24,780 29,988 Sub-Total 88,153 88,492 93, ,883 8,815 8,849 9,334 15,588 Total Costs 96,968 97, , ,471 Benefits Year 2015/ / / /19 Operative Efficiency 117, , , ,548 Admin staff 14,520 49,940 62,000 62,000 Mileage Reductions 4,975 15,075 15,628 17,856 Return Visits 5,148 15,600 16,172 18,477 Debt Collection 14,256 43,200 44,784 51,168 Stock Management 35, , , ,920 Total Benefit 192, , , ,969 Net Benefit 95, , , ,498 Cumulative Net Benefit 95, ,778 1,221,260 1,897, The cumulative net benefits amount to 1.9m over the first four financial years, more than sufficient to repay the initial capital costs of 985k over that time period. 5.6 Taking a five year period, with the prudent assumption that there will be operating and administrative efficiencies, this would allow staffing savings of 215k per annum based on the current workforce, or 1.075m over five years, which is in excess of the 985k initial capital costs. Funding Options 5.7 The funding for the capital costs of the system will be from prudential borrowing. The costs of borrowing 985k over 4 years at the current PWLB rate of 2.5% would be 1.047m including interest costs, compared to the expected benefits of 1.9m over the same time period. 19

162 BUSINESS CASE Building Maintenance Operations New Ways of Working page 20 of Project Management Overview Project Approach 6.1 The project adopts a standardised project management approach to planning, organising, resource allocation and control dedicated to the achievement of a clearly defined goal and project success. 6.2 With this objective the approach employed will plan and deliver using the Council s accepted principles and processes for managing projects, the benefits of which are: A common and consistent approach. A controlled and organised start, middle and end. Regular reviews of progress against plan. Assurance that the projects continue to have a business justification. Flexible decision points. Management control of any deviation from plan. The involvement of management and stakeholders at the right time and place during the project. Good communication channels between the project, project management, and the rest of the organisation. 6.3 Project management activities will be divided into six stages: Definition. Initiation. Planning. Execution. Monitoring & Control. Closure. 6.4 Implementing complex projects, such as the implementation of electronic mobile working, planning, job costing, materials reordering, stock control and management information for building and maintenance operations, can present significant challenges for an organisation. For this reason, a phased approach to execution design, development, testing and rollout will be adopted. Additionally the project will be split logically into subprojects to expedite delivery. 6.5 A single project manager will be appointed to ensure all sub-projects are fully integrated in order to ensure satisfactory completion of the overall project. Key Reasons for doing Project The successful outcome of this project will enable and facilitate the delivery of efficient maintenance and property services to existing and new customers. The project will improve the effectiveness of existing capabilities within the council s building company and in-house building workforce leading to increased profitability and customer satisfaction. 20

163 BUSINESS CASE Building Maintenance Operations New Ways of Working page 21 of 23 The project will enable the Council s commercial company to market an effective responsive repairs and building service in the private sector. The current manual processes, paper based systems and ad hoc solutions are not fit for purpose for the existing operation, limit operating in the private sector and hinder the Council s ability to operate efficiently. There is no real time management information available to managers leading to significant delays in the receipt of financial and operational information. Existing management information is high level and does not give sufficient detail to manage the service efficiently. Attempting to expand the business in the commercial sector without adequate management information is high risk. The successful outcome of this project will enable flexibility and adaptability that would otherwise be unavailable in the management of existing staff. Critical Success Factors Adequate funding for the implementation of the project and ongoing service unit support to maintain the system. A mobile device management solution is in place to support mobile working staff. Project completed on budget within proposed timescale. Network speeds are adequate and disaster recovery in place. The mobile working system is used efficiently. Work Planners are well trained and are able to efficiently schedule the work in real time. Dynamic planned maintenance scheduling is available to optimise the use of the workforce. Elimination of reliance on paperwork and data input. Interfacing with Oracle Fusion. Electronic van stock management is in place. Real time operational and financial management information is available. Interfacing with key building material suppliers. Operatives are able to complete more jobs a day with reduced non-productive time. Travelling times are reduced. The mobile devices (SMART phones) are fit for purpose and spare devices are available within the Service Unit. Key Learning Applied / Evidence of Similar Projects 6.6 For the existing operation to remain successful and for the new company to have the ability to expand commercially it is essential ICT systems are upgraded to levels commensurate with other organisations and competitors. 6.7 Site visits have been undertaken to Sanctuary Housing and Alliance Homes Housing Associations both of whom are running Northgate based ICT systems. Both these organisations are very happy with the performance of their mobile working systems. These organisations advise using market leading software and properly resourcing the project for it to be successful. This advice has been incorporated into this BC and influenced the proposal to implement a fully integrated COTS ICT system. 21

164 BUSINESS CASE Building Maintenance Operations New Ways of Working page 22 of 23 Interdependencies IN / OUT IN Project or Resource that you are dependent upon (IN) or that are dependent on this project (OUT) Upgrade the Northgate & Xmbrace DRS (Opti-time) Servers and their supporting environment Brief description of dependency Existing servers are near the end of their lifespan and will not support the new software. Impact of interdependency on project This is essential to run the new software. IN Upgrade to v5 of Xmbrace DRS (Opti-time Diary) Opti-time upgraded v5 of Xmbrace DRS must be in place to enable the Kirona mobile working solution to operate. IN Implement Northgate Repair Scheduler (Web Booking Client popup in Opti-Time) This package speeds up access to Northgate and Optitime for Planners and will make a significant contribution to the overall efficiency of the system. The overall operational efficiency of planning the workforce relies on being able to process high numbers of works orders quickly. This software is a significant benefit and will enable appointments to be made on first call in an acceptable timescale. IN Upgrade to Business Objects environment to latest version This is reporting software and essential for interrogating operational & financial management information. An up to date version is necessary to deal with the more advanced and complex software proposed. Project Management Organisational Structure Project Board Name Position/Job Title Project Owner Paul Freeman Head of Business Development Project Manager TBA Project Accountant Tom Wilkinson Group Accountant, Finance Senior User David Gamblin Senior Building Maintenance Manager Senior Supplier Portfolio Holder Mark Purvis Cllr Robert Lawton Including Project Assurance, HR, Risk, Communications, Legal to attend as mutually agreed by Project Owner Where required for proper governance purposes 22

165 BUSINESS CASE Building Maintenance Operations New Ways of Working page 23 of 23 Proposed Project Resource (including Stakeholders, SMEs, Internal and External Resource) Resource Project Role Estimated Effort BBC Housing Technical Services and Building Maintenance System user and project support 1 FTE for implementation and ongoing support Bournemouth Building & Maintenance Limited (BBML). System user and project support 1 FTE for implementation and ongoing support Mouchel ICT Project implementation As per costing model Northgate Project implementation As per costing model Timescales and Key Milestones Project start date Project end date January 2015 January 2016 Key Milestone Date January 2015 Mar/April 2015 April 2015 August 2015 October 2015 October 2015 January 2016 February 2016 Milestone Description Mobilisation / Project Initiation Project Initiation - complete Project Design - complete Project Build - complete Project Integrated Testing - complete Project Pilots - complete Project Rollout Complete / System Live Project Closure 7. Appendix Risk Register for preferred option. 23

166 Environment Impact Checklist for all Cabinet Reports Issue: The implementation of electronic mobile working, planning, job costing, materials reordering, stock control and management information for building and maintenance operations report Meeting Date: 17 December 2014 Accountable Manager: Director of Housing, Parks & Bereavement Services Impact Assessor: Simon Ludgate, Key + Balance of positive Impacts? Balanced or unclear impacts - Balance of negative impacts n/a Not applicable Impact Criteria Impact Comments Natural resources impact on use of natural resources for example energy, water, raw materials + The move to mobile working will enable job tickets and records of work carried out to be held electronically. This will almost entirely remove paper from the process which will be a significant saving in raw materials. Travel distances will be reduced due to the allocation of 25,000 building repair jobs a year being undertaken in real time. Jobs are issued one at a time through the Xmbrace DRS (Opti-time) software. This scheduling software continually optimises travelling distances and swaps jobs between building maintenance operatives up until the jobs are sent, sending the nearest appropriate operative to each job. Optimised van stocks and planned visits to the merchant also reduce travelling and waste. The reduced travelling minimises wear and tear on vehicles and fuel consumption. Quality of environment contribution to safe and supportive environments for living, recreation and working? Mobile working will enable a more efficient building repair service to be operated with quicker response times to deal with issues of safety and living environments.

167 Bio-diversity protects and improves wildlife and habitats n/a Waste and pollution effects on air, land and water from waste and emissions + Will reduce CO 2 emissions due optimised routing and shorter travelling times. Efficient stock control will reduce waste by not carrying unnecessary materials and monitoring materials with a shelf life which might otherwise need to be dumped. Council Priority and Objectives for Improving our Environment: Reduce traffic congestion Improve streetscene Improve recycling & energy management Respond to climate change Improve quality of existing space + Reduce travel congestion and CO 2 emissions by optimised routing of vehicles. Please complete and save your checklist, and a copy to Lee Green, Environment Strategy and Sustainability lee.green@bournemouth.gov.uk If you would like help in completing this checklist or would like to request a change, again contact Lee Green by or call on

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169 Cabinet 9 Report Subject Test of Assurance Meeting date 17 th December 2014 Cabinet Portfolio Corporate Lead Service Director Status Classification Councillor Nicola Greene, Deputy Leader and Portfolio Holder Education and Children s Services Councillor Blair Crawford, Portfolio Holder Adult Social Care Tony Williams, Chief Executive Jane Portman, Executive Director, Adults and Children Public For decision Key Decision Impacts on Key Policy Framework Report author No No Tony Williams, Chief Executive tony.williams@bournemouth.gov.uk Executive summary The Council commissioned a Test of Assurance, in line with statutory guidance, to check the effectiveness of the combined role of Executive Director Adults and Children. The independently conducted test concluded that the current leadership arrangements enables the Council to fulfil its statutory responsibilities in relation to both Children s and Adults Services. Recommendations Cabinet is asked to note: 1. the conclusions and recommendations of the Test of Assurance as set out in the report attached at Appendix 1 and endorse the Action Plan at Appendix 2. Reasons for recommendations To present to Cabinet members the report and recommendations relating to a formal Test of Assurance that was conducted in relation to the leadership arrangements for the Adults and Children Directorate in April/May 2014 and for members to scrutinise the report and action plan developed to respond to the recommendations of the report.

170 Background detail 1. In early 2014, the Council in conjunction with Borough of Poole Council tendered and commissioned an independent Test of Assurance in relation to the leadership arrangements of Adults and Children s Services. 2. Statutory Guidance from the Department for Education 2014, requires Local Authorities to undertake a Test of Assurance when combining the roles of Director of Children s Services and lead Member for Children s Services with any other Council functions to ensure the focus on outcomes for children & young people will not be weakened or diluted. 3. The decision was taken that the Test of Assurance would cover both the statutory duties of Children s Services and of Adult Social Care as the Executive Director, Adults and Children covers both statutory areas. 4. It was further decided to commission independent experts to undertake the review together with the Borough of Poole. Both Councils had moved to combined roles within the same timeframe in August to October 2012 and so both Councils wished to undertake a Test of Assurance at the same time. Commissioning the Test of Assurance together produced increased value for money in procurement of independent experts and reduced duplication for key partners in the process. Both Councils have received reports related to their own Test of Assurance. 5. A report was taken to the Children s Overview and Scrutiny Panel meeting on 2 nd October and the Health Overview and Scrutiny Panel on 4 th December where it was agreed to recommend to Cabinet to approve the Action Plan. Impact on Service Delivery 6. The Test of Assurance report is set out in Appendix The report concludes that the current leadership arrangement enables the Council to fulfil its statutory responsibilities in relation to both Children s and Adults services. 8. The report contains a very useful framework for the Council to use in undertaking and implementing its statutory functions and also recommendations for the future.

171 Summary of Financial Implications 9. As part of the Action Plan, the Executive Director, Adults and Children, will review with all Service Directors in the Adults and Children s Directorate whether there are any issues relating to lack of capacity in Service Units which need to be addressed in order for the Service Director to manage the core business of the Service Unit and major change projects and programmes. Any financial implications from this review will be included in the Medium Term Financial Plan for consideration by members through the medium term financial planning process. 10. It is important to note that the report concludes that the Statutory Director arrangements provide good value for money. Summary of Legal Implications 11. The Test of Assurance was carried out in order to comply with the requirements of Statutory Guidance issued by the Department for Education in The Test of Assurance reviewed how the Council fulfils all statutory requirements in relation to Children s and Adults Services. Summary of Risk Management Implications 12. The Test of Assurance was undertaken in order to understand and evaluate the risks in relation to combining the functions of both the Director of Children s Services and Director of Adult Social Services within the role of the Executive Director Adults and Children. The Test of Assurance has considered all aspects of how the Council fulfils and governs its statutory functions at officer and member level. 13. The Test of Assurance was noted as a required action as part of the Council s Annual Governance Statement 2013/14. This action has, therefore, been completed. 14. The Test of Assurance Report provides some recommendations for further consideration including proposing that the Council conducts an annual proportionate review of arrangements to ensure they continue to be fit for purpose. The Action Plan contains proposals for how this annual review will be conducted. Summary of Equalities Implications 15. Central to the Council fulfilling its statutory obligations in relation to Children s and Adults Social Services is to ensure that the needs of all children and adults are assessed and met appropriately. This includes

172 people and families who have protected characteristics under the Equalities Act; vulnerable adults; communities and families experiencing disadvantage and poverty, and particular need groups, such as children in care and care leavers. 16. It is important to highlight that the Test of Assurance concludes that the Council is meeting its statutory obligations, including those required under Children s, Adult Social Care and Equalities legislation. Conclusion 17. The Test of Assurance concludes that the Council s arrangements at officer and member level are working well and provides useful recommendations for further strengthening the arrangements and long term assurance. Background Papers: Minutes of Children s Overview & Scrutiny Panel Meeting of 2 nd October rcommitteemeeting/childrensservicesoverviewscrutinypanel/2014/10/02 /ChildrensServicesOverview&ScrutinyPanel02-Oct-2014.aspx Minutes of the Health and Adult Social Care Overview & Scrutiny Panel Meeting of 4th December 2014 will shortly be found at this link: rcommitteemeeting/healthandadultsocialcareoverviewscrutinypanel/201 4/12/04/HealthandAdultSocialCareOverview&ScrutinyPanel04-Dec aspx Appendices Appendix 1 Test of Assurance Report Appendix 2 Action Plan

173 Appendix 1 STEVE PITT CONSULTANCY LTD TEST OF ASSURANCE FOR THE ROLES OF DIRECTOR OF CHILDREN S SERVICES AND DIRECTOR OF ADULT SOCIAL SERVICES Bournemouth Borough Council May 2014

174 WHAT BOURNEMOUTH BOROUGH COUNCIL WANTED TO ACHIEVE THROUGH A TEST OF ASSURANCE Bournemouth Borough Council (BBC) appointed an Executive Director responsible for both Children s Services (DCS) and Adult Social Services (DASS) in August BBC wanted a test of assurance for the roles of Director of Children s Services and Director of Adult Social Services. They commissioned an independent review of current arrangements to assure themselves that the statutory duties required from the DCS and DASS are being discharged effectively. The Council wished to ensure that their structure and organisational arrangements enable it to: fulfill their statutory duties effectively (including ensuring that children, young people and families receive effective help and safeguarding and benefit from high educational standards locally and ensuring that vulnerable adults are safeguarded and receive appropriate care and support); be transparent about responsibilities and accountabilities; and support effective inter-agency and partnership working. The outcome of the independent review (test of assurance) will assist in the proper Member scrutiny of the arrangements for the discharge of the statutory duties relating to the safeguarding of children and adults, specifically in relation to the arrangements in place to fulfill the statutory roles for the Director of Children s Services (DCS) and the Director of Adult Social Services (DASS). The Council asked the Test of Assurance to formally comment on six areas for children and adults which are described in detail below and to provide an overall statement of compliance. These six areas are directly drawn from the relevant guidance on the role of Director of Children s Services and Adult Social Services. In addition this report presents a model for consideration of governance and support arrangements to ensure that the Executive Director Adults and Children role continues to work effectively in the future. The report makes a small number of recommendations to the Council. NATIONAL CONTEXT Statutory Guidance from the Department for Education 2012 says It is legally permissible for the DCS and Lead Member Children s Services (LMCS) roles to be combined with other operational and political functions of the local authority. However, given the breadth and importance of children s services functions that the DCS and LMCS cover, local authorities should give due consideration to protecting the discrete roles and responsibilities of the DCS and LMCS before allocating any additional functions to individuals performing these roles. In particular, local authorities should undertake a local test of assurance so that the focus on outcomes for children and young people will not be weakened or diluted as a result of adding such other responsibilities. Given the demanding nature of the DCS and LMCS roles, local authorities should consider all aspects of any combined posts (e.g. the impact on both children and adult services where there is a joint DCS and Director of Adult Social Services post). About a third of local authorities with responsibility for children and adult services have combined the responsibilities in one director or strategic director role. Sometimes this is with other areas of responsibility such as housing and public health. Other models include the education and learning functions being placed with a director of economic development. Common drivers for change are the need to make savings; opportunities for a more integrated approach to service commissioning and delivery through taking a whole family approach; and the

175 benefits of a single conversation with key partners (in particular NHS bodies) about service development. DECISION TO JOIN UP RESPONSIBILITIES BBC made the decision to formally agree new organisational arrangements after considerable discussion and consultation which appraised likely benefits and risks. The decision to move to an Executive Director Adults and Children was made as part of a wider set of changes in the structure of the Council which saw the three Executive Director functions focused on Adults and Children, Environment and Economy and Finance. There was a reduction by three in the number of service directors across the Council and movement of functions between Executive Directors e.g. Housing and Parks directorate moved from the adult services directorate to Environment and Economy. The key driving factors were a concern to improve performance, finance and a desire to realise synergies in both service and back-office functions. Across the previous children and adult services directorates there was a reduction of one service director post largely through the bringing together of children and adult commissioning functions into one service, and rationalisation of other functions across the remaining services.. The decision was made on 20 June There followed a selection process for the new role of Executive Director Adults and Children with the current post holder, who had been the Executive Director Children and Families, coming into post in August THE TEST OF ASSURANCE The test of assurance was undertaken through a document review of a wide range of background material provided by the Council, interviews with key staff and provision of a report and feedback to the Executive Director and portfolio holders. Details are included in Appendix 1. RESPONSE TO THE SIX AREAS SPECIFIED WITHIN THE TEST OF ASSURANCE 1. Clarity about how senior management arrangements ensure that the safety and the educational, social and emotional needs of children and young people and statutory responsibilities in relation to adults are given due priority and how they enable staff to help the local authority discharge its statutory duties in an integrated and coherent way. This includes adult safeguarding responsibilities and other statutory functions including those related to mental health We found that senior management arrangements do ensure that needs and statutory responsibilities are given due priority and are discharged in a coherent and integrated manner. The role of the Executive Director is clear as are those of her direct reports. The arrangements for reporting are well developed and understood. The golden thread of accountability can easily be seen. The Executive Director has capacity to exercise her statutory functions. Members have authorized additional investment in adult and children, evidencing the priority attached to these areas. 2. Clarity about how the local authority discharges its children s services and adults social care functions and is held accountable for them from political, professional, legal and corporate perspectives (including where, for example, services are commissioned from external providers) We found there is clarity in responsibilities and accountabilities and arrangements for discharging functions are clear including the education functions of the Council and where the Council commissions services from external providers.

176 There is a wealth of detailed performance information in BBC about the performance of safeguarding services and other services including the performance of schools. However the absence of an overall approach to performance management, reporting and improvement across adult and children s services means the opportunity to take a more strategic view of performance and improvement may be missed. The limited capacity for analysis of data means the Executive Director and her Service Directors are not as well supported as they could be in developing strategic insights that would support commissioning decisions and service improvement and development. There is evidence that the Chief Executive and Portfolio Holders engage well and hold to account. The latter express increasing confidence in knowing what good looks like and if services are going off track. As in many authorities Overview and Scrutiny works reasonably well but could be strengthened. Four meetings a year provides limited time for overview and scrutiny of such a large and complex area of service. The limited time tends to mean the focus is on reporting with a number of key statutory areas that need to be covered e.g. the report of the LSCB or of the Independent Reviewing Officers or critical performance areas such as school performance and pupil attainment. Ideally more officer time could be provided to support questioning and probing and enable specific scrutiny enquiries. It was evident it had limited capacity in terms of time and this led to a tendency towards overview rather than scrutiny. Support for new portfolio holders is important, to underpin partnership working and the best ways to hold to account. In BBC the direct contact between Service Directors and portfolio holders assists in ensuring strong political oversight of the specifics of service delivery for adults and children. The Service Director Legal and Democratic and Monitoring Officer has an effective line of sight for key activity in children s and adults services including the areas of high risk such as the safeguarding of children and adults and the deprivation of liberty of adults. Service Directors show impressive command of detail and capacity to challenge practice at a detailed level. 3. The seniority and breadth of responsibilities allocated to individual post holders and how this impacts on their ability to undertake those responsibilities We found responsibilities are allocated to post holders with sufficient seniority; and the breadth and scale of responsibilities are manageable. Major change programmes and significant events could easily over-extend managers, and contingency arrangements might be strengthened. Less experienced managers need time and support for development. The second tier has a long list of personal accountabilities and is not obviously well placed to absorb additional responsibilities even though they would be willing to do so. The potential additional capacity needs to be in the core professional areas of the service and not just in provision of project or programme management i.e. for the Better Together programme or work to replace the social care ICT system or implementation of the special educational needs and disability reforms. Such programmes of change require very substantial input from professional staff if they are to be successful and deliver solutions which are led by the professional expertise and judgment of the senior leaders in the service and reflect the needs of service users.

177 4. The involvement and experiences of children, young people, adults and carers who use social care, support and other services in relation to local services We found there is evidence that the views and experiences of children, families, adult service users and carers are accessed and made use of, but further developments in this area would support the Executive Director and Members - in testing the robustness of their organisations and services. The leadership given and visibility of the Executive Director in meeting service users and in work to understand their views and experience is important in establishing a positive culture for the engagement of service users in the development and improvement of the service. All staff and members we spoke to were very keen to engage service users and understand their views and knew there was further work that BBC could do to strengthen its work in this area. 5. Clarity about adult and child safeguarding systems and other statutory responsibilities, ensuring that professional leadership and practice is robust and can be challenged on a regular basis We found safeguarding and other statutory responsibilities including for the performance of schools and educational improvement are clear and professional leadership and practice in these areas is generally robust. Managers are aware of areas that need further improvement and are actively addressing these. Relationships with adult and children safeguarding boards are well developed with strong engagement from key BBC staff with both boards. The Executive Director has a direct relationship with the chairs of both boards, and it is important that Chief Executives and Portfolio Holders also enjoy positive lines of communication with them. Given the relatively recent appointment of the chair of the children s board this relationship is at a developing stage. The Executive Director is visible to practitioners and engaged with practice issues in a way that supports her accountability for adult and children s safeguarding. It was notable that in our interviews all staff and partners were positive about the capacity of the Executive Director and the Service Directors to provide good professional leadership on safeguarding and that the changes in scope of roles had had no detrimental impact on this. Indeed most of those interviewed and evidence from the paper records would support a conclusion that this had strengthened under the revised arrangements. 6. The adequacy and effectiveness of the Council s support and engagement in local partnership arrangements We found the Council s support for and engagement with local partnership arrangements is effective. We are conscious that we have not spoken with some key partners Police, schools, senior managers in NHS. Any problems in partnership working that were described to us would appear to have no connection with the joining up of posts in the councils. Those partners spoken to were supportive of the revised responsibilities of the Executive Director. The single point of contact for them at the most

178 strategic level in the Council was helpful e.g. the Clinical Commissioning Group with its all age responsibilities finds a single Executive Director for Adults and Children fits better with their responsibilities and organizational focus. STATEMENT OF ASSURANCE In our opinion the structures and organisational arrangements can enable Bournemouth Borough Council to fulfil its statutory duties effectively (including ensuring that children, young people and families receive effective help and safeguarding and benefit from high educational standards locally and ensuring that vulnerable adults are safeguarded and receive appropriate care and support); to be transparent about responsibilities and accountabilities; and to support effective inter-agency and partnership working. TEST OF ASSURANCE MODEL Everyone that we spoke with in the course of our work in Bournemouth referred to the Executive Director in a complimentary way this was consistent, and in all respects. The positive comments reflected her grip, depth of knowledge across the whole span of the role, visibility, direction of direct reports and confidence of members and the chief executive.. Whilst the contribution of an individual and her personality are important, there are wider features that an organisation should take into account. The model shown in Appendix 2, Figure 1 reflects a number of elements that need to be in place to support joined up arrangements, and provide some assurance that challenges can be spotted and addressed. 1. The Executive Director needs to be the right person with the ability to manage across a range of domains and the capacity to shape a realistic personal work portfolio. 2. Members of her leadership and management team need to be competent; capable; given an appropriate level of authority; able to work with peers and across boundaries; exploit synergies; and be able to act up, whilst being subject specialists. 3. Chief Executives need to be engaged, and should have an active involvement in issues related to Children and Adults; be visible and know - and enjoy working relationships - with managers across the Adults and Children s directorate. 4. Internal Process: there needs to be coherent and effective corporate support from finance, legal, HR, ICT etc Co-ordinated performance management arrangements should ensure robust information to inform judgements and decisions. 5. Well-supported portfolio holders should be able to work in partnership with Officers to an agreed agenda whilst holding them robustly to account. 6. Empowered overview and scrutiny councillors should be competent in holding to account and asking informed questions that challenge

179 7. Safeguarding arrangements that include Boards that support and test local performance, with Board Chairs who provide the Executive Director with critical friend support in this difficult area 8. Partner relationships which enable the organisations to achieve optimal results for local people; and senior officers in partner agencies providing peer support. 9. Coherent and strong mechanisms for user voice, and feedback loops that ensure Councils account to users about responses made to their comments. 10. A culture of challenge, clarity, flexibility, and openness. APPLYING THE MODEL 1. Executive Director: as suggested above there is considerable confidence in the abilities of the Executive Director, and a universal view that arrangements are more effective than the separate Director approach that was in place. Various benefits are seen to have flowed from joining up responsibilities the ability to take an overview, to make more flexible use of resources money and management time; to deal with cross-over issues (such as troubled families) etc. There are for us issues about succession what the Council should do if the Executive Director moves on. The appointment of individuals well established locally and well respected is different to the appointment of a successor who might be new to the Council and to substantial elements of the roles involved. This is an area of risk for the Council who should have regard to successor arrangements. The Executive Director is very highly regarded, but it is important to ask what if questions? What if she wasn t so good? Or faced the kinds of life challenges that we all face from time to time that might impede performance at work? We suspect that the Council would struggle to make effective cover arrangements in these circumstances, and contingency thinking would be sensible. 2. The Adults and Children s Leadership team is potentially strong as Service Directors acquire experience. Job descriptions are lengthy and capacity is tight, however and is likely to remain a challenge with major change programmes and inevitable events that absorb time and attention. Good access to and support from the Executive Director, and direct contact with portfolio holders has assisted in building this strength. 3. The Chief Executive: we were impressed by the positive engagement of the Chief Executive in Adult and Children s services in Bournemouth where there is evidence of leadership briefing and active involvement including chairmanship of the adults improvement board and commitment to promoting work opportunity within the corporate parenting role. 4. Internal Process / Corporate support: it is important that a good level of corporate support be provided to these roles, and specifically the Executive Director to enable her to properly discharge her statutory functions there is some evidence of weakness in ICT; information and in particular capacity for

180 analysis of data; and HR (where protocols can get in the way and processes such as the disciplinary procedure can take a long time to apply). An explicit approach to managing risk is important. The council makes good use of risk registers at service and corporate levels. The organisation recognises the need for a robust governance and assurance framework. The co-ordination of performance management could be re-inforced it appears to be undertaken in silos and as a result appears somewhat fragmented. There are routine quarterly overview and scrutiny reports on performance and Adult Social Care Leadership Team budget and performance meetings which the portfolio holder and Executive Director attend. Minutes from the latter suggest discussion at a technical rather than what shall we do about it? level. The Balanced Scorecard for Adult Social Care Services provides high levels of detail but would benefit from commentary / analysis that translate data into behaviour. There are similar processes within Children s services including educational performance. There is no balanced scorecard for Children s Services and overall the lack of analysis of performance data and information is an impediment to the Executive Director and her Service Directors to them exercising their statutory functions. 5. Portfolio holders are engaged and able. We were told about a regular pattern of meetings and briefings with the Executive Director and Service Directors; visits to services; involvement in Safeguarding Boards. It is important to ensure their ongoing development and support. With the whole of the Council to be elected on May 2015 this presents a potential risk to the current relatively secure portfolio arrangements. If the elections lead to significant change in portfolio holders it will be important that the new portfolio holders are chosen for their understanding and commitment to Adults and Children s Services. They will need a period of induction and development in order to quickly be able to fulfill their important and complex role and provide the level of support to the Executive Director as well as acting as critical friend. They are a key part of the mechanism by which the Executive Director is held to account. 6. Overview and scrutiny councillors do ask searching questions and operate with independent judgement. Their understanding of what good should look like is growing. Any opportunities to strengthen approaches should be grasped. As with portfolio holders the risk presented by changes in chairs of overview and scrutiny and membership of the panels consequent on council elections in May 2015 need to be explicitly addressed and mitigated through good induction and development to those new to the role. 7. Safeguarding arrangements: it is important to buttress open relationships with safeguarding board chairs to optimise their independence but also their support as critical friends. It is also important that strong relationships are cultivated at Chief Executive and Portfolio holder levels with Board Chairs in case the Executive Director is absent for any reason, or difficulties of any sort arise in her relationship with the Board Chairs. Given the increasing importance attached to the role of adult and children safeguarding boards and the level of expectation of what they should achieve it

181 will be important that the capacity of the boards to fulfill those expectations is kept under review. 8. Partner relationships: while partnership relationships with BBC are good and BBC staff are committed, clear on their purpose and effective in partnership working it is critical that these relationships are maintained. Partners need to develop their ability and capacity to become sharper and able to provide the kind of critical friend role which the Executive Director needs. Some good examples were given of how this is working well within the development of Better Together. With plans for more joint working between local authorities and their partners it will be essential that this sharpness and clarity of purpose is developed if the Executive Director and her team are to deliver the aspirations and ambitions set out in the partnership plans. 9. Mechanisms for user voice: the capacity and ability to hear the voice of service users in relation to the quality and impact of existing services and future service developments is a vital means by which BBC can gather assurance that it is safeguarding and meeting the needs of its most vulnerable citizens. In BBC we heard of some excellent examples of how this has been done in the recent past e.g. the planned changes to child protection case conferences. This approach needs to be maintained and be integral to the major change programmes that are being planned through Better Together. 10. Culture: arrangements in the Borough are supported by an evolving culture of challenge rather than blame; clarity balanced with flexibility; collaborative styles of leadership, openness and transparency. CONCLUSIONS AND RECOMMENDATIONS FOR IMPROVEMENTS (banded high, medium, management advice) 1. The Executive Director represents value for money. It is important to think through matters of succession and contingency.(high) 2. It is important to ensure that the Executive Director and her senior leadership team have sufficient thinking space available to enable continued strategic development of the services. (HIGH) 3. It is important that the Executive Director and her senior leadership team are provided with improved corporate support to enable them to better manage performance across adult and children s services and to make the most of the excellent detailed information available to drive strategic development and improvement. (HIGH) 4. We would want to emphasise the importance of corporate support for the Executive Director post and would recommend in particular that support for Information Analysis, Performance Management and the Human Resources function be reviewed. (MEDIUM) 5. We would want to acknowledge the strong support provided by Members and encourage any developments to enhance support to their role and development.(medium) 6. The Council will want to consider how and when it should re-visit this test of assurance. The Council might find it useful to make some use annually of

182 model presented in this report to check whether elements necessary remain robustly in place, outside of any more formal review. (MEDIUM)

183 APPENDIX 1 THE TEST OF ASSURANCE The document review included: 1. Council reports on decision to appoint combined DASS & DCS role. 2. Any local established list of statutory responsibilities which we would seek to correlate with the DCLG data set 3. Performance management arrangements across Adult and Children s services including for education and learning functions. To include description of the process and examples of reports used 4. Arrangements for scrutiny and examples of scrutiny programmes and work undertaken over the last 18 months 5. Arrangements for briefing of cabinet and cabinet members on the services 6. Arrangements for engagement and feedback from service users on service quality, performance and development 7. Service strategies and priorities, including any strategies and plans developed and agreed with other organisations 8. Process for service commissioning and examples of how this has worked in practice including dealing with safeguarding concerns 9. Description of the adult and child safeguarding systems 10. Job descriptions and person specifications for DCS/DASS and of second and third tier officers i.e. their direct reports and those who report to those direct reports. 11. Complete service structures 12. Examples of formal reporting on the service e.g. complaints and representations report, report of the independent review services, reports on adoption and fostering services 13. Terms of reference and structures of the Adult and Children Safeguarding Boards 14. Terms of reference and relationship of HWBB with DASS/DCS role and with the Adult and Children Safeguarding Children Board 15. Joint Strategic Needs Assessment and joint health and well-being strategy. 16. Examples of how DASS/DCS triangulates information from formal processes with information from other sources including from service users, staff etc. 17. Desk top research which would seek to identify any research identifying good practice in this area and reference to experience elsewhere of joining up these roles. 18. Development of hypotheses and lines of enquiry for the interview stage The interviews with key staff during week beginning 28 April 2014 included: 1. Executive Director Adults and Children 2. Chief Executive 3. Lead portfolio holders and chairs of overview and scrutiny. 4. Chair of Bournemouth and Poole Local Safeguarding Children Board and Safeguarding Adults Board 5. Co-Chair of Bournemouth and Poole Health and Well Being Board 6. Director of Public Health for Bournemouth, Poole and Dorset and associate Director of Public Health for Poole 7. Second tier officers and others including those responsible for service commissioning and safeguarding. 8. Service Director Legal and Democratic Services and Monitoring Officer

184 9. Meetings with a number of partners including senior staff from the NHS (commissioning and providing and those with specific responsibility for safeguarding children and adults), and Voluntary sector. FIGURE 1 - TEST OF ASSURANCE MODEL: BOURNEMOUTH 4. INTERNAL PROCESS 5. PORTFOLIO HOLDER 6. OVERVIEW 3. CHIEF EXECUTIVE 5. PORTFOLIO HOLDER HR ICT LEGAL FINANCE PERFORMANCE RISK MANAGEMENT 1. EXECUTIVE DIRECTOR & 7. BOARD CHAIRS 2. MANAGEMENT TEAM 8. KEY PARTNERS & 10. CULTURE 7. SAFEGUARDING 9. USER VOICE 8. PARTNERS SCRUTINY

185 Appendix 2 ACTION PLAN SEPTEMBER 2014 Recommendation Test of Assurance 1. The Executive Director represents value for money. It is important to think through matters of succession and contingency. (HIGH) Actions i. Meetings of the Chief Executive and Deputy Leader will review this issue. 2. It is important to ensure that the Executive Director and her Senior Leadership Team have sufficient thinking space available to enable continued strategic development of the service. (HIGH) i. Executive Director and Service Directors to agree plans for continuing professional development as part of the annual appraisal conversation. ii. Executive Director to meet with each Service Director fortnightly in order to jointly reflect on key issues and review progress of implementing service plans. iii. Executive Director and her Senior Leadership Team to meet for extended sessions together for the purposes of strategic planning. 3. It is important that the Executive Director and her senior i. A Corporate review of current research and intelligence

186 Recommendation leadership team are provided with improved corporate support to enable them to better manage performance across Adult and Children s Services and to make the most of the excellent detailed information available to drive strategic development and improvement. (HIGH) Actions ii. service. Specific actions will be implemented as part of the post OfSTED action plan (Area for Improvement 2) 4. We would want to emphasise the importance of corporate support for the Executive Director post and would recommend in particular that support for Information Analysis, Performance Management and the Human Resources function be reviewed. (MEDIUM) i. New post of Business Analyst created and appointed to which will increase capacity for performance analysis. 5. We would want to acknowledge the strong support i. Portfolio Holders to be provided with development

187 Recommendation provided by Members and encourage any developments to enhance support to their role and development. (MEDIUM) Actions ii. opportunities relevant to their role. Member development programme to be implemented as part of post OfSTED action plan. (Area for Improvement 4) 6. The Council will want to consider how and when it should re-visit the Test of Assurance. The Council might find it useful to make some use annually of model presented in this report to check whether elements necessary remain robustly in place, outside of any more formal review. (MEDIUM) i. An internal annual review and external review on a 3- year basis is recommended.

188

189 Cabinet Report Subject 10 Monthly Budget Monitoring Report to 31 October 2014 Meeting Date 17 th December 2014 Cabinet Portfolio Councillor John Beesley, Leader of the Council & Portfolio Holder for Resources Corporate Lead Ian Milner, Acting Executive Director (Finance) Service Director Rob Ingleton, Service Director, Strategic Finance Status Public Classification For decision Key Decision Impacts on Key Policy Framework Report Author No No Robin Ingleton, Service Director, Strategic Finance Executive Summary This report presents the Council s performance against budget for the period 1 April 2014 to 31 October 2014 and the forecast financial outturn for the year 2014/15. This shows a deficit forecast outturn of 2.537m. Recommendations Reasons for Recommendations It is recommended that Cabinet:- a) note the contents of the report, and the attached Revenue & Capital Management Statements. b) note the action being taken by the Executive Team in consultation with Portfolio Holders to mitigate the in-year position and ensure the General Fund is brought back into balance by year-end. c) to approve the capital rephasing under 1m and recommend to Full Council to approve the capital rephasing over 1m detailed in Appendix B. To ensure that the overall financial management and financial standing of the Council is subject to effective review. Page 1 of 17

190 Introduction 1 The Council approved its annual Budget for 2014/15 in February The Budget encompassed a series of planned savings and efficiencies, enabling the Council to avoid cutting front line services. The Council also decided to allocate a further 2.250m to Children s Social Care to address increasing demand in this area and 750k to support the continuing Local Welfare Assistance Fund to mitigate the potential impacts of Welfare Reform. 2 In setting the budget the Council also provided additional investment in areas important to residents, such as the Road Rescue Fund, the Recession Fund, The Community Action Fund and the Local Improvement Fund; improving roads and pavements, cleaning up our neighbourhoods, tackling anti social behaviour and supporting jobs within our local community. Furthermore the Community Finance Initiative and Inward Investment schemes initiated in 2013/14 will commence in full, enabling the Council to support housing and business growth by building additional housing stock and care units, in conjunction with providing loans and mortgages to both businesses and residents respectively. These Council initiatives will help to further ease the dependency on Central Government support and enable the Council to continue to provide public services in future years, despite a 50% loss in Government funding since 2010 through to 2015/16. 3 Whilst these initiatives have been designed to strengthen the Council s financial resilience and ability to act in future years, the Council continues to face significant financial challenges in the short to medium term as a result of sustained increases in demand for its services and continuous funding reductions. The General fund position as at 31 October 2014 is discussed at paragraphs 7 to Robust monitoring and reporting arrangements are fundamental to the effective management of the Council s finances and resources. In accordance with the Council s delegated financial management model, all budget holders must regularly review current performance against that agreed and advise of any changes likely to impact on the financial position of the service and the Council position overall throughout the financial year. This monitoring report is based on actual performance to the end of October The Housing Revenue Account is reported separately to the General Fund and is currently predicted to meet the budgeted target overall. Individual cost centre variances do occur and are as explained in paragraphs 38 to 40 and shown in Appendix A. 6 The Council s approved General Fund Capital Programme and Housing Revenue Account Capital Programme as at 31 October 2014 were m and m respectively. Both programmes are projected as budgeted. Details are set out in paragraphs 41 to 49. Page 2 of 17

191 General Fund 7 The General Fund forecast to the year ending 31 March 2015, as at 31 October 2014, currently indicates a forecast deficit outturn of 2.537m which includes adverse variances for service budgets totalling 2.888m plus further net corporate savings of ( 351k) as shown in Table 1. 8 Work is ongoing to mitigate emerging General Fund pressures, and action plans are developed wherever possible to ensure that these are addressed resulting in a balanced budget at year-end. 9 The difficulties experienced by the Council in trying to contain costs arising from increased demand and other economic factors outside its control are well understood. Nonetheless all efforts are being made by Officers in conjunction with Portfolio Holders to mitigate the in-year position to bring the overall position to balance by the year-end. This includes action to find further efficiencies, increase income and stop or defer spend wherever possible. Those services currently forecasting a net nil position have also been asked to make every effort to underspend by year-end to assist the overall position of the Council. Furthermore the Executive Director (Finance) and the Service Director (Strategic Finance) are identifying further measures that might be available to assist the current forecast position. 10 The estimated position for the General Fund as at 31 October 2014 is as set out in Table 1. Principally, negative variances relate to Children & Young People, Children s Social Care, Community Learning & Commissioning and Planning, Transport & Regulation. In setting the budget it was recognised that these services would come under pressure because of increased demand and as a result provision was made to manage these budget variances through revenue contingency of 4m. Although shown as committed in Table 1 so far only 2m has been applied. The expectation is that Portfolio Holders, Executive Directors and Service Directors will continue to work hard to reduce the forecast budget position. 11 Tourism has experienced a good summer which has meant that seafront income has exceeded expectations, allowing the pressures previously identified to be covered from this overachievement of income. A problem has emerged with utility services to the pier which will cost 60k to rectify during the closed season, although a current pressure, it is expected that the overachievement of income will fund this. Page 3 of 17

192 Table 1: General Fund Forecast Summary as at 31 October 2014 Annual Working Forecast Forecast Budget Outturn Variance Service Budgets Executive Board (37) Adult Social Care 48,041 48,041 0 Children & Young People 11,049 11, Children's Social Care 25,948 27,348 1,400 Community Learning & Commissioning 19,525 19, Customer Corporate & Strategic Services 10,897 11, Housing, Parks & Bereavement 4,758 4, Environment & Regeneration 25,442 25,442 0 Planning, Transport & Regulation 11,648 12, Tourism & Corporate Communication 2,784 2, Projected Service Position 160, ,640 2,888 Corporate Budgets Interest (1,465) (462) 1,003 Corporate Contingency 4,091 4,091 0 Other Corporate Items (25,656) (27,010) (1,354) Corporate Budgets Total (23,030) (23,381) (351) Total 137, ,259 2, Details of all forecast variances in excess of 100k are set out in paragraphs 14 to 37 of the report in accordance with the Council s financial reporting requirements. 13 The arrow represents the movement in the forecast from the previous monthly Budget Monitoring Report. An upward arrow represents an increase in a negative or favourable forecast. A downward arrow represents a decrease in a negative or favourable forecast. A Page 4 of 17

193 horizontal arrow represents no change to the forecast from the previous month. Adult Social Care - 0k 14 As with previous years the Adult Social Care (ASC) business unit continues to face significant pressure as a result of demographic change and the increase in self funders dipping into eligibility for social care support. 15 In addition to these pressures there has been a Supreme Court judgement in relation to Deprivation of Liberty Safeguards (DOLS). The impact of this ruling is predicted to bring about a ten-fold increase in the number of referrals nationally. Local Authorities are legally required to assess through a statutory process, which must be undertaken by a Best Interests Assessor. Undertaking these assessments at the current level has a considerable cost implication. The costs of these assessments is further increased because of the requirement to ensure formal input from a GP, for which the authority is charged, and legal costs associated with Court of Protection proceedings. The existing pressure, has been offset by some of the monies received for an Ordinary Residence case in 2013/ Pressure on the budget position for ASC continues to be proactively managed within a challenging environment and all possible steps are being taken to ensure that increased costs are mitigated to deliver a balanced budget. Children & Young People 523k 17 Children & Young people forecast spend has fallen from 546k last month to 523k. The majority of the projected overspend relates to Special Education Needs (SEN) transport which continues to be an area of budget pressure. The school population and number of statements of SEN continue to increase, with an increasing number of pupils with particularly complex needs leading to an increase in the number of pupils requiring travel. 18 The service, together with the Passenger Transport Unit and the Tregonwell Academy, is actively reviewing the costs of transporting pupils who have social and emotional rather than cognitive and physical difficulties. The service is also reviewing the need for and mode of transport at the point of statement issue and annual review. An action plan has been developed and is being implemented which includes development of further innovative projects. Whilst these may lead to savings in the future, the impact of these savings are unlikely to be fully realised in this financial year thus the overall service projected overspend position is 523k for Page 5 of 17

194 Children s Social Care m 19 Historically the Council has seen a significant increase in the number of Looked After Children (LAC) with a 43% increase over the last 3 years. This upward trend has continued into 2014/15 but in the last 2 months the numbers have remained steady. 20 Since 2013/14 the cost of some very complex cases has meant the Council has seen an average 8% increase in the expenditure on residential packages since 2013/14. We have a localised challenge due to the lack of available placements and we are working on local sufficiency planning. 21 The nature of the service means that the call on resources will fluctuate during the year and as such the forecast overspend of 1.400m is based on the understanding of the service demand at this time. Children s Social Care priorities are to reduce both the demand for placements and the cost of placements. Community Learning & Commissioning - 301k 22 Community Learning & Commissioning has increased from 148k last month to 301k. The principal element of the forecast overspend relates to the demand led pressure on the home to school transport budget of 237k. Additionally the CST saving requirement of Housing Related Support of 650k has been made as a full year effect for 15/16 onwards. However due to the contractual nature of the service this has meant that the in year effect is short by 250k. 23 The overall service budget position is worsened by pressure within business support staffing budgets. However the overspends resulting from these issues are in part offset by managed underspends in other areas of the service, including 200k efficiency and commissioning savings to be achieved by the Drug and Alcohol Action Team (DAAT), thus the total service year-end forecast is 301k. Corporate & Strategic Services - 171k 24 Corporate and Strategic Services last month reported a 0k outturn. The forecast over-spend is largely due to legacy CST savings within the budget not being achieved within this financial year. This issue is being resolved during the 2015/16 budget setting process for next financial year. Planning, Transport & Regulation - 415k 25 Planning, Transport & Regulation has decreased from 549k last month to 415k. The projected overspend largely relates to a reduction in income from planning and building control fees, resulting in net pressure of 336k. Building control fees are forecast to be 406k below the budget due to the Council only being allowed to recover the costs of providing the service, with planning fees being 135k under budget. Page 6 of 17

195 There are expenditure savings of 205k, achieved mainly by holding vacancies. 26 The cost of providing concessionary travel, which includes free bus passes for the over 60 s is forecast to overspend by 350k. The majority of the forecast overspend has been caused by both an increase in qualifying journeys and an increase in costs from one of the operators. 27 These overspends have been partially offset by an underspend of 298k in transportation services due to staff being charged to the Local Sustainable Transport Plan capital programme which is grant funded. 28 There are a number of other minor under and overspends and the service is retaining staff vacancies in an attempt to reduce the impact of these pressures and are anticipating reducing the size of the overspend by the end of the year. Interest 1.003M / Other Corporate Items ( 1.285M) 29 Other Corporate Items last month was reported as ( 734K). A fundamental review has been completed in respect of the Treasury Management function and the variance reflects the current projection to 31 March Interest charged for the Madeira Road student accommodation scheme is offset by a reduction in revenue contributions to capital as the funding for the scheme is all financed from the capital funding received at the outset. 31 Investment interest received is forecast to be 190k less due to lower investment balances as a result of lower creditor levels, higher debtor levels and cash payments, and other balances being lower than estimated during budget setting. 32 In addition, the budget for investment income set in February 2014 was based on the assumption that an average 1% return would be achieved within 2014/15. The current position on interest rates is unprecedented and there was every expectation by Market experts that interest rates would gradually rise from Quarter 3 in 2014 however the projection has now been pushed back to at least Quarter The Corporate Finance team are continually investigating alternative investment options to improve the investment income achievable and this may improve the overall position by year end. 33 The current scheduled savings and efficiencies planned as a result of the Transformation Efficiency & Change Programme (TEC) are currently under review by the Programme and Project Management Team and Finance. It is likely that a proportion of the planned savings 2.537m will not be realised and the projection reflects that 1.637m will not be achieved. Page 7 of 17

196 34 Following the successful completion of student accommodation at Madeira Road the Council is now in receipt of rental income from the Bournemouth Arts University. The projection builds in an additional 770k income for a proportion of the year. We have also received a one-off refund of VAT and interest of 170k in relation to an earlier claim for trade waste. 35 As part of the ongoing review of all the Council s reserves one reserve for Personnel Training ( 349k) is no longer required for its original purpose and can be utilised to offset in-year revenue pressures. Furthermore unspent Community Action Fund ( 250k) can now be applied to also assist the current in-year pressure. 36 Capital Feasibility funding, which is paid for from revenue contributions, currently has an unallocated balance of 344k and this has been applied to assist the current forecast deficit. 37 The Community Finance Initiative spending included as a General Fund base budget cost has now been allocated to the fund specifically set up for this purpose, reducing overall costs in the current year to the General Fund. Housing Revenue Account (HRA) 0k 38 Appendix A presents the Housing Revenue Account for the period 1 April 2014 to the 31 October The current year-end projection is for a nil (balanced) position. 39 A change in the accounting rules has meant the Council has adopted the componentisation method of depreciation, which has resulted in a 1.8m increase in this charge. The depreciation charge is credited to the Major Repairs Reserve which is then used to contribute to the financing of the HRA capital programme. The higher depreciation charge therefore means that the revenue contribution to the HRA capital maintenance programme can be reduced by the corresponding amount resulting in a net nil position overall. 40 The number of void properties has increased in recent months, caused in part by an increase in the turnaround time resulting from improved specification of void improvements as well as capacity issues within the work force and has had an effect on the rental income collected. A framework agreement and additional resources have now been allocated; this is expected to dramatically reduce the time a property is void. This reduction in income is offset by expenditure reductions elsewhere in Housing Management. The benefit reported last month regarding Right to Buy scheme sales is no longer applicable due to reduced sales compared to previous months. Capital 41 The Council s 2014/15 General Fund Capital Programme as at 31 October 2014 was m. All approved variations in the budget Page 8 of 17

197 since then are shown in Table 2. Presently the Council has future commitments approved, subject to funding totalling m. Resources will only be committed after consideration by the Executive Gateway Board (EGB) of a full business case. 42 The Executive Gateway Board will be pro-actively monitoring projects to understand any slippage going forward and to make sure that schemes are achieved in line with capital programme expectations. 43 The General Fund Capital spend to 31 October 2014 is m representing 27.64% of the total approved budget for 2014/ The Council s 2014/15 Housing Revenue Account Capital Programme as at October 2014 was m. The actual Housing Revenue Account Capital spend to 31 October 2014 was 8.773m, representing 31.14% of the total approved budget for 2014/15. Table 2: General Fund Capital Programme Approved as at October 2014 m Approved Capital Programme - September Approved Amendments Small Amendments Approved Capital Programme - October Approved Subject to Funding (19.061) Current Operational Capital Budget 2014/ The Council wide Capital Programme and performance to date is summarised in Table 3. Table: 3 Summary of Capital Programme split between General Fund and HRA General HRA Total Fund m m m Revised Budget Spend Variance % Spend 27.64% 31.14% 28.43% 46 Contained in the Revenue & Capital Management Statements 1 April October 2014 is a list of capital exceptions where the progress to date on a capital scheme is not in line with the agreed budget profile. 47 The Council is continuously trying to improve the way financial information is presented and capital will be reviewed over the forthcoming months. The spend to date is indicating that slippage is Page 9 of 17

198 likely, however the capital trend suggests increased capital expenditure will come to fruition in the final quarter of the financial year. Work is underway with officers to understand which projects will not be completed and the reasons for this and how much slippage will be rephased into This will be reported to the next meeting of Cabinet but any rephasing of capital schemes in excess of 1m will require full Council approval in accordance with the Council s financial regulations. Executive Gateway Board 48 Following a review of the reporting mechanism for Executive Gateway Board (EGB) the Council s S151 Officer has determined that it is more effective to report non-key decisions made by EGB through the monthly budget monitoring rather than prepare an additional and separate report. 49 A report to align the Local Transport Plan, Bournemouth Economic & Sustainable Movement Around Town scheme and Three Towns Travel project 2014/15 budget within the Planning & Transport programme to confirmed resources available was considered. Overall these changes result in a reduction of 1.3m to the capital programme with some works being rescheduled to be undertaken in 2015/16. This is now pending Cabinet and Full Council approval. The details are attached within Appendix B. Consultation 50 This report and the attached statements have been prepared in consultation with Service Directors and Executive Directors, and on the basis of information provided by them. Options 51 This report provides financial performance information, and as a result there are no alternative options to consider. Summary of finance and resourcing implications 52 The finance and resourcing implications are as set out in the body of this report. Summary of legal implications 53 None. Summary of human resources implications 54 Human resource issues are considered as part of the budget and services planning process that support the allocation of Council resources. Page 10 of 17

199 Summary of environmental impact 55 The environmental impact of the budget allocation is considered by Service Directors and Portfolio Holders in preparing their budget and Service Plan proposals. Summary of equalities and diversity impact 56 Equality and diversity issues are considered as part of the budget and services planning process that support the allocation of Council resources. Summary of risk assessment 57 The effective management of the Council s Budget is fundamental to the good governance of the organisation. Failure to do so will result in inadequate financial health and wellbeing of the Council. Without addressing financial pressures the Council will not be able to develop a sustainable Medium Term Financial Plan and will not be able to effectively invest in its service priorities as identified in the Council s Corporate Plan. 58 Actual performance to the end of October 2014 suggests a number of key risk issues that will need to be kept under close review and the appropriate mitigation taken as needed during 2014/15, principally: a b c sustained and increasing pressures on key areas of service, largely being driven by increased demand for services and/or from reduced income earnings. This is particularly true in areas such as Children & Young People, Children s Social Care, Community Learning & Commissioning; change in legislation leading to alternative ways of delivering services and the imposition of new unfunded responsibilities, or changes to cost/income that can be achieved; the potential impact on service budgets in delivering services during rapid change and transformation and the role of corporate funding resources in helping to manage service transition. 59 This report and the outlined actions will form part of the mitigation strategy associated with the following financial risks identified in the Council s Strategic Risk Register: a b failure to respond to the needs arising from a changing demography pressure on resources in the current economic climate and cuts in public sector funding; changes in birth and death rates; key legislative changes affecting benefits or schools; transfer of public health function to local authorities. (Ref: CR01) failure to respond effectively to the changing national policy agenda within the local context of the town changes in financing and cuts in public sector funding; changes in central government policy including devolving more responsibility to local Page 11 of 17

200 government; differences between central government and local government priorities. (Ref: CR02) c failure to deliver Council ambitions pressure on resources in the current economic climate and cuts in public sector funding; changes in central government policy including devolving more responsibility to local government; differences between central government and local government priorities; pressure from local demographics, other partners e.g. changes to health service; impact of the on-going recession. (Ref: CR03) d failure to positively manage the Council s leadership role in the development of the local economy current economic context and trends including impact on capital receipts; cuts in public sector funding; impact of the recession including increased demand for services; ability of services to meet demand; sustainability of voluntary sector; impact of welfare reform. (Ref: CR07) e failure to manage the finances of the organisation effectively pressure on resources in the current economic climate and cuts in public sector funding render strategy inoperable; misalignment of budgets and priorities; failure to achieve expected capital receipts and/or variations in trading income. (Ref: CR10) Background papers Report to Council 25 February 2014 entitled Medium Term Financial Plan 2014/ /17 & the Budget 2014/15 Reports-Package Appendices Appendix A Housing Revenue Account Summary 1 April October 2014 Appendix B Capital change request for Planning, Transport & Regulation Supporting Papers Revenue & Capital Management Statements 1 April October 2014 Page 12 of 17

201 Appendix A HOUSING REVENUE ACCOUNT SUMMARY 1 APRIL OCTOBER 2014 Income Adjusted Forecast Forecast Budget Outturn Variance Rental Income (22,074) (21,991) 83 Repairs Income (354) (360) (6) Partnership Works Team (4,238) (5,069) (831) Photovoltaic Income (580) (580) 0 Other Income (741) (676) 65 Recharges (855) (834) 21 Total Income (28,842) (29,510) (668) Expenditure Head of Service Housing Management 4,760 4,505 (255) Mouchel Charges (8) Tenants/Leaseholders/IT (83) Repairs 3,472 3, Depreciation 5,616 7,396 1,780 Other Recharges 1,236 1, Partnership Works Team 4,329 5, Photovoltaic (27) Other (1) Total Expenditure 20,645 23,047 2,402 Net (surplus)/deficit for service (8,197) (6,463) 1,734 Appropriations & Other Adjustments 8,197 6,463 (1,734) Net (income)/expenditure for the period Page 13 of 17

202 Appendix B Capital change request for Planning, Transport & Regulation 1. Planning, Transport and Regulations have reviewed the Local Transport Plan (LTP), Bournemouth Economic & Sustainable Movement Around Town (BESMArT) and the Three Towns Travel (3TT) project. This has resulted in the removal of unviable schemes and the addition of necessary infrastructure schemes resulting in a net reduction of 1.3m against the 2014/15 Capital Programme. This will be re-profiled into future years as and when future funding is agreed and the new capital programme has been created. The breakdown of this is shown below along with the full revised programme breakdown for each programme. 2. The full detailed change request outlining the strategic review of funding and resources and also the removal, addition and amendments to capital schemes within the three programmes was presented and approved by the Executive Gateway Board in October and is now recommended to Cabinet for approval. 3. Cabinet can approve rephasing of schemes up to 1m. Full Council approval is required for any rephasing of capital schemes in excess of 1m. The BESMArT rephasing will require Cabinet approval. The 3TT and LTP rephasing will require Full Council approval. LTP LTP - Reduce budget and number of schemes being delivered by the Planning & Transport Capital Programme 14/15. Budget to be decreased by 2,301,456 from 4,730,205 to 2,428,749. Removal of Schemes that will be introduced to future Capital programme - Wallisdown Road Cycleway Scheme - Holdenhurst Road: Wellington Road to Capstone Place principal road maintenance (resurfacing) - Charminster Road: St. Albans to Richmond Park Road principal road maintenance (resurfacing) Page 14 of 17

203 REVISED LTP - SCHEME REDUCING THE NEED TO TRAVEL Budget 14/15 TOTAL 0 STRATEGIC NETWORK IMPROVEMENTS LTP3 Feasibility Studies 50,000 Development of MSBC / LSTF / Quality Bus Corridor / Key Junctions 50,000 SEDMMS - Maintenance / update of model 28,460 TOTAL 128,460 MANAGE AND MAINTAIN THE EXISTING NETWORK MORE EFFICIENTLY TOTAL 212,938 PUBLIC TRANSPORT ALTERNATIVES TO THE CAR TOTAL 48,747 ACTIVE TRAVEL AND "GREENER" TRAVEL CHOICES RoW Improvements 9,000 Others 191,915 TOTAL 200,915 TRAVEL SAFETY MEASURES Casualty Reduction Measures St. James Homezone - Stage 2 2,034 Christchurch Road/Holdenhurst Avenue - Cycle Safety Scheme 38,694 Seabourne Road (Southbourne Grove) Phase 2 - Road Safety and 50,000 P bli R l Casualty Reduction Measures Feasibility Design - prioritised list 40,000 SRTS Schemes Signing & Lining improvements 150,000 TOTAL 280,728 MANAGE DEMAND FOR CAR USE TOTAL FOR INTEGRATED TRANSPORT 871,787 Prioritised Programme of Schemes A348 Ringwood Road - Longham (Bear Cross R'bt to Longham 8,257 B id ) A348 Ringwood Road - Mountbatten R'bt to Poole Lane R'bt 1,657 Road Rescue : A35 Christchurch Rd/ St John`s Rd and St. John`s 270,000 Rd Malvern Road 50,000 TOTAL 329,914 MAINTENANCE - NON PRINCIPAL ROADS Prioritised Programme of Schemes Charminster Road (Area B) - St. Albans Road to Richmond Park 827,300 R d B k d l R d St L k R d L th R d Other 41,528 TOTAL 868,828 MAINTENANCE - STRUCTURES Other 34,555 B3059 Tuckton Bridge - specialist consultation and design 97,130 Bridge Maintenance 219,534 TOTAL 351,219 SURFACE DRESSING TOTAL 7,000 TOTAL FOR MAINTENANCE 1,556,961 TOTAL LTP 2,428,749 Page 15 of 17

204 BESMArT BESMArT - Reduce budget and reduce number of schemes being delivered by the BESMArT Capital Programme 14/15. Budget to be reduced by 929,194 from 2,955,648 to 2,026,454. Removal of Schemes that will be introduced to future Capital programme Queens Park Avenue: pedestrian and cycle improvements SSLTF - BE SMArT Shillingstone Drive - 20 MPH Zone (Muscliffe Lane & Shillingstone Drive) Stour Valley Corridor (phase 1) - cycleway project Budget 14/15 8, ,000 RoW Improvements 2,208 Accessibility Schemes 29,000 Smartcard ITSO 14,070 Creation of car club, Promotion and awareness to support car club creation 5,000 Subsidised cycle parking fund for schools. 58,305 Increase on street cycle parking provision, particulatrly in residential areas with high propensity to cycle Subsidised cycle parking and storage fund for workplaces 30,000 30,000 Castle Lane West Showcase Cycle Route 1,422,087 Turbary Park Avenue - pedestrian and cycle impovements 26,240 Ringwood Road & Poole Lane - cycle lanes 6,000 Other Cycle and pedestrian improvements 240,000 Total SLSTF (BESMArT) 2,026,454 Page 16 of 17

205 3 Towns Travel 3 Towns Travel - Increase budget and reduce number of schemes being delivered by the 3TT Capital Programme 14/15. Budget to be increased by 1,893,560 from 4,566,800 to 6,460,360. Removal of Schemes that will be introduced to future Capital programme - Town Centre Bus Hub scheme - Westover Road - Westbourne: Poole and Seamoor Road LLSTF - Three Towns Travel (3TT) Network Improvements: Delivery Manager AK Hospital Hub - Provision of new bus hub providing enhanced waiting facilities and operational 25,000 improvements Iford package - cycle lanes on A35 linked to DCC 501,000 scheme plus other cycle related infrastructure Iford to southbourne Road - on street cycle lane 394,133 Seabourne Road - on road parking improvements and local environmental improvements and improved 246,000 signage to off street car parks Pokesdown Station - accessibility improvements - 60,000 secure cycle storage Boscombe Bus Station - Improvements to public transport waiting environment including public transport information and safety/security enhancements. Page 17 of 17 Budget 14/15 200,000 Boscombe Precinct - Public realm regeneration. 185,000 Boscombe West - Centenary Way to St Johns Road - Link improvement including enhanced pedestrian and cycle facilities including Toucan/Zebra crossings. 1,200,000 Formalised parking bays and improved signal coordination to optimise traffic flow and public transport movement. Christchurch Road - Palmeston Road to St. Swithuns - 15,227 bus cycle lane improvements Bournemouth Travel Interchange - Environmental, 725,000 operational improvements within interchange Travel Interchange to town centre - Access to interchange public realm improvements, declutter, 1,200,000 legibility improvements etc Richmond Hill - Town centre traffic management and 500,000 public realm scheme Town Centre AAP - facilities to encourage cycling and 35,000 walking Bus Shelter/stop upgrades - Bus stop footway 1,010,000 improvements all stops ITS Improvements:Delivery Manager MD ITS Improvements - Bmth Combined - Signal 25,000 upgrade/refurb and optimisation inc RTI ITS Improvements - Bmth Combined - VMS + CPG 60,000 EVC:Delivery Manager IK Electric Vehicle Charging 53,000 Smarter Choices :Delivery Manager BA Organisational Travel Planning 26,000 Total LLSTF (3TT) 6,460,360

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207 Revenue & Capital Management Statements 2014/15 1 April October 2014